It is like the Northern Rock executives appearing before the House of Commons Treasury Committee yesterday. They were quite unable to see (or at least admit in public) that there might have been something wrong in the way they ran the bank.

They considered the recent run on the bank was all the fault of the Bank of England, for not extending 31 billion pounds of credit when asked so the bank could be sold, and of the BBC for pointing out what was going on. If taxpayers money bailed them out, without the general public knowing about it, then all would have been well.

What about this? IMF says dollar `overvalued'. Is that IMF?!

And now recall that one of the big pillars of this global financial regime is Asian banks stocking dollar-based assets, allowing America to build all possible instabilities and bubbles, but reluctant to invest into their own economies because of inflation "menace".

Japan and China lead flight from the dollar

Japan and China led a record withdrawl of foreign funds from the United States in August, heightening fears of a fresh slide in the dollar and a spike in US bond yields.

Data from the US Treasury showed outflows of $163bn (£80bn) from all forms of US investments. "These numbers are absolutely stunning," said Marc Ostwald, an economist at Insinger de Beaufort.

Asian investors dumped $52bn worth of US Treasury bonds alone, led by Japan ($23bn), China ($14.2bn) and Taiwan ($5bn). It is the first time since 1998 that foreigners have, on balance, sold Treasuries.

[The US] requires $70bn a month in capital inflows to cover its current account deficit, but the key sources of finance are drying up one by one.

BNP Paribas said America has relied on "hot money" from abroad to cover 25pc to 30pc of the US short-term credit and commercial paper market over the last two years.

This flow is now in danger after the seizure in parts of the market over the summer and after the Federal Reserve's half point rate cut, which has shaved the US yield advantage over other countries.

Ian Stannard, a Paribas currency analyst, said the data was "extremely negative" for the dollar. "It exceeds the worst fears. It is not just foreigners who are selling US assets. Americans are turning their back as well," he said.

Central banks in Singapore, Korea, Taiwan, and Vietnam have all begun to cut purchases of US bonds, or signalled an intent to do so. In effect, they are giving up trying to hold down their currencies because the policy is starting to set off inflation.

The Treasury data would have been even worse if it had not been for $60bn of inflows from hedge funds based in Britain and the Caymans, which needed to cover US positions at the height of the credit crunch.

This looks pretty scary, for all we know. (Even if the opinion comes from BNP Paribas.)

Apocalypse about now?

The evil of compound interest is becoming evident: you can't beat mathematical exponential growth in the real world for long.

Of course, borrowers and lenders can make deals, disposing mathematical principles. The situation of lenders getting all assets they don't need, against busted without basic necessities, is not how the market is supposed to work. Unless the lenders would like enjoy the power differential more than just making money.