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The Euro

April 30, 2010 – 4:57 pm

The news from Europe is not good. France reported growth in their GDP long before we did and I was very surprised by that but it appears only a few of the countries in Europe are on the mend. Others such as Greece, Spain, Italy and Portugal are very weak with poorly functioning governments. Why does it matter?

The Euro is tied to all the economies in Europe just like our dollar is used throughout our states. If one country borrows too much money it can default on its loans. When that happens it weakens the Euro and that affects every country in the European Union. That is why the strong economies such as Germany are very unhappy. Their economy is strong yet if the Euro crashes their strong economy will crash along with it. That is why it is important to them.

It is important to us here in the U.S. because even though we are not tied to them we are affected by what happens in the world economy. That is the reality we live in.

Chances are very good the IMF or Germany will bail out Greece but will they bail out others as well? The stock market is uncertain about that.

Good Trading
Steve Peasley

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