Unlimited Deposit Insurance: One Reason the Dollar is Rising?

Here's a great article on the problems with unlimited deposit insurance from Alan Blinder and Glenn Hubbard (via Greg Mankiw's 'More Commentary on the Financial Mess'). One of the interesting parts was about increasingly broad deposit insurance might be one of the reasons that the dollar is rising as savers in other countries with less favorable schemes move their money to the US to keep it secure. This would normally be expected anyway as spooked investors move their money to the more stable US but in this case financial insecurity is spreading from the US to the rest of the world but legislation like this might be one of the factors that money is still pouring into the US:

Third, an unlimited deposit guarantee in the U.S. would pull funds out of other countries, just as Ireland's guarantee led to an inflow of money into Irish bank offices in the United Kingdom. The Irish-British deposit flow happened on a small scale; but the U.S. is the 800-pound gorilla of the world market. Even amidst all this chaos, money has been flocking to our shores.

Thus we might wind up worsening an odd sort of beggar-thy-neighbor game, causing a "giant sucking sound" as deposits fled other countries for the sanctuary of the U.S. and its FDIC. The implications for our international friends could be enormous. In a misguided attempt to create financial security at home, we might inadvertently make the world a significantly more dangerous place to live.