The US continues to lose ground in the global market. US products now account for only 17% of the goods traded internationally. The European Union now accounts for 24% of the global trade.
This has created greater demand for the Euro in the currency market and a lesser demand for the dollar. Trade for the Euro has surpassed the Dollar, and the dollar is losing value across the globe.
This creates a problem for the people who control the more than $27 trillion in US currency tucked away in foreign reserves. If this currency is not needed for trade, what will be done with it?
Yesterday, it was announced that a Russian company may purchase one of America's largest companies, Alcoa.
As the trade deficit continues to expand and the dollar loses hegemony in the international currency market, will we see more of our giant US companies bought up by foreign investors?
2007-02-14 01:12:56 · 8 answers · asked by .... . .-.. .-.. --- 4 in Politics & Government ➔ Politics
Michael E
Believing a weak dollar is good for trade is old school economics. That applies only when the dollar has hegemony. The dollar no longer has hegemony in the currency market. It's has been overtaken by the Euro.
In year 2000, a Euro was worth only 80 cents US. Today, only 6 years later, a Euro is worth $1.30 US. In six years, the dollar has lost 60% of its value in the global market.
2007-02-14 03:58:32 · update #1
We are 8.5 Trillion in DEBT.......that is worse than bankrupt.
If we were bankrupt...$ 0.00...would we be $8.4 trillion richer?
2007-02-14 01:20:13 · answer #1 · answered by rattlecattle717 1 · 2⤊ 0⤋
For a long time one Answers I have been stating that Iraq was invaded because Saddam started tradin oil in Euros through the oil for food program. Iran has started trading oil in Euros and look how it is being threatened. Venezuela wants to start Euro trading for oil and look at the tension between there and the US. See the link when you look at what you have just posted.
Currently all oil is traded in Dollars (except Irans) and this helps prop up the demand for dollars - you can't buy oil without them. As you rightly state Europe is trading much better than the US. When more countries sell oil in Euros then more countries will trade with Europe to get their hands on those Euros. The dollar will lose even more value.
There is are more US dollars outside the US than within and these will rapidly be traded for Euros.
Not only will companies be bought by foreign investors but there will be a major recession in the US.
2007-02-14 09:35:21 · answer #2 · answered by Anonymous · 1⤊ 0⤋
I think we need to move away from the current economic model and return to a more Hamiltonian form of economics . Its just that simple .Muse makes a good point and if more money is going out then coming in we soon will become poorer . Does he know about the foreign corporations and subsidiary's that are owned by American capitalists and use this as a method to purchase property world wide to exploit for the resources we do not have to exploit here . In the long run by conserving our natural resources we will be strong in the future as others become weaker . With no resources of there own they will become workers processing for others which is highly profitable for investors .
Owning the means of production and the resources makes more sense then letting your field be planted on now when it will be more valuable in the future and growing and profiting from others in the mean time as much as you can .
2007-02-14 17:18:48 · answer #3 · answered by -----JAFO---- 4 · 0⤊ 0⤋
Considering it's the currency market that sets the value of the dollar, this is a very serious problem. I believe the figures are for every $1 the US is taking in in global trade $1.01 is going out of the country in global trade.
This is a slow drain and will eventually evaporate America's wealth.
2007-02-14 09:33:24 · answer #4 · answered by Overt Operative 6 · 1⤊ 1⤋
A weaker dollar helps curb the trade deficit....our products become more attractive and imports become too expensive. This creates manufacturing jobs in the States. Isn't a free market beautiful?!
2007-02-14 09:50:16 · answer #5 · answered by Michael E 5 · 0⤊ 1⤋
Only if it stops worrking or if the Democratic machine destroys it with so many social programs it cannot get out. Like most Americans let's say you make 50 K you buy a home for 400k and 26k car and cannot pass up a shore home for another 400K. it you and your wife work and you work hard no problem. You are over extended but you can do it over the next 30 years. But now If Aunt Hillary dumps her drunken lazt no good son at your door and says You have to provide for Him Oppps there goes the good plan and you will go bankrupt!
2007-02-14 09:22:26 · answer #6 · answered by Anonymous · 2⤊ 1⤋
Why do you think the reserve has boosted circulation to record highs and wont even allow our congress to see the figures? They are only prolonging the collapse untill 2008. then the real inflation will hit. then the people will really wake up. can you say depression?
2007-02-14 09:23:22 · answer #7 · answered by Anonymous · 2⤊ 1⤋
No. We have the bomb, Coca-cola, and McDonalds. We don't owe anything. Get it?
2007-02-14 09:37:42 · answer #8 · answered by david m 5 · 0⤊ 1⤋