The risk of a dollar crash and a subsequent financial meltdown are not negligible. Discussing the coming fall in the dollar, mr rogoff recently commented The world is set to jump off the top of a waterfall without knowing how deep the water is below Nonsense, say the optimists just look at history. In the early 1980s, America's current-account deficit rose sharply. Policymakers, economists and journalists fretted about the prospect of a dollar crash. a book published in 1985, Deficits and the Dollar", by Stephen Marris, epitomised the mood. On present policies a hard landing has become inevitable for the dollar and the world economy,"Mr Marris argued. The dollar will, over time, go down too far and there will be an unpleasant world recession. The dollar did indeed go down, just as he had predicted, but there was no nasty recession. Can history repeat that feat? Copyright 2004 The Economist Newspaper and The Economist Group. All rights reservedThe risk of a dollar crash and a subsequent financial meltdown are not negligible. Discussing the coming fall in the dollar, Mr Rogoff recently commented: “The world is set to jump off the top of a waterfall without knowing how deep the water is below.” Nonsense, say the optimists; just look at history. In the early 1980s, America's current-account deficit rose sharply. Policymakers, economists and journalists fretted about the prospect of a dollar crash. A book published in 1985, “Deficits and the Dollar”, by Stephen Marris, epitomised the mood. “On present policies a hard landing has become inevitable for the dollar and the world economy,” Mr Marris argued. “The dollar will, over time, go down too far and there will be an unpleasant world recession.” The dollar did indeed go down, just as he had predicted, but there was no nasty recession. Can history repeat that feat? Copyright © 2004 The Economist Newspaper and The Economist Group. All rights reserved