It's unfortunate that chart doesn't go back to 98, because that would be the best point of reference. In any case, the data do not bode well, but this to me has explanations short of a total crisis of confidence in the US economy amongst our foreign creditors:

1) A fair amount of this can be described by the trouble in which the leveraged speculation community (i.e. hedge funds but also SIVs) finds itself. These heretofore huge players in the data, (though often times capitalized from US wealth, these largely exist for legal purposes in offshore vehicles, making their order flow appear to be foreign), they are now hurting as a collective. Or at least, they have to be- hedge funds were the largest buyers of CDO's (the instruments causing Citi and Merril to shed CEO's), out there- far more so than the banks. On that basis, one would expect their order flow to have unceremoniously shut down.

2) The credit community has been humming along since 1998 without any real serious problems (excepting the TMT fallout of ~ 2001 which was largely confined to telecom and US high yield) while HUGE segments of the bond market have ballooned overnight (CDS from nothing to around 40 trillion (!!), the mortgage market DOUBLED, most of which was private label and often times exotic, leveraged loans were increasing at quadruple digit clips, CMBS exploded such that MBS are now RMBS etc.). I suppose the world investment community is having something of a theodicy at the moment, trying to figure out whether the entire thing is a sham and basically where they stand.

3) Finally, the crisis to date has been totally US centric (credit markets everywhere are locked up, but expectations of default are not the cause per se). This is without precedent. However, the same conditions that exist in the US also exist in other regions, notably Eastern Europe, Australia, New Zealand and even the UK, and investment bubbles abound globally. It is conceivable that, in the eyes of some, the US may appear to be something of a safe harbor when (not if) the global ramifications of this are felt.

4) Plain and simple, the dollar can't go before the fall- i.e. before financial armageddon. It certainly won't be its cause, because the players involved always retain the capacity to manage the FX and all the incentive to up until the game is up.

That and all of the data issues inherent in that flows chart means I'm not sure we're interpreting this graph correctly. However, this does not mean it's not ominous. It is. The question for all when, as I believe will happen, the flows start to normalize, (probably following concerted central bank easing), will inflation explode. IMO, this, and of course the myriad other debt bombs, both USD and otherwise, that will soon threaten to detonate the way subprime has, are the other shoes waiting to drop...

I'm reminded of the visibility of "rights crowd" gadflies within the Nixon administration, apparent only after the release of internal documents this decade. That and dubya's, "we hear the criticism", assurance, (which may have to serve if current executive order/abomination holds, i.e. Cheney gets to parade around a big bonfire of the White House records come January 09, presumably drinking crude oil out of Keith Olberman's skull).

They hear you Glenn- keep up the good work.

It is not hypocrisy to call for emissions taxes or other global warming friendly policies and then to use a great deal of carbon, provided the policies advocated don't specially exempt yourself or your interests. Nothing Larry Page or Al Gore have proposed does this. If they get their way, they will pay considerably higher prices to use carbon, even as their carbon footprint will continue to be higher, even much higher, than your average American. By so doing they will be paying their fair share to mitigate attendant damages, no less, no more- that is the antithesis of hypocrisy.

The salient point lies in how the right wing has sought to define environmentalism as something akin to self-loathing granola-crunching charity instead of what it really is- a position that the value of one type of public good needs to be reflected in policy; that value is inefficiently destroyed by a lack of appropriate public policy. Once we realize that environmentalism is on the side of economic efficiency and not simply sentimentalism, then huge swaths of the right wing (the Teddy Roosevelt type) will also see it as in their best interest, and the policies of this country would change radically. This would be a very bad thing for the energy industry amongst many other behemoths, hence their great effect and heretofore spectacular success in sabotaging the discourse.

How's this for references:

http://en.wikipedia.org/wiki/Climate_change_denial#Origins_of_the_alleged_.22denial_industry.22

Check the bottom of that page for links coming out the wazoo. Alternatively, look up Rachel Carson and DDT and you'll find plenty of slime that started as a pitch by a ethically challenged PR group to Philip Morris. Sound remarkable? It is. And we never would've known about it, but for the Tobacco companies massive class action suit defeats.

To your original post, advocating a public policy does not necessitate living some extreme version of it. Saying so is classic right wing propaganda, i.e. someone who advocates progressive taxation should be a hypocrite for making money. Warren Buffet should be a hypocrite for advocating an estate tax because he's given his money to charity. Blah blah. Does it really make sense that someone with the stature of Al Gore shouldn't be allowed to fly in a private jet? The principle is so irritating I'm not sure where to begin, except to say, read my original post. If they are pleading for a special exemption, they're hypocrites. If their policy would apply to them as much as anyone (and in the case of climate change, more so), then explain to me how that can be interpreted as hypocritical????