Smart Money with Keith Springer Saturdays at 1PM and Sundays at 6AM on NewsRadio KFBK 93.1 FM and 1530 AM

Critical Economic and Market Commentary May 20, 2010

Posted At : June 28, 2010 11:51 AM

Economic Update

The World in a Nutshell

The debt crisis in Europe is scaring the bejesus out of the world markets. There is an underlying fear that the EU and euro will unravel if the crisis continues. Other EU nations – in particular the two largest, Germany and France – are being asked to bear the largest portion of the expense and risk associated with aid needed to “rescue” Greece and other nations.

At the same time, Germany and France are demanding that the nations at risk adopt austerity plans designed to reduce their sovereign debt through reduced government spending and higher taxes, which will crimp economic growth. All of this will have a negative effect on world growth as demand from these countries will be severely diminished.

Here at Home

There continue to be signs that the U.S. economy is expanding, albeit slowly. Manufacturing and production numbers keep chugging along and are gaining momentum.

Going forward, there are two conditions necessary for a sustainable recovery:
1.   Increased employment
2.   Increased consumer spending

Get them, and we’re on our way. Don’t and it’s Good Night Irene.

Either way, it’s time to play D. One important issue to keep in mind is that we are experiencing Deflation, NOT Inflation. You’d better have the right portfolio in a deflationary economy or you’re toast.

Regards – Keith Springer, President of Springer Financial Advisors

Springer Financial Advisors ("Advisor") is a federally registered investment adviser located in Sacramento, California. Advisor and its representatives are in compliance with the current filing requirements imposed upon registered investment advisers by the Securities and Exchange Commission and the State of California. Advisor's web site and its emails of general distribution are limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of Advisor's web site on the Internet or dissemination of informational emails should not be construed by any consumer and/or prospective client as Advisor's solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. A copy of Advisor's current written disclosure statement discussing Advisor's business operations, services, and fees is available from Advisor upon written request. You may also obtain publicly available information about Advisor through the SEC website as follows: http://www.adviserinfo.sec.gov/IAPD/Content/Search/iapd_OrgSearch.aspx. Advisor does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Advisor's web site or incorporated in an email, and takes no responsibility therefore. All such information is believed to be reliable and authoritative but does not constitute sufficient information to be the sole basis for sound investment decisions and all users thereof should be guided accordingly. Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended or undertaken by Advisor) made reference to directly or indirectly by Advisor in its web site, email, or indirectly via a link to an unaffiliated third party web site, will be profitable or equal the corresponding indicated performance level(s). Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client or prospective client's investment portfolio. Certain portions of Advisor's web site (i.e. articles, commentaries, etc.) may contain a discussion of, and/or provide access to, Advisor's (and those of other investment and non-investment professionals) positions and/or recommendations as of a specific prior date. Due to various factors, including changing market conditions, such discussion may no longer be reflective of current position(s) and/or recommendation(s). Moreover, no client or prospective client should assume that any such discussion serves as the receipt of, or a substitute for, personalized advice from Advisor, or from any other investment professional. The information is of a general nature and should not be applied indiscriminately to particular situations wherein it may not be completely applicable. Advisor is neither an attorney nor an accountant, and no portion of the content should be interpreted as legal, accounting or tax advice.