The American dollar is in the midst of a large fall in its value, or depreciation, as measured against other major currencies. The decline has been steady since 2002 and our currency is down about 35 percent from that peak. After strengthening slightly more than 10 percent during the global financial crisis of the past 18 months, the dollar is again falling back toward its pre-crisis lows, representing its weakest international value since 1967.
But there is a definite possibility that the dollar could soon decline further or faster....
The Treasury’s past and current close connections to Goldman Sachs, Citigroup and other major investment banks illustrate how our own doom machine functions. We need to break up these “banks” so they are small enough to fail, and also ensure that no bank, regardless of its connections, is able to demand that the Fed and the Treasury support its solvency in the future to prevent financial collapse.
In this context, a weakening dollar helps the administration to put an unstable financial system back on its feet — and to crank up our “doom machine.”
Full article at http://economix.blogs.nytimes.com/2009/11/12/the-great-shrinking-american-dollar/
