Next stop: Weimar America?

"That’s how we got here — a near total breakdown of responsibility at every link in our financial chain, and now we either bail out the people who brought us here or risk a total systemic crash." Thomas Friedman - NYT

“Excessively cheap money in the US was a driver of today’s crisis,” (Angela Merkel, the German chancellor) told the German parliament. “I am deeply concerned about whether we are now reinforcing this trend through measures being adopted in the US and elsewhere and whether we could find ourselves in five years facing the exact same crisis.” - Financial Times

David Seaton's News Links
A link at Doonesbury led me to the following, fascinating, information:

Big Bailouts, Bigger Bucks - The Big Picture
(...)If we add in the Citi bailout, the total cost now exceeds $4.6165 trillion dollars. People have a hard time conceptualizing very large numbers, so let's give this some context. The current Credit Crisis bailout is now the largest outlay In American history. Jim Bianco of Bianco Research crunched the inflation adjusted numbers. The bailout has cost more than all of these big budget government expenditures - combined:

• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

TOTAL: $3.92 trillion

If a currency is supposed to have any relation to actual value, when I see these numbers it seems obvious to me that the dollar is entering the territory of the Wiemar Republic Deutsche Mark: meaningless paper.

The fear, of course is deflation, but a dollar that once bought victory in WWII and trips to the Moon, but today cannot save a few banks, must be a ticket to coming hyperinflation.

It is impossible to escape certain unpleasant realities of world power

No matter how seductive the figure of Barack Obama might be, glamor cannot offset the drag of worthless money combined with military impotence.

Joseph Nye's "soft power" is just that "soft". The brutal truth is that candy and flowers, a thoughtful word, are important rites of seduction, but after these rites are performed, something hard is expected. If the USA cannot "cut the mustard", other, perhaps ruder suitors will be sought and found.

To me these numbers mean that we are living suspended over an abyss, held only in the slippery hands of a fraudulent system. DS