Still Hanging On

American foreign policy may have an independent streak, but the US depends on huge amounts of foreign capital. Despite some recent dire reports, the dollar’s recent decline has been small, considering recent volatility in the markets and tightening of credit worldwide, reports Satoshi Kambayashi. America’s tendency to accumulate debt contributes to the dollar’s dropping value. Kambayashi points out that the countries with holdings in US treasury bills have no interest in encouraging further decline in the dollar. He surmises that a financial crisis might “accelerate the unwinding of imbalances” and actually promote greater economic stability over the long term. – YaleGlobal