Grand Rapids, MI -- (SBWIRE) -- 12/10/2010 -- According to noted financial advisor Dennis Tubbergen, by keeping interest rates low in order to spur economic recovery, the Federal Reserve may have created an additional problem. Interest rates will have to remain low in order to finance the excessive federal deficit spending.

Tubbergen wonders if this has become a problem with no good solution.

“An increase in interest rates would be too damaging to the national budget and may cause many of our creditors to ‘pull the plug’ and cut us off from credit,” states Tubbergen, who is CEO of USA Wealth Management LLC, a federally registered investment advisory company. Tubbergen believes the U.S. must first deal with the excessive amount of debt we have accumulated before any real progress can be made for an economic recovery.

“The massive level of U.S. debt that exists continues to mount,” explains Tubbergen. “Debt by its very nature is deflationary and deflation by its very nature causes recessions.”

Tubbergen points to a Bloomberg Businessweek article from September 28, 2010 where Yu Yongding, a former advisor to China’s central bank, states that any appreciation of the U.S. dollar is temporary and a devaluation of our currency is “inevitable” as U.S. debt rises.

“The problem outlined here has not gone unnoticed around the world,” comments Tubbergen. “China and other U.S. creditors are concerned about the long-term stability of the U.S. Dollar and the monetization of the U.S. Dollar.”

For Tubbergen, one worrisome aspect of U.S. debt is our ability to finance our current debt while spending more money than we currently take in.

“How can the U.S. spend about $1.3 trillion more than it is taking in this year and still be financing debt?” asks Tubbergen. He goes on to state the U.S. either has to quit spending money we don’t have or print more money in order to continue to operate.

“Should we choose Option B (printing more money) don’t we risk alienating those who already own our debt by causing our currency to be worth less when compared to other currencies?” asks Tubbergen.

Or is that already happening?

For more information on Dennis Tubbergen’s views, visit 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, the information contained herein is not intended to constitute investment advice and should not be interpreted as a recommendation to buy, sell or hold a particular investment.

Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.