Actually I'm not at all certain what this article is trying to tell me, only that it is running around in circles saying things are going to happen which nobody else believes will come to pass. Well, it pain's me to remind the author, though I fear I must, he is the man who told us the Euro would melt like Camembert cheese. That hasn't happened to so why should we believe him on this...

John Walter, Bonn , Germany

Interesting this idea the dollar may come back, but I think all these movements are cyclical in the longer term, and just how much lower can it go before moving up. The issue of the yen is also interesting, as Japan is of course what Britain is not, relatively, speaking and that is an exporter (do we actually make anything any more??) As for Europe, sclerotic is I think the word which sums it all up. A shame, though as a Brit who spends a lot of time in the Eurozone I can afford to hedge my bets.

Chrs Wright, Newcastle, England

Economic predictions are fraught with unknowable pitfalls: derivatives, and their misuse, played a key roll in the subprime disaster and Anatole talks about this being 'not' the big story. However, derivatives could also play a material part in making Anatole's alternative big story a damp squib too. On the ball Corporate Treasury departments should be well aware of their risk to currencies and can hedge exposure accordingly, making money through derivatives as currency moves hit their foreign sales. (think of Porsche's recent headlines)

For sure some Euro exporters will suffer through the coming months but smart derivative use will dampen the affect of currency moves on well run companies. The big story of this period may well be the gradual transfer of Corporate US to the Oil rich Middle Eastern nations (think Citigroup). And more interestingly, what happens to the global economy if Oil rich nations keep capital markets propped up at inefficient levels for a couple of years?

Andy Shaw, London,

Once again we see American ruthless practicality in the face of European malice and envy... The reality is that Europe is as it has been for 70 years... totally dependent on the U.S., it's stronger, richer and more energetic companion.

Europe's economy is locked in the industrial age while America's has moved on to the post-industrial age. The U.S. was just rated the most 1 in international competitiveness despite being the largest economy. The U.S. has a growing population, the E.U.' is shrinking. By a number of measures, U.S. technological superiority is actually increasing.

American does have one Achilles heal, oil and this weakness is what is causing the trade deficit and dollar weakness. What the anti-Americans refuse to see, however, is that a protracted period of high oil prices is exactly the medium and motivation needed to end the oil age. As this is manifests, America's deficit will turn to huge surplus.The U.S Juggernaut will then truly become profoundly dominant.

W.H. Langeman, Tucson, USA, AZ

I agree with George on this one. The target is not the euro, it's the Yuan. The US are talking down their currency to turn the pressure up on the Chinese who will eventually have to revalue.

Johnboy, Jackson,

rather than think on a global basis, think of the opportunities at the individual level, either by buying US real estate at the right time, probably next year, or US shares. The US is thee place and will be thee place for the next 50 years. China and India are over hyped. The US makes the rules, will change the rules and the rest of the world will follow. I have a lot of respect for the Americans, because unlike Britain with itd class sysytem and incompetance, the US respects anybody with new ideas, money or self belief. By the way I am a proud Scotsman, who believes that their is much to learn from the Americans.

Jim mCCALLUM, Calgary, canada

Dear Sir,

I am not an economist, but have to ask - has any economist actually predicted any significant boom or bust for the past 100 years ? I think notaa

Andrew Anderson, rousse, bulgaria, bulgaria

I run a small exporting business, selling specialty raw materials, mainly in developing countries. Our biggest competitor and market leader is US-based and they set market prices in US Dollars. Though we have managed to maintain our sales volumes year on year, we have however seen our gross profits decline since 2003 at an average of -40% each year. With that goes hand-in-hand a decline in the taxes we pay to the Exchequer. At the end of this tax year we will be forced to wind up the company. Not only do we loose, but so does this country. And, all of this grief is purely due to the dollar exchange rate alone.

Do not cry for me, as I am already setting up a new business, but guess what Mr Brown, it's not going to be here, in your socialist paradise! We're going to set-up in the US and so I'm sorry to say that you'll never get another tax Pound or Dollar out of our business. And, we are not alone in this exodus. As they say, "If you can't beat 'em, join 'em".

Nigel, Coventry, UK

Good corrective to all this hysteria about the end of days for the dollar. Isn't the current weakness of the dollar versus the euro just another example of the dollar weapon in action? That is, the US deliberately talking down the greenback to send capital out of the dollar and into a target currency to improve its trade deficit with that country. They did it to Germany in the 70s, Japan in the 80s and 90s, now it's the EU's turn. The fact that the dollar has remained steady against the Asian currencies seems to me proof of this. To all the doom-mongers out there: those Americans are cleverer than you think.

http://reheated.wordpress.com/2007/12/03/the-falling-dollar-and-the-dollar-weapon/

Johnny, London,

The author contends the USD$ value has remained constant to the Yen and Yuan. Hmmm. I thought both were pegged in value to the USD for trade purposes? Which would explain why the three currencies have retained their values no?

