Stock markets are swooning, 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.
Interesting only in that the dollar’s value is increasing just as the American economy looks to be in shambles. How to explain?
The author, Mark Landler, guesses that the explanation lies with the US dollar’s role as a reserve currency. At a time of global economic uncertainty, people buy-up more dollars to protect them against the sudden devaluation of their own currencies.