USA money

maljo

How could the USA economy affect us here in the Uk.

shaymenRup

The old saying is if the US sneezes the rest of the world catches a cold.

Whatever starts in the US will in due course effect us. America has massive debts which it almost cannot afford to pay back.

The US is a key trading partner of the UK and any fiscal changes (designed to earn more money from taxes) are likely to impact of the US spending.

Remember the banking crisis began in the US.

Extreme measures could include devaluing the dollar, so that makes exports cheaper and imports more expensive. Great news for disneyland visitors , but not for the Scottish Whiskey Industry.

However who knows, thats why economists disagree and why different policies work one year but not the next.

sabretoothtigger

We hold like 300bn of usa debt publicly and privately more. If Dollar is worth less then I guess we are too


I dont think USA economy matters so much as what they are doing with dollar worth. Dollars are the basis for wealth held all over the world even people who do not trade with USA still rely on dollar values

If america sneezes the rest of the world cleans it up

Reaper

maljo wrote: »

How could the USA economy affect us here in the Uk.

In 2009/2010 the country we exported/imported to the most to was the USA at £33.5 billion. So anything that affects their economy affects us too.
http://www.guardian.co.uk/news/datablog/2010/feb/24/uk-trade-exports-imports

talexuser

If they technically default it could lead to a stock market crash of confidence, if bad enough or long enough, could contribute to less growth around the world as companies defer investment, thus making paying the debts from growth tax receipts even harder for those countries in hock.

All this from a few tea party "nutters" as Uncle Vince would have it who are totally opposed to quite rich people paying a little more tax to get the country out of trouble.

atush

I remember the golden days when the religious right had no control and were thought of as lunatics.

Until R Reagan needed them to win the nomination. It was the beginning of the rise of religious fanaticism in the USA.

Loughton_Monkey

maljo wrote: »

How could the USA economy affect us here in the Uk.

Not trying to be funny, but this sort of question really has no basis any more.

I'm not saying it doesn't affect us, but it doesn't affect us directly. It is far more complicated than that. It is one of the largest economies in the world and hence affects every other country in the world. We are inextricably linked to each of these other countries ourselves, through a myriad of intricate routes.

Imagine you sat in a control room, with 50 large screens up on the wall, plotting the major Stock Indices of the top 50 world economies [including the 'futures' when the markets are actually closed]. Then every single curve would be the same "shape". They act virtually 'as one' except that over the longer term, the size of all the thousands of ups and downs turn out to be of a different size.

If UK Trade Figures are due out at a specific time, and they are 'bad', then watch the FTSE drop down by 30 points in 3 seconds. You will see that Dow Jones also drops, say, 50 points in those same 3 seconds.

And that's just 'equities'. Now look at interest rates, currencies, bonds, commodities....... These do exactly the same 'jerks' internationally at the same time, but of course in a more complicated way - most obviously since if £/$ goes up, then $/£ must go down.

This is why everyone knows we have a 'global' economy.

The trouble with this [in my opinion] is that as a result, it has become extremely 'fickle' and based much, much, more on sentiment than on 'fundamentals'. There is a huge underlying 'real economy' that grinds along underneath, day by day. Cars still roll off the Hyundai plant. Essex Town Hall buys a new box of paper clips. Mr & Mrs Boggins get their mortgage and complete on their house, and Tesco's faithfully pay the July Interest on their corporate bonds....

But any of the companies involved can be 'worth' 5% less [or more] at 5 p.m. than it was at 8 a.m. The actual 'fundamentals' change in a far less volatile manner, and over a much longer timeframe.