Eric Lorber, a former senior advisor to the undersecretary of the United States Treasury, is senior director of the Center on Economic and Financial Power at Foundation for Defense of Democracies. The economic shock of the last few weeks has shaken the United States economy, erased the last two and a half years of stock market gains, and has left 22 million Americans unemployed. Yet as the economic chaos builds, a silver lining has emerged. Frightened by uncertainty and hungry for safe assets, investors and business owners are flocking to the US dollar. Since the COVID-19 crisis began, the value of the US dollar index rose to near record highs. The greenback has leveled off a bit, but has maintained an edge relative to most major currencies, including the euro, China’s yuan and the Japanese yen. Business owners worldwide understand that if the crisis continues, they will need significant capital reserves to stay afloat during this severe economic contraction. Fearing a liquidity crunch, where the demand for cash significantly outstrips the supply, they are snapping up dollars while the getting is good. Businesses understand that deep US financial markets are the key to weathering difficult economic headwinds. They also appreciate… Read full this story
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