The Bush Bailout Plan

Wednesday night US president Bush addressed the nation concerning the proposed bailout of US banks and tottering financial institutions. Reaction was mixed and even some Republicans criticized the administration’s proposals. Bush urged immediate passage of the bailout plan stating “We’re in the midst of a serious financial crisis, and the federal government is responding with decisive actions.” Bush also stated that failure to pass the bailout plan could lead to a “long and painful recession.”

Because of the perception that the US will act quickly to address the crisis the dollar is holding its own and is providing investors many Forex opportunities.

The Financial Crisis and Forex Opportunity

The current US financial crisis has affected stock, commodities, and Forex markets worldwide. Confidence in the US dollar is waning with many worried that the bailout policies proposed could lead to a devaluation of the US dollar. The financial crisis could not be more ill timed with the US suffering massive debt from the War in Iraq, rising oil prices, and massive infrastructure damage from recent hurricanes.

The Bush plan calls for government to buy 700 billion dollars worth of troubled assets, mostly mortgage backed securities whose values declined swiftly when the housing market imploded. Initially the White House had taken a hard line concerning the bailout plan but has indicated a willingness to compromise to ensure speedy passage of the bailout plan. The ability of the US government to act quickly in a crisis has bolstered the dollar on world currency markets and continues to provide investors with many Forex opportunities.

Political Compromise

The Bush administration compromised with Democrats demand that the pay of CEOs of troubled firms be limited. Addressing such concerns Bush stated that the financial rescue “should make certain that failed executives do not receive a windfall from your tax dollars.” Bush also invited both presidential candidates and key congressional leaders to the White House to work out a compromise on the bailout. Bush also warned that failure to pass the plan would result in dire economic consequences such as disappearing retirement savings, rising foreclosures, lost jobs and closed businesses.

Averting Disaster

One can only hope that politicians, for once, can put partisan politics aside and work together on a plan that would benefit both business and the average American worker. Despite the economy the US dollar is performing well on currency markets globally providing investors a safe haven and plenty of Forex opportunity for seasoned and newbie forex traders.

Quick Forex Tip: Euro currency trading requires a lot of research and investors must keep track of economic information from the twelve member nations. The economy of just one nation can affect the euro’s exchange rate.  In 2010 political uncertainty and deficit concerns about Greece caused the euro to fall considerably in global forex markets. Euro currency trading can be exciting and very lucrative for investors who have done their homework.