London, Uk (PressExposure) September 03, 2008 -- Cornerstone Worldwide hailed the new legislation signed into law today by President George W. Bush as a desperate measure that may have far-reaching repercussions for the US dollar.
The legislation which helps 400,000 homeowners facing foreclosure and extends a lifeline to Fannie Mae and Freddie Mac, the beleaguered US mortgage companies will place extreme pressure on the world's reserve currency said a source close to Cornerstone Worldwide.
President Bush signed the measure at the White House shortly after 7 a.m. White House spokesman, Tony Fratto said, ``We look forward to putting in place new authorities to improve confidence and stability in markets, and to provide better oversight for Fannie Mae and Freddie Mac."
Although the law is aimed at reducing foreclosures and halting the seemingly perpetual free-fall in housing prices by providing federal insurance for refinanced 30-year mortgages for struggling homeowners, it also meant exacerbating the negative perception of the US dollar by US Treasury Bond holders including OPEC countries and China said the Cornerstone Worldwide source.
The recession in the housing market, the worst since the Depression, along with higher fuel prices and a shrinking job market, is weighing on consumers and the economy.