The Slow Fall of The Greenback.(Davos Preview)(US dollar)

Byline: Rana Foroohar and John Sparks

The dollar is as weak as it's been in more than three decades. Its slide is ushering in a new economic era.

Immigrants to New York used to be greeted with signs like "Help Wanted: No Irish Need Apply." But these days, newcomers from Dublin are more likely to be mobbed by luxury property developers trying to hawk them $1 million condos (a handful of new buildings in the city are marketed mainly to rich Irish). Manhattan, like other posh areas of America, is now full of homes meant for foreigners. One in five American real estate agents sold a house to an expatriate last year. The reason is obvious: from Rio to Riyad, dollar assets are a bargain.

The shift, which has been coming for several years now and will be much discussed at the World Economic Forum in Davos this week, is seismic. Since the end of World War II, the dollar's unique role as the de facto international currency has afforded Americans a tremendously privileged place in the world. We filled most of the seats on transatlantic flights, and bought second homes abroad. Our currency was prized by central banks. Countries pegged their monies to the dollar. Commodities were priced in dollars. The strength of the greenback, and of the economy, underpinned U.S. global hegemony in politics and culture. Big American banks like Citibank used to fund Third World governments--now those governments are buying Citibank on the cheap.

Clearly, times have changed. The dollar--along with America's economic place in the world--has been on a well-documented downward spiral since 2002. Back then, a euro was worth 86 cents. Today, it buys $1.46. Of course, the euro's relative youth makes talk of "historic lows" easy to dismiss. More telling is that the U.S. Dollar Index, a futures contract reflecting the ...