U.S. dollar's decline beginning to show up even in black markets

• The dollar's decline against the euro shows no sign of ending.
• Clearly, currency traders have made a long-term judgment about the relative value of the currencies of the Old and New Worlds.
• But now there are signs that we're losing some of the most devoted fans of the greenback: drug dealers, Russian oligarchs, and black-market traffickers of all kinds.
• James Grant, of Grant's Interest Rate Observer, whose animadversions about the dollar and other subjects are as droll as they are pricey, highlighted the latest indignities to befall the once-mighty dollar in his Dec. 17 issue.
• The dollar is popular in the official global economyâ¬"the money that changes hands through computer terminals, checks, and wire transfers.
• For American tourists, Chinese smugglers, Ukrainian arms dealers, and African dictators, the dollar has long been the currency of choice.
• Citing Federal Reserve estimates, Grant writes that "between 55% and 70% of the $703 billion of U.S. currency outstanding circulates outside the 50 states."
• The United States benefits greatly from the fact that the dollar is the world's reserve currency.
• Many of the $100 bills circulating throughout the globe are essentially loans that we never have to pay back.
• Instead, they stay under mattresses in Bogotá, circulate in Iraq, and are stashed in bank accounts around the world.
• But among a subset of global cash connoisseurs, the dollar is losing ground to the euroâ¬"and it has nothing to do with concerns over U.S. multilateralism.
• First, the euro zone has been expanding with the addition of new countries and the continued integration between Eastern and Western Europe.
• Add in the euro's recent strength against the dollar, and the case for Eastern Europeans and euro-neighbors to use euros becomes more compelling.