PLP Advisors, LLC

Financial Advisor Continues His Economic Outlook Discussion

Tubbergen provides podcasts of his radio shows on his website.

 
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Grand Rapids, MI -- (SBWIRE) -- 07/25/2013 -- In our modern world it is difficult to stay on top of everything that is happening financially. Dennis Tubbergen, a financial advisor, author, radio show host and CEO of PLP Advisors, LLC can be counted on to give a little help when it comes to understanding the latest events in U.S. and world economics.

Whether people enjoy his weekly newsletter at http://www.moving-markets.com or his blog at http://www.dennistubbergen.com, Tubbergen is dedicated to sharing his viewpoints and opinions. On July 24, 2013 his blog was titled The Economy and Outlook - Part Three.

"By studying history and understanding what happens when policymakers print money and what happens when debt levels reach unsustainable levels, one might better understand how to navigate today’s difficult environment and manage IRA assets," began Tubbergen. "We’ll look at an example from history." Below he quotes from his blog.

The Weimar, Germany hyperinflation after World War One is often cited as one of the worst hyperinflations that the world has ever seen. Germany used the printing press to finance the war. The country justified its use by rationalizing that they would win the war quickly and use the spoils gained from winning the war to finance it.

This money printing created inflation and many German soldiers began to abandon the military since it was difficult to make ends meet on military pay in a highly inflationary environment. Germany eventually lost the war. The Treaty of Versailles, signed in June of 1919, imposed huge reparations on Germany after the war. The payment demands made of Germany were so great the country could never pay them with “honest” money. So, the money printing continued.

By September of 1920, as a result of money printing, inflation accelerated. Prices were 12 times higher than they had been before the war. Food had accounted for about half a family’s budget before the war, but now food expenditures consumed about three-quarters of a family’s budget. Germany, saddled with bills it couldn’t pay from a war it couldn’t afford, continued money printing. It didn’t take long for the cost of basic staples to become out of reach for most German families. The German Mark was 35,000 to the British pound at Christmas 1922 but by the end of January the Mark touched 227,500 to the pound.

At the end of September of 1923, the German Chancellor declared a state of emergency and put Germany under military rule. In November of 1923, the German government issued a new currency linked to something tangible, land and industrial goods. This stabilized the currency and after a brief recovery in 1924, the deflationary forces of debt kicked in. Companies declared bankruptcy and unemployment soared.

Money printing causes inflation. Unsustainable debt levels cause deflation. When money printing occurs with enormous debt levels, inflation may result for a while, but history demonstrates that deflation cannot be avoided.

"Thomas Jefferson, one of the founding father of the United States understood this relationship between money printing and debt excesses," explained Tubbergen. "He warned, 'If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.'"

To read the blog in its entirety go to http://www.dennistubbergen.com and select his July 24, 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 http://www.dennistubbergen.com. To view Tubbergen’s latest Moving Markets? newsletter, go to http://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.