For quite a while it has been obvious that much of the volatility attributed to other market indicators was due to the volatility of the US$, something I've long seen as a rubber ruler. However I'm certainly not going to waste my own time factoring out the data to demonstrate this.

Ever since parity party plans had to be shelved, the reflexive question has increasingly been why when it is problems in the US financial system and economy which are driving the broader downturn, is it the US currency which is getting stronger?

What it has taken me until know to see is that all those arguments about needing to cover contractual obligations which apply to a rush to sell (stocks, other currencies, mortgages, instruments, commodities) similarly create a rush to buy US$s which have come to dominate future obligations much more than they dominate available liquidity, especially in the wake of the "credit crunch". There are more buyers than sellers of US$s so its price goes up, no matter how many extra are issued/(re)circulated.

One interesting side effect is that US$s, especially modest denomination notes rather that their electronic representation, are the currency of choice for rogues everywhere who have them stashed away as proceeds from their nefarious activities. While legal mechanisms for confiscation have proliferated in recent times, they are never going to make a sufficient difference. So until the US is willing to cancel and reissue its paper currency, the negotiable wealth of the world will be increasingly concentrated in the hands of true criminals, terrorists, survivalists, banned drug and porn suppliers, faith peddlers and their ilk.

One alternative might be for the rest of the world to act with some semblance of unity to stop denominating contracts in US$s and let the now seriously overrated US consumer economy crash and burn. Of those two options the second might be better for the environment, but still not as good as a permanent overturning of the growth imperative, itself a product of innumerate bean counters.