Exchange Rate

Exchange rate is defined as the rate at which one currency may be converted into another. The exchange rate is used when simply converting one currency to another (such as for the purposes of travel to another country), or for engaging in speculation or trading in the foreign exchange market. There are a wide variety of factors which influence the exchange rate, such as interest rates, inflation, and the state of politics and the economy in each country.

 

My last article was written on the topic of recession. During a recession, a significant decline in economic activity spreads across the economy and can last from a few months to more than a year. The article I found relative to this topic was about the recession in Greece. What I failed to mention is that Greece is not the only Europe country currently experiencing an economic crisis.

 

Cyprus is currently trying to save its banks from collapse,and claims that they are facing deep recession. Yesterday morning, (March, 25, 2013) in order to keep Cyprus in the euro zone, and restore the promise to protect bank deposits, they received a $13 billion bail-out package. (10 million in Euros) Cyprus is the fourth euro-zone country to receive a full bail-out. Greece, Ireland, and Portugal were prior.

 

According to the article Pound Euro Exchange Rate Rises After Cyprus Deal; Sterling Fails To Break Resistance Level Vs Dollar that was published this morning at 9 AM, after the Cyprus deal was made, the Euro still struggled to sustain any gains against the U.S Dollar and made widespread losses versus the majority of the major currencies. This deal has put the Euro under additional selling pressure. There was said to have been an initial sense of relief that the Cyprus deal would probably prevent an immediate collapse of the entire banking sector, but that was short-lived throughout the day. Shares in European banking sector stocks suffered a major decline.

 

It looks as if the Euro-area recession is steady declining while unemployment rises. It saddens me to see this financial crisis take place. The U.S is definitely not in an economically good place either, but the recent news articles I have read make it seem like Europe is during ten times worse.

Recession

A recession is defined as a "period between a peak and a trough, and an expansion is a period between a trough and a peak. During a recession, a significant decline in economic activity spreads across the economy and can last from a few months to more than a year." Historically, the United States have experienced many recessions, but the latest took place in 2007 to June 2009 and was referred to as The Great Recession. The Great Recession was said to be the most devastating global economic crisis since the Great Depression. "According to the National Bureau of Economic Records, December 2007 is the moment that the U.S. economy peaked, but unemployment climbed to 4.9 percent, and the recession began."

Published on March 15, 2013, Seen From Greece, Great Depression Looks Good is an article that that not only compares the tragic economic situation of Greece to that of the Great Depression the United States experience in the decade preceding World War II, but also gives a detailed report on the most recent trends of joblessness by sex and age group. According to this article, Women are more likely to be unemployed in every age group shown, and older workers are far less likely to be jobless than younger ones, and among men age 45 to 64, nearly one in six is out of work. Among men 30 to 44, the figure is one in five.

Compared to the United States during its time of the Great Depression, Greece is currently a lot worse. Some believe that the difference in the two economies when it relates to government consumption spending is one of the reasons why Greece is in a much worse predicament.

Honestly, I've never completely understood the term 'recession'. I know it has something to with a decline in the economy and I am aware that we are no longer in one, which is good to know. Whats important is how we act to avoid another recession. There have been a large number of cuts applied to the federal budget recently, and I'm afraid these cuts could put our fragile economy back into a recession.

The World Trade Organizaton

A few weeks back I posted a blog about the United Nations. This week my blog post will be about the World Trade Organization. The World Trade Organization "is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business."  

UN Can Sanction WTO Ruling is an article that was written about a week ago. This article caught my attention because it includes both the WTO and the UN. According to this article, in a World Trade Organization ruling, the United States was awarded millions of dollars from Antigua and Barbuda following the crippling of its Online Gaming Industry. Antigua and Barbuda has held meetings with the World Trade Organization's Dispute Settlement Body in hopes of support recovering lost revenue as a direct result of US sanctions affecting the local online gaming industry. Last week September during the UN General Assembly, Prime Minister Spencer called on the the United States government. The UN feels that the US and Antigua and Barbuda could quickly resolve this dispute if the US would just work with Antigua and Barbuda and hopefully reach a more decent and suitable settlement.

What throws me off about this whole article is that this is not the first dispute between the United States and Antigua and Barbuda. Prime minister Baldwin Spencer felt that the UN would succeed in handling this dispute because they succeeded before. But instead of learning and conducting business in a different manner, Antigua and Barbuda still engaged in negotiations with the United States.

Another thing I find puzzling is that the during the UN Assembly, Prime minister Spencer was quoted saying, “I call on the United States to work cooperatively with Antigua and Barbuda and other remote gaming jurisdictions to forge an enlightened, reasonable and reasoned way of addressing the regulation and licensing of remote gaming services.”

First of all, Antigua and Barbuda happens to be the only remote gaming jurisdiction that has a dispute with the US.