In 2001, if someone had said within 10 years the Euro would be on its way out AND the USA would have its credit rating slashed, you would probably have laughed. In 2001 it was clear the USD / EUR fight would prove once and for all who had the mightiest currency and there would be either one winner or stalemate.
Alas, both currencies are in serious trouble because the backers and balance sheets are not there. History says the mighty USD will win but with its debt now on par with Greece (at least the Greeks can force its people to pay tax whereas in the USA most people already pay) and a political fight by the Republicans who want to see Obama fail at the next election as the man who lost the USA its Triple A isn't causing much of a ripple in the markets.
The reason is because denial is the new black. It won't happen. It cannot happen. The Credit Rating Agencies are wrong. AIG is safe. Lehman will be saved.
The EUR on the other hand is sicker. The bankrupt ECB is hoovering up PIG debt in the hope that in the long run it will get its money back. Unlikely. Banks are only providing short term debt to the ECB because the ECB is Lehmans in the making.
And on the sidelines the Chinese just watch. And wait.
Israel to bail out the USA (bloomberg)
Obama to start wearing a tie again.