Greece Euro Crisis Reinforces Need for Diversification
February 24th, 2010Manchester MO February 22, 2010 — Is the euro doomed whether Germany bails out Greece or not? Even if Europe abandons this currency experiment, its people will still need to spend money on basic needs.
According to strategist Albert Edwards at the Societie-Generale a leading French bank, the euro’s collapse is “inevitable.” Prominent hedge fund trader George Soros also come to the same conclusion.
The government of Greece has been running a high deficit for years, but this is now coming to light. While other countries are affirming their support of Greece, nobody has yet come up with cash to help Greece meet its obligations. Many are arguing that the wealthier Eurozone countries such as France and Germany cannot afford to let Greece go bankrupt. However, such a bailout is illegal according to the terms of the original 1992 Maastricht Treaty.
“Even if the Eurozone countries return to a system of separate currencies, their populations need to eat, need to live someplace, and need to burn energy,” said Richard Stooker author of Income Investing Secrets.
“Besides, the Obama administration and Fed Chair Ben Bernanke are continuing the soft dollar policy begun under President Clinton and continued under President Bush. “If not an outright ‘destroy the dollar’ policy. Therefore, U.S. investors need to remain invested in companies around the world that pay dividends.”
Because of the Greek sovereign debt issue, the euro has fallen against the dollar recently, to just below $1.36. Several months ago, the euro was as high as $1.50. Up until 2000, the euro was valued below the US$.
“Thanks to the recent worldwide debt crisis and poor global economy, many countries have overspent to stimulate their economies,” author Stooker said. “Nobody knows the future. An investor’s best defense is to demand an immediate return by investing for income. And to diversify.”
Check out Income Investing Secrets: How to Receive Ever-Growing Dividend and Interest Checks, Safeguard Your Portfolio and Retire Wealthy and 7 Reasons to Invest for Income Now More Than Ever right now to learn more.
Richard Stooker is a freelance writing with a long time interest and experience in investing.
Richard Stooker
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