(eToro Blog) There have been several revelations over the past few weeks that may bode ill for the Eurozone and the United States. First, it was learned that Spain's public debt has been significantly under-reported, suggesting that their fiscal problems are far worse than earlier realized. In spite of the government's insistence otherwise, the possibility that Spain will succumb to that debt and be forced to take the bailout assistance offered by the E.U./IMF mission is now higher.

Then, in the United States, recent reports show that inflationary pressures are hitting consumers harder than the Federal Reserve would like. Further, Bill Gross, the Pimco executive has suggested that investors should look for investment alternatives other than U.S. bonds which he believes will suffer for the next 15 years, and further that investors should stage a revolt against the Fed's low interest rates.

Given all the "bad" and "ugly" financial news of late, investors are probably wondering whether or not there is anything "good" left to report. Fortunately there is, and investors don't have to look too hard or too far to find it. It's Switzerland, and the only "real" safe haven currency, the Swiss Franc.

The Good: Switzerland- Unlike other industrialized countries in the Eurozone with rapidly growing public debt, fallout from the financial crisis, Switzerland managed to maintain a surplus throughout. The country's current ratio of aggregate debt-to-GDP is, at 38.2%, less than half of its Eurozone neighbors, and far lower than that of the United States. The economic crisis did, in fact, strengthen Switzerland's relative position to the rest of the world. Even as the largest borrower, for the most part, the Swiss government and its various regions generated budget surpluses even during the height of the crisis, as did most of its smaller municipalities. Compared to other developed nations' central banks policies, Switzerland's fiscal policy is without constraint and relatively relaxed, with a great deal of maneuverability available to them. Currently, the only blot on the Swiss economy remains its too strong currency, which threatens to undermine the country's export business.

EUR/CHF- has hit a record lows at 1.2096 but is showing signs of oversold, a rebound towards the 1.23-1.235 seems likely.

The Bad: The Eurozone-Germany and France, to a lesser extent, continue to be the key drivers of the Eurozone's economy, even as Portugal, Italy, Greece and Spain weigh on performance. BNP Paribas' analysts predict that GDP growth in the German economy should remain robust through year's end and they forecast growth of around 3.5% by year's end, the near equivalent of 2010 growth. For the Eurozone as a whole, GDP growth is expected to lose some momentum following the first quarter's performance, and analysts foresee 2% GDP growth by year's end, an improvement of 0.3% from 2010. They predict that business investment and manufacturing output, to a lesser extent going forward, are likely to be what sustains GDP growth. Consumer consumption is expected to remain at the current slightly elevated levels, given increased working hours and falling unemployment levels; as in the U.S., diminished purchasing power is problematic.

The Not-So-Bad: The United Kingdom-The U.K. economy continues to grow slowly but surely pull itself out of the doldrums. First quarter GDP estimates show expansion of 0.5%, with the services sector expanding to its highest level in nearly five years at 0.9%. BNP analysts point out that the U.K. economy is exceptionally dynamic, and the government's efforts to reduce its budget deficit appear to be working. Inflation continues to be problematic in the U.K. as elsewhere in the world, but the central bank does not yet see it as a threat to recovery. The recent consumer confidence poll results suggest that consumers' optimism of their future is growing.

The Ugly: The United States-Analysts from BNP Paribas predict that growth in the U.S. economy is likely to slow further through the end of the year, and given the data, they are forecasting growth at around 2.5%. First quarter GDP estimates support that analysis, easing to 1.8% annualized from the 3.1% and 2.6% growth of the previous quarters. Many of the key indicators used by analysts to assess the U.S.'s economic recovery continue to show inherent weakness; witness declines in software and equipment investment, reductions in manufacturing production and output, loss of purchasing power, etc.

On the all-important consumer side of the economic equation, there is growing concern. Data confirms that consumer spending has slowed, even as purchasing power has diminished and real incomes fall. Higher energy prices and inflation that has been steadily rising, now to 3.2%, also continue to prey on consumers' collective psyche. Recent surveys of consumer confidence levels point out that they remain wary of what their future holds, especially given the 9% unemployment rate. The American dream of homeownership has been put on hold as property values fall in the troubled real estate sector.

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