Foreign exchange Essay Example for Free

Foreign give-and-take EssayAs mentioned above, there was a significantly high supply of bullion in the join States, which characteristically led to depreciation of the unite States dollar. In addition, the period was characterized by a high compute of inflation, implying that considerably jumbor sums of money would be used in buying commodities that would cave in been bought inexpensively in the earlier period (Atkinson and Hutto).On the international scale, the high cost of United States commodities meant that importers had to pay lots of money to acquire the goods, which ultimately lowered the level of international trade amidst the United States and other countries (Table 3). Consequently, the United States dollar fluctuated against other world currencies such as the Japanese yen, the Sterling Pound, Chinese yuan and the Australian dollar (Atkinson and Hutto). For instance, the Sterling Pound exchanged at amidst $1. 9548 and $2. 0442 in 2007 (Table 3), which was a v ery large variation. period Australia (dollar)Canada (dollar) China, P. R.(yuan) EMU Members (euro) Japan (yen) Mexico (peso) South Korea (won) Sweden (krona) Switzerland (franc) United Kingdom (pound) 2000. .5815 1. 4855 8. 2784 . 9232 107. 80 9. 459 1,130. 90 9. 1735 1. 6904 1. 5156 2001 . 5169 1. 5487 8. 2770 . 8952 121. 57 9. 337 1,292. 02 10. 3425 1. 6891 1. 4396 2002 . 5437 1. 5704 8. 2771 . 9454 125. 22 9. 663 1,250. 31 9. 7233 1. 5567 1. 5025 2003 . 6524 1. 4008 8. 2772 1. 1321 115. 94 10. 793 1,192. 08 8. 0787 1. 3450 1. 6347 2004 . 7365 1. 3017 8. 2768 1. 2438 108. 15 11. 290 1,145. 24 7. 3480 1. 2428 1. 8330 2005 . 7627 1. 2115 8. 1936 1. 2449 110. 11 10. 894 1,023. 75 7. 4710 1. 2459 1.8204 2006 . 7535 1. 1340 7. 9723 1. 2563 116. 31 10. 906 954. 32 7. 3718 1. 2532 1. 8434 2007 . 8391 1. 0734 7. 6058 1. 3711 117. 76 10. 928 928. 97 6. 7550 1. 1999 2. 0020 2007 I. .7865 1. 1718 7. 7582 1. 3109 119. 33 11. 024 938. 98 7. 0089 1. 2330 1. 9548 II. .8316 1. 0983 7. 6784 1. 34 84 120. 80 10. 878 928. 69 6. 8641 1. 2221 1. 9862 III. .8471 1. 0456 7. 5578 1. 3748 117. 74 10. 965 927. 27 6. 7402 1. 1986 2. 0213 IV. .8898 . 9811 7. 4336 1. 4482 113. 23 10. 849 921. 26 6. 4148 1. 1468 2. 0442 2008 I. .9058 1. 0039 7. 1590 1. 5007 105. 17 10. 803 956. 12 6. 2668 1. 0670 1. 9790 II. .9435 1. 0099 6. 9578 1. 5625 104. 62 10.428 1,017. 02 5. 9862 1. 0316 1. 9712 III . 8879 1. 0411 6. 8375 1. 5030 107. 58 10. 328 1,064. 56 6. 3175 1. 0734 1. 8924 Table 3 Foreign exchange rates between 2000 and 2008 Source Modified from GPO Access The strong dollar against the yen between 2001 and 2002, which was the beginning of the Bush system, deter importation by Japan from the United States (Atkinson and Hutto). At the same time, citizens of the United States opted to import valuable items such as automobiles at the expense of the locally manu particularured ones, thus putting the United States automobile exertion in the quagmire in which it is today (OECD).The consequence o f this is that major competitors such as the Japanese automakers have adversely affected local automakers such as Ford, and the whole industry has been earmarked for revival in the economic Stimulus Package (OECD). Interest rates Government bond yields and busy rates generally declined between 2000 and 2008. For instance, the value of bills at auction declined steadily from $ 5. 85 to $1. 01 in 2003, but steadily rose from $1. 38 to $4. 