Global Economic Crisis » Global Financial Crisis

Dollar being affected by Yuan

Stephen Cline — Wed, 30 Jun 2010 07:00:31 +0000

The Chinese government is deciding on appreciation of Yuan against the other currencies and more specifically Dollar. Although this has been welcomed in the west, but not what the U.S. government wants for the improvement of the economy.

The power of purchasing of the Chinese companies will rise and commodities sold by china in the U.S. will be cheaper. China will be able to import coal, oil and metals at cheaper costs, helping the multinational companies. But there is surely a flip side to this which will benefit the U.S. customers for buying cheaper goods such as computer and cell phones and the higher transportation costs will see the production being moved into America and reducing the unemployment level. Hence it is very important right now that the U.S. economy adds more jobs amid the criticisms the government is facing because of its inability to decrease unemployment.

The appreciation of Yuan has been done ahead of the G8 and the G20 summit and must be because of the pressure that U.s. and the Chinese governments are facing from all round the world. This move by the Chinese government will see an change in the Chinese defects but only the west can minimize this effects.

Mexican and Asian stocks Rise

Stephen Cline — Wed, 16 Jun 2010 04:40:07 +0000

Some good news for global investors. The global stocks have seen a slight increase in the markets stocks. The Mexican stocks saw an increase in their points as the investors saw some signs of recovery the world over and are optimistic about the U.S. economy’s recovery. The asia stocks too saw a slight increase with the same news circulating markets.
Even thou the companies have not started hiring in U.S. and the threat of European debt crisis affecting the global economy and the world going into another recession. The peso closed stronger than the previous day against the dollar and from the looks of it the climb will most probably continue in Mexico and Asian markets.
But other than some Asian markets and Mexico reported gains, the rest of the international markets showed a mixed response and it seems it is too early to predict a global recovery. The Federal Banks reported that the economy has enhanced throughout the U.S.
The Mexican economy is very much dependent on the economy of U.S. and the stocks are affected by the economic conditions in the U.S. The Mexican inflation also fell thereby giving the policy makers space to keep low interest rates.

Where are the Jobs Increasing

Stephen Cline — Wed, 09 Jun 2010 04:58:07 +0000

It is well known that the U.S economy showed a large gain in jobs in the month of May, but a huge percentage of these jobs were in the government sector in the temporary census workers section which are temporary and are paid by the tax payers money. But still the government insists that the economy is getting stronger. Still Obama and his government is optimistic and are assuring the people that the economy in growing but is still in the nascent stages. It is predicted that the economic recovery will have many falls and ditches in the next few months but it is going to take the effort of every individual to take U.S. economy through these hard times.
Even the opposition has welcomed the new jobs with smiling faces but demolished the hopes of millions by saying that the economy is making any progress. Only 20 % of the Americans believe that the economy is growing steadily and the economic policies are showing some improvement.

Debt causes Stress

Stephen Cline — Fri, 04 Jun 2010 12:44:21 +0000

A recent survey done by the GfK poll concluded that the debt is causing them stress. This survey’s 46% participants were stressed and 23% were at high stress levels. But 53% of the people were optimistic and felt no stress.
Thought the U.S. economy is seeing a u turn from the previous year’s condition when there were fewer jobs and bad recession along with shrinking economy, still the moods of the citizens are not being uplifted.
Many people don’t consider this as an improvement since 10% of the population is still unemployed and the pay slips of many employees have seen a reduction in value. Many people are on the verge of foreclosure and only few with a good credit are going to expect to get new loans. The positive side of this stress is that people are paying their debts much faster than any other time. The Federal Reserve reported that the people are cutting their debt at the fastest rate in more than 60 years.
The high repayment rate of debt is at the cost of reduction in customer spending and this again is causing slow growth and inturn is leading to U.S. economic drag, therefore leading to a positive growth.

U.S. Economy causes Chinese Fall

Stephen Cline — Fri, 21 May 2010 09:44:21 +0000

The Chinese stocks fell to their lowest yesterday, dragging the country’s Benchmark index to the lowest level in more than a year. This recent fall is mainly because of the U.S. economy’s sluggish growth and the European Debt crisis along with the added pressure of Chinese tightening of its business policies.
Many of the nation’s largest companies whose dealings are mainly with the U.S. and European markets plunged by about 2.5 percent. The Shanghai index has dropped more than 22 percent this year and seems to be on a downward spiral making it the worst of Asia’s indexes. Many investors feared that this might continue and expressed the lack of visibility in the market and expect a double dip recession in the coming months.
The European crisis will make china to take the decision to delay revaluation of its currency and delay borrowing costs therefore leading to more tightening measures. It all depends on the measures taken in the European market to stop the global recession once more and the Chinese are watching with their fingers crossed.

