Remember when it used to be all about the Benjamins? Well, with most economists believing that the U.S. is in a recession right now, alarm bells are ringing worldwide as the U.S. dollar has hit an all time low against other major currencies. The U.S. economy looks to be increasingly sick due to the nearly three trillion dollar war on terrorism in Iraq, the huge trade deficits incurred by borrowing massive sums internationally and the mortgage crises which has caused record foreclosures nationwide.

Yes the American people have seen better days and the current situation proves one thing for sure; the U.S. government must be more fiscally responsible if they are to better the current situation and I don't mean the band aid approach of President Bush with regards to his economic stimulus package. With the U.S. dollar being the most used currency for foreign trade and investments worldwide; its weakening state has hit the panic buttons for many investors. Oil has risen to all time highs as a direct result of the weakening dollar. Countless businesses are directly affected by this internationally, especially the transportation industry.

A lower dollar value means higher oil prices, which lead to higher costs for doing business. Put this all together and it's the consumer pockets that suffer once again. The increasing interest of investing into Euros also pose a major unwelcome challenge to the weakening dollar at this point in time. With more dollars being printed everyday, and less investors wanting to hold on to them due to a current lack of dollar confidence, the worlds most used currency might slip even lower.

With all this said, I personally don't believe the Euro could ever overtake the U.S. dollar as the major trade currency, for they have their own internal problems to iron out. I believe that with America being the world leader and claiming a very large percentage of the earths wealth, the dollar will rally hard and eventually straighten itself out over time. It could take some time though, but with so many countries relying on the U.S. dollar's strength to empower their own economies, and countless large corporations directly affected, their will added pressure on the Federal Reserve to clean up this mess before a global recession arrives.

The decline of the U.S. dollar would have a devastating impact on the world as the majority of countries store large sums of U.S. dollars in their own personal reserve banks meaning any major drop in the dollar would be a drop in a countries net worth unless of course they decide to sell and take a loss anyway. With all that's been said here, I don't believe it will get to that level. Too many fat cats, large corporations and countries have too much to lose. The U.S. dollar might be on the ropes, but the great ones always bounce back. Expect the dollar to fight hard and eventually bounce back!