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Economic Flexibility

April 25, 2012 – 5:08 pm

There is not much in the way of new economic statistics out this week but events in Europe certainly make for a nervous market.

Greece reported a weaker economy than expected, shrinking by 5%. That will make it harder for them to meet deficit targets. England fell back into recession unexpectedly for the first quarter as well. It is very difficult for the various EU countries to pull themselves out of a recessionary cycle without government spending but they have spent so much over the years that no one wants to buy their debt. Without that, spending governments lose a strong piece of their ability to jump start their economy. The result is what we are seeing in parts of the EU, weaker economies.

Meanwhile here in the U.S. our loose money policy is pushing our economy along. It is a slow process and Europe is not helping, but we are growing. Then there is Asia with China and India facing slowing economies. However, both countries have started to ease money policies which should work, and both have the ability, unlike Europe, to do so.

Good Trading
Steve Peasley

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