The U.S. economy is growing at a 1.6%,not exactly a double-dip recession,but the economy will actually enter a double-dip recession with shrinking GDP by December 2010.By year end,the unemployment rate will be double digit.Tim Geithner,the Treasury secretary,says that,"we are on the road to recovery."Either he (Timothy Geithner) doesn't understand Economics well or he is a such a liar,misguiding people of United States of America. The 2.34% point gap between yields on two-year and 10 year Treasuries is a matter of concern.If my prediction goes well,the 10 year yields will rise to 3.4% by year end.The yield on the benchmark 3.5% note due on May 2020 rose 3 basis points on first week on July.The Bond market is also not doing well.Two year note yields came down to a record low of 0.59% on June 30,while Ten year yields fell to 13 basis points to 2.98%.The three month London interbank rate or LIBOR,was 0.531% while two year swap spreads to 34.81 basis point.What about the corporate Yields? It ended 2.08% points between company bonds and government debt,according to British Bankers' Association.There is a huge gap between 10- and 30-year Treasury Yields,a clear indication that where the economy is heading. So,what are the solution to these problem?First,the fed should buy a massive amount of long term and private debt.It is too late now,but still it can be a helpful.Secondly,Mr. Ben Bernanke must keep short term interest low as soon as possible.I am 100% sure that these measure would work well.The U.S. is too scared of about confronting china over its currency manipulation,as china holds substantial amount of U.S. government securities.But this is damaging U.S. economy indirectly.So,my prayer to Ben Bernanke is,please take urgent steps or be ready to face the recession.
