The world of money is getting shook! This week we're diving into the drama surrounding the US dollar. Russia and its BRICS crew are challenging the dollar's dominance, and with global use of the greenback dropping, some wonder if its reign is ending. But hold on, America is still the land of opportunity, attracting dreamers worldwide.
We'll also explore the risky world of high-yield bonds that investors are jumping on as interest rates might fall. Closer to home, President Biden's got a plan to help young people buy houses, with tax breaks and affordable options on the table. This could change the housing market and the whole economy.
We'll break down this complex financial situation, where money and freedom are intertwined, and show you how it might impact your future. So buckle up and get ready for an informative ride!
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Find out why Putin thinks the US is shooting itself in the foot. Investors are racing to lock in high yields and President Biden wants to help young people become homeowners. These are the top three headlines in this week's weekly business breeze. First up Russia trying to get fewer countries to use the US dollar, claiming that the US is making the US dollar weaker by using it as a punishment on other countries. Russia thinks this makes the US less powerful in the world and wants to create a system for countries that are part of BRICS group to trade with each other without using US dollars. Other countries are also starting to use currencies other than the US dollar. The amount of the world's money that is stored in US dollar has gone down 6% since 2016, but the US dollar is still the most popular currency that countries store money in, at 59% in 2023. Hey, mr Putin and a lot of these Russian leaders really would like to level the playing field for themselves and the country. However, there's a big however. We are still seeing this country as a number one place that immigrants flock to. If that wasn't the case, we wouldn't have this border issue that we have right now. Why are people still wanting to come to this country. Maybe it's because the dollar still has power. But it's not just a dollar, but it's the freedoms that this country represents, and people want the opportunity to live in a capitalist society where you can make your own way.
Speaker 1:
Next up, imagine you see a sale at your favorite store and everything is marked way down, but you know the sale ends soon. That's kind of what's happening with corporate bonds right now. Investors are rushing to buy them up because they're offering really high interest rates, but they know these rates might not last forever. They're worried interest rates will go down in the future, so they're locking in these high rates while they can. They are mainly focusing on safe, investment-grade corporate bonds rather than riskier ones. This is because they're looking for a safe haven for their money, especially with Mr Jay Powell stating that they plan to stay on track and lowering interest rates two to three times this year in 2024. However, we will have to see about that. I think that it is a good thing that they will raise rates. Some don't think it is, but I think it's a good thing, and this week on Biden Watch, buying a house these days is like trying to get a good apartment in your favorite city. It's super expensive and there's just aren't many available.
Speaker 1:
President Biden feels your pain and wants to make it easier for young folks to become homeowners. His plan includes a tax credit of $10,000 for first-time homebuyers. This is basically like getting a $10,000 discount on your first house. That's a big deal when you're trying to save up for a down payment. A tax credit for people selling their starter home. This could help up three more houses on the market for first-time homebuyers.
Speaker 1:
Imagine it as a musical chair game, but for housing Three tax credits for developers of low-income housing. This would encourage builders to construct more affordable homes, which would make the market more chill for everyone. Or a crackdown on big landlords who are jacking up rents, and this would mean more money in your pocket each month and that frees up cash for other things. I just wonder what a crackdown means on big landlords that are jacking up more rents. We need to look into this proposal a little deeper and see what it actually means a little deeper and see what it actually means Because again, unfortunately, it's the big landlords that circulate a lot of the economic, a lot of the money flow in a lot of counties, in a lot of areas.
Speaker 1:
Some people are concerned that the tax credit for first-time homebuyers will just make house prices go up even more because there will be more people looking to buy. We'll have to wait and see how that plays out, but hopefully, with more affordable housing options out there, it will be easier to find a place to live that won't break the bank. So this all sounds really good in theory, and every action has a reaction, right, and every cause has an effect. We have to see, and we have to weigh this out, as to what this cause, what effect this cause will have. Right? This has been your weekly business brief. I'll see you guys next week. Peace.