Global trade is stalling, dimming prospects that exports will buoy the U.S. economy in the coming months. (link)
"The problems of the advanced economies, particularly the euro zone, are being spread around the world," said Andrew Kenningham, senior global economist at Capital Economics, a London-based consulting group. "Everybody is being dragged down."
What are your opinions about this?
I think the part of this article that worries me the most is not the fact that countries within the EuroZone are struggling in global trade. Instead, the most troubling aspect is that countries around the world such as China and other far east countries have also seen diminishing numbers. It is understood at this point that both the US and EuroZone economies are currently down, however, it is scary to see the overall effects that these struggles are having on the rest of the world.
ReplyDeleteThis is really unfortunate news for the United States in terms of our recovery from our own recession. The article states that exports "have accounted for almost half of U.S. growth during this recovery," therefore a decline in world trade is obviously going to have some pretty harsh effects on the U.S. It is also unfortunate in the sense that now, because of this global slip in trade, companies are having to lower their number estimates in regards to exports, which is never fun to do. It will also be interesting to see if this has any effect on Obama in regards to the upcoming election because, as the article states, raising U.S. exports is a big goal on his agenda.
ReplyDeleteThe way economies run, growth is always correlated to success. The more buying, spending, and consuming a nation does--the better off they will be, theoretically. However as we live in a world with increasingly scare resources (water, oil, hell..even fish), we need to focus more on sustainability over general consumption. Yes, growth is down significantly, but we cannot tie this to economic failures on the hole. Instead of buying and spending as fervently as possible, we need to focus on security, long-term investments, and less risky business ventures.
ReplyDeleteHowever it is difficult, especially in a country that prides itself as THE example of capitalism. Capitalism and its ideologies are rarely tied into sustainability. It will be interesting to see where this discussion goes in the coming months, with the looming fiscal cliff, and various economic foreseeable hazards.
I interpret this article as saying that because we are so connected to the Eurozone the U.S. will not continue to experience the amount of economic growth it can usually depend upon from exports. This isn't good because it will only keep the U.S. in recession for a while longer. If big businesses were able to evoke quick change we could start to produce as well as purchase more domestic goods which in turn would help to stabilize our economy, however since this is not possible the U.S. must wait on the rest of the world.
ReplyDeleteI think this adds even more credibility to our last blog post topic. Globalization has grown to the point where economics boundaries are blurred. We are almost at the point where we are all sharing the same booms and busts. The interesting thing to think about is, will this last? There were talks to break up the Eurozone and Germany was going to take their large economy and run. I am wondering when the day will come when countries start to revert back towards more protectionist practices, or is that even possible at this point in the world's history?
ReplyDeleteMy reaction to this article is really just an overall global slowing of demand. Supply was seemingly high, and therefore producers' estimates needed to be recalculated. People are being more conservative, spending-consuming-only what they have, and this really looks like to me the looming outcome of the eurozone crisis and our own domestic recession. I agree, the more risk protected, long run investment projects, the better.
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