Amid all the chatter, what seldom gets mentioned is the degree to which our currency policy now quivers coyly in the hands of an unregulated US finance industry, rather than those of the Treasury.

Underpublicized also are the long-term risks of this presumptuous trend toward total privatization of the national interest. It’s been going on so long now, it’s just “one of those things”.

With the Treasury Department devoting obscene amounts of its time and resources to massaging certain parts of private financial services industries in a suspiciously sensuous fashion, instead of focusing on the vast and troublesome domestic implications of an unruly greenback’s mood swings careening entirely out of public control, the overall situation becomes that much more volatile and vulnerable to catastrophic outcome.

Clearly this concerns the banks not one whit. Boldly using taxpayer funds as gaming chips, you’ll see them short the U.S. Dollar wholesale in a New York minute. And damn the consequences – as long as they come out ahead on paper, they really don’t give a hoot how low the domestic currency sinks and at what inevitable cost to the American public.

Europe On $500 A Day, anyone?

(At the time of publication the writer didn’t seem to have too many dollars.)

Not exactly – where do you think the Danes get the money to pay for those social programs?

The U.S. has a $3.28 billion trade deficit with Denmark. The U.S. is everyone’s biggest trade partner and we a have a deficit with just about everyone.

Indirectly, WE are paying for Europe’s social programs.

All of these happy little European Socialist states can maintain their nanny-ness because they are all attached to America’s big dirty Capitalist Economy like parasites.

If the U.S. went socialist – the Global Economy would fall apart. Socialism needs to sell to a Capitalist economy to survive.

Here’s a simple (but accurate) explanation:

After a currency debacle in 1998 left its economy in tatters, Beijing decided to radically restructure its financial relationship with the West. Policymakers pegged the value of China’s currency to the dollar, which had the effect of keeping it artificially low.

The cheap renminbi made it irresistibly inexpensive for U.S. companies to manufacture goods in China, even after shipping costs. As more companies shifted their operations to China, the U.S. manufacturing base was hollowed out in the name of globalization and profitability. Americans who once enjoyed high-paying factory jobs moved on to lower-paying service jobs.

China didn’t need much of anything made in America, so instead of buying cars from Detroit and furniture from North Carolina with its factory profits, it bought Treasury bills. The purchase of all those bills drove down U.S. interest rates. So as middle-class and blue-collar Americans saw their wages stagnate or decline, they discovered they could still keep their old lifestyles by borrowing.

Over the past decade, Americans were able to outspend their incomes by easily rolling their debts forward through serial home refinancing. The situation was never ideal, but it worked as long as the value of their collateral — their homes — kept rising.

As long as China kept buying Fannie Mae (FNM, news, msgs), Freddie Mac (FRE, news, msgs) and Treasury credits, the scheme worked in a strange and beautiful way: Our driveways filled up with cars and boats, shopping malls spread out across the suburban landscape, and the retailer with the closest ties to China, Wal-Mart (WMT, news, msgs), became the United States’ largest company.