Bad news brewing?

The average price of credit-default swaps on Portugal, Italy, Ireland, Greece and Spain rose to 406.5 basis points from 363.5 last week, according to CMA. That’s the biggest weekly increase since Aug. 13.

Governments of Europe’s so-called peripheral nations are struggling to lower their budget deficits even as they impose public spending cuts and increase taxes. (Source: Bloomberg).

Austerity programs are not working. They depress economic growth causing tax receipts to decline. Politicians do not want to give up their power and avoid liberalizing their economies. The outcome is to create even wider differentials between the have and have-not.

Why? Because those in power have access to the knowledge to survive and even profit. Those at the lower end of the social scale do not know what to do.

It is happening here too, to a smaller degree. They make every effort to tell us how to work to protect ourselves from ourselves. If you are in business you know what I mean. It is discouraging small business to stay in business.

Is it worth to fight the red tape? The outcome is that the economy loses its vitality and creativity. It is also encouraging the growth of the underground economy.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked best market timer in the 12 and 6 months ending 8/20/10 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 subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.

Disclaimer.The content on this site is provided as general information only and should not be taken as 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.