First, the US Gov't does actively pursue a weaker dollar when it serves American interest (like devaluing the federal deficit during a war, etc). The current astronomical decline in value on the dollar has a lot to do with the outrageous trade deficit, budget deficit, the war in Iraq, etc. Administrative policy can have a dramatic affect on future dollar value, as evidenced by the strength of the dollar in all major pairs (CHF, EUR, JPY, CAD, GBP) after Snow and Bush both stated that reducing the federal budget deficit would be a primary objective in Bush's 2005 Federal Budget plan. Of course, as predicted by almost every central bank in the world, Bush lied and took no measures at all in his budget to reduce the deficit. Bush and Snow are both complete idiots, and you can think Bush the day it costs you $5000 for a pair of Italian shoes (but thanks to the pegged Chinese yuan, you'll be able to pick up a pair of Chinese loafers at Walmart at the same price as always). Instead of introducing a flat-tax as he had proposed (and which could have eliminated the federal budget deficit within a year or two), he completely pulled an about-face and further cut taxes for a very select portion of the population, which has now sent the dollar right back south in a serious fashion. Does the decline in the dollar value affect average people? You better believe it. And it's vastly more far-reaching than simply making American exports cheaper to world markets, or devaluing our federal deficit. In order to offset the decline, at some point the Federal Reserve will be forced to increase the interest rate dramatically (in order to continue to attract foreign investment), which will seriously affect the interest you pay on credit cards, loans, etc. The most dangerous effect of a basement-dwelling dollar is decreased foreign investment which seriously weakens securities for example, and can cause lost jobs, decreased GDP, etc (this is very bad for working Americans). Inflation is not caused simply by a sinking greenback, contrary to common belief. The largest factor influencing inflation is dramatic decreases in the unemployment rate mixed with spikes in consumer spending (at least with Greenspan running the Fed). A bit of a different dynamic here. And generally when this occurs, the value of the dollar is actually rising versus other major currency pairs. The outlook for the dollar right now is very poor. Many currency experts are putting the EUR/USD pair at 1.42 by early summer. The outlook changed dramatically after the Bush Administration's 2005 Federal Budget was released. Expect to see GBP/USD (british pound) around, if not over, 2.00 in the same period. Yeeeehaw... Personally, I love the ride. I'm going short on the USD in almost every pair and making a killing (on long-term positions).