Dollar Regains Luster in Crisis ; World Rallies to Safe Haven

Summary

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Amid the worst recession and financial crisis in a generation, the U.S. Treasury and the dollar lately have reasserted their status as safe havens in a world of storms.

The unique privilege this status confers is helping Americans in major ways to weather the hard times. Among other things, the Treasury is getting nearly interest-free loans to finance ballooning debts and deficits as investors flock to U.S. securities to escape stricken stock, commodity and credit markets around the world. That is enabling the Treasury to issue an unprecedented $1.5 trillion of debt this year - nearly three times its previous record - to finance ballooning federal deficits and rescue a faltering banking and financial system.

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Extract

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Dollar Regains Luster in Crisis ; World Rallies to Safe Haven

The rush into Treasury securities in the wake of the financial crisis that broke out in September suddenly lifted the dollar by as much as 30 percent against other major currencies like the euro and the British pound. Previously, the dollar had suffered a long, six- year decline that left Americans paying record ...

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