It’s really hard for me to find myself here. I’m experiencing some difficulties in managing my post, and where (and how) to post it….

this is why I’ve posted it on front page, because I really don’t know how to do it elshwere. Is it bad… ?

If anyone know where to click-on, where to go, and how to publish my work properly – please give me a sign. However, below you have the full part of my work.

Marek.

State of The United States Economy

Introduction

United States of America is without a doubt, the most powerful and technically-advanced economy in the world. It can be described as a market-oriented, mixed economy where private individuals, corporations and other private business firms make the majority of microeconomic decisions, while being regulated and supervised by the government, who is in the same time, obligated to buy all needed goods and services predominantly in the internal, private marketplace. The United States financial system includes a rich variety of savings institutions, encouraging and facilitating the rising volume of funds, needed to support and ensure the financing of an expanding economy, and the commercial banking system able to respond constructively to its needs. U.S. business companies enjoy greater flexibility than their counterparts in Western Europe or Japan in decisions to invest or expand company’s funds, to lay off surplus, or hire new workers and to develop new products and technologies. At the same time, they are experiencing more difficulties when entering other markets, than foreign firms face entering into U.S.

The United States economy generates the world biggest gross domestic product, with est. 13,16 trillion USD in year 2006 – which constitutes over 19% of the global GDP, giving it the absolute leader position, with the value comparable with combined GDP of 25 European Union states altogether. With GDP growth rate at 2,9% (2006 est.) and inflation rate at 3,2% (2007 est.), the country also ranks eight in the world in nominal GDP per capita, and fourth in GDP per capita at purchasing power parity. However the United States is also the world’s biggest goods importer and exporter, it has also the largest national and international debt with the value of approx. 12 trillion USD (as for June 2007), which is almost 88% of the overall size of the U.S. economy, and relatively large gross public debt, at the level of 64,7% of national’s GDP (2005 est.). With the recent significant devaluation of U.S. Dollar, year-by-year adverse trade balance with revenues of 2,407 trillion USD and expenditures 2,655 trillion USD (2006 est.) as well as with very expensive military presence in Iraq and Afghanistan for a large scale since 2001, the U.S. government is forced to look for savings, while the unfavorable macroeconomic factors of the U.S. economy are slowly going deeper every year since 2004[2].

The United States Dollar

            The United States Dollar is an official country’s currency from the very beginning of its existence. Trough many years of United States supremacy in global economy, Dollar became the most important one, along five main world currencies. Nowadays, it is not only the most used one in the international transactions, but also the most recognizable one in the world. Its power and influence on world economy, in pair with some internal reasons provokes declaring it also an official currency in some other independent countries, like in Equador and El Salvador in American continent, as well as in East Timor and some oceanic states in East Asia. Dollars are also commonly acceptable among others in Haiti, Panama and Puerto Rico, while the currency of many other independent states remains strictly related with U.S. Dollar rate. Unofficially, Dollar remains as a second (sometimes even more valuable) “underground” currency in numerous countries all around the Globe, especially in Africa and Eastern Asia.

            As mentioned before, U.S. Dollar is the most commonly exchanged currency in the world, not only because of valuing the gold and petroleum in Dollars, but also because of international transfers held in USD, even when the parties don’t accept it as an official legal tender. This led to a situation, where there is more Dollars in use outside The United States, than in country’s internal exchange. Economists are estimating, that there was approx. 380 billion USD in circulation all over the globe in 1995, while only one-third within U.S. borders. In April 2004, it was already 700 billion USD, with an estimated half to two-thirds of it still being used overseas.

However at present times, Dollar also remains as the world’s foremost reserve currency, it is continuously loosing on it’s attractiveness for foreign investors as the solid investment. Since bad macroeconomic results and deepening economy recession in previous years caused serious losses on currency’s value[3], the world’s second strongest – European common currency EURO – significantly started to be the most reliable one. Quoting the International Herald Tribune’s report – the former U.S. Federal Reserve chairman Mr. Alan Greenspan, commenting at the pages of German magazine “Stern” the state of the U.S. Dollar as a reserve currency, said that however Dollar is still slightly ahead in its use as a reserve currency, it doesn’t have all that much of an advantage anymore. At the end of 2006, approx. a quarter part of all currency reserves held by central banks were held in EURO, compared to 66 percent for the U.S. Dollar.

