Help me to understand the recovery
Our current Fed Chairman has officially declared that it's very likely that the recession is technically over. He also mentioned that it won't "feel" like the recession is over because unemployment will continue to rise to above the 10% level into next year. If I'm understanding this correctly, that means that there will continue to be even less people to spend money, correct?
In addition, many analysts are predicting that housing prices will continue to fall into next year, reaching bottom somewhere around 10% less than current prices somewhere into the middle of next year. So people will have less equity in their houses, causing less available, spendable cash, right?
On top of that, from that I can tell, banks are still holding underwater loans for houses, cars and everything else in order to avoid having to write off and accept losses, so there is continued risk on loans.
What is going to fuel the recovery? Will it or can it be entirely fueled by inflation? While I seek to understand macro-economics, I'm really really really not understanding where the money to drive the recovery will come from? Please help.