The US government has encouraged a big surge in the country’s currency, which could help refinancing its financial sector. The outcome from that threatens the collapse not just of banks and companies within the country’s borders but entire countries world wide. For instance Russia is heavily effected, because the country operates within the open economy policy and feels the impact of the global financial crises. As the Russian President said: “In fact, we're paying for the blunders made by a number of countries, including the US, since the American market exerts a weighty influence on the international market”. 
Back in September US have decided to shut down the investment banks, that provided with loans to the biggest professional investors. Its done due to the financial crises, which spread through banking, stocks and even into the currency markets. The outcome was the major sales from those investors and the settle of their trades. That led to a whirlwind of liquidation. Korean won, Turkish lira, Brazilian real, British pounds and commodities from oil and metals, all were sucked into the downdraft.
And we thought that maybe American authorities were trying to do their best to prop up asset prices. As the economic lights go out and the US administration is struggling in the dark, possibly it accidentally cut off the hand that feeds it.
On October 3 the $US 700 billion bailout of banks and their bad bets was signed. After that the U.S. Treasury Secretary Henry Paulson assured U.S. Congress it was the only way to avoid financial Armageddon. The stated aim was to support asset prices.
However on the 22nd September with less publicity, Morgan Stanley and Goldman Sachs gave up their investment bank status, which gave them an access to the „big bucks“ and allowed them to borrow and lend much more than traditional banking companies. That was just seven days after another investment bank, Lehman Brothers, filed for bankruptcy protection.
The US is in the need of its currency to be strong, due to the reason of it being a debtor nation, spending more than it earns and dependent on foreign loans. For instance Chinese are the ones financing the bailout of US Banks. Companies are certainly buying dollars in order to pay off their debts. Nevertheless none of this explains the role of the U.S. administration in driving down asset prices. It is certainly not the job of governments to support asset prices at a particular level , and also not to spend $US 700 billion buying them off their banking friends.
Back in September US have decided to shut down the investment banks, that provided with loans to the biggest professional investors. Its done due to the financial crises, which spread through banking, stocks and even into the currency markets. The outcome was the major sales from those investors and the settle of their trades. That led to a whirlwind of liquidation. Korean won, Turkish lira, Brazilian real, British pounds and commodities from oil and metals, all were sucked into the downdraft.
And we thought that maybe American authorities were trying to do their best to prop up asset prices. As the economic lights go out and the US administration is struggling in the dark, possibly it accidentally cut off the hand that feeds it.
On October 3 the $US 700 billion bailout of banks and their bad bets was signed. After that the U.S. Treasury Secretary Henry Paulson assured U.S. Congress it was the only way to avoid financial Armageddon. The stated aim was to support asset prices.
However on the 22nd September with less publicity, Morgan Stanley and Goldman Sachs gave up their investment bank status, which gave them an access to the „big bucks“ and allowed them to borrow and lend much more than traditional banking companies. That was just seven days after another investment bank, Lehman Brothers, filed for bankruptcy protection.
The US is in the need of its currency to be strong, due to the reason of it being a debtor nation, spending more than it earns and dependent on foreign loans. For instance Chinese are the ones financing the bailout of US Banks. Companies are certainly buying dollars in order to pay off their debts. Nevertheless none of this explains the role of the U.S. administration in driving down asset prices. It is certainly not the job of governments to support asset prices at a particular level , and also not to spend $US 700 billion buying them off their banking friends.
Maybe Paulson has seen the light at the end of the tunnel, however in that case maybe the U.S. taxpayers could have their $US 700 billion back please?
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