If money was fleeing out of Europe, where was it to go? The answer since the onset of the financial crisis had been, paradoxically, the United States. As US subprime went bad, there had not been the panicked dollar sell-off that many had feared. Instead, investors shifted into US Treasurys, the very top of the global monetary pyramid. In 2008 the dollar surged and US interest rates fell. Successive waves of QE reversed that trend. The dollar slid against its major trading partners. This imposed losses on investors and made US bonds marginally less attractive. By the summer of 2011, however,
...more
