Sky is falling...

Sky is falling has become a cliché. Everyone is doomed by the fact that US economy is heading towards recession. It seems that there is a consensus in this regards. Now the question is-- Is this recession going to be deep and long or short and shallow. No one has the answer. Taking cue from the economic indicators it seems that the slowdown is going to continue until US government is able to find a resolution to some of the risk of the near term US economic outlook. These risks to the near term US economic outlook are mentioned below.
1. If there is a free flow to interest rate cut then it will fuel inflation. Where is the cap to consider that the rates are too low and when will Fed consider that the inflation has reach its limit and consider the flip side and stop cutting interest rates.
2. Prices of homes continue to decline and it is evident that housing sector is already in recession. Is the houses already priced or we are to witness more decline is housing prices.
3. Exponential hike in oil prices has fueled inflation and seems to a never ending story. Will there be a pass through of high energy prices into consumer inflation?
4. US have funded its trade deficit by vendor financing and weakening dollar has made investment in US lucrative. It is a perennial issue until BOP is positive, which seems unlikely in near future. Will vendor financing continue forever?
5. One of the major indicators of economic indicator is unemployment data. Recent release unemployment data is not supportive of economic growth but looking forward the issue is, will it deteriorate or it has reached its bottom.

I think that these questions will give a better perspective of where the economic trends is heading and better analysis will help us to define and gauge economic trend of near future.