With the American economy in just about free-fall the Euro is taking on more relevance in the world of both oil and world economics. Will Europe have to come to the aid of the US and bail them out? It is a possibility - the British PM said that all of Europe will try to steady the turbulence that is happening on the world markets - but does this lead us to another question - and that question is about the importance of the US dollar as the worlds trading currency?
While the US dollar was once seen as completely stable for trading matters - the recent happenings in the US has pushed it to the fringe with a few countries saying that they don’t want to trade in US dollars - they want to trade in the Euro. Europe’s economy is basically an internal economy with a balance for imports and exports are still relatively strong. It is a trading block and it does seem that it’s doing OK.
If the US economy does fall into depression where does that leave the debt that is being racked up by the current administration. A war that they cannot afford and borrowing is beyond anything that can be continued on the long term. So will the war, both in Iraq and Afghanistan come to an end, not through peace talks but through the US not being sustainable? That we will have to wait and see over then next few months. But it is a possibility.
The fed are acting now as a depression is on hand - that is, as we know bad for the US, what will it mean for the rest of the world and the all important US dollar?
Maybe Bush knew this and is going out with a bang - but one that was not predicted when he came to office the second time round. He will leave a legacy that many will rue for a very, very long time - and it won’t just be a war that should never have been fought.
All Images designed by Alison Rhodes (LastingExpressions)
8 responses so far ↓
originalthinker // March 17, 2008 at 8:49 pm
You have a great looking site. Having said that…..
The legacy that we will rue for a very very long time? Is not one of failed policy with regards to the war being fought today on terrorism.
What does a weak dollar mean in the world of international investing? Buying America and it’s properties for cheap. Slowly but surely turning over our country to the very people who would profit from seeing its demise.
On the other hand, US investors that have been trading in foreign currencies will be best situated for investing cheaply in the US as well. The uber rich will of course become even richer (again) and it seems that we can only hope that in turn translates to yet another potential rise in the US economy.
steve // March 17, 2008 at 9:11 pm
Can someone explain this to me, the USA is one nation, and europe is many, and Europe only has a slightly larger economy. I realize that the Fed lowering interest rates means that there’s a lower return on the dollar, but can that explain everything? The US still doesn’t have the unemployment rate of europe. Is it all the debt the US has, national govt and private debt?
Will Rhodes // March 17, 2008 at 9:15 pm
Don’t you think that Bush has left a worse economy now, not just because of the war - but because he does seem to insist on the rich pulling the poorer members of the US up rather than investing in the middle-class who do all the manual, service labour?
In the nomination race - the American people are saying, quite vociferously, that it is the economy that is in the forefront of their mind rather than the war(s).
Will Rhodes // March 17, 2008 at 9:20 pm
Europe is a trading block, Steve. You have Germany, the third largest economy, Britain the fifth. Each nation trades on its own yet each add to the EU pot.
thebeadden // March 19, 2008 at 3:05 pm
I don’t even know where to start with this. I’ll probably get a little or a lot off topic.
I hope you don’t mind. Just a few things to think about:
-There is a news going around of American people and companies that have already started dumping the American $ for the Euro. So you know the route is already set out. There is no what if.
(Could it be that it doesn’t matter anyway, getting ready for the new Amero?)
-Investing cheaply in the US: Great. Like you said for “big guys” But what about the rest of us? These companies get huge breaks when it comes to paying taxes. They get “grants” and money for research, they get more to help with environmental concerns (with new nano technology that is very hard to monitor because it’s hard to capture. In many cases it’s not better, it’s just easier to leech into our land, air and bloodstream and harder to detect), research and development.
Then comes the great idea to privatize. Where it should be a good thing, you know, open it up for competition, and we win right? Ya, if this was Utopia.
Think about it. When the government doesn’t collect taxes from the big guys, or from State or Country owned assets, where are they going to get their money? The only way they can do this is through you. The people.
We now pay taxes for our land, house, car, everything we buy, we maintain roads (that are mainly being built right now for trade and business {look up:super highway aka NAFTA highway, SPP} and will likely end up being sold to some Spanish company and become a toll-road) that we use to work our 2 jobs to make ends meet and if we are lucky we can afford gas to spend the one day we get to use those roads for enjoyment.
We pay for schools, hospitals, pay insurance on everything, on top of this: war, terrorism, security. Then, no one wants to give you a full-time jobs because then they might actually have to give you benefits. Prices of food and fuel have shot through the roof. But you aren’t going to see any increase in your pay. This is the short list. LOL Pucker up, things aren’t getting better for the people.
Jobs/unemployment: Jobs created are crap jobs. Low wages. Many, many more part-time postions. So that full-time one just became 2 jobs instead of one! Neat! So many more useless jobs. A new number they can use for the stats.
Ok…I’ll stop there. For now
Fearnsy // March 24, 2008 at 3:17 pm
I love the £.
lana // June 8, 2008 at 3:58 pm
Why has the euro risen so dramatically against the dollar
Will Rhodes // June 8, 2008 at 4:00 pm
Predominately because the US dollar is so weak.
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