Bum tidings, folks. The falling greenback – which is inflationary and pushes interest rates higher – is not about to halt its skid for quite a while despite a recent rally, say several dollar trackers. The rally, they feel, has no teeth.

Not only that, analyst Gregory Dorsey of the New York-based Complete Investor newsletter, observes that the dollar – given major structural imbalances in the American economy and under pressure for nearly three years – still has a lot further to fall. “It’s about as sure a bet as you can make,” he said.

Meanwhile, figuring out how much the dollar has fallen is a bit tricky. According to the Federal Reserve’s dollar index – which measures the greenback against six major currencies – the buck has declined 23% since February 2002. On the other hand, the Atlanta Fed’s dollar index, measured against 15 trade weighted currencies, shows a more modest 13% drop in the same period. Versus the euro, though, the dollar has declined 35% over the past four years.

In any event, a weaker dollar – which makes our exports less expensive, while raising the costs of our imports – also reduces spending and boosts domestic savings.

But why more erosion in the dollar? Mr. Dorsey cites several factors:

* The massive budget deficit: It recently hit a record $413 billion, fueled by the costs of the war on terrorism, our military ventures in Iraq and Afghanistan, and the need to fund existing domestic programs.

* The record low national savings rate: Not only is the government not saving, individuals aren’t either. The personal savings rate stands at an abysmally low 0.2% of disposable income, which means we’re living well beyond our means.

* The large and growing account deficit: Because we’re not saving, we’re forced to import savings from abroad to fuel our economic growth. The difference between our savings and investment has declined dramatically in recent years. As a result, the current account deficit is a record $630 billion, or 5.4% of GDP.

Also adding to our dollar woes, especially as it relates to concerns of overseas investors about the vigor of the greenback and therefore foreign interest in American securities, is our surging debt. Total American debt – that’s government, business, and individuals – exceeds $30 trillion, or 2.8 times GDP. Nearly 25% – more than $7 trillion – is owed by Uncle Sam. As for you and me, our debt averages about $85,000 per American household. That’s also a record. Debt concerns, it’s said, are yet another reason the Fed will be forced to push rates higher to attract foreign capital.

Correcting the ballooning $55.5 billion American trade deficit, says gold expert Paul Van Eeden of precious metals tracker Kitco.com, will also require a weakening of the dollar against those countries with which America has the biggest trade deficits – meaning the Chinese renminbi and the Japanese yen.

Meanwhile, how can the average investor make a buck out of the sinking dollar?

For starters, Mr. Dorsey favors gold and gold stocks, given the inflationary implications of the plunging greenback. The precious metal, though, is not undiscovered, having recently touched a 16-year high (it’s currently trading at around $440 an ounce.) Mr. Dorsey figures the next important resistance level for gold is $500 an ounce. Ultimately, he looks for gold and other precious metals to trade much higher. His favorite gold picks: Newmont Mining and Barrick Gold.

American companies that export overseas, particularly China and India, are also seen benefiting from a falling dollar. Intel, Texas Instruments, and Coca-Cola are some of the names that are expected to enjoy strong sales abroad as prices for their products decline for foreign consumers.

Meanwhile, the stock markets in countries with appreciating currencies are seen performing well in the years ahead, thanks to their percolating economies. For American investors, the rising currencies are expected to add to the gains in overseas share prices. Vanguard International Value, one of Mr. Dorsey’s favorite mutual funds, is viewed as well positioned to profit from this one-two overseas punch.