http://www.iht.com/articles/2009/03/09/business/dollar.php
"Debt collapses are going to wreak havoc with exchange rates," Rogoff predicted. "A lot of countries in Europe are already on the brink of default."
Only two years ago, many analysts were suggesting that the International Monetary Fund - created more than 60 years ago to rescue countries in financial distress - no longer had a clear reason to exist. Now, the fund is scrambling for contributions from developed nations to bolster its $350 billion war chest. Setser suggested it needed $1 trillion for all that might yet unfold.
Because worries are deeper nearly everywhere else, the United States and the dollar have essentially benefited from the worldwide panic. In the past year, the dollar has risen 13 percent against major foreign currencies after adjusting for inflation, according to Federal Reserve data. Foreign holdings of Treasury bills increased by $456 billion in 2008.
"It's a huge safe-haven effect," said William Cline, a senior fellow at the Peterson Institute for International Economics in Washington. "The basic assumption that people are making is that the U.S. government will never default on its debt."
