European Debt Crisis: Why Germany is in a Vise

As we wrote yesterday, the entire world is running out of ways to fund itself, and the Greek debt bailout is not as “fixed” as the headlines lead us to believe.

All the major international economic players are looking to Germany to give more bailouts to their fellow Europeans, and 62% of the German people are against more bailouts. Last week we talked about the risk of Greece defaulting on their current bailout, and obviously we expect that the Greek economy will do so.

From ZeroHedge, yesterday:

“Germany’s parliament approved a second Greek bailout package on Monday despite growing German unease over debt-ridden Greece’s ability to push ahead with painful austerity measures and remain in the euro zone.

It was not immediately clear if Chancellor Angela Merkel, facing a revolt from a small group of members of parliament from her own coalition, had to rely on opposition votes to pass the 130-billion-euro ($175 billion) Greek rescue programme.”

There is just not enough money to go around, and even if Germany helps, we don’t think that there’s much hope for Europe in the short-term. No matter what happens with this Greek bailout or the ones that will likely follow, Europe’s debt crisis will continue to affect our economy and markets which means that risk is still very high.

We know from the amount of phone calls that we’re receiving that investors are concerned about these issues. We advise caution and low-risk options right now, but we are not operating from a place of fear. As we’ve talked about before, we believe that opportunities are going to arise later this year for the savvy investor, and we want our clients to be ready for them.

We invite you to join in the conversation by emailing Doug at askdoug(at)dougfabian(dot)com or calling our office at 888-300-3684 Also, please check out our special reports for our advice on how to invest wisely.

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