That is, by accumulating and holding dollars one now...one will be able to buy products and services in the future at cheaper prices if the prices of these product come down in the future.
If you think that a house will be cheaper in a year you will hold your dollars now in anticipation of that lower price. Less dollars in the system (or in circulation)...the stronger the price of the dollar.
And - that and also the recent surge in treasuries has helped the usd, as you need to convert other currencies into usd in order to buy bills, both as a foreign or domestic investor.
the real conundrum right now is why with all of this strength in usd the gold is not falling off of the cliff? it is afterall considered a hedge against inflation, right? i think that with all that's going on it has also become a good fear factor in the world affairs. jmho, i'm sure there are more factors in the price of usd than just these, don't you wish you could know just half of them?...