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     CBS wasnt alone. Headlines like The Dollars Decline Does Matter, Consumers Could Get Caught Under Falling Dollar, and The Dangerous Dollar were all the rage as Americas currency was approaching its lows.

     Other media also cited the Bush administrations economic policies as the cause of these declines, with typically calamitous predictions such as a possible end to foreign purchases of Americas government debt, as well as blaming the rise in oil prices on the depreciating dollar:

    But for consumers, that medicine could be hard to swallow, especially if the dollars decline turns into a free fall. That could spark a run-up in inflation and force the Federal Reserve to raise rates aggressively, potentially bringing down the high-flying housing market. MSNBC.com, Dec. 3, 2004 In what amounts to a vote of no confidence in the U.S. economy, the dollar has faded against the euro and the yen on fears that a second Bush administration will continue to do to the nation what the first did hobble it with a lot more debt. Los Angeles Times editorial, Nov. 15, 2004

     Of course, the broadcast networks were airing similarly bearish reports as the dollar approached its low point. Trish Regan of the CBS Evening News said on December 5, 2004:

     So foreigners have begun moving their money to places with better rates of return, and some nations are threatening to bail out of the US altogether. This could send the dollar into a deeper decline, putting the brakes on the country's economic recovery.

     Its been almost a year since the media began in earnest to warn Americans about the falling dollar, and, as is typical of press predictions, they were wrong. As measured against a basket of currencies referred to as the Dollar Index which trades futures on the New York Board of Trade, the American currency has risen by 15 percent instead of falling precipitously as forecast last December by many media. Against the euro, it is up 20 percent to a two-year high.

     The press were also wrong about foreigners ending their purchases of U.S. Treasury paper such as T-bonds and T-bills. CBSs Regan made a common media prediction regarding the dollar at the end of last year when she said foreign governments, corporations, and individuals would get so concerned about its value, as well as Americas ability to pay back its debt, that they would either stop purchasing Treasury paper or sell it off. Tom Fenton, also of CBS News, said this on Dec. 6, 2004:

     Who is our government borrowing from? Mostly other governments, it seems. Foreign central banks now hold 2.3 trillion dollars (that's $2,300,000,000,000) in American IOUs such as U.S. Treasury bills and bonds. China and Japan are among the biggest creditors. If they decided to sell off a substantial part of this mountain of dollar assets, the dollar would collapse.

     We now know that hasnt been the case. In fact, its quite the contrary, as reported by the Associated Press in a Nov. 9, 2005, article entitled Dollar, Near 2-Year High, Continues Rally:

     Higher rates boost the U.S. currency by making dollar-denominated securities relatively more attractive to investors. Growing foreign investment in the U.S. bond market has pushed the dollar higher and the euro lower.

     The media werent just wrong about the future direction of the dollar and the end to foreign purchases of U.S. Treasury paper. They also missed the mark on their forecasts of an economic downturn. In fact, not only did the dollars value fail to [put] the brakes on the countrys economic recovery, but, instead, the gross domestic product grew by 3.8 percent in the first quarter, 3.3 percent in the second quarter, and 3.8 percent in the third quarter.

     Curiously, even after the dollar had clearly bottomed, the media continued to focus on its weakness, as well as espouse new reasons why its value had ominous portent for the nation. Mellody Hobson of ABC News said this on Good Morning America on February 23 of this year:

Well, it affects them in a couple of ways. One, we saw oil go up yesterday. It's now over $51 a barrel, almost $2 at the pump around the country. More in certain areas. So, that's a very specific effect that comes right out of your pocket because oil trades in dollars. So, when the dollar gets weak, the oil producers raise the price to make up for the difference.

     It was fairly common of the media earlier in the year to blame rising oil prices on a declining dollar. However, as the dollar has increased by roughly 15 percent this year, while oil has increased by about 40 percent, it was obviously specious to suggest such an inverse relationship existed between the two.

     Americans could learn a key lesson from the medias poor prediction skills that many professional investors have known for decades: When the mainstream press begin to recognize a trend in anything and focus a tremendous amount of attention on it, that trend is probably very close to being over.

Noel Sheppard is an economist, business owner, and contributing writer to The Business & Media Institute. He is also contributing editor for the Media Research Centers NewsBusters.org. Noel welcomes feedback at slep@danvillebc.com.