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Why Is America's Crawling Economy Hitting The World?

Why is America's crawling economy hitting the world real bad. UK is on the brink of collapse, the pounds sterling is having a free fall. The EU is almost suffocating and let's not talk about Nigeria and South Africa(which are the two biggest African economies). It's now obvious that America will not be going down alone. Shouldn't the world be praying for America to stand on it's both feet again because I sense doom if this continues.

Comments pleez.

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34 answers

[center]Banking supervisor confident about China´s economy[/center]

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At last we peacefully agree on something. Isn't that cool?

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Deepzone

when IBB came into power, corruption was still at it infancy in Nigeria, by the time IBB left, corruption has been institutionalised, together with 419 and drug. There is nothing that would ever works with the present rate of corruption in Nigeria. OBJ lament the situation when he cried," if l have to work with a clean person there would be nobody to work with".

I agree with you, history will be kind to OBJ. In years to come historians would look back at OBJ period and give him the credit he deserve,

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This is a very very ridiculous analogy because the American populace are not consumers of Nigerian movies. Nigerian movies are bought by Africans and Carribeans living in America.

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Yes America needs pray for our economic stability, America is vested in a lot pf countries although our dollar is weak aganist some countries in Europe we have investments in China, Japan, and even Africa if we start to suffer fiancially other countries will too, mainly because America does a lot of trading with technology as well as food , for instance a lot of our technology is produced in China, Americans love rice but we don't grow it very well here or little at all we depend on other countries to provide us with rice. Americas biggest wealth is generated with real estate and insurance if our economy collapses no one will buy homes for people who reside in other countries and plan to live here or have a vacation home you'll find it difficult to obtain a home because no bank will be able to insure your loan. With the fall of big companys in our country such as Lehmans Brother, Washington Mutual, and AIG these are companys that hold investments not just in America buy all over the world. If you have heard of Microfiancing who help in countries with poverty by giving loans to create businesses in other countries, these companies were a part of that as well. When America bleeds everyone does not because were better than anyone else but because were heavily invested in other countries we may do business with one country more than the other. Our economic crisis will be felt everywhere if we don't keep money in China banks then we don't receive electronics if we don't get electronics then businesses don't operate, if businesses dont operate then people lose their jobs, if people lose their they don't buy goods. Which in turn effects how Americans spend their money just to buy African movies which I absolutley love. Thats maybe an akward senerio but for the most part that how it works. Pray for us we need it.

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and that's why nigeria is flooded with those cheap made in china, made in taiwan goods.

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China is currently holding about a trillion dollar in US bond, a weakened dollar will affect the value of those bond. It need need to keep the value of the yuan weak comparative to the dollar , this would boost its export by making its good cheaper on the world market.

This is one of the prime objective of SAP, structural adjustment programme, that was introduce by IBB regime. The idea was to make export cheap while making import expensive. This is expected to boost the economy and create a demand for goods and services which would led to capital inflow. For the idea to work you need an enabling environment and the right infrastructure. But IBB institutionalised corruption and destroyed the system. Corruption is like a leaking bucket, no matter the amount of water poured in , all would be drain out. If you dont solve the issue of corruption in Nigeria , nothing will work.

If IBB had stayed true to his programme, Nigeria might be on the same par like China today, but the bastard choose to destroy the country by legalising corruption.

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blackspade

l disagree with you. A downturn in US economy will have a serious impact on china, least china holding one trillion dollar bond make it vulnerable. If US is to go into recession, the dollar will take a hit and this will affect the value of the trillion dollar bond held by china, which will impact it monetary  reserve and currency, yuan; which would affect  its micro and macro economy.

US is the engine room of world economy, a serious downturn in US will have a ripple effect all around the world, this would affect many countries which also trade with china. For example it would affect Japan, trade between japan and china would also be affected. Most of the top investment companies/ hedge fund in America are the same firm investing in japan , china, Europe. Its a small world and we are closely interconnected, what affect the eyes will affect the ears.

A downturn in economy will impact china severely, with a population of more than  1.3 billion and a political system unstable and in transition, they are in a precarious situation. Social stability in china depend on booming economy and the ability to feed more than 1.3 billion  mouth.

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i don't think so, the Chinese economy isn't stable enough YET to withstand a global recession. even china admits it would have to develop it's workforce to establish itself.  

china obviously doesn't want a weakened dollar, that's one reason china rigidly controls the value of the Yen

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[center]Big Risk: Surging Debt Makes US. More Dependent on China, Russia, Gulf States[/center]

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I never said China would be immune to the economic downturn of America, I'm just saying it won't make such a big dent in the Chinese economy like some are trying to suggest. China and America have a unique relationship, and they both depend on each other. But, with this American economic downturn, China does have the upper-hand.

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actually i disagree, the chinese economy would go down if it can't recover it's debt from the US. china needs the US to continue to run smoothly along with the world

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wrong assertion, you have to insult me and my Igbo ethnicity?

