Read here, from the Cleveland Fed, the charts and graphs are useful as well. It is the single best source I have seen on this issue.
The bottom line: (with which I agree)
I explain why growing current account deficits and expanding inflows of foreign savings are not indefinitely sustainable, and why big deficits imply big corrections. Throughout the trip, however, I emphasize that we simply have no basis for determining when, how fast, or how jarring any adjustment might be. Those who claim a definitive word on that topic may just be spinning their wheels.
Addendum: Here is Brad Setser on why the dollar is not in free fall.