"O mighty Caesar! dost thou lie so low?

Are all thy conquests, glories, triumphs, spoils,

Shrunk to this little measure?"

You will recognize that line, dear reader. It describes what happened to Julius Ceasar after he was stabbed to death by a group of rivals on the Ides of March in the year

The Ides of March came this past Saturday. When it had gone, the bloody corpse on the ground was that of one of Wall Street's biggest players - Bear Stearns (NYSE:BSC).

Last week, we reported a rumor. That a large Wall Street firm was in trouble - which was said to be the real reason that the Fed announced its new $200 billion of loans.

By week's end the news was out: the Bear had gotten the 'Margin Call from Hell.'

The Fed and J.P. Morgan Chase (NYSE:JPM) rushed in to give aid and comfort. But officials were very worried that if a deal to rescue Bear Stearns were not completed before Asian markets opened this morning, there could be a financial meltdown.

"I've been on the phone for a couple of days straight, throughout the weekend," said U.S. Treasury Secretary Hank Paulson on television…"but I'm not going to project right now what the outcome of that situation is…"

"That situation" of course, was the situation at Bear Stearns. Early reports here in London say that a deal was finally struck with J.P. Morgan Chase to buy out the Bear for a reported $2 a share.

The background for this latest crisis is what we've been reckoning with in these Daily Reckonings for so many months. The geniuses at Bear Stearns had their calculators…their Black Sholes Option Pricing Model…their mathematicians…their risk figures… They had some of the finest minds in the country - or at least, some of the finest minds money could buy on Wall Street.

And yet, a year ago they also had a stock trading for $150. Now, it is down to $2…the shareholders have been largely wiped out.

When Wall Street got the news of the Bear's predicament, stocks were sold off - driving the Dow down 300 points. Then came word that the Fed and JP Morgan Chase were on the case, and the index bounced back, closing down 194 points. Hardest hit, (this will come as no surprise) was Bearn Stearns itself - down 47%. Other financial stocks took a beating too.

We began last week worrying that we might be wrong. We begin this one worrying that we are probably right. At the beginning of the week, U.S. stocks seemed to be rising more than gold. By week's end, things were happening as they should: God was in his heaven. The queen was on her throne. Gold was rising…and stocks were going down. All is right with the world…or as right as it can be after a 27-year credit expansion.

Little noticed in the Bear affair is the role of Chinese investment firm, Citic. The Chinese were going to put up some money to prop up Bear Stearns. There might be many explanations for why the Citic deal didn't go forward, but here we suggest one that is the most far-reaching: the foreigners are growing wary of the United States. You will recall our friend in Geneva told us to "Sell the United States…sell its money…sell its stocks…sell its debt." That attitude is spreading - the belief that the United States is a short sale.

"For years," begins a report in the Wall Street Journal, "the US economy has been borrowing from cash-rich lenders from Asia to the Middle East. American firms and households have enjoyed readily available credit at easy terms, even for risky bets. No longer."

"Clearly, the whole world is focused on the financial crisis and the US is really the epicenter of the tension," the paper quotes Carlos Asills, at Globista Investments. "As a result, we're seeing the capital flow out of the US."

Ed Hadas adds:

"The Fed's rescue of Bear increases the odds of a generalized, taxpayer-funded financial bailout. Combined with superlow rates, that will add to pressure on the beleaguered dollar. Bear is the biggest firm so far to hit the wall this time around. But the biggest name in financial distress could eventually be the US."

*** How do you like those foreigners? We were nice enough to take their money…spend it on stuff they sent over…and ruin our own economy and our own balance sheets so theirs could grow at breakneck speed. And this is the thanks we get! Now that we really need their money, instead of opening their wallets, they ask questions: what's that paper really worth, they want to know?

The United States emits a lot of paper - bonds, notes, SIVs, MBS, securities, repos, you name it - but one piece of paper is the one emitted most and the one the foreigners are probably most concerned about: the paper with pictures of dead presidents.

Colleague Manraaj Singh in London surveys the latest ungrateful grumbling:

"In Japan, Finance Minister Fukushiro Nukaga, today said abrupt currency moves are 'bad' for economic growth, while Economics Minister Hiroko Ota called them 'undesirable' and blamed them on dollar's weakness rather than yen's strength - those are strong statements from the normally reserved Japanese. Closer to home, European Central Bank President Jean Claude Trichet said on Monday that he [was] still concerned about the impact of the euro's surge.

"In Brazil, they've already gone beyond talking about it though. They've taken action to stem the currency's appreciation by reducing the flow of hot money into the country. Brazil has introduced a 1.5 per cent tax on purchases of real-denominated, fixed-income securities by foreign investors and will no longer require exporters to pay a 0.38 percent levy on currency purchases in order to cut the costs of sales abroad.

"'The [US] dollar is melting,' Brazil's finance minister Guido Mantega, said on Tuesday. 'Our plan is to avert an abrupt impact on the foreign exchange rate and help mitigate, in a smooth way, the dollar's freefall.'"

The Wall Street Journal fears a "rout" in the dollar this week. "Dollar poised to fall again," it says…pointing out that another rate cut is likely to send investors rushing to other currencies. It's hard for us to believe that investors don't already know about the coming rate cut and haven't already sold off the buck.

It seems more likely to us that world's central bankers will announce an effort to save the greenback - which will send the dollar up again. If that happens, dear reader, you know what to d sell it on the bounce.

*** David Walker, former U.S. Comptroller General (and one of the main focuses of our documentary, I.O.U.S.A.), gives us another reason to sell the United States.

The U.S. "financing gap" - the difference between what the U.S. government can reasonably expect in revenues and what it has committed to pay out - is growing by $2 to $3 trillion per year. Since George W. Bush took over in the White House, $20 trillion has been added to this deficit.

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.