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No Clear Picture Yet

December 9, 2011 – 6:01 pm

This morning the news coming out of Europe hints at an agreement of a tighter fiscal union with a few countries opting out. That is the first step of fixing the problem but is a long way from correcting the imbalances in their system. They actually still have to take several more very difficult steps. The first is to stop spending more than the tax dollars coming in, the same issue here in the U.S. Also, they need in addition to a more robust ECB (European Central Bank), a monetary reserve, something similar that we have in the U.S. with a separate Treasury from the Federal Reserve.

The meetings over the weekend will give us a clearer picture. So far investors and traders are hopeful but as always the end result may not match the lofty headlines.

Regardless of what they actually do, at some point Europe will not dominate the headlines. At that point, which will likely be next year, the news will swing back to the U.S. and then the Chinese economy. Ours is still showing lackluster growth and China is slowing. It is wise to be paying attention to try and get ahead of the curve.

Good Trading
Steve Peasley

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