Truly a Global Economy

Even twenty-five years ago, the world economy was driven by the United States. Over the course of the last century, America became the engine driving world commerce. For investors and entrepreneurs, an awareness and knowledge of the U.S. market was an absolute must if you aspired to develop a portfolio with upward mobility. Fifty years ago, something manufactured in Japan was synonymous with cheap or substandard merchandise. Today, that is far from the truth. Today, we truly live in a global economy where developments on the other side of the world can have major ramifications in our own backyard.

Recently, we have all been monitoring the stock market with anxious eyes. The impact a relatively small country like Greece has had on the U.S. stock market has been enormous. As a matter of fact, Greece has had an impact far greater than this small country should be able to impact finances elsewhere in the world. With the European market trying desperately to bolster the failing Greek economy, markets in the U.S. have exhibited a volatility unknown just a few short years ago.

Spain’s economy is showing increasingly alarming symptoms of following in the footsteps of the Greek financial woes. Adversely affected by their trading partners, both France and Portugal also are suffering from “ European Union” woes due to their common economic distress.

While China has in recent years had the fastest growing economy in the world, even their unprecedented growth has been stymied in recent months. China’s biggest critics complain because their government does not allow their currency to float free-market like most of the world’s major players. In China, the government has established parameters that force their currency to vary only between these narrow confines determined by the Chinese government.

Brazil has been a shining star financially in recent years. Bucking the trend of economic downturns, Brazil has strengthened their currency dramatically. Mostly this is as a result of Brazil’s energy independence. Ethanol has been a boone to Brazil’s varied economy and the country is enjoying one of the most positive trends in economic growth.

This overview simply pinpoints the true nature of today’s economy. We are all intertwined into one strand of financial health. Today- we must be a student of a truly Global Economy. Click here for a complete online guide to finance, economics, and business.

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Sunday, February 12th, 2012 Economics