Financial advisor Dennis Tubbergen sees the Federal Reserve continuing its plan to use quantitative easing to stimulate the U.S. economy.
Grand Rapids, MI -- (SBWIRE) -- 01/31/2011 -- Dennis Tubbergen, financial advisor and CEO of USA Wealth Management, LLC, a federally-registered investment advisory company, has been talking about the Federal Reserve and quantitative easing the past several months in his financial blog and his monthly newsletter, Moving Markets™.
“A lot of individuals don’t understand the relationship between the Federal Reserve and the U.S. government, but, given the current spending policies of the U.S. government and the recent quantitative easing policies of the Federal Reserve, they should,” explains Tubbergen.
Tubbergen explains the supposed goal of the Federal Reserve in dumping money into the economy by buying U.S. Treasuries is to provide banks with enough liquidity to make loans and have the ‘money multiplier effect’ kick in (whereby each dollar injected into the economy is transformed into multiple dollars).
Many economists believe that event is not likely to occur in our current economy. The unemployment rate has remained above 9.4 percent since May of 2009, and a poll of economists by Bloomberg News shows most believe that figure will not change much in 2011.
According to a Bloomberg.com posting from January 5, 2011, the Federal Reserve will probably continue to push through its plans for buying $600 billion in bonds, further increasing our country’s deficit spending.
“Instead of dealing with the issues head on and letting the system purge itself of the excess debt, politicians globally have urged their respective governments to spend money they didn’t have in an effort to flood economies with cash to ‘jump start’ spending and stimulate the economy,” stated Tubbergen.
The Bloomberg article goes on to state the recently-released minutes from the Fed’s December 14th meeting show the committee expects our economic recovery to “remain modest, with unemployment and inflation deviating from the committee’s objectives for some time.”
What should one of the first objectives be? Tubbergen believes the deficit spending has to stop.
“We, as a country, are on our way to destroying the prosperity and opportunity once handed to us by our predecessors who worked so hard to create it,” concludes Tubbergen.
Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in the USA Wealth Management Building in downtown Grand Rapids, Michigan. Tubbergen is CEO of USA Wealth Management, LLC and has an online blog that can be viewed at www.dennistubbergen.com. His weekly talk show The Everything Financial Radio Show is simulcast on two Michigan metro stations and also airs to over 600,000 financial advisors, with recent podcasts available at www.everythingfinancialradio.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.
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