In an article on the value of the dollar the Washington Post noted that a high dollar makes U.S. goods less competitive in international markets. While this is an improvement over pieces that warn the dollar could plummet if the U.S. doesn't get its budget deficit down, the article still remains confused on the issue. It later told readers:

"For the better part of the past decade, the dollar has steadily lost value against other international currencies, reflecting both the rapid economic growth of many developing countries and a persistent U.S. pattern of spending more than it takes in."

Of course the U.S. pattern of spending more than it takes in is due to the fact that the dollar is too high. In a system of floating exchange rates, like the one we have, the price of currencies is supposed to fluctuate to bring trade into balance. This means that the trade deficit is caused by the over-valued dollar and a decline in the dollar is the predictable result.

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