Dec. 5--Americans have plenty of work to do to climb out of the worst recession since the early 1980s, but safeguards are in place to avert another wholesale banking collapse like the nation endured about 75 years ago.

So says Tim Leach, chief investment officer of US Bank's Wealth Management Group in Minneapolis. He delivered the message at the Paducah Area Chamber of Commerce breakfast Thursday at the Luther F. Carson Four Rivers Center.

"Are we headed into another Depression?" he said. "Answer: No."

The current economy is similar to the 1930s in that excessive debt preceded a stock market collapse, he said. Over the past five years, the nation's private sector has borrowed $3 trillion.

However, regulatory and policy safeguards exist as a result of the Depression. Leach said there was no Securities and Exchange Commission or Federal Deposit Insurance Corp. in the '30s, and the Federal Reserve was in its infancy and relatively inactive.

Leach gave these examples that the current recession is easing after peaking at crisis levels:

The "fear index" measuring stock market volatility peaked two months ago above 80, compared with 45 after the 9-11 terrorism. The index is now about 50, still well above the average of 20.

Treasury rates remain at a 45-year low as people seek safer investments, but interest has risen slightly from an ebb of zero.

The measure of global exchange rates among banks has eased to 2.2 percent, well below its excessive 2008 high of 4.8 percent, but is still 1 to 1.5 percentage points above normal.

"We're past the worst part of the credit crisis," Leach said. "But we've still got some room to go."

He said credit problems, deflated real estate and Wall Street volatility will continue in 2009.

The good news is that interest rates and inflation are relatively low, and gas prices have dropped more than $2 from earlier this year. Leach said the easing of pump prices means another $200 billion for consumers to spend.

"Every penny that the retail price of gas comes down adds about a billion dollars of discretionary spending power in our pockets," he said.

Joe Walker can be contacted at 575-8656.

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