The $700 billion US Bailout Plan - Explained

Dubbed as the Mother of all bail outs, Hank Paulson wants $700 billion of taxpayer’s money to buy up bad debt and ‘rescue’ the markets. These are uncharted measures, no one knows how it would pan out.

The bail out involves massive proportions of money, $700 billion is equivalent of $2,000 for every man, woman child in the United States roughly the same amount of money spent on Iraq war. It seems the bail out could even cost as much as $1 Trillion.

Hank Paulson and Bernanke believe the bail out is absolutely necessary to shore up the falling economy. They say the bad debits taken over by government will begin to give profits over a long run. They feel the risk of not acting will be higher than risk of the bail out and has urged the US Senate to push forward the plan as quickly as possible.

The rescue plan will put enormous pressure on the Dollar and in turn may trigger a rally in commodities especially gold and crude. When executed undoubtedly it will be the biggest clean up act in the history of world markets.