U.S. Treasury Secretary confides indigenous real estate sector

Whatever may be the current woes of the US realty sector, U.S. Treasury Secretary Timothy Geithner is upbeat and is also confident that the existing sufferings won’t set off a new banking crisis. This mood of the top US functionary became evident through his own remarks to the Economic Club of Chicago. He was asked clearly whether commercial real estate could ignite one more banking meltdown and to this he said, “I don’t think so.” “That’s a problem the economy can manage through even though it’s going to be still exceptionally difficult.”

In accordance with Timothy Geithner the global economy has sped up since the worst of the recession and banking crisis last year, and he pointed towards a U.S. Commerce Department report that shows how the economy expanded 3.5 percent in the third quarter. “You can say now with confidence that the financial system is stable, the economy is stabilized,” Geithner said. “You can see the first signs of growth here and around the world.”

What may be the next course of action then? As per him, the U.S. economy will need to be sustained together with private demand without relying on government support. Meanwhile, he said, the existing bank rescue and fiscal stimulus programs will help the rebound gain momentum. “This is going to have to come from private demand, private investment, for it to work and be sustained over time,” Geithner said.

What is more he did opine that the U.S. needs to bring its budget deficits down “dramatically” for the reason that they are too high in the medium term and “unsustainable” in the long run. Investors need confidence that the U.S. that is “going to have the will to do that as the economy recovers,” he said.

All these lead to a pertinent question. Can this view of the US Treasury Secretary be taken into consideration? The main reason is that woes are still strong in the US real estate sector and there seems to be no immediate respite.