An economic analyst maintains the weakening financial condition
in Europe provides warning signs for the U.S. economy.
European financial officials recently announced that Greece owes
twice as much money as originally thought. Meanwhile,
Britain has debt problems of its own. Government officials there
declared state debts equate to 66.1 percent of its Gross
Domestic Product (GDP).
Scott Carter, CEO of Lear
Capital, warns that Europe is a harbinger of things to
come in the U.S.
"In Europe, you have social programs that have been granted to
an aging population, and the proper money hasn't been set aside to
pay for those and the bills have come due," he explains. "The
United States is just entering that right now. We have our baby
boomer generation beginning to retire -- 15,000 people a day are
retiring, and Social Security, Medicare ... Medicaid and all
the entitlement programs needed to take care of these individuals
have not been funded properly."
So, many U.S. investors are diversifying personal financial
portfolios to brace for further global economic woes.
"[They] try not to be in all dollar-denominated assets like
stocks or just having money in a CD," Carter observes. "They
buy hard assets, whether that is real estate, whether it is
commodities such as gold or silver. It is just a different
investing environment because the future doesn't look as bright, if
you will, from a gross standpoint as the past has been."
Many in the Eurozone are looking for a post-World War II,
French-German reconciliation to lead other European nations through
a season of economic recovery.