The US economy and joblessness

Stephen Cline — Mon, 05 Apr 2010 16:25:56 +0000

There seems to be some encouraging news on the US economy front with an increase in jobs creation reported in the month of March. Around 162,000 jobs were created in this month, which is the highest in 3 years. But there is a tamed and muted response from analysts as well as officials because joblessness has been quite persistent and stubborn in its hold over the US economy over the past few years. Every now and then when encouraging signs emerge; it is quite followed by something else that seems to have gone wrong somewhere else. Everyone is saying that there is a long way to go and the government has a lot to do to get jobs creation back on track.

To fight joblessness in the US economy, the government is trying to push credit to small businesses and ensure that jobs like that of teachers and policemen are protected and also created. These are expected to combat job loss that has claimed millions of jobs over the last 2 years. It is true that without these concerted efforts, it will be impossible to stem the tide and get people back into jobs that can sustain themselves and their families.

US Economy to create jobs again

Stephen Cline — Tue, 23 Mar 2010 15:01:55 +0000

There are enough indications that the US economy will start to create jobs once again. This is not tough given the fact that the US economy seems to be turning round the corner and also coming up with measures to ensure that there is visible improvement in how the economy fares. A lot of measures have to do with the private sector which is the engine of growth an which helps create a lot of jobs, this is all fine, but steps need to be taken to address the core issues that led to the crisis in the first place, if this is not done, you will have a situation where the US economy could get back into the doldrums all over again. This is not at all ideal and has to be countered tooth and nail. There are indeed quite a few measures that are being taken by the government to bring the US economy out of the doldrums, but it must also be ensured that there are enough checks and balances to prevent a repeat of the debacle and the catastrophic events that took place earlier.

The stimulus package that had been given seems to have been good, but unless it can be sustained and lead to real growth, its effects could be quite short lived.

Of the European Economy and getting out of Recession

Stephen Cline — Mon, 22 Mar 2010 16:16:53 +0000

There are many who feel that the European Economy will be mired in recession for some time more. Just when the US economy was looking up and there were some signs of revival, you got the news that there are serious problems with the European Economy where countries like Greece are on the very brink of disaster financially. This is where you have economist never being quite able to make up their minds on anything. They feel that on one hand something could be at the crux of an issue, while on the other hand, they feel that just the opposite could also be true. This is what had Truman quite exasperated as he had wanted a one handed economist which is so hard to find.

But the European Economy is something that cannot be window dressed and taken care of. There are so many aspects to it that it could well boggle the mind. On one hand the German economy is going strong ad you have many countries being indebted to Germany to the extent that they are getting into deficit financing to service their debt. On the other you see that unless these countries cut down on their debt, it would be bad for the German economy itself.

The free economy model sank the US economy

Stephen Cline — Mon, 15 Mar 2010 15:18:55 +0000

There was a time when anyone who spoke against free economy was labeled a communist and an anti-social in countries like the US. The great votaries of free economy said that public controls and governmental intervention in economic matters should be minimal. This is because of the fact that this is what was said to be the core of the success of the SU economy for so long. Now that the recession is on us and there are so many banks and financial institutions that have gone down, there are many who are blaming the same free economy that has gone out of control over the last few years.

The free economy model of the US economy meant that there were very little checks and balances and controls on banks and the financial companies which led to the sub-prime lending crisis that was the precursor to the whole recession. It is only now that the Us economy is becoming wiser and putting in place necessary controls on banks after much water has run through and so many jobs have been lost. While the votaries of free economy are much quieter now, you never know if they will actually remain quiet as these can be a very vocal set of people and economists.

The Chinese economy focuses on creating jobs

Stephen Cline — Mon, 08 Mar 2010 14:59:28 +0000

The Chinese economy is the fastest growing economy in the world. This is not surprising given the fact its government has paid a lot of attention to creating new jobs. This is quite different from some other countries which have not done so. There have been measures that the Chinese economy has taken to promote exports and higher factory output. This is why the level of growth in the Chinese economy has been so fast over the past many years. Even when there are problems, the government creates conditions to correct the situation and help in increasing the level of growth of the Chinese economy.

Given the fact that the world economy is quite week at the moment a lot has to be done by the government to ensure that the Chinese economy rate of growth is high. When the external market is not very supportive, there is only so much and not more that the internal government can do in order to help with the increase in economic growth internally. These are the challenges that the Chinese economy faces, as it tries to keep up with the pace of growth required to retain its position as the fastest growing economy in the world, against serious contenders elsewhere in the world.