France's Trade Policy Essay

dollar was close to an eight year shortage against the real, having lost more than 33% of its value during 2009 alone. During the past 12 month era, the exchange rate of the U.S. dollar (USD) has diverse from a low of BRL R $1.5310 to in height of BRL $1.7790. During 2010, the United States dollar typically kept an everyday exchange rate between (BRL) R$1.70 and (BRL) R$1.80, occasionally reducing below the (BRL) R$1.70 level.

Another impact the euro could have on the American economy is by effecting the exchange rate of the dollar. Although there is great potential for the euro to have a positive impact on American business, there still is much uncertainty regarding the long-term effect it will have on the dollar's role as the world's dominant currency. Federal Reserve chairman Alan Greenspan in his remarks on the euro on November 30, 2001 states that, "clearly the

With President Obama’s most unprecedented spending plans in history, as well as trillion-dollar budget deficits and the potential to more than double the U.S. national debt in the next 5-10 years, there is now a widespread speculation that the dollar is headed for new all-time lows and a possible collapse.

 Some argue that the current degree of integration is an economic union with an  evolving common political structure (but this is not entirely true given that all countries  do not share a common fiscal policy).   EU Objectives    Provide for free internal flow of production factors:   o Labour   o Capital   o Products    Provide protection for European industry and workers (free trade within and  protection outside countries)  o Tariffs and quotas applied to most basic commodities and services    Steel, Coal, Textiles, Agricultural Products    Banking,

The financial crisis of 2008 has been described as the worst financial crisis the world has seen since the great depression, but there are now murmurings of the potential for an even greater financial crisis, a currency crisis, caused by the demise of the US Dollar. The Dollar has been the reserve currency of the world since it took over from the Pound at the end of world war two, but we examine if it is about to crash spectacularly?

In the 1700’s, France was easily the richest country in Europe next to Great Britain. Its great and powerful navy and an army of hundreds of thousands of men also made it a formidable state.

It however would not cause less US decay to be absorbed thus causing a rebalance in the currency reserves and would mean the country begin selling USD instead of just replacing the portion they have with something else. Seeing the uncertain US financial situation could set off an avalanche that would be the definite end of the US as a superpower and immensely reflect the collapse of the Soviet Union, which was overextended.

There is one danger, and that is that inflation will become a problem. If there are more and more dollars being printed, while the velocity of money will still flow at a very fast pace, dollars could potentially lose their value. Even worse, as the government mismanages money, the danger is that the rest of the world no longer has the faith in the dollar. This will mean that they might no longer accept dollars, and that would result in a lot of money with no place to go. This can result in hyper-inflation like with what happened with Germany before World War 2. However, at the moment, the rest of the world has also printed lots of their currency, so the dollar remains the best bet. If you are nervous about hyper inflation,

When demand for euros increases because the United States imports more European goods, then the U.S. dollar price of the euro will increase and the euro has appreciated in value.

Through out history the currency will collapse when a nation’s debt exceeds its ability to repay even the interest. The government will try to postpone the problem by printing more and more money. But, with the larger the debt, the more dramatic the inflation must be to counter it. The Euro is predicted to crash before the dollar. The dollar, although seeming to be a sound currency, is only sound in relation to the euro. Therefore, once the euro collapses, the dollar will be exposed. After

Economic analysts say trading among other countries with no stipulations improve global efficiency in resource allocation (Tupy, 2005). Free Trade delivers goods and services to those who value them most and allows partners to gain from specializing in the producing those goods and services they do best; according to Tupy’s findings, Economists call that the law of comparative advantage. Tupy also states when producers create goods they are comparatively skilled at i.e. Germans producing beer and the French producing wine, those goods increase in abundance and quality. Trade allows consumers to benefit from more efficient production methods, for example, without large markets for goods and services, large production runs would not be economical. Large production runs, in turn, are instrumental to reducing product costs while lower production

After the long awaited single currency implementation known as the euro, there have been many ups and downs to this monetary system. Many have been quick to criticize while others still praise its value claiming it will soon be valued strongly against the dollar. Our paper looks into the various aspects of the euro and the progress it has made since its initiation. We begin with a brief history of the euro then move on by raising some questions concerning the effects of the euro on various economic aspects such as competition and global financial institutions. We then provide insight to the various strengths and weaknesses of the euro and the implications this currency has on various institutions such as banks.

Deutsche Bank (Karczmar, 2004) suggests that the euro could eventually challenge the dollar as a reserve currency, but the euro is still far behind the U.S. dollar as a reserve currency, representing just 24.2 percent of the world banking reserves in the 2013 third quarter (International Monetary Fund, 2013). Numerous economists endorse the United States’ ability to safely continue its external deficits. Cooper (2001) poses the argument in its simplest form:

French government was extremely in debt. French government had used more money than what they had in their budget and this caused them not only to be in debt but also to be at the border of bankruptcy.

Thanks to adopting Euro as their trade currency, France has managed to turn what could be risks of loss or currency risks caused by price fluctuations into foreign investment. For example, due to dollar weakness, France unfortunately lost an estimate of nine percent of their revenue growth back in 2004 but with a rising demand for French imports and the power of Euro, France weathered the storm and remains a top economy in the world (Tested by the mighty Euro, 2004). In the past, the economic outlook in France has seemed unbalanced, been questionable, and everything about their economy pointed towards a recession; fortunately for them, Euro has proven its reputation of being solid and fixed throughout the EU.