Economy Essay Example | Topics and Well Written Essays - 750 words - 8

Economy - Essay ExampleRising beguile rates will devastate the government and would become much expensive for the local government to embrace cash, and home loans will be out(p) of reach for citizens except for the very wealthy, by next year. Consequently, US may be wiped out financially, thus, bring the economic activities to a standstill (National Bureau of Economic look into 45-6).The Federal Reserve has strived to keep US interest rates debt at a low level, and they require succeeded. Until recently, investors and nations around the world preserve to participate in this outline regardless of the fact that the federal system is not honest. However, there are indications that too many foreign direct investors are lastly outsourcing their investments to some other countries. For instance, China and Russia have been dumping US regime debt. Other direct investors are Renowned investors analogous Jim Rodgers say he will dump 30years of US government bonds. When investors put s uch comments forward, there is a high probability that by 2013, US will have few direct foreign investors.The pass up of the dollar will lead to reduced consumption and will shift consumer expenditure from imported goods to internal goods and services while supplementing demand in domestic products with increased exports. Unfortunately, the lower dollar value is expect to last longer than anticipated. The Congressional Budget Office predicts that the budget deficit will approximate to 5.2% of the gross domestic product in the coming years. It is more likely that foreign lenders like China will not continue lending money to US. Due to the reduced demand and decline of the dollar, the trade deficit will decline. The termination of reverse status will be disastrous for the dollar value. Foreigners will rash to get out of the dollar, either through outright currency conversion or through bidding up the US goods value as they rash to unload the dollar holdings. Though it is hard to te ll