Tearaway inflation to hit US economy soon
Monday, 23 March 2009
From Fazle Rashid
NEW YORK, March 22: The Federal Reserve's decision to pump in billions of dollars to revive the flagging US economy has given rise to the fear that the economy would soon be engulfed by a tearaway inflation. The dollar suffered its biggest weekly loss for nearly a quarter of a century while a rally in US equities fizzled out as doubts over Fed's move began to creep in, a reputed paper said
The US dollar, known as the sovereign of all currencies, lost to other major currencies. Dollar tumbled 4.8 per cent against euro, 3.1 per cent against pound, 5.2 per cent against Swiss franc and 2.0 per cent against yen.
Norway's krone is said to be the strongest currency now. The financial stocks lost 12.9 per cent in two days. Bank of America was one of the biggest losers. Its share dropped 10.7 per cent to $6.19, Wells Fargo lost 9.3 per cent at $13.99 and Goldman Sachs fell two per cent to $97.32. American Express, the credit card provided, is set to post loss in 2009 and 2010 and would slash its dividends hurt by rising unemployment and delinquency in payment. Credit card is the life blood of the US economy.
The Federal Deposit Insurance Corporation revealed that the banks have made heavier loss in the fourth quarter than earlier expected. The shares of two oil giants Chevron and Exxon-Mobilo fell 3.6 and 3.3 per cent respectively. The loss at the General Electric was 5.4 per cent.
The leading market measures all lost ground. S&P lost 2.0 per cent, Dow Jones Industrial Average dropped 1.7 per cent and Nasdaq Composite fell 1.8 per cent.
Xerox said its share lost 18.7 per cent. Several companies have successfully raised cash by selling bonds or are in line to do so as the investors turned to corporate bonds as the yield on government bond fell. Philip Morris raised euro 2.0 billion. Merck announced it would issue bond amounting to $1.0 billion before its planned $41 billion take over of rival Schering Plough.
NEW YORK, March 22: The Federal Reserve's decision to pump in billions of dollars to revive the flagging US economy has given rise to the fear that the economy would soon be engulfed by a tearaway inflation. The dollar suffered its biggest weekly loss for nearly a quarter of a century while a rally in US equities fizzled out as doubts over Fed's move began to creep in, a reputed paper said
The US dollar, known as the sovereign of all currencies, lost to other major currencies. Dollar tumbled 4.8 per cent against euro, 3.1 per cent against pound, 5.2 per cent against Swiss franc and 2.0 per cent against yen.
Norway's krone is said to be the strongest currency now. The financial stocks lost 12.9 per cent in two days. Bank of America was one of the biggest losers. Its share dropped 10.7 per cent to $6.19, Wells Fargo lost 9.3 per cent at $13.99 and Goldman Sachs fell two per cent to $97.32. American Express, the credit card provided, is set to post loss in 2009 and 2010 and would slash its dividends hurt by rising unemployment and delinquency in payment. Credit card is the life blood of the US economy.
The Federal Deposit Insurance Corporation revealed that the banks have made heavier loss in the fourth quarter than earlier expected. The shares of two oil giants Chevron and Exxon-Mobilo fell 3.6 and 3.3 per cent respectively. The loss at the General Electric was 5.4 per cent.
The leading market measures all lost ground. S&P lost 2.0 per cent, Dow Jones Industrial Average dropped 1.7 per cent and Nasdaq Composite fell 1.8 per cent.
Xerox said its share lost 18.7 per cent. Several companies have successfully raised cash by selling bonds or are in line to do so as the investors turned to corporate bonds as the yield on government bond fell. Philip Morris raised euro 2.0 billion. Merck announced it would issue bond amounting to $1.0 billion before its planned $41 billion take over of rival Schering Plough.