Grand Rapids, MI -- (SBWIRE) -- 02/26/2013 -- Most of us could use a little help trying to decipher the world economy and how it will affect our daily lives. Financial advisor Dennis Tubbergen keeps an eye on what is happening in the world of finance and how some actions in other countries can be compared to the United States.
When financial advisor Dennis Tubbergen isn't busy helping his own clients, you can find him writing his Moving Markets newsletter or interviewing a guest expert for his weekly radio show.
Tubbergen, who is an author, radio show host, and CEO of PLP Advisors, LLC, spends a lot of time giving his opinions on the economy in his weekly newsletter at http://www.moving-markets.com and in his online financial blog. On February 18, 2013 his blog was titled Japanese Economic Contraction Extends.
"For the third consecutive quarter, the Japanese economy contracted, confirming a deepening recession in spite of aggressive money printing by the country's central bank," began Tubbergen. "Japan has been trying to stimulate its economy since the 1990s through massive government spending and borrowing. All the country seems to have to show for its efforts is a massive debt. Yet, in spite of proving unequivocally that printing money to solve a debt excess problem won't work, look for the country to try more of the same."
Tubbergen quotes from a February 14, 2013 article in Reuters on the subject, "Japan's economy unexpectedly contracted in the fourth quarter, failing to escape a mild recession and playing into the hands of a government pushing for more aggressive monetary expansion that's drawn international criticism.
While a 0.1 percent drop in output defied expectations of a slight uptick after two quarters of contraction, economists expect the economy will slowly recover this year with the help of bolder monetary and fiscal stimulus and an improving global economy.
The Bank of Japan also struck a more positive note on the economy while keeping its policy on hold after it boosted its monetary stimulus and doubled its inflation target to 2 percent a month ago.
Markets, however, have no doubt that Prime Minister Shinzo Abe will keep pushing the central bank for more, given the still fragile state of the economy. A return to rising prices also appears far off after nearly two decades of low-grade deflation.
"Notice that in spite of the central bank's efforts to generate inflation of 2% through massive money printing, the bank is falling short," explained Tubbergen. "The Japanese economy is still contracting and the contraction has been occurring for three calendar quarters."
According to Tubbergen, in order to produce 2% inflation, even more money printing will have to occur. For inflation to occur, more money must be added to the system than is removed from the system via defaults. Tubbergen notes that more money printing will only continue to increase debt levels and ultimately, the walls will come tumbling down and deflation will set in until asset prices have reset.
"The far less likely alternative is to destroy the currency through money printing and hyperinflation before deflation sets in," concludes Tubbergen. "There is no avoiding deflation with such massive debt levels."
To read the blog in its entirety go to http://www.dennistubbergen.com and select his February 18, 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. To hear his shows as a recorded podcast go to http://www.everythingfinancialradio.com.
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.