Preceded earlier in the week by well publicized Wal-Mart documentaries that appeared on CNBC and PBS’ Frontline, Wall Street’s attention was further focused on the retail sector as a result of today’s mega-merger between K-Mart and Sears. Amidst the anointment of retailers as the locomotive and savior of the US economy few are paying attention to the fact that the currency that enables Americans to perpetually shop, and acts as the foundation of their consumption, is rapidly losing its purchasing power.

Today the U.S. dollar fell to a new all time low against the euro, with the U.S. dollar index hitting a new nine year low. The current excuse (they change daily) were comments made by Treasury Secretary Snow that the U.S. would not act to stem the dollar slide (as if it could) and which blamed America’s current account problems on inadequate foreign consumption. Doesn’t the Secretary realize that the only way the rest of the world can consume more is to stop buying, and start selling U.S. treasuries, which would send the dollar tumbling, interest rates and inflation soaring, and plunge the U.S. economy into a recession? This is certainly a wish Snow had better hope doesn’t come true during his tenure.

During today’s press conference, when informed by a Bloomberg reporter that his comments were sending the dollar lower, and that his “strong dollar policy” was not working, Secretary Snow replied laughingly “the policy is the policy.” I guess that just about sums it up. When asked by a bear Stearns analyst how he expected foreigners to react to the losses they were suffering on their massive U.S. dollar holdings, Snow apparently replied jokingly with the equivalent of “no comment,” a modern day version of “let them eat cake.” Secretary Snow may be laughing now, but it’s America’s creditors that will finally have the last laugh, while Americans themselves are left crying.

Once foreign governments finally discontinue their foreign aid programs, otherwise know as currency intervention, allowing the dollar to collapse, Kmart shoppers, as well a customers of Wal-Mart, Target, and J.C. Penny, will no longer have the means to buy, as the dollar’s diminished value prices them out of foreign markets. Retail shelves will be empty, as the imported products that used to fill them become too expensive for Americans to afford, and domestic manufacturers no longer exist to fill the void. And since foreign savers will no longer be willing to lend them any more money, American shoppers will be unable to use their credit cards, even if they could find something worth buying.