There are several things that affect the value of the US dollar. One of the main things is how much money is in. circulation. Every time the Federal Reserve prints more money the value of the currency in existence decreases. When we went off of the Gold standard the value of our dollar went way down overnight. There is a finite amount of gold and when the dollar was tied to gold it was more stable. Now when the Federal reserve needs more money they just print more. If you or I did that it would be called counterfeiting. This is a major cause of inflation and the downgrade of our credit rating which further devalues our dollar and harms our economy. If our dollar was still backed by gold they couldn't do that because they can't just create more gold. There are other factors but this is the main one.