Originally Posted by RawAlex

The US could reverse the trend by raising interest a bit to make their currency look a little more interesting, but because of the mortgage sub-prime situation, they can't really raise the rates, which is putting tremendous negative pressure on the US dollar.

The US government is also not in a rush to prop up the dollar, because the current low value of the US dollar makes most imports much more expensive. That means that it is cheaper to produce or manufacture goods within the US, which helps to contribute to fuller employment. The one asterix to that is the chinese yuan renminbi, which is pretty much hard pinning to the US dollar, which means that the cost of Chinese imports hasn't moved, making them cheaper than almost every other source in the world.

The US trade deficit with China for July was 28.3 BILLION dollars... almost a record. But with the dropping US dollar, exports have picked up:

http://afp.google.com/article/ALeqM5...5SED2LaIQG7aBg

For anyone outside of the US getting paid in US dollars, things pretty much suck. At the point where the US dollar hots 1:1 with the Canadian dollar, those of us north of the border will be looking at 40-50% less earnings on exchange rate differences alone compared to 5 years ago, and about 20% since the end of 2005.