I like your thinking suanna, but what is available to 'back' any sustained movement into a rising USD? Real numbers of what would push the USD higher are not there IMO.
IF real interest rates do rise, it's to stem inflation - Australia does this all the time. This can only be because the availability of disposable cash and the purchasing actions of the consumer. I don't know where this would come from given unemployment is rising - GDP per capita might give an indication on the average wealth of US citizens, however the enormous disparity that is executive to real worker salaries is obscene in the US.
I like your use of diametric opposites, because we are 'hearing' exactly that from all the commentators. The US cannot get increases in inflation WITHOUT solving the employment problem UNLESS they are in a welfare condition. Which is certainly possible, IMO - and disasterous in the medium term and leads to currency failure as this can only be achieved by issuing more currency.
So the flight to safety might simply be those taking advantage of the principle of diminishing returns - being that the higher the price of something, the less % return for the same step change in price movement. The converse of this holds true.
At USD 75 cents, only small movements are needed to provide good returns on your money (I don't trade forex). The principle of minimising losses on a losing position (for those who stayed in) is to try and pick the highest exit position possible, and beat the market to that point of exit (for those wanting to exit). For those who speculate the currency, a lower USD is a nirvana for better short term returns - and I think that is what we about to see.
Time will tell ... but the US has lost touch with it's people, and thinks the banks will save the day via a monteary policy that is completely out of whack with incomes.
