The debt crisis will lower nominal national income while increasing the purchasing power of the US dollar.
The euro fell to a four-year low on Wednesday amid continued investor worries about Europe's sovereign debt woes. German Chancellor Angela Merkel banned naked short-selling, seeking to combine new regulation with an already announced $1 trillion euro rescue package, to shore up the currency.
Why the European financial crisis could mean trouble for Americans.
Metals like gold and silver have become a core holding for more investors as they focus on the risks that lie in sovereign balance sheets. The gold price was as high as $1,245.80 per ounce Wednesday.
The US put $700 billion into a bailout of US banks during the financial crisis. Now the nations of the euro zone are proposing a similar bailout fund – €750 billion – to deal with the Greek debt crisis.
Ultraorthodox Jewish men harvest wheat ahead of the Jewish Shavuot holiday in a field outside the Israeli community of Mevo Horon on Monday. Shavuot commemorates Moses receiving the Ten Commandments and is also a harvest holiday. It begins next Tuesday at sundown.
Markets across the world soared after the European Central Bank promised the creation of a $955 billion rescue fund for eurozone countries with debt problems. But some economists are worried about moral hazard – bailouts leading to reckless spending.