With the wide range of financial struggles that we see in our daily lives, we may be tempted to flip past or tune out news stories about economic crises in other countries. Unemployment, inflation, foreclosures, and other troubling things are things that we hear about on a daily basis and sometimes they hit close to home, or even worse, at our very own homes. The financial goings on of the entire world do have an impact on us – some more and some less, but an impact just the same.
The Eurozone crisis has been in the financial news a great deal lately, and you may be wondering how it will affect us here in America. We do live in a global economy, so our finances are connected to the finances of others all over the world. As the American economy begins a slow recovery from a very dark place, the actions of other economies will help to determine whether that recovery happens even slower or gains momentum. Part of the recovery that the United States economy has been experiencing is due to an increase in exports. Many of those exports go to Europe. As the European economy experiences its own set of troubles, consumers and governments will be cutting back on spending across the board, including those things that they have been buying from us.
The financial troubles in Europe also affect the stock market and other investments, as well as overall consumer confidence. Bad news is bad news, and when Americans hear bad news about money – even if the news comes from other countries – and we hold on to our money even tighter. This could slow the small gains that we have recently made with our own economy. One final thing to note about the Eurozone crisis is that while it is likely that a strong dollar relative to the Euro will make European travel less expensive, many Americans are still finding that travel in general is outside of their budget. Even at a discounted price, a European vacation is still out of reach for most Americans.
Photo by clarita on morguefile.com.