Earth Cup Economics

As you enjoy watching the rush and excitement with the World Cup in South Africa, you might also love to think of how these nations are drawn together not merely about the football field and also in world economics.

Let's examine how these competing countries perform on the globe marketplace...



Australia vs Germany

Unfortunately Australia was outclassed by Germany's stronger team.

But that does not mean we are outclassed in your economy. Although driven by different sectors, with Australia being rich in minerals and resources and Germany with the other end in the spectrum having strength in manufacturing, both countries are linked economically.

Germany is known for its creation of cars and machine tools, while Australia is well known for that unprocessed trash forced to get them to.

So we'll likely remain friends from the paddock for a long time with the export/import relationship. Coal exports to Germany comes down to over half a billion dollars 12 months while Germany is Australia's fifth largest merchandise import source (mainly cars). (Source: DFAT)



USA vs England

England's goalkeeper Robert Green designed a shocking blunder when he fumbled the only goal scored by the United States to even final score to 1:1.

In relation to fumbling, a similar may be said for the UK's economic recovery in contrast to the US.

The International Monetary Fund is predicting 3.1% growth for that US this year and just 1.3% for that UK. Certainly this can be reflected in the currency movements in the pair over the past year with all the US dollar strengthening.

But even though the two countries are seeing different speeds of growth, both countries will more than likely see subdued growth on an extended period.



Greece vs South Korea

These two countries can be a complete contrast economically as well as inside the game that has been played on Saturday night (Greece 0: South Korea 3).

While South Korea's unemployment rates are 3.2%, Greece's unemployment minute rates are in a staggering 11.6%.

In fact, the economic strength in South Korea is not restricted to their country alone but additionally spans the Asia Pacific region.

China's exports were up 48.5% in here May that is fuelling strong increase in other neighbouring countries such as South Korea and even Australia. Things are even learning about in New Zealand. The main risk is when China's tries to cool its economy impacts about the growth story inside the region within the short? to medium?term.

Greece meanwhile is an economic basket case. The country cannot afford to pay back its debt and after this has to choose from declaring itself bankrupt or leaving the Euro currency. If Greece chooses to go with its own currency, the currency may be devalued. This will hopefully stimulate exports but balancing the books is a slow process.



South Africa

Holding the World Cup will obviously boost South Africa's economy from the tourism dollars, yet it's additionally a possibility to display to the world all the changes that have emerged on this nation, particularly during the last decade.

South Africa is often a country full of resources and there can be an ever-expanding number of ASX-listed companies associated with exploration and production there.

A sample of a few ASX-listed companies significantly associated with South Africa include:

? Vantage Goldfields (VGO)

? Anglogold Ashanti (AGG)

? Continental Coal (CCC)

? Molopo (MPO)

? Industrea (IDL)

? Resource Generation(RES)

? Atomic Resources (ATQ)

? Peak Resource (PEK)

? Riversdale (RIV).

The country has well-developed infrastructure and transport sectors. Yet it's and a country that features a large gap between wealth and poverty. With infrastructure being built, it is more and more attracting to businesses.

But the biggest problem because of these companies heavily associated with South Africa is stability. Instability comes through the gap involving the wealthy and poor as well as their entry to basic services. But it's less the steadiness of governments these firms can be concerned about ? they can be more concerned about the steadiness of business arrangements.



What concerning the South African rand?

South Africa's currency ? the rand ? is much like the Aussie dollar because it can be considered a risk currency. So it tends to be strong when the US dollar is gloomier and weaker when the US dollar is higher.

As you will see through the chart below, the US dollar to South Africa's rand (shown in dark green) moves in a similar way to US dollar to Aussie dollar (shown see how to avoid green)



So enjoy yourself watching the rest of the World Cup and ensure you avoid fumbling as well as worse scoring an own goal by paying awareness of what's happening inside the global economic pitch.

Happy trading and happy World Cup!



Happy trading!

Julia Lee

Equities Analyst

Bell DirectArticle Source: Lee can be an Equities Analyst for online share trading platform Bell Direct. Julia provides info on share trading and internet-based trading for frequent traders and investors.

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