Current Foreign Finance: The Dollar Strikes Back (A little)

The dollar has seen to be making a little bit of progress already in a dismal recession. According to marketwatch.com increased by .239 points from 87.782 to 87.543 in "the North American trade late Thursday."

This is quite the hopeful look compared to the Euro that seems to continue to worsen in value. According to marketwatch.com the Euro decreased to the amount of $1.25 this past week, and economists hope it increases, yet it still seems to be dropping.

The reason why the dollar has been doing better in foreign finance is because traders were more cautious with their money-spending and investments, according to marketwatch.com.

Although the Euro may have dropped in value, there is no hint of right now if one of the 16 countries participating in the European Union will drop out and start producing its own currency for the sake of saving, according to marketwatch.com. Germany's prime minister doubted that any country would leave the EU, but then Germany has not insisted to financially help other ailing EU countries that need financial support.

In general, the U.S. dollar seems to be on the rise (a little) as long as more people are cautious with their spending and investments but not overly-cautious. Spending is what stimulates the market, but it is also what can break the market. By saving more Americans will learn when they do make bad decisions in the market, they will have some money to rely on. Hopefully, other countries like those in the EU and the U.K. will also follow suit.

For now, this is Chloe Colbert reporting on foreign finance for The Colbert Report.

(Picture provided from www.flickr.com)

Between the period of 1969 and 1971 the unemployment rate grew by 1.6 million, but that was at the cost of more college graduates and the baby-boomers who were new in seeking for jobs. Today unemployment is higher as of a result that from 2008 to present 2009 more than 2 million jobs have been lost but not at the cost of more people seeking jobs.

I still believe that unemployment is a key issue in the American economy, but natural unemployment is normal if it's between 2% and 3%. An economic stimulus package would only add more to the debt that we are already in. China currently holds bond in the American federal banks, and a stimulus package may not create those jobs that would account for this debt. The way that America decreased its employment in the early 70's was by creating more jobs for the college graduates, and at that time there was more versatility for people to do new jobs because those previous one did not exist.

This economic bailout is trying to prepare itself for worser times while still trying to spend more to help give jobs. Yet, according to Times.com the economic bailout began by including "$780 million for pandemic flu preparation and $14 million for cybersecurity" but had to remove those two topics because they were found to be irrelevant.

According to the actual bailout document, some of the proposed programs to which the money will be given to are programs like infrastructure construction, agriculture, and energy and waste programs. The fact that programs that improve infrastructure are receiving money is a little deterring because it is now completely practical of how these programs will create more jobs. To hypothesize, if the improvement of roads and highways makes pathways more accessible for businesses and work, then people will spend more and therefore create jobs to supply those services. Yet, because many Americans are more focused on saving, investing their money into long-term investments, and pay off debt, then it would be quite impractical to develop better infrastructure that would indirectly encourage Americans to spend more of their money when they actually want to save them.

Unemployment Rate Difference: 1969 to 1971

Actually the real reason why the number of jobs available in 1971 grew by 1.6 million yet the unemployment nearly doubled was because more people were looking for jobs than were available. The baby boom children just had been born between 1946 and 1965, so many of them were just graduating from college. Therefore, many students were looking for jobs and trying to be incorporated in the successful work-force, which in this time had more technology and provided more opportunities for jobs. Yet, the baby boom population was already so massive, and with the natural unemployment rate, there were just enough openings for every college student and already working or 'looking-for-work' non-college people. Because the new students were looking for jobs too, they added to the total number of people looking for a job. Because the same amount of people still had jobs yet many more people were unemployed, the 3.4 unemployment rate doubled to 5.9 unemployment rate.

Update on Foreign Finance

Update on Foreign Finance

As the economy continues to downfall other countries are affected too. China has been involved in the downturn too because the Yen has decreased severely at the hand of America. According to FXStreet.comHowever "the Chinese currency was pinned again at just above 6.8 for every USD." Currently the new Obama administration wants to accuse China for its wasteful spending because it has overspent and abused its right in economic free trade. Yet, according to the BBC China is still expecting new growth with its increase in technology, which will make it even more ahead of the U.S. dollar.

Current Foreign Finance

It seems that the world markets are still behaving poorly but will hopefully look brighter in a new year...a new age. According to x-rates.com for one dollar a person can receive 0.727033 pounds, 1.26607 Canadian dollars, 0.774593 Euros, and 1.5443 Australian dollars. These rates are still dismal but higher than they were in last August of 2008. Around the world stocks are falling desperately into more astringent situations. According to an article on the washingtonpost.com, Singapore businesses may have to expect less success than they wanted because of "unemployment and industrial production in the U.S. and Europe, and falling Asian exports." Because Americans are consuming less, this effects the material markets in other countries, especially the ones that make many of our everyday things like clothes. When the markets in the U.S. failed, countries were also less likely to invest in them because they too would not be making a profit. Even in terms of sponsorship, the American domestic business, AIG, has declined to continue funding the uniforms for the UK Manchester United soccer team ever since it had to borrow money from the U.S. government in threat of going bankrupt, according to CNNMoney.com. Without the means of monetary funds to support domestic businesses in one's own country, it becomes even harder for those countries' businesses to support other international businesses. Especially in this time for the U.S. companies have had to reduce consumption of materials from Asia and other parts of the world. Business and the monetary exchange rates will rebound as soon as governments and businesses realize their faults and make better budgets. I believe it is time for change, and maybe that change can begin in America.

Current Foreign Finance

Currently in the exchange rates of the major monetary units, the U.S. is lacking poorly compared to the U.K. and the Euro, two major currencies in use by many Americans. This decline in the U.S. dollar spot exchange rate signals those American markets should invest more in making their businesses appeasing to foreign companies. The spot exchange rate measures countries' monetary currencies in other According to Wikipedia "The spot exchange rate refers to the current exchange rate. The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date." Therefore, without the forward exchange rate, companies would not know when to increase a country's monetary value in other countries by adding extra businesses. The forward exchange rate signals which specific companies should get into the market and which market will be the most profitable, especially in foreign countries, to improve the value of the American dollar in other countries.