What's That Burning Smell?
That would be the US dollar, as more and more governments and investors around the world realize that the Treasury and the Federal Reserve are in the process of destroying the world's reserve currency.
The Other McCain lays out his perspective here; sample quote:
...We are so f****d now that the only question is what kind of financial rubble we will find most useful in rebuilding the shattered wreck of an economy that will be left desolated by the remorselessly descending spiral of inflation/stagnation that now begins in earnest...
Denninger, of course, has an equally piquant take; here's a taste:
Were I China, sitting on some trillion dollars plus of Treasury bonds, I'd be nervous too. In fact, I'd be shortening duration like a madman, laying off anything but the shortest end of the T-bill curve and hedging like crazy, all the while doing my damnedest not to get caught so as to not ignite a stampede and risk getting trampled.
Oh wait: They are.
Read both articles and the embedded links.
By the way, anyone have a spare English-Mandarin phrasebook?
Alea iacta est.