Further, the value of the USD in terms of what it will buy has decreased. I am here living and buying. My costs are necessities have increased significantly. The US gov's inflation data is tame but you know better if you are -like me- out here trying to survive and without pay raises while inflation takes your buying power.

All this is very complex and I don't think anyone... including the US fed reserve knows anything for sure fwiw but I'd love for someone to clarify things and prove to me otherwise. fwiw

George , Buffalo NY, USA

I've contributed a couple hundred bucks to the shrinking deficit by giving up the pleasure of extravagently expensive British beer in favor of domestic brands!

David, Philadelphia, USA

The _really_ bad news seems to be that such a scenario is going to lead to a flood of calls for protectionism from EU politicians, calls which will likely be acted upon sooner or later.

A global recession somehow seems almost the lesser of two evils.

Ian Kemmish, Biggleswae, UK

Anatole has got it completely right. It's not only trade but capital flows too. With the Dollar this cheap , non-american investors will start to buy up US assets and its the capital account which immediately impacts the valus of the $. in addition, as the interbank market has imploded how are non-american banks going to fund theirs US$ assets. An amercan institution
can borrow from the Fed. The others will have to buy $'s.

Alan, Paris, France

Alan Abel, Paris , France

The decline of the dollar over the last 5 years and the calls of the "USA is finnished" that accompanies this political diatribe has to do to a large extent with European/British American bashing and nothing to do with real economic.When Europe wakes up shortly to a full blowen recession they will realize that their idiotic hatred/jealousy of the USA is what has lead them down this path and not level headed economic or political thinking. Of course they will then blame the Americans for their woes as they have always done in the past.

Leslie Udwin, Jerusalem, Israel

The psychological phenommena of "recency" makes humans think what is currently going on is the norm, and will just continue going on. But in the natural world cycles rule driven by natural entropy versus self-organizing efficencys on a constant sea-saw. Long wave currency cycles do exist and people are mistaking this short wave down cycle for the dollar as a permanent thing. But they neglected to see this ball of mercury is reasserting itself by exporting more product cheaply and as the sub-prime fraud is absorbed the combination of increasing exports and financial transparency will strengthen the dollar. All the Federal Reserve has to do is not lower rates too much, just enough to stimulate speculative investment which will re-inflate the growth engines of the economy. Strangely enough America is in the cat-bird seat on this one and the over-valued Euro will become increasingly precarious, as will the commodity driven emerging market currencies with any global slowdown.

Brian Stewart, Los Angeles, USA

If Europe bears the brunt of the depreciation of the US dollar, then the UK will also be affected. Roughly 60 per cent of UK foreign trade is with Europe. If Europe slows down then there will be some slowdown in the demand for UK exports. This slowdown in Europe is dependent on how much growth in Europe is reliaant on net exports. The pound is appreciating against the US dollar as well, so UK exports to the USA will be adversley affected. This will depend on the price and income elasticities for UK goods and sevices in the USA. Then there is the issue of UK exports competing against US exports on world markets.

Richard Flockart, Canberra, Australia

I suspect that the US government, instead of taking their complaints to the World Trade Organization that rarely sympathizes with the US, has decided to allow the devaluation of its currency. Their silence over the US Dollars devaluation is breathtaking.
For years, in Europe, I used to hear screams of anguish that the Dollar "was too strong" (as though it was a matter of pride?).
I have found Americans extremely practical people. Their Honor and patriotism does not extend to their currency. They could care less if their currency was used as toilet paper in the Congo, as long as they are laughing all the way to the bank.

Myles, Bath, UK

It seems the current trend for currencies is a race to the bottom, but some of the US's partners are getting twitchy about rising inflation, and are contemplating decoupling from the US dollar. This may make things a little better for Euro denominated companies, but only if those countries have industries which are in direct competition to EU firms.
But there also is the issue of EU companies buying commodities in US dollars, and therefore also saving some money there. It won't affect labour costs but it could help to ease some of the financial pain.

Justin, Nr. Lincoln, UK

Interesting contrarian point-of-view. Two things that I think aren't being considered here:

1- low US currency rates are exporting massive inflation to China, making it likely that China will revalue upwards

2- economies driven by oil 'de-dollarize' their economies (principally by invoicing oil in other currencies), effectively revaluing upwards their local currencies.

Wouldn't these actions effectively distribute the burden more than just on Europe?

Yannick, Barcelona,