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Resilience in the U.S. – Is It Enough?

December 14, 2011 – 5:50 pm

It is a little surprising that the U.S. economy seems to be the only one that is not shrinking as is happening in Europe, or its growth is not slowing as we see in South America and China. Emerging markets have much better growth numbers than we do in the U.S. but growth in those places has slowed. Yes, it has slowed because they were fighting inflation that plagued them most of the year and they have recently reversed course, but they have slowed.

Not only is it surprising that our economic numbers have gained strength from the summer it is also a little frightening to think our very weak economy is not so weak in comparison. We are by far still the largest economy so we are still an anchor for the world and China as well as many parts of Asia are still growing in the mid to high single digits percentage points. Those are good things.

Despite our struggling recovery that seems to be very resilient and China’s recent efforts to spark some more growth or at least prevent their growth from contracting any further the story is still going to be about Europe. Their efforts are still too timid and for the rest of this year and next they will continue to be the story that will drive the stock market and maybe the world economy. They have taken some important first steps to save the EURO and the European Union but more needs to be done and that may or may not be possible. All eyes are focused on Europe and will remain that way for some time.

Good Trading,
Steve Peasley

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