If the world went to the euro? What would it do to the US economy?

Question

If the world went to the euro? What would it do to the US economy?

Answer 1

If the world went to the euro, there would be a lot of effect to US economy. Let me list a few:

1) Currency is like any other commodity that countries, funds, bonds, banks, companies and individuals buy and sell every day. Like you will buy Euro when you go on a holiday to Spain or we buy US$ when we come to the US. Currently 90% of the World's International Trade is done in US$, so every country from Russia to Brazil has to buy US$ to buy other commodities (for e.g. Russia buys US$ selling either its Currency in exchange or products and then with those US$ they buy Rice from Thailand). Now if world shifts to Euro there would be no importance of US$ and the economy would crumble as US would have to sell its products or currency to buy other products through Euro. So, depending on its Interest rates and Gold Price - in such cirucmstances you will get 4 US$ per Euro (1Euro = 4US$).

2) Now with above scenario, prices of food and perishable goods in the US will rise to optimum and the economy will go in to negative trend. There would more inflation than growth. And the internal US economy will go near-bankrupt.

3) The third effect will be on Multi-National corporations, like Coca-Cola, IBM, Microsoft, which has presence in all over the world. As soon as the world shifts to the Euro, these companies will have loose 300% of their profits and many companies would not be able to afford repayment of their long-term debt.

4) With the above "thrid factor", US banks will face disastreous situation. Like they are facing today with Subprime, they will start loosing through the companies and corporate clients.

5) The Wallstreet would cash because of above reasons (3&4), this would effect other remaining companies in trade and also individuals who put up their life savings and invest in few stocks.

6) The last problem US will face is: Energy Crisis. Today all countries in world buy US$ by selling their products or currency and then buy Crude Oil from Saudi Arabia or other OPEC nations, these OPEC nations then get paid in US$, which they save and keep in US Banks, so the whole cycle of US$ coming back in the US will fall and ultimatley the whole US Ecomony will go back to stone-age.

These are only possibilites. I might sound negative but - its practically the Economy of Currencies and Economy of States. Unless the US comes up with something really strong to resist these forces - above can happen if the world went to EURO.

I hope this is helpful.

Thanks

Madhav

Answer 2

Fvcker it all up.....

Answer 3

dollar would be worthless.

Answer 4

I'm not sure about the US economy being British but I know that the euro has affected us!

I want Britain to go to the euro!

Answer 5

Your question is not clear. Do you mean if all countries would use the euro as a currency? If that's what you mean, there's no need to even think about that because it is irrealistic, it is impossible. The euro is a european currency and it will never ever be used as a currency in USA. Don't waist time thinking about impossibilities.

If you mean something else, be a little more specific.