It's the global economy, stupid.

The US is not the only country whose economy is suffering right now. Investors have been watching the numbers around the globe for a while now, not just the numbers here at home. Many people believe that China is going to raise interest rates at their central bank due to high levels in inflation around the world. Countries in Europe are also struggling to maintain strong economic numbers, like China and America, during these hard economic times. The leaders from the world’s leading economic countries just wrapped up a meeting in South Korea about the struggling state of many nations. Of course everyone had good things to say but many people wonder how many will follow through on what was said as world leaders work to get the world economy back on track. Even after the meeting there were still no definite decisions about what to do to get things rolling again.

Investors will continue to keep careful track of other countries economic states as well as the economy here at home. Many want to see what will happen with countries whose markets are still emerging and have potential to be major players in the world market. Most investors are also keeping careful watch over the economy in China and economic decisions made by the Chinese government. There are some who believe China is purposefully trying to push down the value of the yuan, the Chinese currency. This is something that needs to be watched very closely by everyone because many say it is a ploy by China to one up the United States when it comes to trade. This is a major cause for concern since China “recently reported a $27.2 billion trade surplus while the United States posted a $44 billion trade deficit.” The possible hike in interest rates in China and the poor European economy need to be watched very closely along with the economy here at home. All are very important in today’s society because the world economy is so deeply intertwined.

China needs to be watched because they are relying very heavily on property investment to fuel their economy; property investment accounts for nearly sixty percent of their economy. This is an extremely high number, countries in the past have relied on property investment of up to thirty percent but their economies have fallen apart. It will be very hard for China to continue to maintain this high level of investment in property, if their economy slows down what will that mean for the rest of the world? Investors and economist need to keep a very close watch on every country’s economies, especially the major players around the world. If things get any worse than they already are in anyone country it could have major repercussions around the world.

http://money.cnn.com/2010/11/12/markets/thebuzz/index.htm