"It's raining cash, alleluia, it's raining cash..."

So, the federal government wants to buy up $1,000,000,000,000 in "toxic assets".

And now the Federal Reserve is starting to manufacture out of thin air $1,000,000,000,000 in paper money (with nothing to base it on or back it up).

Suicide of the West has an excellent commentary on this insanity:

... Bernanke announced that the Fed would “purchase” $1 Trillion in Treasury bonds and mortgage securities. Where did the trillion dollars come from?

Keyboard magic, folks. And it spells the end of America. Why?

I-N-F-L-A-T-I-O-N.

Inflation is classically defined as “too many dollars chasing too few goods.” It manifests itself in rising prices and that’s how people think of it. But inflation is really a debasement - a cheapening - of the currency. Some inflation in an economy is good. Slowly and steadily rising prices are accompanied by rising wages and profits, and both reflect a healthy level of economic activity...

... The Federal Reserve’s job is to regulate the money supply in order to achieve steady, stable growth in the economy. But the Fed under Bernanke has panicked, and it has shut down the monetary sweat glands altogether by opening the spigot on the printing and distribution of money. It will take some time for the overheating to kick in, but Bernanke is creating the eventual likelihood of hyperinflation, or economic heat stroke.

The value of the dollar drops 25% under The One.  And BofA's strategist says to sell instead of buy because he sees this light at the end of the tunnel is actually an on-coming freight train. The GOP is trying to warn us that The One's budget is going to spell trouble for us all.

What else is happening??  China continues to buy U.S. debts:

Investing in U.S. Treasury bills is "an important component part of China's foreign currency reserve investments," People's Bank of China Vice Governor Hu Xiaolian said at a news conference on Monday.

"So as an important component we are naturally relatively concerned with the safety and profitability of U.S. government bonds," Hu said -- a statement apparently aimed at concerns that rising debt to fund Washington's stimulus package could spur inflation and weaken the dollar.

China is Washington's biggest foreign creditor, holding an estimated $1 trillion in U.S. government debt. A weaker dollar would erode the value of those assets.

China then calls for "a new world currency" to replace the dollar:

China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund...

... “This is a clear sign that China, as the largest holder of US dollar financial assets, is concerned about the potential inflationary risk of the US Federal Reserve printing money,” said Qu Hongbin, chief China economist for HSBC.

Of course, Geithner is "open" to this new idea that China has proposed:

Geithner, at the Council on Foreign Relations, said the U.S. is "open" to a headline-grabbing proposal by the governor of the China's central bank, which was widely reported as being a call for a new global currency to replace the dollar, but which Geithner described as more modest and "evolutionary."

"I haven’t read the governor’s proposal. He’s a very thoughtful, very careful distinguished central banker. I generally find him sensible on every issue," Geithner said, saying that however his interpretation of the proposal was to increase the use of International Monetary Fund's special drawing rights -- shares in the body held by its members -- not creating a new currency in the literal sense.

"We’re actually quite open to that suggestion – you should see it as rather evolutionary rather building on the current architecture rather than moving us to global monetary union," he said.

So, we'll have hyper-inflation or stagflation by this time next year (sooner if oil prices go crazy again this summer), then the federal government will go bankrupt, then China will..............???