The Decline Of The Us Dollar

International Business
November 27, 2007

The Decline of the U.S. Dollar

The U.S. dollar bill is nose-diving against foreign currencies. In the other(prenominal) year, the U.S. has been declining, its down
12% to the euro
7% to the yen
8% to the pound,
15% to the Canadian dollar
10% to the Swiss frank.
The dollar is the most heavy international reserve currency, followed by the euro. Over the last hardly a(prenominal) years, the value of the U.S. dollar has fallen by more the 15%, and by total of more than 50% against the Europes currency, the Euro. The devaluation of the U.S. dollar means a decline in the buy power of the dollar, which leads to a decline in living standard.
Factors that be affecting the strength of the U.S. dollar:
In explaining the fall of the dollar, the accepted account deficit can be viewed as the wide-ranginggest atomic number 53 factor. The current account deficit is the difference between what Americans give from other countries (exports, services, investments abroad) and what we pay out to other countries (imports, services, loans).
Another big weight on the dollar is the large U.S. budget deficit.



This is bet to stick to grow due to increased military disbursement and exploding cost of Social Security, Medicare and Medicaid
Domestic prices are up across the board because imports now cost more with a profligate dollar.
Another often overlooked cost of a weakening dollar is higher interest rates. Because a falling dollar diminishes the global appeal of dollar denominated debt, U.S. interest rates allow inevitably rise, resulting in increasing capital costs for house servant manufacturers.

The potential results of the fallen dollar:
The unify States will continue to loose its grip on the overall world economy.
At present rates, China will have a big economy than the U.S. by 2050.
A tanking dollar also weakens the United States strength in international relations, as it hopelessly tries to treat with strong-currency countries and...If you want to get a full essay, order it on our website: Ordercustompaper.com



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