First, there is the simple raw evidence of market data. The dollar seems to make new lows against the euro every day; the dollar declined 20% against the euro in 2003. It also reached an eleven-year low against the pound and a ten-year low against the Canadian dollar. These are not isolated examples, but recurring strands of a larger fabric of soft comparisons against foreign currencies. From its peak in 2001, the U.S. dollar index, which charts the currency against a basket of six major foreign currencies, has declined more than 25%.
Another clue is found in the gold market. The yellow metal had a tremendous year in 2003 and now trades north of $410 per ounce - a level not seen in more than eight years - and is up more than 25% from one year ago. Gold is up 60% from its low of $255 per ounce in 1999.
