Grand Rapids, MI -- (SBWIRE) --05/23/2011 -- Financial advisor Dennis Tubbergen often discusses U.S. and world economics in his online blog and in his Moving Markets™ newsletter. In one of his recent blogs, Tubbergen shared a few comments on how the U.S. looks from the standpoint of others in the global economy.
“Widely-known investor Jim Rogers said recently that the U.S. was certain to lose its AAA debt rating,” explains Tubbergen. “Deutsche Bank agrees, calling the United States the fourth riskiest country to lend to in the world. Both comments were noted in a recent article published in Business Intelligence on May 8, 2011.”
Tubbergen quotes the article as saying in part, “Legendary global investor and chairman of Singapore-based Rogers Holdings, Jim Rogers expects the U.S. to lose its AAA credit rating after Standard & Poor’s revised its outlook on U.S. sovereign debt to ‘negative’ from ‘stable.’ S&P said last week the United States had until 2013 to come up with a credible plan for addressing its financial problems.”
The article went on to say, “A new report from Deutsche Bank ranks the U.S. government as the world’s fourth riskiest sovereign borrower, behind Greece, Ireland and Portugal, and just ahead of Italy.”
S&P credit analyst Nikola G. Swann is quoted in the article as stating policymakers in the U.S. have yet to agree on a plan to reverse our economic misfortune and Rogers goes on to say our government is simply printing money to solve our debt problems and he “cannot imagine lending money to the U.S. government for 30 years in U.S. dollars at 3%, 4%, 5% or 6% interest, as the government will never be able to pay off those debts.”
Rogers even went so far as to say in India’s Economic Times, “It is a conscious policy of the U.S., as far as I can see, to debase the currency.”
“When Deutsche Bank ranks the U.S. as a riskier borrower than Italy or Spain, it should be a wake-up call to the politicians in Washington that deficits need to be brought under control now,” asserts Tubbergen. “Not reduced gradually over a 10- or 12-year time frame.”
Tubbergen notes that the Federal Reserve has stated that the second go-round of printing of money – or Quantitative Easing 2 (QE2) – will stop at the end of June.
“If QE3 isn’t undertaken, we’ll see exactly what investors think about the value of U.S. government debt,” warns Tubbergen. “I agree with Rogers, investors will demand a higher interest rate on U.S. debt to compensate them for the increased risk.”
Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in the USA Wealth Management Building in downtown Grand Rapids, Michigan. Tubbergen is CEO of USA Wealth Management, LLC and has an online blog that can be viewed at http://www.dennistubbergen.com. His weekly talk show The Everything Financial Radio Show is simulcast on two Michigan metro stations and also airs to over 600,000 financial advisors, with recent podcasts available at http://www.everythingfinancialradio.com.
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