Guess What Happened The Last Time The U.S. Dollar Skyrocketed In Value Like This?Michael Snyder A surging U.S. dollar also greatly contributed to the Latin American debt crisis of the early 1980s and the Asian financial crisis of 1997. Today, the globe is more interconnected than ever. Most global trade is conducted in U.S. dollars, and much of the borrowing done by emerging markets all over the planet is denominated in U.S. dollars. When the U.S. dollar goes up dramatically, this can put a tremendous amount of financial stress on economies all around the world. It also has the potential to greatly threaten the stability of the 65 trillion dollars in derivatives that are directly tied to the value of the U.S. dollar. The global financial system is more vulnerable to currency movements than ever before, and history tells us that when the U.S. dollar soars the global economy tends to experience a contraction. So the fact that the U.S. dollar has been skyrocketing lately is a very, very bad sign. Most of the people that write about the coming economic collapse love to talk about the coming collapse of the U.S. dollar as well. But in the initial deflationary stage of the coming financial crisis, we are likely to see the U.S. dollar actually strengthen considerably. As I have discussed so many times before, we are going to experience deflation first, and after that deflationary phase the desperate responses by the Federal Reserve and the U.S. government to that deflation will cause the inflationary panic that so many have written about. Yes, someday the U.S. dollar will essentially be toilet paper. But that is not in our immediate future. What is in our immediate future is a flight to safety that will push the surging U.S. dollar even higher. This is what we witnessed in 2008, and this is happening once again right now. Just look at the chart that I have posted below. You can see the the U.S. dollar moved upward dramatically relative to other currencies starting in mid-2008. And toward the end of the chart you can see that the U.S. dollar is now experiencing a similar spike And of course it isnt just the euro that is plummeting. The yen has been crashing as well. The following chart was recently posted on the Crux Investors are starting to get nervous. At one time, investors couldnt wait to pour money into emerging markets, but now this process is beginning to reverse. If this turns into a panic, we are going to have one giant financial mess on our hands. The truth is that the value of the U.S. dollar is of great importance to every nation on the face of the Earth. The following comes from U.S. News World Report Over the past few months, I have been repeatedly stressing that so many of the signs that we witnessed just prior to previous financial crashes are happening again. Now you can add the skyrocketing U.S. dollar to that list. If you have not seen my previous articles where I have discussed these things, here are some places to get started Guess What Happened The Last Time The Price Of Oil Crashed Like This? The warnings signs are really starting to pile up. When we look back at past financial crashes, there are recognizable patterns that can be identified. Unfortunately, most people in this world end up believing exactly what they want to believe. No matter how much evidence you show them, they will not accept the truth until it is too late. This article first appeared here at the Economic Collapse Blog. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here. 