Over the course of the recent recession, foreign investors have often favored dollar-denominated investments due to a number of factors, including the evaluation that such investments are a “safe haven” investment during times of uncertainty; comparatively favorable returns on investments, a surplus of saving in other areas of the world, the well-developed . financial system, and the overall stability and relative rate of growth of the . economy. Capital inflows also allow the United States to finance its trade deficit because foreigners are willing to lend to the United States in the form of exchanging the sale of goods, represented.
