http://www.stltoday.com/news/national/u-s-companies-feel-impact-of-european-debt-crisis/article_9a2fe073-bab6-5a9d-ab3a-84105533f0bf.html
So as wonderful as the US economy is... the crisis in Europe is having a great impact on our companies and banks in a negative way. Just what we needed, right?
The European Union is the United States' number one trading partner, "Nearly $475 billion in goods crossed between the regions in the first nine months of 2011. About 14 percent of revenue for the 500 biggest U.S. companies — roughly $1.3 trillion — comes from Europe." So their spiraling downfall is obviously going to affect the companies and people living here in the US. Companies are losing a lot of profits, hesitant to hire, and people are not willing to spend during these hard times, forcing the prices to drop and hurt the companies even more. Companies such as: Whirlpool, General Motors, Nike Inc, Abercrombie & Fitch (although I wouldn't mind their prices dropping) are some examples of places losing lots of money due to the European debt. Even small businesses are getting hit by this. Some of the US corporations actually not hurting are Sara Lee, Kraft, and McDonalds.
The banks are also being greatly impacted as you could probably assume. They're cutting lending and holding onto all their cash so in case this crisis doesn't end soon, we're not hit AS much. If the crisis worsens, the debt we hold of European governments could lose value which would definitely be bad for our economy. The fear is that the US and European governments may be worried each other can't cover losses that the lending would stop completely. That would impact the whole global economy.
What should people in the US do to prepare for the Europeans potential downfall? How should companies try to increase profits while this whole crisis is undergoing? How may their crisis affect people our age in America?
The only way the debt crisis can be solved is slowly pay back off the debt little by little at a time. For example the Debt that Greece owes can be fixed by giving faith back to companies to invest in Greece again make it a tourist place again thats always a great source of income and look at programs that dont work and get rid of those and fund programs that do work that way your getting your money's worth. If the Europeans dont fix this debt our economy will tank down harder then ever before why should America have to stuff cause they are lazy and stupid and dont know how to spend money? Invest money in the weak countries and build them back up that way they can help keep the Euro zone together and get our money.
ReplyDeleteEurope's economic downturn is catastrophic for the world as a whole. I was reading that even China's economy is feeling it, which, is surprising mainly because everyone pinned them as one of the up and coming global super powers economically (even more so than they already are.) I don't think there's much America can do, we need to hope that Greece doesn't default and that would be a step in the right direction but that only takes us so far. Because the Euro is taking such a hit it could re-establish America as a large figure in the global economy. I personally feel that the US should "revert" to industrialization and become more self sufficient. America views itself as above those lowly factory jobs, but those jobs could save our economy at least. By decreasing imports and increasing employment it could provide a boost to our economy and save us from the sinking ship that is Europe.
ReplyDeleteSorry for blowing up your blog, Tiia, but I totes need to catch up on my comments.
ReplyDeleteAnyway. I agree with what John said, I think America is a little too dependent and involved in the rest of the world. I don't think we should completely isolate and hide ourselves, but there is more we could do to protect ourselves from failing economies of other countries around the world.
We could probably start by not poking our nose in every other country's business.
Also, becoming less dependent on other countries, like John said, we could bring back more work and money to our own country.
Random: of course McDonald's isn't suffering. It's cheap, convenient, and irresistible. Even though I hate it, it's everywhere around the world. I wonder how much money they make for the US...