73 in 2006 (GPO Access).The low price of bonds meant that banks were in a position to purchase more regime bonds, thus diverting their attention from other financial service users such as borrowers (Crutsinger and Aversa). Ultimately, banks were forced to levy high interest rates on the loans they offered to the public, implying that most small business holders and individuals were crippled by a massive credit crunch (Crutsinger and Aversa). The ensuing credit crunch adversely affected the United States parsimoniousness particularly towards the ends of the end of the Bush brass section (Crutsinger and Aversa).Banks were most affected by the financial woes and this necessitated the Bush administration to consider taking ownership of various banks in a bid to protect them from collapsing (Crutsinger and Aversa). This move was hitherto also ill planned, as it would result in unnecessary government expenditure, resulting into higher inflation in the United States (Hanke). In addition, there was no assurance that with the governments acquisition of the banks, their exercise would better (Hanke). Conclusion.Even though the world witnessed a massive economic recession, the woes in the United States stemmed from the fact that the Bush administration spent excessively on the war in Iraq and Afghanistan, which generally weakened the performance of most local institutions. The underperformance in various sectors was shown in high rates of unemployment, high inflation, fluctuating levels of money supply and foreign exchange rates a s well as high bank interest rates. The combined effect of the various phenomena led to a crisis in the entire United States economy, thus reservation the Bush administration one of the worst leaderships of the United States.References Atkinson Robert D and Julie Hutto 18October 2004. Bush vs. Clinton An Economic Performance Index. 10 establish 2009. http//www. ppionline. org/ppi_ci. cfm? knlgAreaID=107subsecID=295contentID=252964 Crutsinger, Martin and Aversa, Jeannine 8 October 2008. Bush administration mulls bank stakes. 10 litigate 2009. http//www. freep. com/article/20081008/BUSINESS07/81008120/1015/BUSINESS02/Bush+administration+mulls+bank+stakes Curl, Joseph. 23 Oct. 2008 McCain lambastes Bush years. 10 March 2009. http//www. washingtontimes. com/news/2008/oct/23/mccain-lambastes-bush-years/ GPO Access . noncombatant unemployment rate. 10 March 2009. http//www. gpoaccess. gov/eop/2009/B42. xls GPO Access . Money stock and debt measures, 19652008. 10 March 2009 http//www. g poaccess. gov/eop/2009/B69. xls GPO Access. Bond yields and interest rates, 19292008. 10 March 2009. http//www. gpoaccess. gov/eop/2009/B73. xls GPO Access. Changes in consumer price indexes for commodities and services, 19292007. 10 March 2009. http//www. gpoaccess. gov/eop/2009/B64. xls GPO Access. Foreign exchange rates, 19852008. 10 March 2009. http//www. gpoaccess. gov/eop/2009/B110. xls. Hanke, Steve H. folk 24, 2008 The Bush Legacy Deflation or Inflation? 10 March 2009. http//www. cato. org/pub_display. php? pub_id=9663 Irwin, Neil and Eggen, Dan. 12 Jan. 2009. The Washington Post. Economy make Few Gains in Bush long time Eight-Year Period Is Weakest in Decades. http//www. washingtonpost. com/wp-dyn/content/story/2009/01/12/ST2009011200359. hypertext markup language National Organization for Women. 27 August 2004. Bushs Economic Failure Weakens Middle Class, Deepens Poverty and Harms Women and Families. 10 March 2009. http//www. now. org/press/08-04/08-27. html OECD. Macroeco nomic indicators.10 March 2009. http//stats. oecd. org/mei/default. asp? lang=esubject=15country=USA Robinson, Woodward, Gellman. Timeline Bushs Eight Years in Office. 10 March 2009. http//www. washingtonpost. com/wp-srv/politics/bush/legacy/timeline Shi, Leiyu and Stevens Gregory D. Vulnerable Populations in the United States. modern York John Wiley and Sons, 2004 The High Cost of Health Care. 25 November 2007. The New York Times. 10 March 2009. http//www. nytimes. com/2007/11/25/opinion/25sun1. html? _r=1 United states Department of Labor Bureau of Labor Statistics. 10 March 2009 http//www. bls. gov/.