NEW YORK (CNN/Money) - Every day you hear some economist saying that a weak U.S. dollar is bad for the U.S. economy. What are the trade-offs of a weak vs. strong currency?

-- Dave Vaughn, Glen Allen, Virginia

Have you ever heard the expression that "every golf shot pleases someone"?

What it means is that the double-bogey (two over par) you just made on the 17th hole may not be too pleasing to you, but the guy who had been trailing you by one shot and has just taken the lead couldn't be happier.

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Well, the same dynamic applies to international currency markets.

Thing is, though, it's not as if all the people who profit are in one country and the losers are in another.

Let's take an example. Over the past year or so, the U.S. dollar has lost considerable value versus the euro -- it recently cost an all-time high of $1.22 to buy 1 euro, 17 percent more than at the beginning of the year.

Who benefits and who loses from the euro's rise and the dollar's decline?

Well, if you're an American who's been planning a vacation to Europe, then you lose.

Let's say, for example, you booked a hotel in Spain for 100 euros a night (you can see I'm a budget traveler) when the euro was trading at $1.04, it's level at the beginning of this year. At the time, that meant you would effectively have had to come up with $104 to acquire the 100 euros for each night in the hotel. Now you'd need $122.

Similarly, the tourist industry in Spain is not pleased. You may think twice about making going at all, and if you do go, you may not spend as much as you would have otherwise -- not a good thing for the local shops and restaurants.

So who is pleased by the change in the currency?

Any American company that exports goods to Spain (or any of the other European countries that use the euro) is thrilled, as is the Spanish consumer who buys such goods.

After all, the U.S. company's products are cheaper, which means the American company has a chance at selling more products. And the Spaniard who buys U.S. products has to shell out fewer euros.

Now, I've purposely kept my little example simple. In the real world, a whole bunch of other adjustments could be going on.

Generally, though, a falling dollar makes foreign goods more expensive to U.S. consumers and U.S. goods cheaper to foreigners. That means American companies that make products here and sell them abroad tend to do better when the dollar weakens, which tends to reduce the U.S. trade deficit.

So why the doom and gloom in coverage about the falling dollar?

• One fear that a continued decline in the dollar might make some of the foreign nations we rely on to finance the U.S. budget deficit less apt to buy Treasury securities. The reason: a falling dollar reduces their returns when they translate their gains back to their home currency, so they might demand a higher premium to compensate them for the currency risk, which would result in higher U.S. interest rates.
• Another oft-cited concern is that, by making exports to the U.S. more expensive and thus increasing the price U.S. consumers must pay for those goods, a weakening dollar can lead to higher inflation.
• Finally, there's the worry that more expensive exports from euro-zone countries may hurt foreign businesses that export products to the United States, thus threatening the fledgling economic recoveries in various European countries and Japan. Ultimately, stronger economies in Europe and Japan help the United States because a good number of American companies depend on those nations to buy their products and services.

Fact is, because of the wide ripple effects, I think it's extremely difficult to say what the ultimate effect of the dollar's fall will be.

I don't claim to have any special insights, but I do know this: any trend that is inherently unsustainable isn't going to continue unchecked.

There is somewhat of a self-correcting mechanism in the currency markets in that if any currency's value falls too far below some inherent measure of its worth, the products of that country will become more attractive, which will increase demand for those products, which will increase demand for that country's currency, which will increase its value.

That's not to say that I completely pooh-pooh concerns about the dollar's value, but I don't lose sleep over it.

As the dollar has weakened, I've gotten more and more questions from people looking for ways to exploit this weakness. Indeed, I even got a cold call from a guy two weeks ago telling me I could double or triple my money within a few weeks by investing in currency options. (I asked him to send me specific details of what he was proposing, but, surprise, surprise, nothing has arrived.)

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Strategies geared toward exploiting currency movements rely on you getting the direction and timing right -- that is, knowing in advance whether a currency is headed up or down in the near future. That can be a tricky call, however, even for professional currency traders.

So if all this coverage about the falling dollar has led you to wonder whether you might profit from the dollar's decline, I suggest you first read a column I wrote earlier this year about the potential upside and downside of one way to play the dollar. I also did a story for the December issue of MONEY magazine that looked at other ways one might profit from the falling buck, although that's available online only to MONEY subscribers and AOL members.

Once you know more about the risks as well as the rewards of currency plays, you can decide whether it's a game you want to play.

Walter Updegrave is a senior editor at MONEY Magazine and is the author of "Investing for the Financially Challenged." He also answers viewers' questions on CNNfn's Money & Markets at 4:40 PM on Mondays.