Topics In Global Economy Essay Example for Free

Topics In Global Economy Essay With such drastic globalization of worldwide economics, it is now an issue of vast importance to us all.   The impact of current trends in global economics affects each nation and the corporations within it, as well as every citizen, working or unemployed, within its population.   Global economics was inevitable, given the statistics reflecting the increasing popularity of the world wide web as well as the unlimited communications capabilities allowing us to conduct business or easily buy products either from a local business or from a market on the other side of the world.    However, the global market is chiefly responsible for stabilizing inflation rates in the European and U.S. arenas.   One byproduct of global economics is the development and implementation of the Euro dollar. Although it is result of globalization, it has effectively addressed the long standing issues of confusion and instability in the international trade market due to the continuous fluctuations of the scores of currencies existing in the world marketplace. A significant slowing in inflationary trends has been noted during the last few years but many believe that the future will bring a series of setbacks as well.   In The Grandfather Economic Report, Michael Hodges wrote that â€Å"in the 1990’s the (U.S.) federal government created $2.8 trillion of new debt†¦ more than created in the nation’s entire history prior to 1990 †¦.and another $2.7 trillion since 9/11/01.† Yet federal deposit income in China increases by roughly 15% each year.   This rate of growth will have a serious impact on the U.S. national debt.   With an increasingly disproportional balance of import and export trade between the U.S. and Asia, an alarming loss of revenue will certainly plague America and Europe.   This trend will be hard to reverse if changes in the trade balance can not be initiated.   Most of these conditions resulting from the Asian policy that devalues their currencies compared to that of the dollar. The impact of this policy on the US trade balance is negative.   With more dollars being sent to Asia due to devalued exchange rates, statistics begin to reflect a deficit of funds as well as trade block tactics such as high import tariffs discourage these sales in the Asian market. The impact of this policy on the trade balance on Asian economies is that a continue trend of economic prosperity can be anticipated for these Asian nations.   This trend, if allowed to continue, will also bring growth at successively higher percentage rates with each passing year. The effect this policy has and will have on the interest rate on Asian and US treasury securities is that these rates will continue to fall in the U.S. due in the this policy.   Japan’s Finance Minister Kiichi Miyazawa states that â€Å"We acknowledge the importance of the internationalisation of the yen in light of global economic and financial developments such as the Asian financial crisis: the birth of the euro also attests its importance. In this context, we have recently announced measures to promote the yen’s internationalisation, which include measures to increase liquidity in Japan’s short-term financial markets as well as those to facilitate investment by foreign investors in Japanese government bonds.†Ã‚   This policy will surely bring about a successful reversal of downward spiraling of Asian interest rates. As for how this policy will level of indebtedness of US households, businesses and Government, a continuation of this policy regime will undoubtedly result in a rise in debt levels for all, as set the stage for possible economic depression not only for the U.S. Government and global scale due to enormity of the global economics venue. Immediate and viable initiatives must be utilized in order to prevent this threat.