Essentially in a nut shell if the value of the dollar declines vs other currencies then it costs more dollars to buy the same basket of goods. For example six months from now it will cost more to buy the same goods as it does now, if the dollar continues to decline. Why? Well take oil for example, oil is priced in dollars but when the dollar declines vs the euro it also declines vs oil in other words the price of oil in dollars goes up. This has nothing to do with supply and demand, it just means that yesterday 1 barrel of oil was worth 67 dollars of oil, today the dollar weakened a little bit and so the barrel of oil is worth 68. But to a person holding euro's the barrel of oil costs exactly the same, because the dollar declined at roughly the same rate against both oil and the euro.

Essentially you have to understand that the dollar is not a fixed unit, if the value of the dollar declines then in essence the value of everything that the dollar can buy goes up!

And that is why you hear people worrying about the decline of the dollar because is slowly, ever so slowly devalues what you have in your pocket.

Let me give you a scarier example, from 2000-2007 your returns in the stock market were severely diluted because the dollar was declining, because stocks too are measured in dollars and if the dollar declines then it declines against stocks as well. So in an ideal world when investing in stocks you want to find a country that has both a strong stock market and a strong currency, then you get a double benefit, your stocks go up but also the currency does as well, so stocks might go up 10% in the currency they are denominated in but the currency also rose 5% against yours as well.

So currency investing is a lot more about maintaining your purchasing power and hedging against the decline of your currency. Since the dollar has been declining for almost 8 years now this perhaps is a fairly wise thing to do.

This leads onto a whole nightmare of topics including the loss of the dollars status as reserve currency, the evils of fiat money and the stupidity of politicians (aided and abetted by their populaces) but that is beyond the scope of your question.