Tante Janine lost her right to vote. But that was the least of it; the old woman was dead.

"We all remember her as 'Tante Janine,'" said the eulogist, "because she was like a family member to us all. Always ready to lend a hand...always ready to comfort the sick...and help with community projects...Tante Janine was there for us all."

"She will be remembered by us too, as a woman who was always full of life...even though in her own life she had to overcome many obstacles and hardships."

Poor Tante Janine had her share of life's miseries. Her husband died young. And then, her only child was killed in a motorcycle crash a few years ago, leaving her alone in the world. And then, she was crippled by severe arthritis and finally done in by something else.

"We will all remember her fondly," continued the farewell address, "but she would not want us to do so with tears..."

Yet, there in the front row, in a church full of gray heads, were two very pretty young women whose eyes ran like leaky faucets. Janine Armande had taken to them both - Maria, your editor's daughter...and Elisabeth - as if they were her own kin.

Tante Janine had taught the girls to knit. Maria, waiting for a photo-shoot, would pull out her knitting to pass the time. Then, she would send Janine a copy of the magazine - usually a fashion spread - which the old lady would show off as if they were photos of her granddaughter. May she rest in peace.

"We saw her in the morgue," Maria reported earlier. "Elisabeth cried, but I didn't really know her as well; I wasn't as close to her...She looked pretty good."

Veni et vidi. Gaze on the dead, and learn their secrets.

No one seems to care about dead people. No stockbrokers ask for their business. No politicians pander for their votes. No one cares what they think or what they may have learned before they shucked their mortal shell. They get no respect, just a quick sendoff...and then they are on their own.

But come with us, dear reader. And let us look into the open carton and see ourselves, we Americans...the world's mouth. But not ourselves as we pretend to be - full of pretense and chutzpah - but as we really are, with our mouths shut.

Lately, we have taken up a morbid fancy. We think we hear the dead whispering to us: 'come over...peer into this carton...and take a good look!' We read the obituaries first. And show up for funerals a half an hour early so we will get a good seat. It is as if each corpse had something to tell us; but the poor stiff cannot speak. So, we have to stare and wonder.

"In death, all debts are paid," said Shakespeare. The dead get no breaks; they are held to strict standards. Rigor mortis - that is what draws our thoughts toward the defunct. The dead are paid up. Settled. They make no mortgage payments and take no calls from creditors. Their Final Reckoning is over and done.

A body decomposes into its constituent elements. If we watch carefully, maybe we will find out how it works. The soul goes Heaven-knows-where...while the rest returns to the dust from whence it came.

And the debts? Where do they go?

We lean over the box. We want to know. Who gets paid...and who gets stiffed?

Every debt is eventually settled, one way or the other. It is paid by the borrower. Or - if his luck runs out - the lender must make up the difference. Either way, like a night janitor in an empty schoolroom, death cleans the slate.

How is it then that Americans think they can slide into paradise...owing the rest of the world $2.5 trillion, net? Do they think their heirs can add to their borrowings at the rate of another $2 or $3 billion every day, forever?

Such is the remarkable state of the world that China - a 3rd World Nation - lends the U.S. $300 billion per year...buying that much, according to the latest estimates, in U.S. Treasury bonds. Without Chinese support, the dollar would have already collapsed...bond yields would have soared...and the U.S. economy would be in a recession, if not a depression.

Where does the money come from? The Chinese get the dead presidents from selling products to live Americans - who seem ready to consume anything that comes their way. First, the dollars come rolling off America's printing presses...then they make their way into the hands of Chinese and other manufacturers...(in the first quarter of 2003 alone, China's exports to America rose 35%)...and finally, are returned to their birthplace as loans.

China is fast becoming America's 'company store,' to whom we owe our standard of living...and maybe even our soul.

And thus comes an even more remarkable curiosity:

"In an era of free trade," begins a complaint from Treasury Secretary John Snow, "we should not have to confront the issue of countries distorting their currencies to gain unfair trade advantages."

The specific country to which Snow refers is China. The trade advantage the latter enjoys is that it sells much more to America than America sells to it, by a ratio of 5 to 1. And the unfair distortion is that China pegs its own currency to the dollar.

Daily Reckoning readers will have to rub their eyes. They will have a hard time seeing what is unfair or distorted about fixing your currency to the world's reserve money; that is the whole idea of the Dollar Standard system. It seems admirable on the part of the Chinese, rather than conniving. But the Treasury Secretary is a desperate man. Thirteen rate cuts have failed. Perhaps a dollar devaluation would help. What stands in the way is China's resolve to hold its currency steady against that of its major trading partner.

An entire American generation has grown up being told that it could spend its way to prosperity. Snow, McTeer, Greenspan, Bernanke - they all still believe it. Debt is no problem, they say. Spend, spend, spend.

American spending has created a boom in China, where the average person works in a sweatshop, lives in a hovel, and saves 25% of his earnings.

And yet, Americans have come to believe there is something unfair about China's trade practices...that they must be 'stealing' jobs with a distorted currency, rather than competing for them fair and square.

Meanwhile, in America, the average man lives in a house he can't pay for, drives a car he can't afford and waits for the next container from Hong Kong for distractions he can't seem to resist. He saves nothing and believes the Chinese will lend him money...forever, on the same terms!

That this cannot go on forever seems hardly worth pointing out. Whether it will go on much longer or not, we cannot say. But that it will all end badly seems a lead pipe cinch.

If the Treasury Secretary can pull off a devaluation against the Chinese currency, he will effectively stick Chinese investors with the bill for America's debts. Compared to their own currency, they will be holding assets in a declining one. He will, no doubt, succeed eventually. Because it seems sure that the dollar will go down. But at what cost? If the Chinese are too badly stiffed, why would they continue to lend? And what will become of us when foreign lenders are no longer willing to pony up?

Which way to Buenos Aires?

Oh, you worthless dead people! If only you could move your lips and tell us something useful! All of these debts, conceits and tomfooleries must be settled somehow...if only you could tell us how!

Instead, you deconstruct in front of our eyes...and take your secrets to the grave.

Your editor,

Bill Bonner

Editor's Note: Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter publishing companies, and the author of the free daily e-mail The Daily Reckoning (www.dailyreckoning.com). He is also the author, with Addison Wiggin, of "Financial Reckoning Day: Surviving The Soft Depression of The 21st Century" (John Wiley & Sons) due out in September. This essay was originally published in the Daily Reckoning.

2 August 2003