For the complete report in the The Guardian click on this link
2007: there may be trouble ahead for the US
In an effort to prevent domestic social upheaval and to appease the Bush administration, which has asked it to spend more money domestically, China embarks on a large-scale program to improve its environment and social services. This, along with rising world oil and commodity prices, leaves China with less money to lend to the United States. The resulting drop in the value of the dollar causes Opec nations to stop transacting in dollars. It also prompts Warren Buffet, most global corporations, and several giant hedge funds to put more money into euros and yen, causing the dollar to drop further and faster.
With everything Americans purchase from abroad suddenly costing much more, and the nation still needing foreign money to support its budget deficit and personal spending, US interest rates rise considerably. Millions of American homeowners are unable to pay their mortgages, resulting in a wave of bank foreclosures. Housing and auto sales plummet and unemployment rises. Median wages drop, but America's global rich, who have hedged their savings in foreign currencies, are richer than ever. This fans the flames of economic populism and nationalism. In June, Congress refuses to renew Bush's fast-track authority to make trade deals.
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