European Recovery is Still Uncertain
Online, August 10, 2010 (Newswire.com) - As we head into the end of summer, the economic recovery of the European Union (EU) remains as uncertain as that of the United States.
Dennis Tubbergen, financial advisor and CEO of USA Wealth Management LLC, a federally registered investment advisory company, gives economic updates through his blog and his monthly newsletter Moving Markets. In his July newsletter, Tubbergen notes that the bailout of Greece and Hungary's financial problems could impact U.S. consumers and U.S. markets.
"Ultimately, with regard to Greece, EU members were faced with two choices, neither of which was good," explains Tubbergen. "Option One was to let Greece default on the debt and risk the survival of the Euro. Option Two was to bail out Greece and risk the country not executing its austerity plan and/or having more European countries like Spain and Portugal line up for aid."
Tubbergen believes the bailout package will either end up serving as a temporary measure, only to have Greece's fiscal problems resurface at a later date.
Ultimately, Tubbergen forecasts this will be bad news for the Euro and better news for the U.S. dollar, not necessarily because the dollar is so strong but because it is the best of a bad lot of currencies.
"The rest of the world seems to agree with this assessment," notes Tubbergen. "Not all that long ago the Euro was being discussed as a possible alternative to the U.S. dollar for a world reserve currency. Now, most of that talk has ceased."
Tubbergen points to Garry Shilling's July edition of Insight, where Shilling states during the months of January and February, money flowed out of Europe at an annualized rate of $50 billion.
"Short term, a bounce in the Euro seems likely given how far and how fast the Euro has declined," concludes Tubbergen. "Long term, however, unless European countries execute their austerity plans as required, a larger decline seems likely."
For more information on Tubbergen's views, visit www.dennistubbergen.com.
The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.