The Big Three - another break in the bailouts

Volatility is returning into the EUR/USD exchange market as a bailout of the auto industry becomes increasingly elusive. Senate majority leader Harry Reid acknowledged that congressional efforts to rescue Detroit's Big Three might falter. The White House also quickly denied any desire to step in. In that case it would be up to the new administration to take action.

It is hard to see how in this climate of multibillion dollar bailouts of Wall Street banks, a $25 billion cash infusion into the auto industry seems to be an overreach. After all Washington is populated with monetarists these days. After Lehman this could become the second assault on global financial markets (in particular financial markets in Europe) which inquisitive minds could view as Washington's financial equivalent of declaring war on the Euro currency. Maybe to trash a potential rival reserve currency is the only way out for a beleaguered US dollar!

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source: Democrats seek to lower expectations for bailout
AP, Wednesday November 19, 2:06 pm ET
http://biz.yahoo.com/ap/081119/congress_autos.html