Effects of euro zone crisis on us

Effects of Euro Zone Crisis on U.S. Presented by:

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Introduction  The euro zone crisis affected all economies

across the globe and the U.S.  It is ranked among the strongest economies in the world .  All the 17 euro region counties comprised seventeen percent of the world’s economy.  They generate $12.2 trillion in gross domestic product in 2012. http://www.premiumessays.net/

Discussion  The economy of Germany is the 4th largest  

 

globally .

It has a strong financial ties ,trade and investment with the US .

When there is shock experienced in one region, the effects it has on the other are important.

The European crisis directly affected trade in the U.S. The demand for goods from the US went down because of reduced incomes. http://www.premiumessays.net/

 The euro zone is the 3rd largest United States

export destination accounting .  This is for at least 15% of its good exports as well as one third of its service exports.  The United States is tied to the global economy in numerous ways.  This is for instance through exchange rates, interest rates, credit spreads, bank borrowing costs and trade.

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Effects to the U.S.  The crisis affects the U.S. as well and in more

than one way.  U.S. banks are global and most of them have operations in European countries.  Everything would be placed on a balance sheet and this would raise the risk the country faces.

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Outcomes Experienced  Bank capitals would increase.  Credit spreads would increase.  Assets on balance bank sheets would also lose

their value.  Greek exit would cause serious repercussions in the U.S above and over any form of direct exposure.  The mortgage rates in the U.S. have always been low .  This is because of the Fed’s policy aimed at keeping them low. http://www.premiumessays.net/

 The crisis also affected the mortgage industry.  This is because most of the deals available are

under conservatorship arrangement with the government.  This weakens euro and a strengthening dollar has on the U.S.  This affects flight safety.  The positive effect and this is the country remains a safe haven for a large number of investors. http://www.premiumessays.net/

Effects of Euro Zone Crisis on U.S. Presented By:

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