[Agent86]

Originally Posted by Pharaoh

It's a little more complicated than that. Inflation usually leads to increased interest rates, which usually makes a currency more desirable (and typically increases its value). Most economic indicators are "good for economy = good for currency", but inflation is counter-intuitive.

I think the current situation is less the dollar gaining value and more the other currencies losing value. There are a lot of non-US banks in deep trouble too, and there are plenty of bad mortgages around the world.

A bunch of money has been moved out of banks (US and other), since banks are no longer considered as safe as they used to be. A lot of that money being put into US Treasury bills. The foreign money has to be converted to USD to buy t-bills, and that's also bullish for the dollar.

I second that