Europe's problems

Greece, Italy, Spain, the UK and other countries in Europe have huge fiscal problems. These problems cannot be solved any time soon.

The problems of these countries derive from their low productivity when compared, say, to that of Germany. The high productivity country is bound to crash the low productivity countries in a monetary union.

In the old days, Greece, the UK, and Italy would have devalued their currencies. This is how markets work. Now, however, they cannot do it. The UK might have to do it and forget about its intentions of "belonging" to Europe.

Milton Friedman predicted the EMU will collapse. If not, the price to be paid by the low productivity countries will be huge. See what is happening in the countries listed above.

The US faces, in a much minor scale, the same issues. Ohio, for instance, is a weak dollar area when compared to NY or CT. This is the reason why Ohioans find these states so expensive.

We cannot escape the markets. They always win. A low productivity state or country with its high social costs and low productivity and low income generating industries is bound to pay the price for its inefficiencies.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.