Just a few "talking points" to add to the commentaries above, and why I think the dollar isn't going to recover at least within the next couple of years:
At last report, the U.S. debt and other "obligations" totaled $55 trillion. There's a better-than-even chance that there isn't this much money in the world, much less the U.S.
The problem with the housing crisis is that it isn't just housing, but the staggeringly large debt pyramids that banks and other lenders built on top of mortgages while not keeping enough money in reserves. I think in the near future you're going to be seeing a lot more things like CEOs retiring (Citigroup) and big houses being investigated for hiding losses (Morgan Stanley).
Every year since something like 1913, the Treasury reported how much money it was printing annually. This year, for the first time, they decided to keep that information secret. The cynic's view of this might be that they're trying to hide the numbers in order to prevent hyperinflation as the dollar drops and interest rates are cut.
There are two big ways this country has supported its debt: oil sales (oil can be used to back up our money as gold once was, put simply--"petrodollars"), and other countries buying dollars for their reserves. Now other counties (as said above) are starting to take Euros as well...Iran made the mistake of saying it would only take Euros, which lends more fuel to the fire between us...and they're shedding dollars from their reserves. Not dumping them--that would hurt them as much as us--but they are doing significant downsizing.
And if we attack Iran, the effects on the dollar might not be foreseeable, but there's a strong probability they would be catastrophic.
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timeasmymeasure
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