I have written a great deal about the European debt crisis over the last several months. Today I thought I would give you the latest analysis of the crisis from The Economist, the widely respected, London-based forecasting giant. I've been reading the Economist for almost 30 years, and I think you'll find their latest views on the European crisis interesting (if not scary).
Following the analysis from The Economist, we take a look at how some of the world's largest banks are preparing for what could be the end of the euro. While most large European banks are in denial about the possible end of the euro, other large banks around the world are scrambling to reduce their exposure. I have also linked to a very good article on this very subject at the end of today's E-Letter.
Next, now that the Super Committee has failed, the automatic spending cuts of $1.2 trillion over a decade are set to kick in starting in January 2013. The media is warning that such draconian cuts will devastate the Defense Department. Well guess what? $1.2 trillion over 10 years is only $120 billion a year. The federal budget is projected to increase by more than $120 billion a year over the next decade. In that case, there will be no net new spending cuts, just a slowing of the rate of increase. That's the dirty little secret the media is not telling us!
Finally, if this extremely volatile stock market has rattled your nerves, I have a suggestion for you. I suggest that you consider investing with Metropolitan Capital Strategies, one of my favorite professional money managers. Metropolitan has the option of going 100% to cash (money market) in extremely volatile times such as we see today. We are hosting a free live WEBINAR with Metropolitan Capital Strategies this Thursday, December 1 at 2:00 EST. I highly recommend that you join us!