Some may consider Greece to be both literally and economically distanced from the United States. Ironically, comparisons between the US ‘Lehman brothers’ and the Greek default are being uttered across the European financial landscape and media network. This cross country comparison serves as a powerful and equally haunting reminder of the connectivity between global markets and individual economies. The global financial beast is one and the same. Greek wings are flapping within the European ecosystem pushing Europe to the verge of a financial epidemic. An epidemic Jeremy Cook, Chief Economist at World First believes could make “the (financial) falls of three years ago look like a picnic.”
It’s true that the stock market on average tends to return meagre profits during economic slow times, but for the clever investor, an economic downturn can sometimes signal a good opportunity to trade in foreign currencies, on what is commonly know as the Forex market.
S&P has cut the US outlook from stable to negative. So can Republicans and Democrats put aside their differences to tame the supermassive deficit before the US implodes?
In the last 24 hours the ticking clock Republicans and Democrats have been operating under regarding the US deficit struck an intimidating bong. Ratings service Standard & Poor’s has slashed the US economic outlook from stable to negative – reflecting behemoth debt the US acquired in 2009 and the miniscule odds of its being paid back before 2014.
China has consumed Japanese growth, stepping up to its rightful position on the throne of financial supremacy. Binary options can be used to trade on economic events and market direction. China’s increasing prevalence within the financial world, is elevating the impact of Chinese economic events.
Japan has surrendered the title of second biggest economy in the world to China.
Japanese success and forex allure to an extent became a self-fulfilling byproduct of its descent. The rising Yen, driven by investors seeking risk adverse FX pairs, fused with weakening consumer spending to contract Japanese fourth quarter economic results. The tiger’s prowl was in many ways already predetermined by the velocity of Chinese growth throughout 2010, tempering market surprise.
Ireland is in economic meltdown, with forex trading yet again being reminded of the delicate balance of the Euro. If you thought that the incoherent panic of the Greek Debt crisis had been swept under the carpet, think again. Traders are yet again being pounded by European disdain as yet another country weakens at the heels. Ireland is far from falling into economic disrepute but it is beginning to walk a very thin line in terms of reputation and confidence.
The Euro is not contained within one country and therefore its value is intrinsically linked with the economic paths of many countries. While in times of prosperity the value of the Euro is locked in and somewhat endorsed by multiple successes, it only takes one small cog in the constantly churning Euro zone wheel to fracture the fragile economic machinery.