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The Crossroads of The Dollar: Financial Instability in the first week of April

The first week of April held an erratic and shifting foundation for the U.S. — and world — economy. The Dow Jones Industrial Average (DJIA) has alternated between steep dives and rapid climbs, and the story remains much the same for the NasDaq composite. This has left much of the world searching for an answer as to exactly what is going on, and how it will affect investor confidence in the coming weeks.

One possible explanation is that of overvalued stocks making up a large bulk of investment vehicles; companies like Tesla (TSLA) have been under intense scrutiny in the past weeks, and this tension was intensified by concerns over customer privacy relating to the titans of tech, Apple (AAPL), Google (GOOG), and Facebook (FB). Although these issues are significant and can pose a large problem to continued economic growth, they are also obvious and will be met by the leaders of each company.

More worryingly and despite rhetoric to the contrary, the U.S. middle class is feeling a major squeeze. For the first time since 2009, housing markets are showing signs of collapse in major metropolitan hubs on the east coast like New York City. Moreover, the increasing proportion of millennials in the workforce are very spendthrift, and wary of conspicuous consumption. This is bad news for an economy geared towards the previous generations, and could signal that a reorganization is necessary to meet the needs of the new middle class. Such reorganization would be built more upon the ethereal ‘experience’, and take into consideration mounting student loan debts and a generation that is finding it difficult to achieve the traditional markers of adulthood enjoyed by their forebears.

No matter the case, a global and interconnected world economy means that every market feels the strain of this tension. Such a challenge will require a levelheaded approach to head off further difficulties now, and greater cooperation among world leaders to ensure tranquility and consistent growth into the future. Without a concerted effort to maintain our economic system, the rest of April and indeed, 2018, could continue to be fraught with danger for the world economy.