balanced fund quarterly report
December 31, 2011
Economic Commentary
The escalation of the European debt crisis dominated world headlines in the fourth quarter. There was a transition of leadership in both Greece and Italy which added to the uncertainty. These changes, however, should provide a more stable government for these countries in the future. The spotlight remains however on the leaders of Germany and France, along with the European Union, to coordinate a viable framework which will allow Europe to effectively tackle its debt and deficit problems.
Greece continues to be a factor as the new Greek Prime Minister recently stated that the economy would collapse in early 2012, with the potential for a disorderly default, unless the country accepted income cuts as a requirement to receive additional international funding. As a result, the potential break-up of the Euro still remains a possibility and will influence discussions that occur in the Eurozone over the next several months.
