THERE HAS been a lot of talk lately about taking the U.S. dollar being dead and the world has been talking about taking the dollar standard off the world standard and putting all international transactions including oil onto a "basket of currencies" standard.

The reason for this talk has arisen mainly because some in the world think that the U.S. is borrowing too much money and seems to be going even further into debt as the Congress takes on a new health care entitlement program and contemplates even more bail outs.

Rumors started floating around last week that the gulf Arabs are planning, along with China, Russia, Japan and France to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar. Even Brazil was rumored to be in on the act.

Right after this news hit the waves, the Saudis and France denied any secret meetings and denied that they were even working on such a program.

However, gold prices have been soaring in recent days. This usually means that traders are hedging against a falling dollar.

Yet, the dollar as expressed against most other currencies has not appreciably changed.

If oil started to be sold not for dollars but for the basket currency, what would this mean for us?

It would mean significantly higher oil prices for us here at home. It might also mean that everything else we import would cost more.

Ever since the Bretton Woods agreements reached after WWII, when the modern international financial system was created, the U.S. dollar has been the world standard and used for most world trade.

Chinese Central Bank's governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

In fact, a great deal of America's debt is at very low interest rates and is owned by China.

At present, the dollar is set to remain the world standard until at least 2018.

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. This is no great surprise considering Iran's assets have been frozen in the U.S. for years.

Lately, the dollar has been falling slightly as against other currencies like the Euro, the Yuan and the Yen.

Watching the daily trading, to me, the change seems to be only a slight one and confidence in our dollar appears to remain high. As yet, at least, we have not begun to suffer from the inflation woes that often come when the government starts spending far more money than it brings in.

So what is the relative value of the dollar today as related to what it was worth in history?

For example, George Washington was paid a salary of $25,000 per annum when he was president. Today, President Obama makes $400,000 and gets a $50,000 expense account on top of the salary amount.

However, if we compare the Consumer Price Index from 1790 to 2009, the $25,000 that Washington got paid equals $608,000 today.

So is President Obama underpaid?

Let's look at another example. The Erie Canal was built starting in 1817 for a price of $7 million. It opened up the Midwest to trade and migration. At the time, it was the most important transportation vehicle that had ever been completed.

To dig the same canal today, it is estimated that it would cost $168 billion.

The Civil War cost the country in 1860 dollars a total of $6.7 billion. If this number were put in today's dollars, that war would have cost $22 trillion.

Of course, those figures to not take into account the fact that war disrupted the economy of the north and completely devastated the economy of the south.

Historians have estimated that the impact of the war on the economy and the cost of lives cost an additional $7.3 billion. This means the cost of the war (as a share of the output of the economy) was nearly $46 trillion if measured in current dollars.

A Model T Ford cost new $290 in 1925. In today's dollars that would be about $17,000. Of course, the Model T didn't have air bags, a computer on board, seat belts or even an automatic transmission. If you consider those things, the price would be much higher and that's why the price of cars isn't cheap under any scenario.

In 1930, Babe Ruth signed a contract with the New York Yankees for $80,000. In today's dollars that would be about $12 million.

It cost about $25 billion to put a man on the moon in 1969. Today, that cost would be about $416 billion.

As a comparison, the NASA budget for the current fiscal year is approximately $15 billion.

But what about the cost of something we all need and must have every day, the price of a gallon of gasoline.

In 1949, the average price of a gallon of gasoline was $.27.

If an unskilled worker filled up in 1949, that gallon of gas cost him a certain percentage of his average hourly wage.

If we compare that percentage of the hourly wage from 1949 and today, the actual cost has fallen.

That is because wages have generally increased faster than the price of gasoline in this country.

The $2.59 a gallon a worker pays today compares to only 18 cents at 1949 prices.

So what does this all mean?

If you think in terms of what things used to cost and what the cost now, the big numbers aren't really as scary as many of us seem to think.

As yet, there is no inflation in this country. The Fed has kept interest rates low in order to maintain the economy without raising inflation rates.

On the other hand, we should be concerned about the amount the government is borrowing, albeit, at a very low interest rate.

The reason we need to be concerned is because the percentage of gross domestic product, that is the amount of everything that our nation produces, as compared to the percentage of the amount the government owes has been climbing at a very scary rate.

Just two years ago, the percentage of government borrowing was 3.3 per cent of gross domestic product. Now, it is over 10 per cent according to the most recent government figures.

Does this mean that the dollar is in trouble? I really don't know but all of us could use some education.