QUESTION:   Why is the U.S. Dollar falling drastically?
ANSWER:       Simple.  Incessant inflation caused by excessive creation of money out of thin air.

The situation is exacerbated by rampant borrowing and spending.  The monetary system is an upside-down pyramid scheme, and the debt is now so large, and spending and borrowing is so out-of-control, collapse of the pyramid is most likely inevitable.

USD to EURO:

 

USD to Chinese Yuan:



USD to Japanese Yen:


 
USD to Swiss Franc:

 

USD to British Pound:

 

USD to Canadian Dollar:

 

USD to Australian Dollar:

 

USD to Brazilian Real:



USD to Danish Krone:



USD to New Zealand Dollar:

 

USD to Singapore Dollar:


     Sources:

• http://finance.yahoo.com/currency ;

• http://www.discount-currency-exchange.com/currency-resources/currency-graph.cfm  
   

Did you notice that short-lived spike in year 2008 above?
What was that?
That was what happened when other nations around the world were devastated by the 5-star rated mortgage backed securities peddled all over the world to fuel the doomed housing bubble.
Countries, such as Iceland, went bankrupt.
But even that massive fraud on the world can not prop up a doomed pyramid scheme forever ; not when U.S. nation-wide debt has grown from 100% of GDP in year 1956 to 420% of GDP in year 2009, and money is being created as debt at a ratio of 9-to-1 of debt-to-reserves, creating a situation where 90%-to-95% of all money in existence exists as debt. 
Where will the money come from to merely pay the interest on that debt, when that money does not yet exist?

NOTE:  Rising demand of GOLD is raising GOLD prices world-wide, and most other currencies have inflation too, but the jump in price in U.S. Dollars is much larger than other major currencies due to the falling U.S. Dollar.

$U.S. Dollar price increase = 317% increase in 5 years (from $335 to $1061 as of OCT-2009):
 

However, the federal government changed the way it measures inflation in 1983 and 1998.
Remember the double-digit inflation of the late 1970s and early 1980s ?
Based on the pre-1983 measurement method, inflation in AUG-2008 is really 15.6% !

 

As of OCT 2009, the federal government tells us that inflation is ZERO (or negative).
Do you believe that?
Check out these economic statistics at Shadow Government Statistics:  http://www.shadowstats.com/alternate_data 
And then look at the U.S. Dollar compared to other international currencies.
And remember that those other international currencies also have inflation of their own too!
The government can lie about inflation, unemployment, GDP, and other economic statistics, but it can't easily hide the declining value of the U.S. dollar compared to other international currencies.

On top of that, taxes and fuel costs are not included in the CPI (Consumer Price Index) calculations, despite federal taxes as high as 31% for some people.
Consider the following:

• A postage stamp in year 1950 was 3 cents; in year 2008, it costs 42 cents (1,400% inflation = 4.74% per year for 58 consecutive years).

• A gallon of 90 Octane full-service gasoline cost 25 cents in 1950; as of AUG 2008 it costs about $3.84 (1,536% inflation = 4.91% per year for 58 consecutive years).

• A house in 1959 cost $14,100; as of AUG-2008, the median home price is $213,000 (1,511% inflation = 4.88% per year for 58 consecutive years).

• A dental crown in year 1990 cost $200; as of AUG-2008, it costs $1,100 (550% inflation = 11.3% per year for 18 consecutive years).

• Monthly government Medicare insurance premiums paid by seniors was $5.30 in 1970; as of 2008, it is $96.40 (1,819% inflation = 11.34% per year for 28 consecutive years; up 70% in the past 5 years);

• Several generations ago a person worked 1.4 months per year to pay for government; as of 2008, the average person works 5 months per year to pay taxes;

• In the past, one wage-earner families lived well and built savings with minimal debt, many paying off their home and college, and educating children without loans. How about today?

Based on that, what do you really think the real inflation rate is ?
What ever it is, it is too high, and it is likely to get worse.
Already, inflation has been positive for 52 consecutive years (since year 1956):


Incessant inflation, year after year, for 52 consecutive years, is actually exponential inflation, since the percentage this year is really more than the percentage of the previous year, which is more than the percentage of the previous year, etc, etc., etc.  That is why the Consumer Price Index sky-rockets after 1956. It's like compounding interest, except in reverse, by eroding the value of the currency, instead of preserving it. That is, the year-to-year inflation does not reveal the exponential nature of perpetual inflation every consecutive year, as does the CPI chart, which does reveal the exponential nature of perpetual inflation.
For example,  see what $100.00 shrinks to for the current (as of AUG-2008) 5.37% inflation, after N years:

Notice above what  5.37% , 9.8% , and 15.6% inflation does to $100.00 in only 4 years.