From his Oct 10 column:

The truth is that the falling dollar is good news. For one thing, it’s mainly the result of rising confidence: the dollar rose at the height of the financial crisis as panicked investors sought safe haven in America, and it’s falling again now that the fear is subsiding.

The dollar is falling because of reckless economic policies like those Krugman advocates. Yet he actually thinks it’s falling because of confidence? It’s the exact opposite. Foreign banks are dumping dollars because they have no confidence in us. They’re switching to Euros, gold, and other currencies. New foreign reserves were 63% dollars in 1999. Today that number has fallen to 37% (see bottom).

We are losing our status as the world’s reserve, and it is most certainly not a good thing. Having the dollar as the world’s reserve brings extraordinary benefits. And we’re giving them all up, just to save bankers butts’ and attempt to stimulate our way to prosperity.

Consider this Bloomberg article: Dollar Reaches Breaking Point As Banks Shift Reserve.

Unless we change course immediately, the dollar will keep falling. Krugman doesn’t get it. He continues to advocate horrible fiscal policy. Excerpt from Bloomberg piece: