Now that all the enthusiastic partying over that 300 point increase in the Dow has ended, it's time to get back to reality as most of the world sees it.
The Australian, out of Sydney, Australia, is among the first extra-national publication to declare that the US must pay the bill for a long luxury ride, and cites as justification The Wall Street Journal article which ruefully admitted, "the US could no longer keep running up a tab on luxury imported goods, electronics and, more importantly, oil, on the 'national credit card'."
Lost amid all the boisterous revelry over Fed Chairman Bernanke's abandonment of inflation control in favor of economic stimulus was the cost of the action: the dollar is collapsing relative to foreign currencies. This decline threatens the status of the American dollar as the favored reserve currency, and hastens the time when the world's central banks drive that last stake through the heart of the 1944 Bretton Woods Agreement and fly solo.
What this means in simple Texican lingo? The pricing of oil in dollars may be coming to an end - and with it American hegemony. But having more of a less-valuable currency - even if only on paper - conquers the understanding that such a fact requires. And they don't like any links to information, either.
For those who aren't sniggering behind their barbed-wire-bastioned Airstreamers over their inflated portfolios, several nations are considering delinking their currencies from the dollar. Some are doing so in order to keep exported American inflation from overheating their domestic economies as they no longer have any concern for their former economic master's welfare. After all, you aren't going to worry about your neighbor's barn burning down if your own roof is beginning to smolder!
But more ominous are the recent moves by Gulf States to convert their weakening and less-valuable dollars into tangible assets. Is it not an article of faith in the investor's world to sell an under-performing asset to allow purchase of one which holds far more promise of profit? As a result, Abu Dhabi bought 7.5 per cent of Carlyle Group, and Dubai and Qatar each bought large holdings in NASDAQ and the London Stock Exchange. Better to hold something of real value than to be stuck with the empty promises of a worthless promissory note.