It's the Dollar, Stupid

This is what happens when you create enough debt that it no longer becomes attractive.

China has resolved to shift some of its foreign exchange reserves -- now in excess of $800 billion -- away from the U.S. dollar and into other world currencies in a move likely to push down the value of the greenback, a high-level state economist who advises the nation's economic policymakers said in an interview Monday.

This will only go a ways to depressing the dollar, which needs to happen as a result of the boneheaded economic policies Bush enacted. The dollar drop will lead to a decline in imports and with any luck will hamstring our ever-expanding trade deficit. The world is losing confidence in the U.S. economy, which has largely been buoyed by them buying our debt for the past 10 years. When we no longer have cheap and easy access to funds and are no longer able to live a lifestyle built on debt, reality will hit home and the average consumer is going to find himself in a huge hole.