Subject:

David Hale: Will European Turbulence Slow US Growth?

Dear Clients, Please find attached our latest monthly report, “Will European Turbulence Slow US Growth?” Key themes in the report include: • The US economy remains on track for solid growth in the fourth quarter, but the 2012 outlook hinges on congressional action on the issues of long-term deficits and further stimulus • Europe appears to be entering into another recession, and the onerous banking capital requirements from the EU summit agreement will only exacerbate this weakness • Japan’s economic recovery continues apace, although the Ministry of Finance has been forced to intervene in currency markets to restrain the yen • Chinese property markets and inflation have trended downwards recently, but Chinese consumers continue to show resilience • Oil markets have softened in recent months, but Iran looms as a major threat to price stability in the oil markets Additionally, I have attached a discussion point by Mark Zoff, “How Eurozone Rebalancing Could Lead to the Euro Unraveling.” This piece examines the discomforting historical precedents for the sort of deflation in advanced economies that is being expected of the peripheral economies in order for them to regain competitiveness while remaining in the monetary union. As always, we welcome any comments. Best regards, David Hale Chairman David Hale Global Economics, Inc. 847-386-6009 (tel) 847-386-6011 (fax) davidhale@davidhaleweb.com http://davidhaleweb.com http://whatsnextbook.com NEWS: Yale University Press has published “What’s Next?” Unconventional Wisdom about the World Economy, by David Hale and Lyric Hughes Hale, available now About "What's Next?":http://whatsnextbook.com This email and any attachments to it may be confidential and are intended solely for the use of the individual to whom it is addressed. Any views or opinions expressed are solely those of the author and do not necessarily represent those of David Hale Global Economics, Inc. If you are not the intended recipient of this email, you must neither take any action based upon its contents, nor copy or show it to anyone. Please contact the sender if you believe you have received this email in error.