President Obama signed PORK!

The problem with the world is not that there is an economic crisis, it is that the politicians who are “trying” to deal with it are just making things worse. When US President Obama was candidate Obama, he promised the US people that he would eliminate excess spending, known to all as Pork. Well, after three enormous bailout bills filled with this Pork passed through the US congress, President Obama signed them – saying things arrogantly like “it’s a stimulus bill, what do think we do in a stimulus bill, spend” to justify the frivolous dollars that were spent. Yet yesterday was the clearest sign that this young, charming, good-looking man has no experience as CEO and limited experience in politics. Prior to signing a new 410 Billion Dollar spending bill filled with 8500+ frivolous spending items (pork), he lectured the press about how earmarks (pork) are bad and how it was shameful that congress needed to continue this policy of adding items to a budget that have no place in a budget in times of a crisis the magnitude of which the world is facing.

He then went into a closed room and signed the bill – with no cameras present.

Forex traders took it out on the dollar yesterday as people are starting to worry about where all this money is coming from. The US printing presses are on overdrive trying to make enough money to meet the demands of this Presidency which is already responsible for close to three trillion dollars of spending – more than the GDP of most major countries – and he is not even past his first 100 days.

Sure, all this spending might help the economy in the short term – how can an infusion of so much money not start an economy. But he is sealing the fate of the global economy for the next ten years as interest rates will soar and taxes will be raised in an attempt to pay for all this. Forex brokers have it right, sell the dollar because inflation will kick in and then the devaluation will begin. Get out while you can – before the carnage on Forex street really begins.

Look for Online Forex traders and blogs to begin trying to find a new favorite. Perhaps the Australian Dollar as I have been touting for months. It has done quite well – the yields are high and the potential for growth is great. Keep watching the Aussie – and don’t say I did not tell you so.

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Obama was on Vacation for Valentine’s day

I am at a loss to understand the new American administration. Last week, President Barack Obama spoke in front of the Nation and told a tale of how dire the financial situation was in the US and the world and how something needed to get done soon in order to fix it. He asked for his Congress, made up of two political parties, to stop bickering, band together and pass the nearly 1 Trillion dollar stimulus bill before it is too late. His exact words were “not everything in this bill is perfect, but what we do know, is that we need to act on it immediately”.

So his congress acted and passed the 1108 page legislation that commits 790 Billion US dollars to stimulate the economy. And what does President Obama do? He goes away on vacation for valentine’s day, leaving Washington and the stimulus bill to wait until Tuesday for his return. IF this was such an emergency wouldn’t he have signed the bill himself before going on a mini-trip with his wife? I wonder what all the unemployed people in the US (there are now over 13,000,000 of them) were saying when they saw their leader eating at a $450 per plate restaurant Saturday night – or when news came out on Sunday that he is replacing his 4 year old helicopter (Marine 1 as it is called) with a brand new one that costs more than a Boeing 747. His country is in dire need of stimulating and he is spending unnecessarily.

Well, the dollar was still holding up although Forex Brokers are a bit nervous about all the US spending. Investors stuck with dollar last week despite everything because there are really no options out there right now. England is having a difficult time, Ireland is on the verge of bankruptcy, so is Spain and Greece. Russia announced, to the chagrin of Forex traders holding Euro positions, that it is re-evaluating their payment of debt to the EU (its another way of saying they have no money right now). Even China has been admitting heavy job losses. It is difficult to see where someone investing or trading in the Forex can do better but the US. But I have a better solution.

Look this week for the down under dollars, New Zealand and Australia, to be strong – they are not as bad off as the rest of the world – yes they are hurting, but their liabilities are less exposed to the global economy. I see the dollar giving in this week and investors start to unload their positions. It is not getting pretty out there, and Forex Trading professionals know a rat when they see it – you cannot predict doomsday and then spend like there is no tomorrow on long term items like the US is doing. Let’s wait and see how the market reacts once last weeks happenings have been digested fully.

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Daily FX Updates and Chart Analysis of AUD/USD

GBP

The Bank of England (BOE) released the quarterly inflation report on Wednesday which showed that the level of inflation has been receding more than anticipated. The report came with a comment from BOE governor, Mervyn King, that based on this information, further action is necessary to ease the economy’s continued decline. This news sent the Pound Sterling down against the Euro and US Dollar. At 4PM GMT, the Pound was down 1 ½% to .8996 versus the Euro and down over 1% to 1.4390 against the dollar.

USD

Investors and traders were still digesting the nearly 2 Trillion Dollar bank bailout plan announced by US treasury secretary, Timothy Geithner. Coupled with the US Congressional stimulus package that President Obama has been pushing through the legislature, this brings the total amount that the US is investing in stemming the economic decline to nearly 3 Trillion Dollars. Many applaud the US for their steadfast, all-in approach to helping the economy but question the size and scope of the plans and America’s ability to actually afford it. The Dollar fell ½ of a percent to the Yen to 90.26 and ¾ of a percent against the Euro to 1.2943.

AUD / NZD

The Australian and New Zealand dollars has been the beneficiary of the US, UK and Euorzone’s woes lately and this momentum continued on Wednesday. The Aussie currency rose over ½ of a percent against the USD to .659, ¼ of a percent against the Euro to 1.9682 and 1% to the CAD to .8217. The Kiwi currency (NZD) was up 1% to the dollar at .5273, ¼ of a percent versus the Euro to 2.4637 and a big 1 ½% to the GBP at 2.7368.

Chart AUD(Blue); NZD(orange) against USD – 5 day change.

The “Down Under Dollars” have benefitted significantly in the past five days against a host of currencies. The chart below shows a 5 day moving average for the currencies against the US Dollar. As the US’s plans continue to be revealed and traders continue ther analyses, the fundamentals and technical’s seem to favor the AUD and NZD in the near future.

Read more analysis at: http://www.finexo.com/

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