I'll let Rasputin do the talking for me today, on the ongoing drama surrounding the U.S. Dollar, otherwise referred to as the "U.S. Nightcrawler". Apparently, the Fed is willing and able to monetize rotten Cabela's bait and hook receivables, breast implant and liposuction receivables, 0% Best Buy LCD TV receivables, etc. from the bleeding private label bagholders via its Alphabet Soup programs. No wonder the U.S. Dollar is taking a drubbing.

Yet interest rates remain at or near 40-year lows, the U.S. continues to finance its huge deficits without a hitch, each issue going out 300% oversubscribed, and the Asian and OPEC debt enablers keep swallowing more and more nightcrawlers.

Imagine Ben and Timmy with their hands in the bait can, flinging more and more of this stuff:

Rasputin describes the situation the best:

"World trade--which has fallen off roughly THIRTY-PERCENT in the last year--is even beyond the drop seen in the previous Great Depression.





The question now becomes:



"What happens next?"



...and from everything I'm seeing (Australia's central bank notwithstanding) is the most massive, coordinated, pervasive, abusive MONETIZATION, REFLATION, NATIONALIZATION AND FIAT-FLINGING the world has ever witnessed by all major governments and central banks.



And, as Mish points out here:



http://globaleconomicanalysis.blogspot.com/2009/10/competitive-currency-debasement-look-at.html



...even China is partaking in a true "Beggar thy Neighbor/Race to the Bottom" currency debasement, so it isn't just the Western World trashing their currency.



So, either these central banks and governments are willing to continue to burn their currencies to the ground, AND the U.S. is allowed to go back to the "good ol' days" of running up FOUR TRILLION FIATSCOS per year of brand new debt (over and above the near sixty-trillion we already collectively owe) in order to again become "The mouth of the world", or it's back to "Great Disintegration I".



Frankly, I'd rather see the latter than the former take place, but I suspect that the world's central banks and governments are going to try to incite "Global Weimar" in order to keep the whole "Ponzi Pyramid of Debt and Derivatives Death" from continuing to implode.

Uncle Sugar runs up a $1.5 trillion fiatsco deficit, yet manages to sell 10-year Treasuries at a 3.21% interest rate.



Now, here's the funny part:



Nearly thirty years ago, the world was going BERSERK when Uncle Sugar's TOTAL debt--accumulated during the first two-hundred years of this country's existence--reached one trillion fiatscos.



Total. One Trillion.



And, as previously mentioned, it took over two-hundred years to get there.



The result of this fiscal extravagance was that the "Bond Vigilantes" smacked Uncle Sugar with upwards of SIXTEEN PERCENT interest rates to compensate them for their perceived risk of funding his financial infidelity.



And today?



Uncle Sugar is running up more than the ENTIRE budget-deficit-to-date back in 1980 in ONE SINGLE YEAR, yet he only has to pay ONE-FIFTH the interest rate on new debt?



Oh, and by the way, don't for a minute believe that one-point-five trillion number is anywhere near accurate. It's not. Between the stealing...er..."borrowing" of funds from Social Security and the "off-budget" items, the real number is probably closer to two trillion.



And let us also not forget that it isn't exactly like our dear Uncle has been a model of fiscal sobriety in these last thirty years, as he has run up twelve trillion fiatscos of debt prior to going on this latest bender.

Meanwhile, regarding the U.S. nightcrawler...



Forty-six friggin' percent fall over twenty-four years. Would you call that a trend?

If an investment or asset fell forty-six percent, nearly one-half, over a period of twenty-four years, would you consider it a loser?



Would you stick with it, or get rid of it in disgust, finally throwing in the towel?



Well, that very question is one with which our foreign debt enablers are wrestling, as they have watched the U.S. fiatsco fall from its 1985 high of:



164



...to today's roughly:



76



...crushing the value of their holdings of our debt.



And they're not happy about it.



In fact, as this lengthy-but-informative Bloomberg article so vividly reveals:



http://www.bloomberg.com/apps/news?pid=20601109&sid=aPoUCijvAfCk



...our creditors are seriously considering--and moving into--alternatives to the U.S. nightcrawler-backed buck.



Furthermore, the empty rhetoric of Turbo Tax Timmy's:



"A strong U.S. fiatsco, blah, blah..."



...is falling on deaf ears, as the world is finally figuring out that the U.S. wants a WEAK nightcrawler, not a strong one, in order to allow us to cheat our debt holders and even allow Amerika's few remaining exporters to show a profit.



(Ras Conclusion): The trend is undeniable:



-Twenty-four years.



-Forty-six percent fall in the U.S. fiatsco.



-U.S. fiatsco share of world reserves dropping.



-Debt enablers moving to alternate currencies and buggy whips.



-Those same debt enablers balking at buying more of Uncle's debt.



-Uncle states he wants to borrow another three-trillion fiatscos in two years. (And ten trillion in ten years)



-Uncle and the Fed both actively trying to destroy the value of the nightcrawler.



Yet, people STILL believe that the U.S. fiatsco is gonna magically RISE, even as Uncle Sugar continues to pile debt to the sky and our debt enablers are moving away from our currency in droves and the Fed will be the ONLY buyer of Uncle's debt?

Imagine being an Asian central bank--already stuffed to the gills with U.S. nightcrawlers--then being forced to SUCK DOWN MORE of the creepy, crawly things just to keep your own export industries continuing their utter collapse.

.....................

Same old junk running today.

Despite world record unemployment, accelerating foreclosures, negative GDP as far as the eye can see, the Gamblers continue to pile into retail stocks: