The Dollar is now the cheapest currency in the world to borrow, since the Dollar LIBOR rate fell below than the corresponding Japanese rate for the first time in 16 years.
One of the biggest reasons why Dollar is losing value is because of the US National Debt.
As of today the gross US national debt (Treasury securities) outstanding, stands at $11.4 Trillion.
Of this the debt owed to external parties is probably about $6 Trillion.
Going forward, meanwhile, the latest government projections indicate a $9 trillion increase over the next decade, touching a whopping $20 Trillion in 2020.
In absolute terms, it would smash all previous records, while in real terms (as a percentage of GDP), it would be the largest increase since World War II.
Over the long-long-term, the growth in national debt is projected to be catastrophic, as the baby boomer retirement leads to an explosion in entitlement spending.The resulting strain on the system is summarized by the Government Accountability Office: “Without changes, spending for Social Security, Medicare, and Medicaid would permanently and dramatically increase the Government’s budget deficit and debt, leading eventually to renewed financial and economic instability.”
The UN report – the first multinational statement on the issue – argued that dollar’s status as the world’s reserve currency should be subject to reconsideration in light of the major imbalances in global trade that have produced the current financial crisis.
Source:
http://www.forexblog.org/2009/09/dollar-under-pressure-on-all-fronts.html
http://forex.gftforex.com/public/item/239108
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