August 2012

August 2012 Europe is in a death rattle and needs to adjust the Maastricht Treaty to survive Getting this treaty amended is tantamount to a married couple settling amicably without harsh words, arguments and long delays. So basically it will not happen overnight and Europe will plunge deeper and deeper into debt. Only a few Euro Zone countries can borrow, Switzerland, Norway, Finland, Denmark, Sweden and Luxembourg. Surely not enough to hold the rest together. Action is needed fast but I do not see it happening fast. I would wait until things to come together here before investing. Sure you can risk some capital and get paid on some fabulous news story but I would not bet on it happening. USA companies are cash rich since it outsourced just about everyone but the CEO and he is soon under consideration by the board. Most of the cash is located overseas and that money will be invested overseas, particularly in Asia. The bump in US Home data is probably a blip on the EKG but the patient is struggling to survive. Even if these companies get the green light to bring the money back to the USA will they invest in the USA? I do not think so. The returns are not in mature economies. Stay in USA for a protectorate FED and a country that will do anything to survive but do not bet the kitchen sink and do not expect good returns. Asia is where the growth is and you have to be in it to win it. Asia is the bull market for the next 50 years and sure we will have down days or months but the trend is up. Outsourcing is not done yet as another wave will begin soon. The west is out of fiscal ideas and will let their corporations do anything to survive and keep market share even if it means potential social unrest. Governments will pacify its populations with promise of new programs or new deals. How long can this last – depends on the resilency of the people that make up the country. Pleasant Investing Dreams.

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