The Race to Recovery

(Export Development Canada – Peter G. Hall)

Once again, the ‘R’ word is everywhere – although this time, it’s not recession, but recovery. Positive signals in the economy are mounting, setting off lots of ‘recovery buzz’. Trouble is, the growth that we are seeing still leaves us well below pre-recession activity levels. Clearly there is a big difference between the return of growth and the onset of true recovery. The race to recovery is on, but we still have big hurdles to clear before we’ll have a solid fix on the finish line.

This race has now been underway for awhile, and key hurdles have already been cleared. Financial markets staved off crisis last fall, as massive and rapid injections of liquidity kept funds flowing in the wake of the toxic asset problem. Large financial institutions have returned to profitability, and credit spreads have stabilized at much more normal levels. The world economy has also survived a drop in total production and trade far larger than any in recent memory. And the current optimism about the near-term future is occurring as unemployment rates around the world continue to march upward. Read more or watch the video here