Weathering the Storm of the Dollar Slipping
Written by OnlineLoan on 17:59Weathering the Storm of the Dollar Slipping
The dollar has been sliding against the euro, the Chinese yuan, and the pound for the last nine months, reaching the lowest in the midst of a credit and the fall in property prices. What does this mean for American growth? According to the Federal Reserve, forecasts for economic growth will slow from over 2.5, and inflation remains a concern. But one figure does not give an explanation.
The dollar is an indicator of how strong and robust of the American economy, compared to other countries and currencies. As news of record mortgage to market volatility and soaring oil prices continue to spin in the United States, consumer confidence has fallen, and with it have tightened their spending. The signals of an impending change that the Americans will have to weather, but which in reality is a good start for making some fundamental changes in the economy.
If the Americans are forced to effectively, (instead of going in the negative savings, as the average American has in the past two years) a fall of the currency can be effectively absorbed without causing economic catastrophe. In short, most Americans plan for their future economic well, and are in reality the debt more often. No matter how much the growth of the American economy can generally experience, it is unbearable for our current levels of spending lead to a beneficial result indefinitely. Therefore, a fall in the currency an economic force necessary to deal, which could have a much better outcome, even if the transition is somewhat unpleasant.
Depressing currency also makes American exports cheaper for other countries, therefore, ensure that the demand for manpower will be attractive to American foreign interests. While this may guarantee a certain amount of growth, if American manufacturers aren't hiring Americans (because we aren' t ready to do the job and illegal immigrants are) the United States can not enjoy these benefits . Hence another attitude change is in order: That there are no jobs in the United States that Americans are not willing to perform. This has been a great force in American history, as industrialization and manufacturing in America fueled its development into an economic powerhouse throughout the twentieth century.
The weaker dollar is also beneficial in the OPEC oil price in dollars. This means that even if the oil has reached nearly 100 dollars a barrel in recent weeks, it was still cheaper than what it could be if they decided to price oil in euros. OPEC therefore absorbs the weakness of the dollar in tandem with consumers, placing no special charge on the Americans. If they were in the price of oil in another currency, the Americans would be hardest hit, but perhaps the United States could reduce its dependence on foreign oil. It's possible that the rise in oil prices, combined with the other factors mentioned, could trigger the growth of alternative energy production on a larger scale.
Above all, the United States enjoys a currency less powerful because the current model of economic growth is not sustainable, if not downright foolhardy. In order for America to remain a world leader, he should be able to conduct more quantity of products consumed. The United States must also be able to produce more sophisticated solutions for its weaknesses, at lower cost, which it now has the opportunity and motivation to do so.
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