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PLEASE! Do you know anything about this?
Since 2001 we've been in Europe, and I innocently assumed that after the Irak war the dollar would soar! I can't understand how this is good for america that her currency has tanked. Especially as a strong dollar has always been touted as a GOOD thing in prior years.

There are good things and bad things with a devalued dollar.

Good things,
US produced goods and services become more competitive in the global market
The 45 Trillion dollar debt gets easy to deal with since the real value of 45 trillion dollars is less with a devalued currency.

Bad things
Everything gets more expensive, since your dollar is worth less after being devalued you have to fork over more of them to buy stuff.
Interest rates go up, since nobody wants devalued dollars you have to raise interest rates to make them attractive to investors.
Americans get poorer, foreigners get richer, the buying power of foreigners goes up and the buyer power of Americans goes down.

In general weak currencies are bad news for those holding them. In particular a weak dollar is bad news for Americans, since prices will rise but pay checks (for most) will not. Should the fall of the dollar get really bad, and there is no reason to think it will not, then we might find that our paycheck buys about as much as any other third world worker paycheck. Which buy the way, as many of us have pointed out over the last several years is the plan. No way the US can compete in the global market with a high paid work force, so Gov decided it is time for a pay cut, hence the falling dollar.

Hope that helps.

I can't understand how this is good for america that her currency has tanked. Especially as a strong dollar has always been touted as a GOOD thing in prior years.

The truth is that this is a hardball game being played out. China pegs the price of its currency to the dollar so that no matter what happens to the dollar, Chinese goods are undervalued and American goods uncompetitive in comparison. This is a game of brinksmanship to get the Chinese to blink and decouple the Yuan from the dollar. Once that happens, then the dollar will go back up. But they have to blink first. There's a lot more down before we see some up.

There was for years in place a "STRONG DOLLAR" policy and the government would do everything in its power to prop up the greenback in relation to foreign currencies... The current administration has not embraced the strong dollar policy of the Clinton administration.... this has created a situation where the Dollar is naturally re-adjusting in a relatively short time frame, a readjustment that in reality has been going on for quite some time, but is only now free to do it.

I'm not losing sleep over a weak dollar vs the Euro. THere are those that say I should be, but I just don't agree with them.

The lower the dollar's value against the Euro, the lower the margin, and the more expensive goods will be in the US producted by companies tied to the Dollar. What made the US bad for manufacturing and export was the fact that the cost of goods sold was so high relative to the value of the currency in consuming nations, that US imports were too expensive to be competative.

Now, the inverse is going on.

The downside as I see it to a weak dollar will be few buyers for US Bonds... which basically are funding federal deficite spending, and have been for generations (yes, even during Bubba's reign). THis may finally force DC to deal with their bloated spending practices, that have been going on for 30-40 years now. It won't be a pleasant re-adjustment, but if it stops the notion that the public's money is for every liberal cause out there and forces a contraction of federal waste and spending.... and a fundamental shift by the electorate to how it views the federal government and its spending practices... that a few years of Pain is worth it in the long run.

We shall see.