US Dollar: A Sinking Ship?

by Caela

March 18, Wednesday, the US Federal Reserve announced that it would pump an extra $1 trillion into the financial system by purchasing Treasury bonds and mortgage securities in an attempt to save the US economy.

The market was surprised and enthusiastic with the news with the Dow Jones industrial average jumping 91 point at 7,486.58 after being down 50 points before the announcement. It also led to a big drop on the yield of long-term Treasury bonds.

By of March 22, Gold prices rose hitting $952.10, a sign of declining confidence in the dollar. The dollar, which had been losing value in recent weeks to the euro and the yen, dropped sharply again. The Dow Jones industrial average dropped 122 points at 7,278.38.

Today, March 23, Dow Jones industrial averaged jumped 401 point at 7,679.48 after the US Treasury’s announcement of the $1 Trillion Public-Private Plan to buy banks bad debt.

What does this mean? Here’s an explanation from Glenn Beck of FOX News and Walter Zimmerman.

Is it time to get out of the dollar? Well, China, France, Russia et al. seem to think so as they push forward a call for a new global currency. One thing is for sure, the world will be looking closely at the dollar and watching what the coming G-20 London Summit will bring about.

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