>But we are hanging on by a thread now.

No we aren't. The general public is being terrified by the standard scare tactics of the media, and to a lesser extent by those who stand to profit from a weakened US. The sub-prime 'crisis' is not nearly as big a deal as it's being made out. The total foreclosure's are minimal compared to total ownership. Numerous deals are being made both big (Bear Sterns) and small (rate freezing and re-finances). Frankly the whole mess needed to blow up in order to get back to sound lending practices. This is a typical result following an overheated situation.

Inflation and dollar degradation are important but they're not unheard of nor unmanageable. These types of economic consolidations are necessary for a healthy economy over the long term.

Now, if you'd like to discuss energy and grain inflation, which are becoming disastrous through numerous detrimental policies in the US and abroad...

>For example, if the Chinese were to base their yuan on the Euro rather then the Dollar, it would cause a major degredation of all US finance markets.

The Chinese are not going to base the yuan on the Euro anytime soon. Their share of US debt and the strength of their exports to the US ties their economy directly to ours. The financial world does not operate in conjunction with the rhetoric of politics, it operates behind the scenes with the real power brokers. Europe is facing numerous growing problems, social and economic, which are not being addressed politically but are being assessed financially and the outlook is not appealing long term.