In most countries, a rise in debt would have a series of economic consequences leading to the devaluation of the currency and a return to an equilibrium. This has not happened with the U.S. dollar because of a unique externality -- its role as the world's currency. However, that role itself dependent on a number of factors, including but not limited to domestic resources stocks, strong legal and political systems and sound economic policy. It is conceivable that a shift in these underlying qualities -- such as the decline in foreign confidence in U.S. accounting systems -- could signal a shift to other currencies such as the Euro as the world's default. Without that key externality, the U.S. dollar would be subject to collapse. This may take more time to occur with the dollar than with other currencies, but ultimately market forces will prevail, meaning that the U.S. debt situation is not sustainable indefinitely. b) it is worth being worried about the large amount of U.S. debt held by foreigners. Such leverage inherently increases risk, meaning that the U.S. economy's risk has...
The level of foreign debt can continue to increase in the short run, but in the long run such increases will reduce the stability of the U.S. economy, which could have devastating impacts on the nation's competitiveness as it compromises the underlying systems from which the dollar derives its strength. A weak dollar may improve export prospects, but at the cost of diminished savings and a precipitous decline in quality of life.
The U.S. economy is currently downshifting. Real GDP appears to be growing nearly 2% annualized -- at most -- in the current quarter. This rate is down from 3% during the first half of 2010 (before impending downward revisions), and 4% during the second half of 2009. Weakening support from the monetary and fiscal stimulus, the fading inventory rotation in manufacturing, and the consequences from Europe's debt crisis are an
U.S. Census Bureau Analysis of Key Questions Has the "baby boomer effect" impacted market demand and market supply in your industry? If so, how? (Explain clearly) In the retailing industry there continues to be a very significant "baby boomer effect" on every aspect of value chain operations, from the suppliers chosen to the technologies used to automate the logistics and fulfillment systems. The net effect of the baby boomer generation is to
U.S. Bond Market I agree with Standard & Poor's (S&P) downgrade of the U.S.'s credit rating. It was motivated by the fact that Congress and the Obama Administration had been unable to come up with a budget or fiscal plan that would stabilize the nation's medium-term debt dynamics. Furthermore, they cited serious problems with U.S. monetary and fiscal policy, which they felt left the United States very vulnerable in a time
He states that changes international capital flows have been the primary consequence of increased deficits and likens this to direct competition between the U.S. Treasury and the U.S. exporting industry. He reasons that the flow of foreign funds into the Treasury prevents these funds from being available for foreign purchase of U.S. goods and services. Thus, the more our government borrows and finances with foreign funds, the more our
U.S.A and Turkey Diplomatic Relations Events between the U.S. And Turkey since the End of Cold War Gary E. Oldenburg has it that the cold war ended with the collapse of the Soviet Union in December 1991. Various things have happened between Turkey and the U.S. since the end of this war bearing in mind that the first contests of the cold war were in Turkey, Greece and Iran. Ceren Mutus (2011) notes
I therefore believe that, the U.S. president should have his hands to steer this aspect by balancing interest rates as well as inflation. When inflation increases, interest rates should also increase to discourage borrowing. The other significant argument is by Kathy Lee that the U.S. president should raise taxes while reduce government spending. The U.S. government should increase tax to encourage the citizens of U.S. with enough money from businesses
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