The budget battle of 2011 is now over. The next battle will be about raising the debt ceiling, another way of giving one permission to spend more than they have. Meanwhile America's debt crisis continues to build.

Yesterday the dollar lost ground to the Euro on world markets. More importantly is the confidence foreign markets have in the US dollar. This morning's Wall Street Journal had this to say:

The larger story is that the world is starting to protect, and perhaps ultimately free, itself from America's weak dollar standard. The European Central Bank recently raised interest rates and may do so again to prevent an inflation breakout. China is allowing more trade to be conducted in yuan, a first step toward making it a global currency. At a meeting of developing countries—the so-called BRICs—in China recently, leaders called for "a broad-based international reserve currency system providing stability and certainty." They weren't referring to the dollar.

Commodity prices are rising, especially fuel. While part of the cause is market speculation there is also the fact that each major financial trading bloc has increased the supply of money. More money chasing the same amount of commodities leads to inflation. Prices are higher and likely to stay there. One wonders where the tipping point will be when events create unintended reactions.

The bills are coming due. The credibility of the dollar and the United States economy continues to erode. Yet nothing has yet emerged to replace the dollar as the primary world currency. When it does it will be a whole new world.