.

History will Repeat Itself

Unless we learn from it

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Austerity in a weak Economy

is Devastating-

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Japan

.

.

Almost two decades ago Japan’s rising economy was the envy of the world

Then, they went into recession and introduced austerity measures.

The end result was a stagnant Japanese economy with a Debt to GDP ratio of well over 200%

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Yale’ Economist

Robert Schiller

(pg. 84 Money magazine)

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“Fiscal austerity to reduce debt can backfire -as has been the case in debt laden Japan.”

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Aside – How does Japan manage an ugly Debt to GDP ratio well over twice ours? Low Low Low Treasury bond rates.  We do the same with our Low Rates. Their rate for the 10 year bond is under 1%, ours under 2%

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__________

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England Hits Recession

Another Austerity Mistake

.

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Headline Daily Mail

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“The first double dip for 37 years…

Britain endures

longest downturn for a century”

..

Now besides Europe waking up to the fact,  austerity doesn’t work we have England as the latest example.

Even countries like Spain and Ireland who had budget surpluses before the 2008 meltdown are now in deep trouble after introducing austerity measures. (See STOCK Section below on downgrade of Spanish bonds)

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____________

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The Primal Scream


.

Investors411 is just one small blog

that’s been right about

this again and again and again

..

“Of course we must eventually deal with the deficit.  But the example of Britain and Europe show that austerity in the midst of a jobs crisis is a form of insanity.

.

It ultimately makes deficits worse and leads to economic stagnation and double dip recessions.”

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Quote from Must Read

Editorial

by John Atcheson

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“Splitting the Difference Between Myth

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and Reality Is Not Good Economics

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Told You So -

The UK’s Double Dip Recession and Ours”


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STOCKS

.

.

  • Spanish Bonds rose SIGNIFICANTLY this AM near 6.00% danger zone. Rate at at 5.96% at 6:45 AM EDT Latest update on Spanish bond rates for traders HERE
  • Despite austerity Program in Spain Spanish Bonds were downgraded two levels Story Here
  • Two trends – Bad news – US economy keeps deteriorating at a slight rate. Good News - Earnings report are outstanding for US companies.

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Reading Tea Leaves

.

.

Simply Put – The massive gains in stocks over the last three years is NOT trickling down into the US economy in a Significant way. The rich are getting richer as working middle class Americans stagnate.

Any stock move significantly higher is predicated on the Fed continuing some kind of liquidity dump. The latest liquidity injection “Operation Twist” ends in June.

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************************

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Your Stock List

.

.

Today’s the last day to submit your favorite stocks

to be on YOUR stock List starting May 1st.

.

List your choices in the comments section

or email them to me.

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*******************

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Spanish Bond over 6% = Change to NEUTRAL

These bonds are now back below 6% = CAUTIOUSLY BULLISH

.

Longer Term Outlook

3 months+

.

Getting Shaky again

CAUTIOUSLY BULLISH

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AS ALWAYS, DO YOUR OWN RESEARCH BEFORE INVESTING

ALL TRADING INVOLVES RISK & POTENTIAL LOSS OF PRINCIPLE

CHECK ALL DATA, I MAKE MORE THAN GRAMMAR  ERRORS.

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