Implementation of a single Euro currency in many European countries has caused problems, especially in Greece resulting in bankruptcy and riots. However, Greece is not the only country to be affected: other European countries such as Germany have had to lend a helping hand to its neighbor and because the world is becoming more of a global economy, almost everyone else is affected, including those in the U.S.
American Advantage of the Falling Euro
With the Euro falling in prices, the American dollar’s purchasing power goes up, in other words, the dollar can get more bang for the buck when purchasing European products such as European cars, wine, and taking trips to Europe can be much less expensive. European retailers are also spotted advertising merchandise in terms of U.S. dollars to attract tourists.
Disadvantages of the Falling Euro in U.S.
With less purchasing power, European investors are investing less. What that means is stocks will go down, including stocks of American companies that do business in Europe. Economies follow stocks and does not shift gears even when stocks go down.
What we gather is that economic effects are not contained within countries, on the contrary, as communication, travel, and technology advances, economic boundaries become more vague.