Specialists are forecasting, that if the current trends will not change in the nearest future, other countries holding the United States debts may want to convert their obligations into EURO or any other, more stable currency. This would most-probably bring very harmful effects to the world’s most known legal tender – the U.S. Dollar.

USD to EUR currency value comparison chart, source: http://finance.yahoo.com         

The United States Financial System

General regulations, taxation and interest rates are set and controlled by The Federal Reserve System, which is de facto the U.S. central bank. However it is considered to be as an independent national bank, because its decisions don’t need to be accepted by any government’s executive representative, including the President, it must work within the frameworks of the overall objectives of economic and financial policy, established and approved by the government itself. There can be found a modifier: “Independent within the government”, considered as the most accurate one. Commonly known as “Federal Reserve”, or informally “The Fed”, it consists of the Board of Governors, Federal Reserve Banks, Federal Open Market Committee, Member Banks and the Advisory Committees. The main goals, spelled out in the Federal Reserve Act are obligating “to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates”. Since 1913 when The Federal Reserve System was founded by the Congress, over the years, its role in banking and economy has expanded. Practically then, it is responsible for supervising and regulating the bank institutions to ensure the safety and transparency of the U.S. banking and financial system, maintaining the economy stability by strengthening the state’s currency and keeping the inflation in proper, profitable level, avoiding the risks of potentially arising threats, and protecting the consumer’s credit rights. It also provides the financial services to U.S. government’s internal and foreign institutions.

The United States Foreign Direct Investments

            The world economic phenomenon of foreign direct investments (FDI’s) is very clear factor of progression of globalization. Nowadays, opening the internal’s ground for foreign investors, is the requirement of competitiveness. Opening business in different country creates access for its workforce, technology and other precious resources, frequently just unavailable at local markets. Nevertheless, usually building new workplaces, takeover the controlling packs of the shares or just opening a partnership with foreign companies is the best way to extend corporation’s horizons, as well as to gain influence in specific branch and simply – earn more money. Foreign direct investment outflows from the OECD area to the rest of the world grows from USD 593 billion in 2003 to USD 668 billion in 2004.

FDI does not include short-term capital flows, such as stock market’s speculation or some private portfolio investments.

It’s no surprise, that world’s largest economy – The United States are also very lively involved in abroad investments. The U.S. FDI outflows are ranked at the top of the list, and still are on the rise since the 1970s, when the first statistics has been started. As the general trends were, and still are very optimistic and encouraging for all foreign investors around the globe, it’s Americans who were willing to spend the most from their means for investing abroad. Referring to “The New Economy Index”, a publication of Progressive Policy Institute in Washington D.C., the U.S. foreign direct investment activity grown from an average of 45,3 billion USD in the early 1970s, to an average of 117,5 billion USD in the first half of the 1990s. In 2004, out of 25 largest international capital merges, 5 had a U.S. based company as the purchaser. OECD experts announced that the FDI outflows from the United States took an all-time record of 252 billion USD in 2004 – which was a gigantic, almost 80% raise comparing it to the year 2003 (141 billion USD). 

I’ve finally finished my part….I would appreciate any suggestions so feel free to comment.

regards;)

Have a pleasant read and don’t be ashamed to punish me for my mistakes

Regards

http://aatws.wordpress.com/students/lukasz-domurat/

The bonds that tie Europe to the United States are strongly steeped in the last century.

America brought peace and stabilization to Europe several times during two World Wars. Thanks to generosity of Marhall Plan America helped to rebuilt the destroyed economies and recover political system in Western Europe.

Through the Cold War America and Europe stood together facing together the soviet threat. The danger of soviet invasion was uniting factor for transatlantic relations and European integration. Western Europe and America had a common enemy. NATO provided collective security arrangement where everyone had a voice.

The decade of the 1990s was significant for the world order. The apparition of anti-communist opposition in Poland and across Central and Eastern Europe shook the old order. The fall of the Berlin Wall and the reunification of Germany, the end of the Soviet Union and the decomposition of Warsaw Pact, and the new freedom for the former Communist states of Central and Eastern Europe followed it. As a consequence it led to reconfiguration of objectives in transatlantic relations.

New century brought new challenges and threats for both America and Europe. Globalization, terrorism, peace process etc.

