I agree with many of the observations that Terry makes about
some of specific factors behind the dollar decline. But I still
have one problem. Maybe I am being picky, but I think that we
need to be very careful about asserting that this decline is the
decisive indicator of the collapse of US hegemony. Speaking as
one who has spent 15 years analyzing the empirical manifestations
of world-system position (which subsumes within its scope the
concept of "hegemony"), if the world-system position of a country
were correlated 1.0 with its exchange rate (as is perhaps
unintentionally implied by Jozsef and Terry), than all of our
work (especially mine!) would be very much easier. While the
dollar drop may indeed reflect (and is perhaps even catching up
with) the decline of the W-S position, let us remember that
speculators controlling enormous assets control short-term
currency movements, while the "true" dollar value vs Yen or
D-marks will only unfold over the long term.
-Peter Grimes