The dollar’s rapid decline internationally has devalued all dollar-denominated assets, from the currency in your pocket to the value of the building where you work and the value of your 401(k). And it has devalued the assets of US corporations to the point where many of them are now very attractive targets for foreign acquirers.

The InBev-BUD transaction illustrates the point: the aggregate sale price for BUD is US$52 billion, or about €32.7 billion. Had the exchange rate remained stable from the day George W. Bush was installed as president (when €1.00 = $0.83), the price would have been closer to €63 billion – far too expensive for InBev then or now.

But the exchange rate did not remain stable. Seven years of profligate financial management – including tax cuts, tax rebates, economic stimuli, years of unbalanced budgets, unmanaged spending, and an unfunded (not to mention unprovoked) war – have shaken the world’s trust and confidence in the US. The currency markets have responded accordingly, devaluing the US dollar to the point where the greenback has dropped 48% against the euro in just seven years.

Thanks to mismanagement on an epic scale, the US has racked up a $9.3 trillion national debt, a $6.4 trillion trade debt, and a projected $400+ billion budget deficit for FY 2009. We also have some $50 trillion in future commitments – Social Security, Medicare, veterans’ benefits, etc.

Add to that some $2.5 trillion in consumer debt and if becomes clear that we US citizens are presently on the hook for some $69 trillion.

When you think of that in terms of our GDP, about $15 trillion, we as a country are in debt for nearly five years' income. Could any of us handle that much debt and keep piling on more? I doubt it.

Our assets include about $50 trillion of real estate and $16 trillion in the value of the equities markets -- $66 trillion. Subtract the liabilities from the assets and you can see that we are basically insolvent on an economic basis.

Simply said, as a nation, we are effectively broke. If that staggering fact doesn’t leave you crying in your beer, maybe this will: it’s getting worse, not better.

We continue to spend like drunken frat boys, piling up deficits year after year. Those deficits grow the national debt and they are funded mainly by the money from foreign sources. Consider: with $66 trillion in assets and a $6.4 trillion trade debt, this country has already sold off about 10% of itself to foreign sources. That number increases at about 1% per year. We are consuming way more than we produce and we are borrowing to make up the difference.

The currency markets have responded the same way your bank would react if you ran up too much debt, had too little income, showed an inability to live within your means, and resorted to selling assets to finance your lifestyle. They would see you as risky and unstable. And they would be right.

The purchase of Anheuser-Busch by a non-US competitor should be a wake-up call. It will be neither the largest nor the last transaction of its kind. European and Far Eastern corporations are already looking for similar deals. When any company realizes it can expand its market share, take a competitor out of the marketplace, and boost profits and returns – all at once, at a deep discount – it really has no choice but to go for it. That’s just what InBev did.

The US now has a number of attractive, and suddenly affordable, target corporations. Many are icons of American culture. Before long, the US may have to become a multilingual nation whether conservatives like it or not.

As a nation, we are experiencing what will become a massive credit hangover. The binging started in 2001. Sobering up will be a painful process. But the longer we wait, the more painful it will be.

Our financial situation presents five imperatives to the presidential candidates, whether they wish to acknowledge them or not. All five demand positive action from the next president in his first term. They are:

· Raise federal revenues and reduce spending to balance the budget and to begin reducing the national debt. That means many long-hoped-for initiatives and programs may have to wait until we can afford them.

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