Is Europe Really Recovering?

09/12/2013 6:00 am EST

Focus:

SPEAKER 1:  Hi, my guest today is Mark Lebovit.  Hello Mark, and thank you so much for coming by.

M:  I love doing it.

SPEAKER 1:  Now, Europe this week, they’re talking about Europe has emerged from a recession finally.  Are you doing anything with European currency?

M:  Anything you read on the financial press, newspaper, television, you have to look at skeptically, just like we talked about previously in another interview about the economic numbers, so I don’t believe Europe is turning.  I think it’s a disaster over there, I have contacts in Europe telling me what’s going on, I think 25% unemployment in Spain and France is socialistic and they’re about to collapse because all the money is leaving the country, because they want to impose 100% tax on income in France.  You tell me how Europe’s going to do well if you impose 100% tax on entrepreneurs.  They’re going to leave, they’re not going to tolerate that nonsense.  Italy is in trouble, Greece is just as bad as it’s been.  One of my best friend lives in Athens, tells me stay away, it’s still bad, because I said maybe there’s some bargains there.  He said give it another year or two.

SPEAKER 1:  What about Ireland or Germany?

M:  Here’s the story.  Germany is up for – Merkel is up for election in September.  She professes austerity and she’s been correct because Germany has this history of what happens when you print too much money.  We saw this in the Weimar Republic.  US doesn’t have that history, but also, US has got the reserve currency, so we get away with murder where Germany couldn’t get away with that, but the election is in September.  If she gets reelected, and I don’t know if she is or not, but it appears that she could because austerity prevails, then you could see the euro collapse, because that the European market needs is what Bernanke has done here in the US.  Now, I’m not saying it’s the right thing.

SPEAKER 1:  Sure, but it props up the market.

M:  It’s the wrong, but it props up the market, and they’ve been austere and Germany has been the flag bearer in that regard, so if she gets kicked out and austerity is out the window and they can print all the money they want in Europe, then I would say Europe is going to do well for the same reason the US did well, because they’re going to drive the markets higher; all this money is going to be out there, but if she gets reelected – it’s very important what happens in the next 30 days, in our markets as well, watching what happens.  If she gets reelected then you’re going to see euro go down and US dollar will probably increase.  Why?  Because money will flow into the US to get away from the deteriorating situation over there, so that’s sort of my opinion and Japan has been printing twice or three times the level, I think, of Bernanke, so that market should continue to do well.  He’s gone super QE over there.

SPEAKER 1:  Right, right, economics..

M:  It’s just an economic nightmare.  I mean, basically, you’re just printing money that doesn’t exist.

SPEAKER 1:  Are you buying currencies anywhere?

M:  Honestly, he only currency that I would buy, the yen, because it’s being driven higher; we know that QE is working there, and the US market once we get out of a correction.  We’re in a correction phase right now; August, September, October.  Let’s see where it goes, but we probably have another rally, and on a big picture basis, our markets are going to go a lot higher because I don’t think tapering or lack of QE is really going to happen when unemployment is really as bad as it is.  I mean, like I say, they’re hiding the numbers, but people in the know; know that they can’t stop printing the money.  Those things are going to turn south, so I mean, on a long-term basis, you want to probably be in the dollar and the US stock market even though we know it’s sort of a mirage.  You can still make money in a mirage.

SPEAKER 1:  That’s right.  Super, thank you.

M:  My pleasure.

SPEAKER 1:  Thanks for joining us at the MoneyShow.com Video Network.

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