Dollar's decline could boost some industries

He said those government agencies and businesses seeking tourists from abroad are highlighting the weak dollar in their advertising.

“If you’re trying to get more people to get here from Europe you can’t ignore the fact that the U.S. is the best bargain it’s been years,” Kay said.

Cheaper prices for U.S. assets could even help portions of the struggling housing market, said Quincy Krosby, chief investment strategist at The Hartford.

“I think this is going to accelerate foreign purchases of U.S. property,” she said.

European buyers, she said, could, buy second homes in the United States in not only bustling cities but also, for example, near golf resorts.

Still, while some sectors of the economy might benefit from a flagging dollar, many observers expect the longer-term ramifications will pose difficulties for the U.S. economy.

“If you want to take over companies or if you want to expand it makes it harder,” said Merk, adding that U.S. assets become less-expensive targets.

“You can’t defend yourself. Your currency is worth less in an international arena and we’re in a globalized world. You’re going to be up for sale. All U.S. assets are up for sale,” he said.

While analysts might disagree on how widespread some pain will be as the dollar slips, all agree no one would benefit from a crash.

“The most important aspect of a decline in any currency is that it’s orderly,” Krosby said. “This has been orderly,” she said of the pullback.

She contends the absence of comment about the dollar following the recent gathering of the Group of Seven wealthiest nations indicates the G-7 is expecting a gradual decline.

Forces continue to weigh on the dollar, however. Some investors see interest rates as more likely to fall as the economy slows in the United States, whereas interest rates are rising amid stronger economic growth, making their returns more attractive. In addition, governments from China to Russia to Korea have announced plans to diversify their holdings beyond the dollar, long the world’s sole reserve currency. And while they don’t want to see the value of their existing sizable dollar holdings decline, they can find value in emergent currencies elsewhere.

“If U.S. assets become a bit less attractive, the country that was putting a dollar a day into the U.S. might put 50 cents or they might hold off for a week or two,” said Laura Ostrander, lead manager for the Columbia Strategic Income Fund.

Brown said if the value of the dollar drops by half, as he predicts, there could be wide-ranging social changes as well as poorer consumers were forced to pay more for goods now produced abroad.

“One of the most potent forces may just be most fundamentally a change in the standard of living,” he said, questioning what would happen if the dollar fell by half but prices doubled. “That will be one more reason why the decade ahead will be at a societal level a little less easygoing,” he said.

“If you’re going to take a trip overseas, I suggest you take it this year and don’t wait.”

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