If there is one key factor the U.S. has going for it... if there is one plan Greenspan has that is working... it's the gradual devaluation of the U.S. dollar against other world currencies.

I've been writing for some time now about "Greenspan's quiet plan" to devalue the U.S. dollar. My prediction has been right, so far, with the U.S. dollar falling against other world currencies over the past 24 months. I believe the trend will continue. And I believe it is the proverbial "ace in the hole" for Greenspan.

A cheaper U.S. dollar achieves several positive results:

-- Foreign goods start becoming more expensive for Americans. Hence, Americans may start to look at buying American again.

-- Foreign labor, which is currently being tapped by the large American corporation, also becomes expensive. Hopefully, this is a step in the right direction to create domestic jobs.

Now think about all the foreigners that have invested in U.S. assets. Will they sell as the U.S. dollar declines in value? Likely not.

A simple example is all the foreigners who book vacation homes along the Florida coasts. Canadians, Germans, Argentineans, and other foreigners are huge owners of vacation homes in Florida. A Canadian who bought a condo in Florida two years ago at CDN$450,000 will see that property only worth $390,000 today because of the currency exchange (assuming no increase in the value of the property). And although two million Canadians migrate to Florida each winter, this is only one example. There are major foreign corporations with substantial investments in properties, stocks, and businesses in the U.S. And a lower U.S. dollar means they will likely have to hold their assets for years or take the currency loss.

The U.S. dollar will remain under pressure for several reasons, the most well-known being its large current account deficit. The U.S. current account deficit is the U.S.'s broadest measure of its trade with the remainder of the world. And it rose to a record $166.2 billion in the second quarter.

Foreign countries have become wealthy thanks to a previously high American dollar. Countries all over the world dreamed of shipping their goods to the U.S. for consumption because they were paid in American dollars that converted into a greater amount of their own respective foreign currency.

The Canadian example is a great one, as 80% of all the goods manufactured in Canada are shipped to the U.S. market. When US$1 was equal to CDN$1.50, a Canadian manufacturer had a competitive edge (assuming constant costs) shipping to the U.S. But US$1 only equals CDN$1.29 today... and that competitive edge is disappearing fast.

The TD Bank expects the U.S. dollar to be worth only CDN$1.20 within 24 months. A dimmer forecast comes from the National Bank of Canada, which expects one U.S. dollar to be worth CDN$1.18 within 12 months.

Anyway you look at it, this is bad news for foreign manufacturers, great news for the U.S. domestic economy, and a real triumph for Greenspan, even though he will not publicly admit there's a plan in place for the structured decline of the U.S. dollar against other world currencies.

By the way, Warren Buffett is betting billions the U.S. dollar will fall against other currencies.