Dollar Pullbacks will Hasten the Impending World Financial Crisis

One devastating effect of the US recession was the evaporation of dollar entry to the developing countries. This observable fact is damaging to the weaker economies that were tied to the dollar investments.

Major US multinational corporations have shut down their offshore plants in the developing countries to reduce expenditures and to hinder the economic slow down of the US from gulping them. This resulted to major unemployment problems in the developing countries that were dependent on job creations from direct foreign investments.

Dollar aids and credit lines are likely to diminish as the US investors strengthen up their mainland plants and investments. In this dire situation, the US investors will not continue to finance on any risky investments especially in the volatile economies of the developing countries.

Moreover, as a result of the dollar pullback in virtually all markets in the world, overseas foreign workers will be facing retrenchment actions from their companies that rely on the dollar influx to their capitals. Sequentially, dollar remittances from the overseas foreign workers will decrease and therefore will shake economies that are relying on it.

Developing countries will then be at great risk to collapse. They have no money resources to finance their economy.  There will be no jobs for the citizens and the number of unemployment will possibly increase as thousands of jobless OFWs return to their countries.

In conclusion, the evaporation of the dollars will give way to the collapse of the developing countries and will only hasten the economic disruption of the world financial market.