With the major news events such as the jobless claims, global economic struggles and slowing economies, the US Dollar Stock Index may not continue to rise in relation to other currencies. The large market share of the U.S. Dollar has allowed large international companies to expand into the United States, making it the largest country in the world. Their profits come from this exposure to the American consumer.
But, we all know that there is always a drop in prices when the economy slows down, as it always will. This means that smaller companies will start to suffer and will be forced to lay off employees or even go out of business. Many of these companies have been the American heroes to the world for many years, but now their dreams may come crashing down on them.
As the economy suffers, household income declines and wealth fall. Not only that, but many of these family-owned businesses are now paying taxes twice on their profits, which can create an even bigger fiscal problem than there already is. For those families who were the owners of these businesses, having lost their jobs, their real income decreases, which results in the next main trend.
Income Costs of Living Increase: More expensive fuel, rent, food, utilities, etc. mean more money coming out of your paycheck to pay for these costs. And, then those who lose their jobs to begin to pay taxes twice again, leading to a very expensive federal budget. This affects our national debt and the rest of the world, as their citizens are forced to pay for our problems.
Domestic Assets: Those families who have home equity and other assets also lose their jobs, causing additional tax obligations for these family members. The costs of everyday life come out of the pockets of others, and we cannot solve this problem by simply passing the tax burden on to others. It just doesn’t work that way, it’s not a matter of if but when we are going to have another fiscal crisis.
Debt as a Percentage of GDP: Debt is always a problem, and debt only gets worse when economic numbers start to diminish. It’s so easy to get sucked into a financial bubble, and then we all stand up and run for the hills. The problem is how many more bubbles can we stand? Is there any place left in the economy to go?
Extra Budget Requirements: Now that our debt problems are too big to handle, other areas of the government are needed to help provide more help for those in need. There are not enough funds to do it all alone, so the Federal Reserve must step in. But, they are still a part of the same big business that has made our debt problems possible. Only the Federal Reserve can be trusted to stop printing money that is not backed by anything, and then the Federal Reserve System is not trusted to do what needs to be done.
Deficit Spending: Remember, all this money they are taking from the pockets of people, will just create a financial deficit, which means they are creating a negative impact on future GDP growth. This is why a Federal Reserve Bank is needed, to take this money away from them, before the economy spirals out of control. Then, everyone suffers, not just the individuals and families who have their own financial problems.
A strong dollar, lower interest rates, and lower taxes mean that with today’s economic statistics, the dollar stock index may fall in the near future. We are living through some tough times that will likely last at least a few more years, and all the problems that are affecting all Americans can only be solved if there is a massive support of the American people.
Small Businesses: Even with today’s headlines, we still have along way to go until everyone is able to get out of poverty and return to their families. As families are lifted from poverty, and people with very little income have something to live on, the trend towards good jobs will be back on track.
With all the different factors affecting the dollar stock index, and the overall economy, the trend towards higher interest rates may soon reverse, bringing more trouble upon the US economy. After the economy rebounds, many people are going to need to find a job again. and having a job should not be a problem.