'Perfect Storm' Batters US Economy

Unpredictable markets continue to feed stagflation fears
By Jim O'Neill,  Newser User
Posted Mar 14, 2008 12:30 PM CDT
A foreclosure sign tops a sale sign outside an existing home on the market in northwest Denver.   (AP Photo/David Zalubowski)
camera-icon View 4 more images

(Newser) – A perfect storm of economic maladies has the US economy reeling on the edge of recession and officials struggling to limit the damage it causes, reports the New York Times. But many economists say there isn’t much the government or policy makers can do besides batten down the hatches and, in the words of a Charles Schwab analyst, “let the system wash it out.”

Although banks are clearing the worst of the subprime mortgage crisis, other industries are feeling the repercussions. Inflation and unemployment are on the rise as the dollar sinks, driving up energy prices—but also driving out overly leveraged investors. That actually sounds good to analysts willing to ride out the storm. "It's not just a silver lining," one economist says of the shakeout. "It's a platinum lining."