A note on the dollar

I found the following comment very interesting.  It's from Foreign Affairs Magazine (the Sept.-Oct issue).  The article is by Barry Eichengreen entitled the "Dollar Dilemma":

"The only problem is that, for all the talk about change, the dollar's importance to the world has not diminished. In the foreign exchange market, the dollar actually strengthened following the outbreak of the financial crisis..When investors fled to safety, they fled to U.S. Treasury bills. In the face of spreading illiquidity, the U.S. and foreign investors alike sought refuge in the most liquid market, the market for U.S. government debt securities.  Since then, the dollar exchange ratio has fluctuated, but there has been no dollar crash.  And there is no evidence of a massive loss of confidence".

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