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U.S. Economic Recovery Will Take Some Time.

By F. Gregory Holland, RFC®

Holland Financial Services LLC is confident that the U.S. economy will continue to grow, however the level projected is likely to be at a pace that may be disappointing when compared to previous recoveries. In our view, the European debt crisis is a huge threat. The Sovereign debt crisis in the Eurozone is conceivably a predominant major risk in terms of over all global economies of scale.

The U.S. economy has shown high levels of tenacity; however confidence in this regard is yet to be seen, given the massive proliferation of consumer debt, an enormously challenging housing sector, political discourse, as well as a stagnant economy and a less than favorable employment outlook.

Another factor that complicates matters is our rapid increase in the national debt. This means that not only is our U.S. economy under siege by European debt, we have our own debt problems to contend with. Many are not aware of America's 15.1 trillion national debt crisis. For those who are keenly aware such as institutional investors, market corrections and crashes will come without warning.

In our view the next market cycle, which is anticipated to have a duration of approximatley 10 years, will likely be volatile and many hard working individuals desirng to save and even those with discretionary income to invest, may lose substantial amounts of capital reserves in what they deemed to be a correction or even appropriate market conditions.

U.S. GDP growth may rise throughout 2012 primarily after the third quarter, despite unemployment being elevated in the first half of 2012. We anticipate job growth to increase slightly in the third quarter. This may attribute to supporting stabilization within the housing market.

Given the current economic climate, perhaps some government investment may be appropriate. The median projected return for 10 year Treasury securities near the latter part of 2012 and beginning in the fourth quarter is expected to be near 2.50.

Perhaps the dangers of fiscal policy and political turmoil won't hold back a U.S. recovery. Currently China's reserves are more than sufficient. In these times of uncertainty safety takes precedence. Adhering to concise and solid guidelines may facilitate with an overall planning process.

Source: (Bureau of Labor Statistics)

Holland Financial Services, LLC is a registered investment advisory firm providing consultancy to instiutional and private clients.

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