Searching For Growth
Market Updates
12/14/12The two areas that have helped the US economy grow since the 2008 collapse have been manufacturing and exports. Things may be changing, however, as we are beginning to see a real decline in exports – see chart below. The contraction in Europe is also starting to spread. This is not surprising as we are in a global economy and essentially have been since 1790 – see Wesley C. Mitchell, Business Cycles. This is why we have been so concerned about what has been happening in Europe over the past year. What the world needs now is growth strategies – lower taxes, less regulation and a reduction in wasteful spending to name a few. In our opinion, increased taxes are not the answer.
Italian Soap Opera
This week Mario Monti resigned as prime Minister of Italy. Why? Because the austerity measures he put in place have affected ordinary folks more than anticipated and they are not happy. Silvio Berlusconi has decided to run for a sixth term, but this time on an anti-EU stance. If you recall, Silvio resigned because of an infamous Bunga, Bunga party. He is a character and if he is re-elected, sparks will fly throughout the EU. What can you say about a country that elects a porn star to their parliament? This will be a political show worth watching!
We plan to send our next update during the first week of January. We wish you and yours the very best during this Holiday Season and hope you have a fantastic 2013!
Sincerely,
Your THOR Team