In fact, the surprise is that it hasn’t fallen further and sooner. The dollar’s fall does indeed reflect serious weaknesses in the American economy. But it is not bad news as such. It reflects the problems but forms one part of the solution to them. The economy needs American exports to grow if it is to avoid a recession, or just eventually to recover from one, and the falling dollar is encouraging such export growth. The really bad news would be if the dollar were not to fall. And really, it needs to fall further against the currencies of its big Asian trading partners, China and Japan, if America is to be able to cut its imports and boost its exports.

The real question is how bad the American recession is going to be. Economists’ forecasts — such as those from the IMF last week — so far suggest a slowdown rather than a true recession. Maybe that’s possible, but to me that will be a surprise. When banks are losing billions, when house prices are falling, when lending is seizing up, the likeliest outcome is surely quite a sharp downturn. When Japan’s financial markets began to crash in 1990, there were at first many months when pundits and policymakers claimed that the “real economy” was not going to be affected very much. But bit by bit, it was. I’m not suggesting America is now going to match Japan’s “lost decade” of the 1990s: it is more resilient than that. But, to repeat, it will be a surprise if it emerges unscathed from the current financial turmoil.