On the dollar.

"The U.S. dollar has been the king of currencies since the first world war, when it began to dethrone the pound sterling. Its primacy survived the great inflation of the 1970s and the vast swings in its external value during the 1980s and 1990s. But now, for the first time, it is weak when a plausible rival is strong."

"The shift in the dollar's role is, none the less, slow. By the end of the second quarter of 2007, for example, only a quarter of the foreign currency reserves whose denomination could be identified by the International Monetary Fund were held in euros, up from 18 percent when the euro was launched. Meanwhile, the dollar's share had fallen to 65 percent, from 70 percent in the beginning of 1999."

"Moreover, the decline in the dollar's external value has been precipitous. Against the euro, the dollar has fallen by 40 percent since its peak at the end of January 2002. On JPMorgan's broad trade-weighted index, the real value of the currency has fallen by 28 percent since February 2002. It is now lower than at any point since 1980. This fall has happened even though the total value of foreign currency reserves rose by just under $4,000 billion between February 2002 and September 2007."

--Financial Times (editorial), December 27, 2007

Matthew Rees is head of the financial markets practice at White House Writers Group, a Washington consulting firm.