The Devaluation of the United States Dollar: Causes and Consequences

This paper identifies many of the challenges that the U.S. dollar faced between 2002 and 2008, and also the consequences Americans are facing because of the dollar's free fall in value. Implications of the United State's current activities, both inside and outside of its borders, are examined in order to determine the causes of the decline of the U.S. dollar. In addition, a potential remedy is presented and includes the formation of a coalition with other countries to begin allowing all currencies to float freely in the exchanges, thereby letting the market dictate currency prices. Of course, the likelihood of this is small. Another remedy that is within the power of the U.S. but also unlikely to take place is to reduce government spending as well as the ever-increasing deficits. If drastic actions such as these are not instituted, further declines in the dollar's value will take place, and the ramifications will be severe