Daily FX Breaking News: US dollar slump

Last week saw the US dollar slump towards the end of the week as fears over the proposed 900 Billion dollar stimulus package took traders and investors away from the greenback. It is in my opinion that the US needs to rethink their entire fiscal policy at this point. IT is ignorant to believe that they can just print their way out of the economic mess without affecting the global economy in the long run.

The US holds special status as a maker and breaker of economies around the world. Brokers trading the Forex know that the US is relied upon for trade and assistance my countless countries, developing and developed. And yet, their proposed spending bill will put enormous pressure on their own economy, and will have a trickledown effect to many of economies of the world.

In 1930, President Herbert Hoover, in an effort to stave off the coming depression, launched a series of laws that made things worse. By over-spending, and insisting on US made products only – he excluded the world economies from his plans. This snub at the world ended up causing the “great depression” as trade was now limited and “what you had, was what you would get” as they said. Today, 2009, sees the US making the same mistakes they made back then. The worlds economy is one. We are a global entity – and we are mutually reliant upon one another. For the US to have protectionist clauses in an enormous bill that even their own oversight committees believe will not have enough of an impact to help their economy in the long-run is short-sighted.

Forex brokers, traders and the investing community will not be kind to the dollar if this bill passes – as I am sure US public opinion will change drastically towards their new President who promised change. A promise of change seems to be translating itself into a repeat of the past. And the world cannot afford that at this time.