Economist tells Palatine group economic tide to turn
Robert Genetski, one of the nation's premier interest-rate forecasters, expressed slight optimism about the economy when he addressed more than 300 business leaders Thursday morning.
“I think the tide is going to turn, we just have to wait and see,” said Genetski, known for his conservative outlook and research of classic economic principles.
Genetski addressed the stock market, Ebola scare and other issues at the 11th annual economic breakfast in Palatine sponsored by Cornerstone National Bank & Trust Company.
The forecaster said several recent moves account for a decline in living standards and a lack of steady growth in the economy. He said the federal health care law, EPA regulations, Dodd-Frank Financial Reform and minimum wage legislation are restricting economic freedom.
Genetski blamed the Federal Reserve for economy weakness, saying the fact that banks are holding assets is hurting the economy. “The last recession was created by mistakes by the Federal Reserve. We have to change our economic system. The system is broken,” he said.
When asked why banks are holding assets, he said regulators were embarrassed after the economic downturn and now want to make sure banks have enough capital. In addition, Genetski said the Federal Reserve is paying banks a more attractive rate to hold assets now.
In looking ahead to the next year, he outlined several predictions and suggestions including:
• A pick up in spending by 5 percent or more.
• Inflation will hold at about 2 percent.
• Housing prices will see moderate increases.
• Be careful about investing in gold and oil.
• Interest rates will continue to go up.
Genetski ended his forecast with a quote that he believes in from Winston Churchill. “You can always count on Americans to do the right thing — after they have tried everything else.”
Several participants at the economic outlook agreed with Genetski.
“He hit it spot on,” said Mike Carlino. “I like his historical perspective.”
“It was right on target,” agreed Kurt Giehler, a Prospect Heights architect. “I agree with his philosophy and I found his graphs to be very helpful,” he added.
Inverness Attorney Robert J. Ross said, “I thought the forecast was realistic and had a good insight as to what is happening.”