Tag Archives: Austerity Measures

“Wednesdays with Axel” …. Hard fast Austerity Choosers

In our continued series from our Private Client Roundtable event held earlier in the year, and our special guest speaker Axel Merk, we note a few countries that are making the hard choices, according to Merk.

Downward trending line = Hard Choice (Austerity)

Merk Central Banks Balance Sheet

Downward trending austerity driven line:

  • Bank of England
  • Sweedish Riksbank (Huge early adopters, 2010)
  • Europ0ean Central Bank

Note the upward, non austerity, possible “inflation way out” of the USA. Also worth noting, while Japan is all the rage, they have only begun the process of inflation and can go much farther by increasing their banks balance sheets.

Austerity Versus Inflation

Clearly, according to Axel, there are differing policy decisions on how to recover from the great world slow down. Those that are leading today, USA, Japan may not be the leaders tomorrow, as others are taking their medicine today through austerity measures, again according to Axel.

Time will tell if the easy way out or the hard way works…no matter the outcome, keeping a watchful eye is very important. Thanks for bringing this to our attention Axel!

Have a great Wednesday!

John Kvale

8222 Douglas Ave # 590
Dallas, TX 75225

Fiscal cliff and austerity measures, are they not one in the same?

Yesterday it hit me as Angela Merkel’s much heralded arrival in Greece was announced through the various media outlets. Ok, maybe I am slow, but is there a huge difference in the Fiscal Cliff and Austerity measures.

Let’s take a look:

  • Raise Investment related taxes….Check
  • Increases in Employment related taxes…Check
  • Decrease government spending…Check
  • Possible increase in an already elevated unemployment rate…Check

While I am not saying the US is in the same economic condition as Greece, Spain or Italy, what I am saying is what my parents always told me as a kid

When you point your finger at someone, you have many more pointed back at yourself…so be careful, and think before you point!

Just as we (present party included) have many concerns on the pending US fiscal cliff, it is very reasonable to see how austerity measures may produce the same concerns.

While there is not an easy way out, there are certainly ways out and we will get there one way or another, it just may not be as easy as we all expect.

Hat tip Colonel J, my international running buddy for the original thought!

Have a Great Day!



8222 Douglas Ave # 590
Dallas, TX 75225