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It is possible if home prices continue to go down, the economy would then experience another recession: Alan Greenspan.

August 02, 2010 (Hamsayeh.Net) - Former US Federal Reserve Chairman Alan Greenspan, who many people believe was the person behind the current economic turmoil engulfing western economies, said there’s a strong chance of a double-dip recession if the housing market continues to deteriorate.

Speaking to reporters on Sunday, Greenspan said US economic recovery is slowing down as shown by several key economic indicators, including the worse than expected GDP figure released on Friday. Latest official data point to a slowdown in economic activities across the US, rising unemployment, increasing number of foreclosures and a ballooning government deficit.

‘It is possible if home prices go down. Home prices, as best we can judge, have really flattened out in the last year, we're in a pause in a recovery, a modest recovery, but a pause in the modest recovery feels like a quasi-recession,’ said Greenspan.

The former chief’s warning comes at the time when Obama tries to convince people of a major economic turnaround following his financial solutions introduced earlier. Obama, reassured Americans of the importance of big banks having a free rein in US economy, thereby he provided enormous public funds at their disposal.

Obama is a staunch believer of free market ideology that says if big businesses pocket huge profits, they would automatically boost the overall economic activities and therefore create more jobs. But he fails to tell Americans that corporations prefer to setup workshops overseas because of lower wages and more suitable conditions for doing business in other places like China, India and Indonesia.  

In July the US growth lost 1.3 percent GDP growth in the second quarter of this year after a 3.7 GDP growth in the first quarter of 2010. The 3.7 percent figure was achieved only after the Obama administration injected trillion dollars of taxpayer’s money into the economy soon after 2008 US presidential election.

In July the US growth lost 1.3 percent GDP growth in the second quarter of this year after a 3.7 GDP growth in the first quarter of 2010.

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