Quote:
Originally Posted by Sushi
and that is because of confidence in the US economy, despite all the difficulties.
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I kinda disagree.
When you purchase an equity or a fund, you do it with dollars that you have purchased with your labor.
When you cash in a fund or equity... you have to think of it like selling - or trading it for US dollars. (Another type of asset). When you have large amounts of people cashing out of funds & equities, they are actually buying US dollars in trade for those assets.
Supply and demand comes into play, where to the average investor or bank (not the fed) the high demand for US dollars causes the price of those dollars to climb against the assets that are being cashed in.