Learn and Make Money Online
How? Easily, by understanding the global economy and how it affects your ability to make decisions that will make you money online.
China’s recent stock market decline and subsequent devaluation of the yuan. Sent shock waves throughout the financial world, as it showed that China would allow its currency to devalue, when usually it is pegged to the US dollar at around 6 to 1.
The fact that the Government’s using financial levers to stabilize its economy, is a sure sign that things are about to get a whole lot worse.
By devaluing its currency (around 3% against the U.S. dollar) the country’s exports becomes cheaper for the rest of the world and as products become cheaper more interest is shown by purchasers and as China has an export based economy that would be a good thing. But it may be a case of too little, too late.
However most other currencies have fallen much further against the U.S dollar. Since 2014, the New Zealand dollar is down over 25% and the Australian dollar has dropped more than 30% since 2013.
The Mexican peso has fallen 28% and the Canadian dollar is down 31%, since 2001.
In Canada’s case this was mostly due to the fact that the Canadian economy has gone into recession because of the low price of Oil.
As a major oil exporter and the world’s fifth-biggest producer, oil made up 27% of exports last year. Last month, the Canadian dollar hit an 11-year low against the dollar.
More recently the Brazilian real has lost 23% and the Russian ruble is down 16%. As a group, Asian currencies are at their worst exchange levels since the ‘financial crisis’ of 1998, the Malaysian ringgit is down 14% and the Indonesian rupiah 9%. In fact most emerging market currencies are at their lowest levels since 2002.
This has come about as a result of virtually every government irresponsibly printing money and calling it fancy names like “Quantitative Easing“ (Q.E). What this means is that they are creating billions of new notes, euros, pesos, dollars and yen every day and injecting them into their economies.
This makes their currencies worth less as more go into circulation and it actually steals wealth from the very people they pretend to serve.
A Strong Dollar
Comparatively the U.S. dollar has gained about 20% vs. other major currencies during the last year. Even though the U.S. used ‘Q.E‘ to print Trillions of dollars from 2008-2014.