What theoretically needs to happen to improve the US economy/ make the dollar stronger?
Posted by admin in Finance Wednesday, 9 November 2011 04:31 4 Comments
I guess I don’t really understand economics. I know stocks need to be up, employment rates should be high, and that oil prices need to go down, but that’s it. How should we go about making the economy better?
Thanks.
raise interest rates. republicans fancy this low to stimulate the economy but right now we are in a stagflation high unemployment and inflation fixing one worsens the other. but by raising interest rates we will go into a recession. countries invest in countries natually with the highest interest rate. more money the bettter. also u want to tighten money supply so there for the gov should buy back bonds. remember republicans are in control right now. oil is tied to the dollar so if we raise interest rates our dollar appreciates compared to other currencies and prices fall but you can now buy more with that dollar. currently, when you hear of employment in the news, you hear of auto workers. canada has a national health care; US does not we privatize (republican) while obama wants to nationalize (socialism). in theory privatization works because firms compete to get contracts but bush and ilk give contracts to buddies. so back to my point GM and Ford cannot compete in market place because they have to pay for health care. in canada they don’t have to pay for health care.
There needs to be confidence in the abstract.
First and foremost to cut down the ‘consumptive’ life style. Everyone should account for less personal expnditure.
Next, bring down the military expenditure of the government. It is based on fear, paranoea. But there are entrenched bodies that dug their heels to present a ‘fait accompli’ of the alternative as loss of jobs and that is simply scary. Mind you, there is no military threat to America and never was (except on Pearl Harbour that is 1600 nautical miles away in mid-Pacific). American psyche was so poisoned that any other person (or living organism) whom he cannot comprehend he will take that person a threat. And is on guard. Why everyone including the imagined ‘Aliens’ are out to destroy human race in general and Americans in particular? Perhaps such a creature is extending its hand in friendship, love! But it is the profession of Generals to whip up spectres of threat to American way of life (And make America jump into the rescue act of huamnity).
But in fact, that way of life is threatened by Ameicans themselves by their conspicuous consumption. By the end of 21st century it would be realised that lot of damage was done in the name of patriotism gone berserk. Loyalty to one’s own country, patriotism are positive and healthy sentiment that ought to be pleasant to one, generating a cozy feeling.
Lastly, the contemporary economic theories of production feeding on itself, production justifying itself etc have become so sticky that no economist who is ambi-dextrous (a past POTUS declared his preference for ‘one-handed’ economist who doesn’t say ‘on the other hand’) is able to break free. But there are some amongst them who were able to wriggle out of their chosen subject, to say ‘more production is not all’. America has set a standard to the world of ‘more and more consumption’ that makes more production inevitable. Now the whole world is following America. And for a wrong reason.
raise rates…for instance USD is paying 1.95% interest while australia is paying 6.95% why would i want to own us dollars paying 1.95% when i can make 3 times as much owning australian dollars? so people are selling us dollars and exchanging them for australian dollars to get a higher interest rate from their central bank. so all this selling makes the dollar go down and the price of commodities like oil and wheat go up.
cheap interest rates are good for stocks and credit cards in the us which makes people want to buy stuff but it really doesnt do you any good if you wanna go fill up your gas tank cause you hae to buy the oil from some other country,