In the past 6 months we have seen the US dollar devaluated against other currencies around the world. Many are worried that this situation can end up in to another era of economic crisis in the United States. A crisis that happened on the first quarter of Obama’s presidential.

A different situation happened in Canada, the Canadian dollar continue to gain strengths. The Canadian dollar to US dollar exchange rate becomes the indicator of the economic growth in Canada.  It seems like the Canadian are winning the game against US in term of economic.

Canadian industries that are importing products from US won the biggest advantages from this situation. They can now import products at reduced rates due to the stronger dollar. Even though that this situation could negatively affect Canadian local products, but it can also force Canadian local products to be more competitive against imported products.

Many investors using the US dollar to Canadian dollar exchange rate as the main reason to switch their investment from US industries to Canadian growing industries. The government in US must do something effectively to prevent a worst economic situation.

Economist called this situation as another perfect storm. According to a recent comment in the New York Times, “the decline of the dollar might take more than a decade, but it could happen even sooner if we do not get our financial house in order.”

Indeed, a perfect storm of the greenback is brewing, and the reasons are obvious:

The U.S. government is spending more than its income, and this has been going on for the past two decades.

The U.S. government is continuing to print money to bail out its ailing economy, which seems like a bottomless pit. There are trillions of dollars held by investors and speculators outside the United States. Their sentiments over the value of the dollar may shift anytime soon. The value of the dollar is perceived merely in the eyes of the beholders, many of whom are getting very nervous about the prospects of their dollar-based assets.

The U.S.government should be bracing itself for the perfect storm – the dollar devaluation.