Financial Advisor Helps Explain Worldwide Quantitative Easing

Grand Rapids, MI -- (SBWire) -- 12/16/2010 -- While the past year or two has been very difficult financially for a lot of Americans, the economies of many other countries have also been less than robust. Financial advisor Dennis Tubbergen has been attempting to explain the current financial situation with its quantitative easing in his online blog and in his monthly newsletter Moving Markets.

“Since the U.S. government is spending more money than anyone will loan, the only other option is to print money, which ultimately devalues the currency,” explains Tubbergen. “Worldwide, quantitative easing, or monetization of debt by printing more money, is occurring.”

Tubbergen, who is CEO of USA Wealth Management, LLC, a federally-registered investment advisory company, thinks there is a great deal of similarity between quantitative easing and a worldwide poker game.

“If you’re a poker fan, what we’ve got here is a giant, worldwide poker game with a lot of bluffing going on,” states Tubbergen. “When the U.S.’s central bank (the Federal Reserve) announced quantitative easing the first time around, the rest of the world quickly ‘called’ and embarked on quantitative easing programs of their own.”

Tubbergen claims if the U.S. Dollar were to weaken significantly against other currencies, U.S. exports could become more attractive to consumers in other countries and domestic goods would become more expensive and, therefore, unattractive to domestic consumers.

The end result?

“Instead of dealing with the issues head on and letting the system purge itself of the excess debt, the politicians urged their respective governments to spend money they didn’t have in an effort to flood economies with cash to ‘jump start’ spending and stimulate the economy.”

According to Tubbergen, over the past year and a half there have been numerous headlines from sources such as Reuters and the Telegraph.co.uk referring to the ‘embracing of quantitative easing’ by the Bank of England, the Bank of Japan, and the European Central Bank.

“To finish the poker analogy, every one of these countries has a weak hand, or a system that has reached debt capacity,” notes Tubbergen. “The only chance they have to stay in the game is to continue to bet.”

Tubbergen claims the problem with poker is that sooner or later everyone has to show their cards and deal with the consequences.

“We haven’t yet gotten to that point,” concludes Tubbergen. “But in my opinion, that day is coming.”

For more information on Dennis Tubbergen’s views, visit http://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. Investing in securities involves a risk of principal loss. 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.