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May 8, 2010: Market Week in Review

Posted by Larry Doyle on May 8th, 2010 9:33 AM |

The bill comes due.

This week’s bill is in Greece. The bills right behind it are in other EU nations. The larger bills are in the UK and the US. How will they be paid?

A combination of fiscal austerity measures, debt restructuring, monetization through currency devaluations, and potentially defaults. The civil unrest playing out in Greece is likely a precursor to similar unrest in other nations. Unless and until real fiscal discipline is implemented and executed, this civil unrest will spread.

Fiscal discipline may stunt short term government stimulated economic growth, but that is the only remedy for a path to long term economic prosperity. Washington has shown no appetite nor inclination to write this prescription. Our future is and will continue to be very challenging until they write the prescription. As I wrote the other day, “Athens Today, London Tomorrow? Washington Next Week?”

Welcome to the Sense on Cents Week in Review where I provide a streamlined recap of month-to-date market returns. (more…)

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