I don't have time for immature imbeciles who don't know how to have a civilized conversation. "bawomolo", I think you have the wrong sub-forum, this area seems like it may be too "complex" for your mind to handle. I suggest you do your future posts in the Jokes sub-forum for now on.

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When did that happen?

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That still doesn't mean China will be greatly effected by the U.S. economic downturn like you're suggesting. China is rapidly starting to become more dependent from American investments. As I said before, as long as America owes China money, you won't see China falling down the economic ladder with America.

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as deepzone said, countries like vietnam, bangladesh, pakistan, india are good sources of labor though.  china would cease been a cheap source of labor when it's becomes more of a developed economy with increased educational attainment.  

the US is china's main trade partner as evidenced by huge trade deficits, american companies are the biggest investors in china.  china wouldn't haven't experienced it's economic boom without the easing of relations with the US. soviet aid was never this beneficial .

i don't argue about that but the last time i checked, one country still remains the largest economy in the world and what's the population of china by the way. china is a large country with huge economic inequality.

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I think the war in Iraq is a big guzzler. @$10-12BN per month? Even the Chinese economy will not survive that huge expenditure for two years.

American billionaires are coming together to put in their stake to save America. Watch Bush tonight @8pm ET.

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China also has the largest "Current account balance" in the world, which means they have a surplus of nearly a trillion dollars, whereas America is broke, and in tremendous debt with not only China, but the world.

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China would be hugely affected by a downturn in the american economy. contrary to popular opinion, most of the chinese economic boom are concentrated in the cities of shanghai, beijing, hong kong etc while the countryside peasants and non-han minorities remain poor.  where do you think the chinese goods are going to go too.  China doesn't have a strong service industry compared to other developed countries.  

the US could always find a cheaper labor source u know. that's the point of globalization

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True, but the US. depends heavily on Chinese imports, so in reality you won't see that effected by that much of a margin. Almost everything here in America is made in China, and if the U.S. were to stop importing Chinese made products, there economy would collapse even more.

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Your statement defies the number one business rule: every customer is important. If china lose businesses coming from the US, they will feel it immensely besides, majority of these companies in China are US owned. India is another economy that may come to a halt if the US goes down.

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The United States owes China almost a Trillion dollars. China's gross domestic product is growing at a rapid rate, and China doesn't depend on the US. as much as people think. China is a worldwide trader, and doesn't "Blacklist" countries, and as long as they go on like that, they will always have an economic upper hand over America.

The plurality of Chinas exports do go to America (21%), but that is only a small percentage compared to all the countries they also ship to. I can see America's economic downturn slightly effecting China, just because exports may slightly decline from America, and other countries who're dependent on them, but at the same time, there's still that debt hanging over America that will need to be paid somehow.

To put it bluntly, China is growing at too much of a massive rate for America's economic downturn to effect them. China branches our EVERYWHERE, there's trillions of more dollars of trade opportunities for China, besides America and it's dependents.

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The EU is another big client they can contend with. I think the USA is more dependent on China more than China is dependent on them. So, a downturn in Americas economy will be a bad business for China but will not crash their economy.

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America remains china's biggest client just like America is saudi arabia's biggest client. Hence the reason why the problem in america is affecting the economy in china.

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they(China) and USA rely on each other.

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a huge giant that itself relies greatly on america?

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When America sneezes, the world catches a cold. Is there any truth to the saying?

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This probably explains why:

Obasanjo policies unfavourable to North - Tahir

Dipo Laleye, Minna - 14.08.2008

FORMER minister of Communication during the Alhaji Shehu Shagari administration, Alhaji Ibrahim Tahir, has said the economic policies implemented by the admnistration of former President Olusegun Obasanjo assisted in the under-development of the North.

Tahir, who said this in Minna, Niger State, on Wednesday when he delivered a lecture entitled “The Renewal of Hope” at the presentation of award of excellence to the state governor, Dr. Babangida Aliyu, by the Gamji Association of Nigeria, added that the economic policies were put in place by the government allegedly in concert with the Central Bank Governor, Professor Charles Soludo.

Alhaji Tahir said it was regrettable that some “inexperienced, callous, immoral, corrupt and odious young Northerners were roped into the scheme and they played their part in a most noxious manner.”

He submitted that if the policy packages of the Obasanjo government in the last eight years were critically examined and the allocation of resources sector by sector x-rayed, it would not be difficult to conclude that the implementation of the policies were designed for the underdevelop of the North.

http://www.tribune.com.ng/14082008/news/news22.html

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But we shifted to China some couple of years back?

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Nigeria and South Africa shouldn't have been so dependent on America, and should have made the smart decision and get close to China. Economies in Africa like Angola, Sudan, and DR Congo, who have growing business relations with China, are having their economies boom right now. China is also booming, growing at 8-9% a year, and it's economy shows no sign of slowing, neither do Angola, Sudan, and DR Congo with the before 2 being amongst the worlds fastest growing economies.

America's economic downturn largely effects countries who solely rely on trade/investment with them, more often than not, many others still continue to rise. Iran, India, Brazil, are also examples.

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