Excessive Debt Continues to Hold Down U.S. Economy

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Noted financial advisor Dennis Tubbergen believes high levels of debt could cause even more problems in our economy.

While world economic news lately has focused on sovereign debt and not private debt, private debt still exists and remains high. Noted financial advisor Dennis Tubbergen feels the economic trouble we face today resulted from excessive debt in both the public and private sectors. And, it is these high levels of debt that could cause even more problems in the U.S. and the worldwide banking system.

Tubbergen, who is CEO of USA Wealth Management LLC, a federally registered investment advisory company, gives four basic reasons for his belief in a continued recession.

“First, the massive level of global debt that exists continues to mount,” explains Tubbergen. “Debt by its very nature is deflationary and deflation by its very nature causes recessions.”

Number Two on Tubbergen’s list: consumer spending is not rebounding to levels needed to sustain economic growth.

“Third, I expect real estate prices will continue to decline given the number of new foreclosures and the glut of inventory on the market,” continues Tubbergen. “The high level of joblessness along with the continued decline in real estate values will make consumers feel even less secure. And reduced consumer spending will further energize the deflationary cycle.”

Tubbergen’s fourth reason is equity markets that may continue to decline, causing investors to spend even less.

According to a June 7 Bloomberg Business Week article quoting Allen Sinai, chief global economist at Decision Economics, the odds of a double-dip recession have been raised from one in 20 to one in four. (The U.S. Bureau of Economic Research defines a double-dip recession as “a return to a weakened economy after an economic recovery.”)

“As the year progresses, I expect a growing consensus will exist among economists that this recession could indeed be a ‘double dip’,” concludes Tubbergen.

For more information on Dennis Tubbergen’s views, visit http://www.dennistubbergen.com.

The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, the information contained herein is not intended to constitute investment advice and should not be interpreted as a recommendation to buy, sell or hold a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.


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Joy VanOeffelen
USA Wealth Management, LLC
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