Tuesday, September 20, 2011
G7 Countries Announce Joint Currency Intervention
Due September 23, 2011. What is the G7? Why are many of the world's currencies in trouble? What needs to be done??
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Welcome. This is a blog dedicated to the students enrolled in the CSHS AP Economics classes. Click on the title of the article, read, and click comment.
The G-7 reminds me of the United Nations but instead the 5 countries discussing world issues, financial countries come together from 7 countries a few times a year to discuss economic policies. France, Germany, Italy, England, Canada, and the U.S. are represented, each country having large economies.
ReplyDeleteI could not really find any answer to the second part online, so I had to use my other resource, my father. He said that Europe is spending more money then they are taking in and are basically going broke. He also said something about 50 year old people who are retired no longer have pensions and contributes to the decline of their economy.
What I did find online, were articles on a one world currency. There are ups and downs to this. There would be a lack of competition and centralized world power, everything America hates.
A good idea might be global and local trade.
This article tells how China should step in and help with the wordly economic problems.
" this arrangement allows the Chinese government to skim off a significant slice from the value of Chinese exports without interfering with the incentives that make people work so hard and make their labor so productive. It has the same effect as taxation but it works much better."
http://www.georgesoros.com/articles-essays/entry/china_must_fix_the_global_currency_crisis
All I can say is China has a strong economy but needs to lend a hand right now
The G7 is a group of seven major industrialized countries (United States, Japan, Germany, Britain, France, Italy and Canada). Many of the world's currencies are in trouble because of inflation due to excess amounts of money printed. The G-7 had to intervene when the Japanese yen weakened the dollar. As a result of the global market experiencing instability over the past couple of years, countries' currencies are in competition. The G-7 is in fear of the strength of the Japanese yen as it could affect Japanese exports, which are important to trade with other countries. The G-7 countries need to combine their efforts to thwart the excessive increase in the value of the Japanese yen. There cannot be a currency in large world powers that dominates the rest. Since Japan is in a state of rebuilding, they need to keep their economy in stable conditions in order to maintain international trade. If nothing is done, the US dollar might have no value when compared to other world-powers such as Japan.
ReplyDeleteThe G7 is a group of nations, including the United States, Japan, Germany, Britain, France, Italy and Canada, who are developed and industrialized. The currencies seem to be in trouble because of the excess variations and lack of coordination within exchange markets, which have "adverse implications for economic and financial stability." One example is the yen, incredibly strong and over powering (as shown by the victory between the Japanese currency and the U.S. Dollar). In order to return back to stability, there must be some kind of intervention and cooperation from the G7 nations that do not allow the yen to dominate the exchange market, whether that includes increasing our strength or decreasing theirs.
ReplyDeleteThe G7 is a group where 7 finance officials from 7 countries (France, Germany, Italy, England, Canada, United States and United Kingdom), come together to discuss economic policies.
ReplyDeleteDue to debt, many countries are now printing paper money to pay off their debt. Even though they are paying back the other countries with the newly printed money, that causes the price of the currency to decrease, and so does the value which would mean they are getting paid what they owe, but the value has decreased.
Like what Zoey and Jocelyn said, the G7 countries will have to cooperate to help one another to try to balance out the currencies to where they aren't overpowering one another.
I feel that we aren't blogging, but just regurgitating the information in the article. If I wanted to know whatthe article said I would read it...
ReplyDeleteAnyways I wouldn't be too sure if the Japanese would want the value of their yen to depreciate. Of coarse their government would, but from the perspective of the citizens the rise in the worth of the yen is great because they can buy more for their buck (or should I say yen! hahahhahah). So the issue here that needs to be decided is whether we should be focusing on how to depreciate the value of the yen, or if we should increase the value of the dollar.
P.S.
This is basically a general question so if you know the answer please let me know in class. Why couldn't we bring the worth of the dollar up by burning the currency, or by not printing money for a while?
The G7 is a meeting of financial ministers from 7 industrialized nations. The countries are the US, Canada, Germany, France, Italy, UK, and Japan. These countries' currencies are in trouble due to inflation. These countries have massive debts to pay off and they continue to print money. This lowers the value of the currency. The 7 countries must work together to boost all their currencies and make arrangements to pay off their debt since that is what is causing the excessive printing of money.
ReplyDeleteI am also confused on the point Kevin has brought up. Why the G7 wants to weaken the power of yen? I don't understand the rationale behind this decision. In my opinion, Japan is in a state of rebuilding, if the G7 depreciate its value, wouldn't it mean that Japan's power of buying would decrease? Japan is most likely to buy resources from foreign countries and I think by remaining or increasing its buying power could actually be beneficial to both sides.
ReplyDeleteI don't really understand why the G7 would do this so I might be completely wrong about this. :(
The G7 is a meeting in which the 7 financial ministers from France, Germany, Italy, Japan, United Kingdom, United States and Canada all gather. Each of these countries are currently dealing with economic problems, namely inflation and market failures, due to increasing debts and the severe natural disasters that have plagued Japan. In attempts to reverse this, the G7 countries agreed to weaken the value of Japan's currency, the yen, in order to lessen the economic blow to Japan's economy, which will, in turn, benefit the other six countries as well. I personally think that to reverse the problems the G7 countries are facing, the countries need to work more on paying off their debts.
ReplyDeleteThe G7 is group of nations that are developed and industrialized that all meet. Many of the worls's currencies are in trouble due to a number of factors such as market failures, inflation and increasing national debt. What is trying to be done is lowering the value of Japan's yen but i think this is a bad idea. Japan is trying to rebuild after a hard period of national disasters and this could hurt them even more. The countries should focus more on paying off foreign debt rather than hurting another country's economy.
ReplyDeleteThe G7 is a group of finance ministers from seven different industrialized nations including the United States, Japan, Germany, Britain, France, Italy, and Canada. Many of these countries problems are due to the massive debt that they are in. None of them can pay of this debt because they are printing money when they don't have money to be spending. They should be focusing on paying off their debt instead of printing so much money.
ReplyDelete