By James Smith
The Federal Reserve’s recent unwillingness to come to the aid of the US economy by way of quantitative easing three has taken many by surprise. Even in the wake of a double dip recession chairman Ben Bernanke seems confident that no further action can be taken. It would only encourage more inflation and make the US dollar even less appealing as the world’s reserve currency. Given that China and other countries have threatened to undermine the US dollar’s current status as such, this is a move that provides some reassurance for these countries. On the other hand there is a good deal of concern about the liquidity of banks and other financial institutions within the United States, and this has created some concern throughout the online forex exchange where the US dollar is concerned.
A lack of inflation is always a good thing for the value of a currency, but an outright refusal by the central bank to intervene in any way is concerning. Such measures could be a sign that the chairman is anticipating the entrance of a Republican president, which would definitely signal a move away from intervention. While Democrats do indeed make every attempt to intervene in both the economy and private enterprise, Republicans are far more known for staying out of the way. While it might seem harsh, the Republican ideals with regard to taxation and economic intervention do have their merits, and while a Republican has been in the Presidential office the US dollar has tended to fair somewhat better. Even though the United States is the world’s largest and most robust economy, it requires maintenance in a number of different capacities.
The current financial situation necessitates the motivation and efforts not only of world leaders, but also of the people they represent. Such changes are not likely due to the often entitled attitude of Western nations, and it is this very attitude which has landed them in their current predicament. Spending your way out of debt is as ludicrous for an entire nation as it is for a single citizen, and until the economy gives way completely this will remain an un-tested fact yet again. Current austerity measures being imposed in Greece are being ignored by populace in terms of seeking economic viability, and are instead being viewed as an attempt to deprive them of their human rights. It is this very sense of entitlement that has brought about the budget crisis in the first place.
About the Author
The author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to stay up to date with the latest forex quotes
