Is the US economy going down the drain?
the US dollar is doing poorly compared to many other currencies such as the Euro or the Canadian Dollar. If the US economy goes into a recession what would happen, and would it have any effect on the world or not?
I know it has to globalization lol, but what are the main causes for this change in value to occur?
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Many people have various responses to why. Let me explain something very simple to you that all people should know. Everybody wants to make money. We are never content. The companies each year do not care about you as a human being or this and that. The fact is they have to come up with a plan to present share holders that next year they will make more money. These share holders are from China, Europe, Japan, Etc. It is no news that the US is the most captalistc country of the world market. What happens then is that everybody all over the world wants to put a dollar into the US ECONOMY PIGGY BANK. What allot of people dont realize is that we cant always win. The fact of the dollar falling is that there are more solid markets out there with stronger gain. In other words After the super spending of military, the slowness of jobs, and the DOT.COM bust, all that was left was the Construction industry. So many companies all over the world invested in it. The fact is that it was to good to be true. in matter of months a house would go up 5 to 10k or more. So what is happining now is that all those people that put money in to a company that said they would make money with construction are now pulling there money from WALL STREET and putting somewhere else. The bottom line is that in the past 5 years there were growth in the US that would take normally 10 years. People buying cars, houses, vactions, investments all with equity of houses or FLIPING houses. OR THINKING that the house market would keep buming and they would cash in later. But it all came crashing. BOTTOM LINE WHEN YOU HAVE….a countries CURRENCY going down it means that the INTERNAL AND EXTERNAL trading of goods economic spending, growth and future outlook seems to be on a balance.
America is interested in increasing exports, and decrease high flow of imported goods, Specially from China, Now this is Economic activity That if any country wants to decrease imports they depreciate their currency, This is what exactly happening with USD, Chinese goods are destroying local market, and from now importing those finished commodities in USA will be costly.
Wow. All this interest in international exchange. Must be a test coming up.
The economy was in a recession during George Bush’s term and came out of very sluggishly.
However, the usual story we tell about the dollar and recessions is that falling dollars will help stimulate US exports, which helps increase domestic income which exactly what is needed. So, when we see the dollar fall it says that today we are in a recession but tommorrow we may recover by increasing exports.
The dollar is doing poorly because the US cut rates further than other Western economies during the last recession.
When the US goes into a recession, it tends to drag the rest of the West down with it.