Grand Rapids, MI -- (SBWIRE) -- 05/15/2013 -- With so much going on in the economy, it can be hard to keep up with everything that is happening in the world today.
Dennis Tubbergen, a financial advisor, author, radio show host and CEO of PLP Advisors, LLC gives a hand.
Whether people enjoy his weekly newsletter at www.moving-markets.com or his blog at www.dennistubbergen.com, Tubbergen is dedicated to sharing his viewpoints and opinions. On May 10, 2013 his blog was titled Spain: Unemployment At Record Levels.
"Another piece in The Telegraph discussed Spanish unemployment levels," began Tubbergen.
Below he quotes from the April 25, 2013 article.
The mind goes numb. Spanish unemployment jumped by yet another 237,000 people in the first quarter to 6.2 million, or 27.2pc.
This is equivalent to roughly 8.3 million in Britain, or 39 million in the United States. The country is losing 3,581 jobs a day. There are 1.9m households where no member of the family has a job.
The national rate of unemployed youth is 57.2pc, rising to 70pc in the Canaries.
This is in spite of mass emigration by Spanish youth. El Pais reports that 260,000 young people aged between 16 and 30 left the country last year.
A great number have come to London. They are all around the Telegraph offices at Victoria working in Pret a Manger and Starbucks, delightfully well-mannered.
Others have gone to Germany, or the Persian Gulf, or further afield. Such is Spanish diaspora, unseen since mass exodus after the Civil War, or the Conquista.
Some claim that unemployment was almost as high in the early 1990s. It was not. A study by the Bank of Spain found that today's rate would be 4pc to 5pc higher under the old way of counting, nearer 32pc.
Nothing like this has been seen before in modern times. Spain's jobless crisis in the 1930s was much milder, and for a good reason. Spain was not strapped with the deflationary disaster of the interwar Gold Standard. It went its own way.
The Rajoy government said today that the crisis is "dramatic" but insisted that the country has regained the confidence of the financial markets and is at last on the road to recovery. Sadly this is not the case. The bond vigilantes have been quiet only because the ECB has promised to backstop the Spanish debt market. The crisis in the real economy is getting worse. The City knows that.
Public debt jumped from 69pc to 84pc of GDP last year, and only part was due to the bank bail-out. That is a big jump in one year and it understates the actual debt. David Owen from Jefferies says the real figure is 113pc once trade credits and unpaid bills are included, a figure available from the Bank of Spain.
"The story demonstrates the effects of printing money and not printing money," explains Tubbergen. "Because Spain is in the Eurozone, the country cannot print money, which has resulted in a deflationary depression with staggering levels of unemployment."
Tubbergen goes on to say the U.S., on the other hand, has debt-to-GDP levels that are at least as bad, or arguably worse than those in Spain. Because of the quantitative easing of the Federal Reserve, the ugly effects of deflation have been minimized, at least for now.
"But the debt will eventually have to be dealt with and, as we are learning from the country of Spain, deflation is painful," concludes Tubbergen. "Deflation can also potentially wreak havoc on an investment portfolio. If you're planning for retirement, in my view deflation is one of your worst possible enemies."
To read the blog in its entirety go to http://www.dennistubbergen.com and select his May 10, 2013 entry.
Tubbergen’s syndicated radio show can be heard on metro Michigan stations WTKG 1230 AM and WOOD Newsradio1300 AM and 106.9 FM.
About Dennis Tubbergen
Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in Grand Rapids, Michigan. Tubbergen is CEO of PLP Advisors, LLC and has an online blog that can be read at www.dennistubbergen.com. To view Tubbergen’s latest Moving Markets? newsletter, go to www.moving-markets.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.