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Lately there has been a lot of talk about the US economy coming to a recession. Some analysts are saying that the US is in a recession but others don’t agree. The only agreeable thing is that the dollar is falling.

In some aspects the falling dollar is a good thing for the US - it means that products made in US are cheaper compared to the things made in other countries. This in turn enables the US companies to sell their goods with better prices as compared to their competitors. On the other hand it also means that for people living in the states it is more expensive to buy foreign products. This can make everything starting from bananas and finishing with foreign cars more expensive for the US consumer.

In the long run the falling dollar is a bad thing. Nobody wants to use a currency which simply put vaporizes.

Lets imagine for a moment that you are the Central Bank of China and you decide to put 1 billion dollars in a safe. When you open the safe 3 years later you have only 700 million dollars left(no smartass, nobody took the 300 million - it just vanished).
This is what is happening with the for at least three years dollar - the longer you keep it the less it will be worth. This is why countries like Iran don’t want to use the dollar for selling oil.

But what about the bloggers?

Bloggers and online businesses are relatively safe - as far as they make and spend their money inside the US. The same is actually true for online businesses that make their money on markets that have no direct link with the dollar. Markets like this could be the European Union, Asia, Australia and basically any market which allows for a web based business to operate without buying or selling any product that has anything to do with the dollar. So that is the good news - most online businesses are relatively safe.

The bad news

The bad news is that there is a group of bloggers and web businesses that are hurt daily because of the falling dollar. This is the group that make their money in dollars and spend it in other currency. If you live in England and have a website that makes money selling products or services to people in the US you are actually losing money every day.

The easiest way to understand this is by imagining a blog such as the one you are currently reading. What I do is write articles about the things that interest me and hope that people with similar taste will find them. Each time somebody visiting my blog decides to click on an ad I make a small amount of money.

Most of the people on my blog are from the US and the advertising program I use pays me in dollars which is the case with all advertising programs that I am aware of. The problem is that I live in Estonia - a small country in the European Union. Our money is directly tied to the euro. Within the last 3 years the dollar has fallen more than 30% compared to the euro. This means that while you make the same amount of dollars with your online business you can buy 30% less stuff for it in the EU. So basically just to stay even you would have to increase your income 30% to keep the same living standard.

The falling dollar is actually improving some businesses who operate from the US but make their money elsewhere - the amount of euros(or other currency) they get their income in translates day after day to a larger amount of dollars.

While it is difficult to say if there are more US companies getting their income abroad or more foreign companies who get their income from US it is definite that the falling dollar is hurting bloggers around the world. The reason is simple - most advertising programs are based on dollars. The only way to stop hurting bloggers is to use another currency.