As of July 2008, Japan and China led the list of countries owning U.S. Treasuries, with more than half a trillion dollars each. The United Kingdom owned 291 billion, and the oil exporting countries collectively have about $18 billion in U. S. Treasuries. In all, foreign holdings of long-term Treasury securities amount to more than half of our outstanding long-term debt.

Of course, these figures do not include other dollar-denominated investments that are owned by foreign investors or countries, including equities or agency notes. Put it all together and, as Blanche DuBois would have said: "We live on the kindness of strangers."

Just how long will that "kindness" last? How long will the world be willing to lend to us in dollars, even as we print and borrow more? Right now, dollar-denominated assets have been disappearing "down the drain" faster than we can create them.

The disappearing dollar assets include: stock market losses, real estate losses, bank capital writedowns, and -- coming soon -- writedowns of "impaired assets" on corporate balance sheets. All point to a current problem of DE-flation, not inflation.

So the federal government continues the "bailout" -- whether through TARP, sending money to automakers, or directly to consumers. The world is allowing us to create new money, which they continue to accept at face value while earning little or low interest. They're betting on us to succeed in restoring economic growth. They're learning they need us as much as we need them. For the moment, anyway. But they're not extending any more credit to Zimbabwe.

And that's The Savage Truth.