Dennis Tubbergen does a quick examination of the euro zone.
Grand Rapids, MI -- (SBWIRE) -- 03/13/2013 -- In today's world it is difficult to stay abreast 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 hand when it comes to understanding the latest events in U.S. and world economics.
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 March 6, his blog was titled Soros: Germany at Least Partially to Blame for Euro Zone Troubles.
"Billionaire George Soros was quoted in a CNBC article this past week saying that Germany is at least partially at fault for the financial woes facing the euro zone," began Tubbergen.
Tubbergen quotes from the March 1, 2013 article below.
Germany is by far the largest and one of the healthiest nations in the euro zone but billionaire investor George Soros said it shares some of the blame for the region's prolonged crisis.
"We have gone from crisis to crisis. Germany did the minimum that was necessary to preserve the euro but no more! And that is what maintained the crisis conditions which are now four years old," Soros said at the World Leaders Forum this week.
He sees the underlying problems as twofold: First, Germany is in the driver's seat. It doesn't dictate policy, but effectively no European policy can be proposed without first gaining its approval.
The second problem is that Germany is pushing austerity on debtor nations, and Soros doesn't see forced budget cuts as an effective solution. He argues the situation is actually only going to get worse.
"I am afraid Europe is in an existential crisis," Soros said. 'The debtor coutnries are subordinated to the dictates of the creditor countries and have effectively been relegated to second-class membership. I think this is politically not acceptable."
Austerity measures could trigger a debt-deflation spiral, Soros believes, which could lead to lower wages, layoffs and reduced consumer spending. That could create a long-lasting recession in which the debt burden keeps growing.
"I have a question for Soros," notes Tubbergen. "Why would Germany do any more than was absolutely necessary to keep the Euro afloat? The German electorate wouldn't allow anything more than the absolute minimum. After all, German taxpayers who work to their mid-60s have a problem bailing out Greeks who retire at age 50 with a pension that's equal to their final salary."
Tubbergen goes on to say that of course the debtor countries are subordinated to the dictates of the creditor countries; that has been the case for as long as debt has existed. There is an old proverb that states, "The borrower is slave to the lender." Tubbergen believes that nothing has changed.
"I believe Soros is spot on with regard to one issue, though," concludes Tubbergen. "Austerity measures imposed due to debt levels being unsustainable have always resulted in a debt deflation spiral. Greece is already experiencing this, as is Spain. The debt deflation cycle in Europe is just getting started."
To read the blog in its entirety go to http://www.dennistubbergen.com and select his March 1, 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.