The United States has the world’s largest economy, which represents 20% of normal worldwide GPD. The US dollar is a widely used currency in global transactions. It is the world’s leading reserve currency. Countries all over the world used it as the de facto currency while others they use it as the official currency. The United States has ensured a stable growth of GPD and a moderate unemployment levels. There are high levels of capital investment and research.
Although the economy of US has been healthy, volatility in bond and stock markets coupled with slowing Chinese economy has raised alarm in the global capital about what the future holds. The first potential effect in the US will be planned to raise interest rates by the Federal Reserve. However, the move may not be enough to steady the US economy. These issues have raised constant debates from the US leadership regarding fiscal policies. One side prefers to rein in spending while the other wishes to spend more. The US economy has registered an unfunded utility debt of more than $16 trillion in the last five years. Economic experts have expressed their fear with the rate at which the liabilities are increasing and that the amount may double in the next decade. The sad part is that quantity of the debts is no close to debts of European Union debts combined.
The Reserve Currency
Despite the enormous debts, US is likely to get their way with the debts than any other country. As mentioned, the US dollar is the leading global reserve currency. Having such a status gives the US the power to run up a bar like no other country and still maintain a relatively stable economy. The global market uses the US dollar to price its products and carry most of their international transactions. The dominance of the US dollar in such occasions raises its value and demand. According to the Financial Times magazine, the dominance is likely to be challenged by China. Having established over 35 currency swap deals, China is gaining the traction to replace the US dollar and will soon take over the economy.
An Overview of Christian Broda
Christian Broda according to forbes.com is a writer and economist by profession. He graduated with a degree in economics from San Andreas University. He is a renowned columnist in the Quarterly Economics Journal and the American Economic Review. He focuses on trade and international finance. Mr. Broda was an economics’ lecturer at the University of Chicago. Currently, Mr. Broda is involved in a variety of hedge fund startups and plies his trading with Capital Management Company. Christian Broda is married and a proud father of two sons.