USA were supporting the EU’s enlargement process, as a stronger and bigger Europe would be more interesting partner.

But how this partnership should look like. Here the divergences appeared. Whilst European politicians would prefer to be USA’s equal, their American counterparts don not share this vision, as they are often convinced about American global power and percept Europe as a regional power. What they propose is asymmetric relations what is not well received from the other Atlantic side.

Robert Kagan[1] the author of very famous essay ‘Power and Weakness’ presents very interesting view of American and European relations. He’s convinced that Europe is no longer a super power and its political influence effectiveness is limited to areas shearing borders with it. So he proposes an active cooperation with America to stabilize and transform such a vulnerable zones like: Balkans, Middle East, north Africa or former soviet republics.

Europe is seeking for its identity and the Europeans seems to be not sure whether they should define it with or in opposition towards USA.

USA supports European integration processes but don’t want to resign from bilateral relations with particular countries in Europe.

The perception of USA and American interests is quite diversified across the continent here.

Whilst there are traditionally countries representing disinclined attitude to America like France, Germany, Spain, there are also countries showing greater openness: Great Britain, Poland, Italy. For these reason it’s difficult to European Union to speak one voice.

The visible tendency, which differs both sides, is the gradual emergence of a set of norms within much of Europe (especially within what former U.S. secretary of defense Donald Rumsfeld referred to disparagingly as “the Old Europe”) about the role and use of power in the international sphere. It is the reverse of the American enthusiasm for the early and unilateral application of force. Sometimes characterized as the European Way, it essentially privileges, diplomatic and economic engagement over the threat or actual use of force.

Besides the general attitude towards international law. The Europeans reproach Americans instrumental using it, according to their international interests.

Americans and Europeans not only differ over how to deal most effectively with threats to international peace and security, they also define those threats in very different ways. Rightly or wrongly most people in the United States have internalized the core message of its administration when it comes to dealing with the terrorist threat, in particular:
Waiting to be struck again before doing all in our power to defeat those who would do us harm is no longer an option.

Often then do not understand European willingness and readiness to resolve the conflict by mediation and other non violence means.

They do not subscribe to the view that the best way to neutralize the threat is by the seemingly wanton application of military force. Better to conceive of the problem asessentially criminal in nature, European officials indicate relying on practices and techniques used to suppress such activities the world over, by peaceful means.
That’s why it is said often that Americans are from Mars, and Europeans from Venus.

Just how profound have the differences become over these and related issues?

A January 2007 BBC poll revealed that 74 percent of Germans surveyed agreed with the proposition that U.S. influence in the world is mostly negative. Sixty-nine percent of those polled in France felt the same way, as did 59 percent of Russians who were asked[2].

This is why in so many areas American and Europeans find themselves competing.

There are some questions that find different points of view from both side of Atlantic.

GMO, Kyoto Protocol, Rocket shield in Central Europe, American military presence across Europe these are very problematic issues and they are judged in a different way.

However all these differences cannot deny the fact that globally America and Europe are allies. Even if they do not agree about tactics they speak the same voice about strategy.

As it was in the case of Iraq war. European were not totally against using power but they wanted to run out other options before.

Now USA and European countries agrees in general about defense and security issues.

Sarkozy’s France loudly condemns Iran and its will to develop nuclear technology.

Peace in Balkans, Middle East, war in Afghanistan, war on terrorism put together both America and Europe.

What’s very significant recently USA gained a very strong supporter in Europe as French president Nicolas Sarkozy was elected. France represents very loud voice in transatlantic relation creation. Since now it’s been very difficult partner which usually were strongly criticizing American foreign policy. Recently thanks to Sarkozy reshaping its attitude towards America and reconfiguring its options. This makes believe in rapprochement between two partners.

International system is imperfect, but it is important. Trust between Europe and USA
Need to be re-established. Working together can be more efficient that open competition and rivalisation.

Przemysław Rybak, International Relations, University of Wroclaw 2008

Our part  is ready. It is on Kasia’s blog:

http://aatws.wordpress.com/students/katarzyna-janota/

If you have any comments keep it to yourself Of course it is a joke Feel free to comment!

Click and comment: Intellectual Property part

Szymon

Best regards

I’ve posted my part of the report on my blog site. It’s waiting for your comments!

Greetings.