“You ain’t seen nothin’ yet!”

Actually, we’ve seen so much already that it’s hard to believe there’s more coming. But there’s sure to be more…and we have a feeling it will be worth the wait.

Yesterday, for example, GM filed for Chapter 11 bankruptcy protection. It couldn’t pay its bills. GM was once the strongest corporation on the planet. But it has been around for nearly 100 years. Heck, everything wears out eventually…even a ’55 Chevy.

“Obama Nationalizes GM,” says a triumphant headline in France’s La Tribune.

Triumphant?

Yes, according to the papers, Obama may have been handed the keys to GM…but the old jalopy is worn out. The French say the whole US economic model is ready for the junkyard. More on the French…and the French model, below…

First, let’s stick with the USA.

The Dow rose 221 points yesterday – to 8,821… Investors think the worst is over.

Everything is going up. Copper is up 65% so far this year. Oil is up 53%. Soybeans are up 22%. Stock markets are up about 30% worldwide. And gold is 12%. In this company gold is a laggard!

Copper has risen so much, say the papers, because China is buying all it can get. What it is doing with the stuff we don’t know; maybe it is stocking up at what it believes are low prices.

Maybe it is hedging its bets. China has the biggest pile of Treasury bonds in the world – $768 billion of them. That’s 768 billion reasons to worry. Because each T-bond is denominated in dollars…and while everything else is going up, dollars are going down. Yesterday, the dollar touched a new low against the euro for this year – at $1.42.

T-bonds are down too – minus 5% for the year. It would not be at all surprising for the Chinese to be stockpiling oil, gold, copper and all the other inflation hedges they can get. Their dollar-denominated bonds may go down…but their commodities and gold would go up. Overall, they’d come out even.

Yet this week, Mr. Tim Geithner – the big banks’ main man in Washington – is in China trying to reassure the Chinese that America takes its financial obligations seriously. That’s something we never expected to see either. America may have the strongest economy on earth. But if the commies stop financing it, we’re out of business.

So Geithner is in China, hat in hand, like a major debtor called into the bank president’s office. Geithner, of course, has no choice. He has to go…and say what he has to say. He will use all the right words. He will show the appropriate seriousness…he will smile when it is called for…and put on a grave face when he needs to.

The trouble is, there’s little he can do to help the Chinese. They want him to protect the dollar and the bond market. That’s something he can’t do.

“It will be helpful if Mr. Geithner can show us some arithmetic,” said Yu Yongding, a former advisor to the Chinese central bank.

Yes, we’d like to see that arithmetic too. How do you add $1.75 trillion in deficits…pay for it with funny money from the Fed…and still come out even on the value of the dollar? There’s no arithmetic we know of that works in the Chinese favor. Right now, the numbers…and the logic of the situation…are telling us that feds aim to create inflation. Instead of trying to keep prices under control…they’re trying to get them to go up. That’s yet another thing we didn’t expect to see!

The US government is less concerned with protecting foreign lenders than it is with getting the US economy back to its old E-Z money ways. Cheap money is what people want. Cheap money is what the feds are trying to give them.

Today – will wonders never cease! – the US is pushing its phony money all over the world. The Chinese, meanwhile, are champions of financial integrity. Just wait until they give up on US bonds…then, we’ll really see something we ain’t seen yet!

The French think they were right about everything. Iraq, for example. The French have deep ties to the Arab world. They knew Iraq would be a tar baby for the US – just like Algeria had been for them. You pick it up…you can’t put it down.

But Congress and the administration not only ignored the French (as they had when Charles DeGaulle advised against intervention in Vietnam in the early ’60s – it was a “rotten country,” he said) they accused France of cowardice, dumped good bottles of Bordeaux down the drain and renamed French fries ‘freedom fries.’

Remember the jokes? When a bomb blew up a Spanish train, France raised its color-coded Terror Alert system…from mauve for “Collaborate” to chartreuse for “Run and Hide.”

And remember what Anglo-Saxon economists said about the French economy? It was ‘sclerotic’…it was a ‘museum’…first, it was tied up by labor unions and then the socialist politicians did kinky things to it.

But every dog has his day, and now the French are enjoying a delicious moment of schadenfreude.

The frogs stayed out of Iraq…avoided a housing bubble…and side-stepped a credit crisis.

And now, the “French model” for managing an economy is the envy of the world. At least, that’s what you might think if you read The Economist. A recent issue has Sarkozy on the cover…looking confident and pleased with himself. By contrast, Britain’s Gordon Brown and Germany’s Angela Merkel look as though they needed a drink.

What’s the ‘French model?’ It’s a system where the state meddles heavily in the economy. Health care, education and public transport are all government enterprises. And political cronies, rather than entrepreneurs, run key businesses.

Heck the French don’t even have a word for “entrepreneur,” as George W. Bush pointed out.

It seems to work fairly well. The health care system functions fairly well – while taking a smaller percentage of GDP than in the US. The trains run on time (except when there is a strike). Grammar and secondary schools are probably better than in the US; the universities are probably worse. And many of France’s private businesses are world leaders – Air Liquide, Danone, LVMH, to name just a few that come to mind.

And so far, France has suffered less from the worldwide financial meltdown than any of its rivals. The last time we were in Paris, the restaurants seemed as full as ever; taxi cabs were as hard to get as ever; and Paris property had barely come down at all – at least, officially.

“I’m not so sure…” said a colleague in Paris. “I’ve been looking for an apartment for the last year. A year ago, there was almost nothing available in my price range. Now, I’m seeing lots of places. I looked at one last week. It is listed at $340,000 – about what it would have been a year ago. But the agent told me that the seller would probably take $275,000. If they’re telling me that right off-the-bat, I figure it might go for $250,000.”

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