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How will Boston blasts affect the United States?

(People's Daily Online)

08:30, April 19, 2013

Boston blasts are tragic. As the United States is the world's sole superpower, the incident shocked the whole world, and the potential uncertainty it may bring to the international market and economic trends has caused concerns among market participants.

In the short term, as there is very little material damage to U.S. production capacity and physical wealth, the Boston terrorist attacks virtually have no impact on the real sectors of the economy. The major potential impact is that it may affect the psychological expectations of asset market participants, and then affect the market price of the asset market.

If the market participants' expectations have a significant deterioration, it should be bearish for the recovery trend of U.S. real estate and stock market prices. Fortunately, the U.S. economy has been on a recovery track, rather than in a state of continuous decline, and market participants are relatively optimistic, so bad reaction to the Boston explosion in the short term will not be too intense.

The ultimate impact of the case on the international market and economic trends depends on the identity of the perpetrators and the U.S. government's response.
So far, there are various speculations about the identity of the bomber in Boston blasts, and they mainly fall in three categories: the international Islamic terrorists, extreme right-wing forces in the United States, and other extremist forces in the United States. Some people added the DPRK and Syria into the suspects list. However, for those objective observers with international knowledge, they basically do not believe the DPRK or the Syrian government will take this approach.

If the bomber were the extremist forces in the United States, the impact of the case on international commodity markets and the American asset markets will soon disappear, but it is possible to cause less conspicuous but rather long-term impact on the "re-industrialization" process in the United States. Re-industrialization and investment in the United States is facing a series of major economic barriers, and the primary obstacle is U.S. monetary hegemony itself. Look at the principle of the so-called "Dutch disease", you can understand this.

Source:People's Daily Overseas Edition
Read the Chinese version:波士顿爆炸对美影响如何
Author:Mei Xinyu, researcher at the Research Institute of the Ministry of Commerce

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