The Difference Between Europe and Us

This article originally appeared on on Sept. 4, 2014 at 6:03 p.m. To read more content like this AND see inside Jim Cramer's multi-million dollar portfolio for FREE... Click Here NOW.

On the one hand, we have a country of 313 million people that's on the mend, an anemic grower that could be getting stronger. On the other hand we have a continent of 742 million people that's sick and getting sicker. This combination of an improving United States and a faltering Europe has become a very big factor in why our stock market's been a terrific place to invest all year, even as on any given day, of course, it can decline or just plain old mark time.

It's always mystifying to people how these two regions can interrelate. For most of my career, they really were quite separate. But that's because they weren't taken en masse until the creation of the euro 15 years ago, and they haven't had a real impact until the European economies started faltering right after so many of our countries decided that Europe, with its huge and growing population entwined in a single currency, is just too juicy a place to invest.

Not any more. It's becoming a disaster as the continent's economy shrinks, demand dries up and the biggest country in the union, Germany, insists on maintaining a balanced budget even as the opposite strategy is needed to spur growth. Consider Germany's leader, Angela Merkel, the Herbert Hoover of Europe, committed to fiscal discipline even as the Continent plunges back into recession. Contrast her with the European central banker Mario Draghi, who is trying to be Franklin Delano Roosevelt, combating the deflationary decline with easier money left and right, including today's surprising rate cut and a pledge to buy all sorts of unorthodox bonds to get things moving.

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