Keith Springer President of Capital Financial Advisory Services in Sacramento California Announces the Release of his Critical Economic and Market Update
Has Humpty Dumpty Recovered?
SACRAMENTO, Calif (MMD Newswire) June 28, 2010 -- Keith Springer, President at Capital Financial Advisory Services gives in-depth analysis on the economy after Housing Sales collapsed a record 33 percent to an annual pace of 300,000 last month from April.
"All the king's horses and all the kings' men have been trying so hard to put Humpty back together again. So now that we are 18 months past the initial 911 call, how is the patient?" Springer begins.
"Well, some doctors claim the patient has fully recovered and should be back ballroom dancing within days. On the other hand, there are others insist he will surely flat line at any moment so have your black veil ready. One thing is for sure: The economy is at a very dangerous crossroads."
"So far we have been following a Keynesian path, shoring up the economy with direct stimulus or backdrop guarantees. Unfortunately, that path is now ending and we are approaching the Crossroads. Do we veer left and keep stimulating the economy or do we take right and allow the economy to be on its own?" Springer continues with his analogy.
"Unfortunately, we need to go in both directions, which is not a good sign for the patient. The reality is that the stockpiles of medicine we have been administering are running dangerously low, and all the Kings' men are having one heck of a time. That of course being government money (future debt) to spend and the public will to spend it."
"The problem is that even though U.S. banks have and written off debt and recapitalized themselves, most governments have taken the bad debt from the private sector and transferred it to the public. When we bailed out the banks (again), the government put a floor under the economy and issued record amounts of debt to pay for it. The developed world has far too much debt, over $250 trillion of total liabilities which is the equivalent of almost 400% of global GDP, with far too high debt-servicing costs. Reducing this debt will be deflationary, regardless of the fact that banks will be forced to print money."
To view more of Keith's newsletters visit www.KeithSpringer.com and click the "Weekly Economic and Market Updates" link, email Keith@KeithSpringer.com or call (916) 925-8900
Keith Springer is President of Capital Financial Advisory Services, a SEC Registered Investment Advisory Firm, frequently provides commentary and analysis for various global and national media outlets. He has developed a proprietary process for successfully building tax-efficient retirement portfolios and has been providing specialty wealth management services for over 25 years.
Add this page to your favorite Social Bookmarking websites
