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The years of U.S. isolationism are long gone and its economy is linked into a greater world economy that can be just as volatile and unpredictable as its own can be at times. The global market means goods of every kind can be exchanged between countries to ensure everyone gets what they need to survive, but it also means every little hiccup in one country's economy can have affects on other economies around the world. Essentially, the US economy does not operate and fluctuate completely on its own. It feeds off the help and interference from outside markets that are now connected to its. This is why the economic problems that started in the USA as well as Europe have now spiraled into an international credit crunch that is affecting other countries who depend on the USA for exports and rely on the USA to accept their imports. Through those exchanges economies are linked, for better or for worse. For example, the USA is the world's largest exporter of some grains. Smaller countries depend on those exports at reasonable prices to feed their people, as it is the main staple in their diet. Now that the USA is in an international credit crunch the price of grain has risen dramatically at the same time its estimated output has decreased. This has other countries who cannot afford to pay high prices for the grain to protest. On a similar note, the U.S. imports a huge array of products from China and recently there has been massive protest from the American people over lead found in many products, especially a high number of children's toys. The are both examples of how the world economy is connected together and how the economic downturn in one country affects others as well. The international credit crunch is especially affecting Europe and the U.S. since European banks have been loaning money to and buying investments from the American banks. Now that the banks are all experiencing hardships and requiring large amounts of financial aid from the government, both economies are suffering under the internatinoal credit crunch. Every country in the world now depends on one another for food, gas, and every other commodity we all take for granted these days. These connections are so strong that when one country faces trouble it is going to affect the rest of the world. The international credit crunch is not one that we can pull ourselves out of completely alone. The policies and economic maneuvers made in other countries such as Europe can have a big effect on our own struggle to get out of the crunch. |
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