North America:

South America:

Europe:

Africa:

Asia:

Oceania:

East Asia:

Right now, East Asia is a political 'hotspot'.Between China, Japan, and the Koreas, there is always something going on!

North Korea and South Korea used to be one country, but separated in 1953. South Korea is supported by the US and North Korea is supported by China. Now, tensions are rising between the two countries after North Korea bombed a South Korean island.

What will happen now? The two countries are supported by the two largest economies in the world!

China and the USA have begun talks about how to handle the Korean situation.

But China and the USA have more to talk about than just that!

The Currency War:

(To understand this issue, first be sure to read about the economic crisis)


Many believe that one of the major reasons the economy hasn’t sprung back from the recession is because there are certain countries that are controlling the value of their currency instead of letting it rise and fall based on how much they export. This all began when China decided to attach the yuan to the US dollar so that it would always be 20% lower in value.

Why would China want it’s currency to be lower than the USA?

It is a good question. The reason is, that if the Chinese yuan is of little value, then China will be able to sell it’s products for such a cheap price, that everyone wants to buy from them, and they end up making more money than they would for a higher price.

Think about it:

If one store was selling a hat for $10, and another store was selling the same exact hat for $2, you would probably buy your hat from the cheap store—everyone would.

This process is called devaluation.
For a while, the US tried to pressure China to allow the yuan’s value to be determined by their exports, but China wouldn’t budge. So, the US decided that they had no other choice but to devalue their currency as well.

What would you do?

If you were the store that had been selling hats for $10, and you see all of your customers going across the street to the cheap store, how would you solve your problem?

But let’s think some more:
What would happen if everyone lowered the prices of their hats?
Competition. There is a lot of fear right now that if the US and China (the top two economies in the world) do not allow their currency to rise and fall with the economy, a currency war will breakout. That means, every country will start devaluing their money and no one will be willing to buy from anyone else.

But what happens when no one buys anything?
No one makes money, and the economy collapses!

What do you think?

What would you tell the leaders of the US and China if you had the chance?