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Fears of a war between India and Pakistan, along with new warnings about terrorist attacks on America, have given the world’s financial markets a collective attack of nerves. The world’s big currencies have suddenly grown more volatile and at least one central bank has intervened to try to calm the markets. But could the latest uncertainty also signal the long-predicted decline of the dollar?
"It is easy to see what is driving the latest attack of nerves. In America in recent days, the Bush administration has been issuing ever more alarming warnings about another terorrist attack. Such fears have had an immediate practical effect: on May 22nd, the Brooklyn Bridge in New York was closed temporarily after a suspect package was found. But the warnings, and the reaction to them, have also alarmed the financial markets. Suddenly, the dollar seemed a less attractive prospect: it has lost some of its allure as the traditional safe-haven currency. Gold, long unfashionable, jumped on May 22nd to its highest level in two years. Significantly, in dollar terms, it rose above the value it reached in the aftermath of September 11th last year, when it had also enjoyed a very brief resurgence."
11:23:15 AM Google It! 
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