Europe's weight on the U.S. economy

“Europe is important for what happens in the rest of the world economy.” says Robert Zoellick, President of the World Bank (NYTimes, 2012). The United States saw a 2.2% economic growth in its financial markets, which is lower than expected but much greater than our counterparts in the Eurozone. The United States and Europe both experienced the grips of the worldwide recession in 2008 and then again saw decreases in their markets at the end of 2011. But, despite these downturns the U.S. has experienced a profitable first quarter in 2012, unlike many European nations. In previous decades this would prove to be destructive to the U.S. economy, as the economies have been rather dependent on each other. However, foreign markets have seen extreme growth which alleviates the dependency between the U.S. and European economies. The dependency has been displaced on other foreign economies and thus the U.S. is not binded by the woes of the European economies. In an earlier post I discussed how the U.S. has increased their production of oil to 55% of our consumption. U.S. energy is being used domestically, and is being traded worldwide displacing our dependency on foreign goods. This is true in other economic industries as well, where the U.S. can seek trades with other nations instead of European nations. This places Europe in a unique situation that they have not experienced in centuries. Their economy is struggling to survive, and dependency on them is much lower as of recent. European nations need to experience a strong reform in their banking systems as well as their governmental spending policies if they expect a change in their economic outlook. Don't get me wrong, the economic downturn in Europe will hurt the U.S. economy, but no where near as significantly has in recent decades.

Ewing, Jack. "US Growth Is Tepid, but It's the Envy of Europe." New York Times. Nytimes.com, 28 Apr. 2012. Web. 28 Apr. 2012. <http://www.nytimes.com/2012/04/28/business/global/28iht-econ28.html>.

Oil in the U.S.

The Dow Jones Industrial average closed at 13,080 points on Friday. This is a significant increase from the peril the market experienced throughout much of the last 4 years. But, despite this increase, tensions in the middle east still remain and gas prices are nearing $4 a gallon here in North Carolina. This has led to movements across the nation for more fuel efficient automobiles, and transportation systems to alleviate the need for fuel. However, throughout the midwest oil rigs are popping up and are drilling, using new technology that enables them to gather oil that was previously too costly and too difficult to drill for. President George Bush started this movement during his terms by enacting drilling friendly policies, much to distain of environmentalists in the U.S. President Obama has continued his support for Bush's policies, which has led to a sharp increase in fuel production. "In 2011, the country imported just 45 percent of the liquid fuels it used, down from a record high of 60 percent in 2005. (Krauss, 2012)" This is a huge step for the U.S. economy, which brings up the question will the U.S. ever be fully energy independent? In my opinion we may see that day, with fuel "imports decreasing by 20% over the last three years from members of OPEC. (Krauss, 2012)" In fact the United States has actually begun to export fossil fuels, and may one day become a leading global exporter of fuels. This is a far cry from what is going on in the U.S. today, with President Obama only partially supporting the Keystone pipeline from Canada. The U.S. could one day become completely energy independent, but for now gas prices are still approaching all time highs and the tensions in the middle east are still looming.

Krauss, Clifford, and Eric Lipton. "U.S. Inches Toward Goal of Energy Independence." Nytimes.com. The New York Times, 22 Mar. 2012. Web. 23 Mar. 2012. <http://www.nytimes.com/2012/03/23/business/energy-environment/inching-toward-energy-independence-in-america.html?pagewanted=1&ref=economy>.

Oil Prices and Economic Outlook

Oil and gas prices have reached almost all-time highs with a "barrel of oil costing $109.77 a barrel" (CNNMoney, 2012). These oil prices are the highest since the bottom fell out of the stock market in 2008, where gas retailed at about four dollars a gallon. The rise of gasoline prices is puzzling because of the increased production of domestic oil, coupled with a decrease in demand for gasoline in the United States. The law of supply and demand states that when the supply of a product increases, inversely the price decreases because demand decreases, and vice-verse. But as we all know, the world is now a global economy, where tensions in the middle east effects markets around the world. The European Union placed an oil embargo on Iran in January, which has driven Iran to threaten to shut down the Straight of Hormuz. The sheer threat of closing down the straight will decrease trade significantly around the world, but mainly in European and Asian nations. This could cause the Asian markets, such as China to cool down, which would have an effect on the U.S. market. This all takes place in light of a recent economic recovery in the United States. This recovery could be halted with the global increase of gas prices, which as history shows that recessions follow spikes in the price of gasoline. There is however hope that Saudi Arabia will boost its production of oil, as well as the increased production of crude oil and natural gas in the United States. These two factors could help to alleviate fears and could continue economic growth world-wide.


Farrell, Maureen. "Will Oil Prices Kill the Stock Rally?" CNNMoney. Cable News Network, 26 Feb. 2012. Web. 26 Feb. 2012. <http://money.cnn.com/2012/02/26/markets/stocks_lookahead/index.htm?iid=HP_LN>.

NY1 News. "Senator Schumer Urges Saudi Arabia To Boost Oil Production." Senator Schumer Urges Saudi Arabia To Boost Oil Production -. 26 Feb. 2012. Web. 26 Feb. 2012. <http://manhattan.ny1.com/content/news_beats/political_news/156653/senator-schumer-urges-saudi-arabia-to-boost-oil-production/>.

Facebook has taken the world by storm, since Mark Zuckerberg created it in his Harvard dorm room. The social media giant has nearly 900 million users worldwide and has seen considerable revenue through the use of its advertising. However, the creators of Facebook are struggling to convert their product into a viable application for mobile devices that generates revenue. The use of common ads has proven to be unsuccessful, because users find them to be annoying on a much smaller screen and therefore are far less likely to click on them. Facebook generates revenue everytime a user clicks on one of their featured ads. They are not satisfying this revenue stream with their mobile apps, therefore Facebook needs to figure out a way to incorporate their ads into their product layout. There is word however, that Facebook has looked to move into the smart phone industry. They have already collaborated with HTC on a mobile device with Facebook integrated into it, but this proved to be unsuccessful. But, with the recent backing of Twitter by apple, look forward to seeing Facebook pursuing the smart phone market with another manufacturer.