Wednesday, October 8, 2008
Global interest rates
Rates for interest were cut globally yesterday to avoid more damage to each sectors economy. Decades and decades ago it would have seemed infathomable to have such an occurance happen. It only goes to show how interdepent the global community has become. The U.S. is a major source of influence not only socially but also financially. The current financial crisis in the U.S. has caused other markets to respond. Reading this report reminded me that through this time America is not the only one suffering. Other nations use the dollar in determining their currency and if the dollar loses value then their currency also loses value. It would be interesting to see how citizens of other nations have responded or are responding to our current situation.
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My sister in-law was in town from Sweden while all of this was happening. During her stay the Swedish crown had lost about 15% of its value. It was a hard hit for her because she had budgeted her mony according to the pre-market crash. Of course, Sweden is a socialist democracy; so, the adhere to many of the principles of capitalism until it jeapordizes the general well being of their citizens.
Even though they adhere to socialist principles they are one of the freest nations in the world with many of the same rights we have. In fact, they were #9 on the global free press rating.
Belgium and other nations with similar governmental structures nationalized some of the largest banks in Europe last week to prevent a total crash of their economies. Similar to the bailout bill, but just went about it a different way.
It's funny...America is the bad guy when we invade countries and ignore the wishes of Western European nations. But, when they realize that our well being is directly related to theirs, they do rally around us.
It has been said that our greatest assurance for peace, it to have strong economic relationships with other countries. Yet, the flip side is we all effect each other when something goes wrong. We see this with the global recession.
We have two things that are happening in the world that historically have created great changes in civilization: 1) overpopulation 2) Lack of or access to natural resources. Both of these things are issues are effecting our global economy.
We have a lot going on and based on history, I am expecting the world that we know today to be a very different place soon. If this will effect the foundation of our government, I don't know; however, with trends like these anything is possible.
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