There used to be a saying: “When Wall Street sneezes, Europe catches cold.” That’s not the way it is any more. As one economist has written: “At the start of the new millennium, the US – the largest economy – is almost twice the size of the next largest economy, China, and about three times the third largest economy, Japan. Thus, the size of the US economy is larger than the next two economies combined, revealing clearly the uni-polar nature of the global economy. The fourth largest economy, India, is a little over one-quarter the size of the US economy. The next five positions are taken by the big four of Europe: Germany, the United Kingdom, France and Italy. Brazil and Russia bring up the rear with their joint size less than that of India.”
As much as things are changing, it remains true that the Federation’s economic well-being is closely tied to the economic performance of the U.S.
The U.S. and the Federation are major trading partners. Perhaps equally important, the growing local tourism industry and real estate development are both closely linked to the willingness of American citizens to travel and invest here. If the U.S. economy runs into sustained problems, it will not be good for the people of the Federation.
In the last few weeks, the U.S. government has intervened to keep the credit industry from contracting or, in a worst-case scenario, collapsing. It remains to be seen if these efforts will be successful.
Without credit, there is no growth, and that growth is vital to the economic well-being of the Federation.
This is no time to panic. The Federation still has plenty of jobs, good services, sound currency and available consumer goods.
It may be a good time to remember some simple tips to save money should we see an economic downturn. Here are a few ideas:
– Start putting a few dollars every week in a savings account that you do not touch. It should be money just for emergencies.
– Look for ways to reduce entertainment costs. It might be cheaper to borrow a book than go to a festival or dance.
– Take advantage of food bargains wherever you can find them. Compare prices at the market. Share cost-savings recipes and plant a garden. Also, see what you spend on dining out versus what you would spend by preparing your own meals.
– Turn off lights, televisions and any appliance you can whenever you can. Electric rates aren’t going down any time soon.
– Try to repair clothes rather than replace them.
Of course, for those who live on a tight budget, these and many other small things are part of their lives right now. Should the economic picture darken, the people with the least will feel it the most and it will be the duty of those who can help to do just that.
At this time, there is no reason for gloom and doom in the Federation, but with matters in great flux to our north, it would be wise to take some prudent steps.