The doomed dollar is the latest topic of conversation on the trading floors having, at the time of writing, dropped by about 9 per cent against the euro since the beginning of last month.

As people start talking about a dollar crisis, it's worth remembering that we've been talking about a euro crisis for the past two years. A 9 per cent fall is not exactly devastating stuff. Given that everyone has believed that the dollar has been overvalued ever since the euro first saw the light of day and didn't like it very much, a fall in its value is long overdue.

The problem, as far as markets are concerned, is not that it's falling but that it's falling so fast.

Of course this happens all the time. Once a currency starts on the slippery slope to lower levels, it always seems to gather enough pace to make everyone gasp in horror and predict all sorts of mayhem. With the US economy in apparent free-fall too, I suppose everyone's waiting to see exactly how messy things can become.

One of the reasons for the dollar's previously extraordinary strength was the fact that investors knew that putting money into the US economy was an almost sure-fire way of making money. But with the stock market falling and company profitability declining at an almost equally swift pace, the US is beginning to look more like the big bad wolf than the Goldilocks economy.

As with all economies in trouble, a weaker currency is the result. And a weaker currency is actually necessary.

Traders are now hanging on the words of US Treasury Secretary Mr Paul O'Neill to see whether or not the authorities have changed their strong dollar policy. They'll be hanging on a long time if Mr O'Neill's last pronouncement, that there was a "continuing continuous policy, we have the same dollar policy", is anything to go buy. I wonder do those guys have to learn to come up with cotton-wool sentences.

Unfortunately for Europe, the troubles in the US are reflected in poor company earnings here too. But at least the almost inexorable tide of investment going across the Atlantic has been stemmed and that can only benefit European industry.

Additionally, a falling dollar will also bring down the price of oil, finally helping the European Central Bank (ECB) to realise it's low-inflation targets and giving it more scope to cut rates. (Although surprisingly, given the speed of the slowdown everywhere else, the ECB still seems to think that growth in the euro zone will exceed 2 per cent this year.)

The dollar isn't the only thing that's falling. Economists are pitching in with their estimates on how much the Irish property market has to drop.

Obviously this is a much more sensitive and important issue for most people than the value of the dollar. Rather unsurprisingly, the industry is dismissing talk of 10 per cent falls over the next couple of years, although I don't see why. If everyone (and there is nobody in this country who didn't think so at the time) believes that house prices have gone up too far too fast, what's the terror in seeing them come down?

The estate agents are all afraid that potential purchasers will be too terrified to buy, while prospective sellers become more and more anxious about putting their property on the market. In my leafy suburb, prices of some properties doubled and then doubled again. A 10 per cent fall is hardly catastrophic. And bigger falls are much more likely in older, second-hand houses than in new developments pitched at first-time buyers - although if it means that newer developments are more keenly priced that's all to the good.

But the industry is behaving in an ostrich-like way if it shakes its collective head and denies the possibility of price falls.

For the first time in at least five years I saw a house advertised in the property pages with the banner "priced for a quick sale". Until recently, every sale was a quick sale. The market is dictating the price. It dictated prices on the way up and it'll dictate them on the way down too. But, like with the dollar, it's how fast a fall happens that worries people.

The words "negative equity" are being spoken in horrified whispers as though to utter them out loud would be in some way treacherous. Because around 80 per cent of us own our homes in the Republic, negative equity could indeed be very painful.

However, despite the stories of banks giving out 100 per cent mortgages at the drop of a hat, the actual loan-to-value ratio of mortgages is about 75 per cent - and that's for first-time buyers. That would mean that house prices would have to fall by over 25 per cent for those people to be in negative equity situations. For anyone who purchased before prices launched themselves into the stratosphere, negative equity is still a long way away.

Panic isn't necessary but realism is. If everyone knows that some of the price rises over the past few years were totally unrealistic, it makes no sense to suggest that relatively small price falls over a couple of years are in some way a disaster.

So the property gurus are right to warn us against undue pessimism. (Mind you, it's hard to have faith in an industry, that constantly tries to convince us that 350 square feet of living space is "surprisingly spacious" or that a house with rising damp and woodworm only needs "a little restoration".)

We've grown accustomed to thinking of our net worth in terms of the value of our homes. It's a fine measurement but not the only one. Given that most of us take out 20-25 year mortgages, price movements over a period of even five years are irrelevant.

Back in the 1980s house prices fell - a friend of mine bought a then astronomically expensive house only to see the price go down almost a quarter six months later. Obviously, in the past few years, people have looked at the development where those houses are and have shaken their heads at the luck of the people who own them. But my friend didn't feel lucky in 1983, just scared.

Soon we'll be seeing features on making your house attractive to potential purchasers. Once again, the kitchens of the Republic will be filled with the aroma of freshly baked bread and percolated coffee to seduce unwary buyers. You can buy the freshly baked bread smell in a spray, apparently.