Now that the world can no longer deny America's willingness to blow off our debts, who'll put money in our purse?
Of course, [China's moves into the euro, South Korea's into the renminbi and gold, and other nations' into gold] are all minor moves in a currency market still dominated by U.S. dollars. That's good news for the U.S. economy in the short-term, because it lessens the threat of a massive sell-off and keeps borrowing rates relatively cheap. But the recent pileup of central banks and sovereign wealth funds into gold (according to the FT, central banks are on their biggest bullion buying spree in 40 years) is a warning signal that global esteem the almighty dollar (and the U.S. economy's strength) is already eroding.There's a huge and growing overhang of dollar positions that other countries want to unwind. Whenever the race for the exit starts, it's going to get ugly for us. Uglier.