Financial Advisor Warns Borrowing Against Future Production Can't Work

Online, September 9, 2010 (Newswire.com) - For over a year now noted financial advisor Dennis Tubbergen has been making the case that the U.S. economy is in for a 'double-dip recession,' with the second dip likely worse than the first. (A double-dip recession is one where there is a recession, followed by a recovery, followed by another recession.) Recent financial news has not caused him to change that opinion.

"While the jury is still completely out, more evidence surfaced recently supporting my position," states Tubbergen, who is CEO of USA Wealth Management LLC, a federally registered investment advisory company.

Tubbergen refers to a posting from Bloomberg Businessweek on August 24, 2010: Sales of existing houses plunged by a record 27 percent in July as the effects of a government tax credit waned, showing a lack of jobs threatens to undermine the U.S. economic recovery. Purchases of single-family homes also dropped 27 percent, the biggest one-month decrease in data going back to 1968."

"Now that the first-time homebuyer tax credit is gone, home sales are tanking," explains Tubbergen. "While this tax credit may have revived the market, it did so only on a temporary basis. Home sales were simply accelerated during the tax credit program as individuals looking to purchase a home did so more quickly in order to obtain the credit. The government, by initiating the tax credit, borrowed against future production or future home sales."

Tubbergen sums up the housing situation. Now that the tax credit has expired; home sales hit a 42-year low when measured in terms of the greatest one-month drop.

"Politicians are spending money that we'll probably never be able to pay back, borrowing against future production to such a great extent as to jeopardize our very future," warns Tubbergen. "In an attempt to revive the American economy, they're spending the production of not only our children, but our grandchildren and great-grandchildren."

Tubbergen notes that whenever you borrow there are consequences.

"From where I sit, the state of the housing market may just be one symptom of our ill economy perpetuated by our government's spending habits," he concludes.

For more information on Dennis 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.