In a weak climate, U.S. dollar has surprising muscle
very interesting, especially the take on our political system and our action in this matter....seems that contrary to my belief that the bailout is bad, some are taking it as a sign of american political stability as opposed to other markets beginning to crash
In a weak climate, U.S. dollar has surprising muscle
Stock markets are falling, credit markets remain frozen and some foreign officials are predicting that the United States will lose its status as a financial superpower. And yet the dollar - the most visible symbol of America's financial might - is surging...
But the dollar is not like any other tender. As the de facto reserve currency of the world, it benefits from global upheaval, even those that originate in the United States....
Indeed, the appeal of the United States reflects a lack of better options. Much has been made over the past few years about the rise of the euro as a rival to the dollar. But Europe hardly looks like a safe bet now, with its own crisis metastasizing.
And unlike Americans, Europeans have not fashioned a coordinated response to their financial problems, despite a meeting of leaders over the weekend convened by President Nicolas Sarkozy of France.
...
The dollar's greatest value, experts say, is as a symbol of the long-term creditworthiness of the United States.
"In talking to investors, policymakers and academics around the world, they have this confidence - not just in our economic system, but in our political system," Rogoff said.
http://www.iht.com/articles/2008/10/...ess/dollar.php
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Originally Posted by Yurt
