No one involved in financial markets or economic analysis would dispute the importance of the dollar. It is simply one of those givens — important because everyone says it is important. If we have learned anything since the birth of the present system in the early 70s, it is that exchange rates affect everything else in the economy.

Table 1 shows nine macroeconomic variables affected by exchange rates and the impact of improper valuation. We can move down the list in short order; a caveat of "all else held equal" applies to all items.