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The problem with socialism is that sooner or later you run out of other people’s money – Margaret Thatcher, Prime Minister of Great Britain

In our last update, we talked about the Bavarians and Catalonians’ desire to separate from Germany and Spain respectfully. There is now a separatist movement in of all places – Belgium. Recently, in local elections, separatists had sweeping gains in Belgium. Venice now also wants to separate from Italy. What is interesting to note is that each of these areas are the most productive areas of their respective countries. Why? Because there is a transfer payment from them to less productive parts of their country.

The elites in Europe still want to create a “United States of Europe”. The difference between the United States and Europe is that we were united in core beliefs and a constitution BEFORE we became a fiscal union – a common currency didn’t come to the US until 1793. The elites in Europe created the Euro first and thought that the cost for leaving the Euro would be so great it would force a united Europe. Instead it is causing divisiveness. Although Britain does not use the euro, it is becoming clearer that they are getting disenchanted with the European Union. It looks like the Nobel Prize awarded to the EU was premature at best.

What does all of this mean? The European Union is dissolving before our eyes. The only question is will it be a fast or long and painful process. The problems in Europe might be coming to the United States if taxpayers around the country bail out California, Illinois, New York and New Jersey from huge underfunded pension and health care obligations. Hopefully, lawmakers take heed of what is happening in Europe. We love Texas too much to see them leave the Union.

Market Thoughts

We have two weeks until the presidential election is over. Until that time, we believe the markets will be relatively calm. That is unless there is an “October’ surprise. When the election is over, there will be more clarity for investing.


Your THOR Team

Written by

James E. Gore, CFA®, CAIA, CMT®

Jim serves as the Chief Investment Officer of THOR, is a Chartered Financial Analyst charter-holder, a Chartered Alternative Investment Analyst, a Chartered Market Technician, a member of the Association for Investment Management and Research and a member of the Cincinnati Society of Financial Analysts.

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