"There are more tears shed over answered prayers than over unanswered prayers..." - Teresa of Ávila, patron saint of headache sufferers

SO HANK PAULSON, Ben Bernanke and George W.Bush got their wish. The US Dollar is now the world's strongest currency.

Aw...shoot!

"I believe that a strong Dollar is in our nation's interest," claimed Henry Paulson in his first speech as US Treasury secretary, made at Columbia University two years ago. It's a phrase he then parroted time and again, repeating the formula first dreamt up by Robert Rubin 13 years earlier.

The plan then (and ever since) was to fob off foreign complainers back when Bill Clinton faced a federal deficit worth nearly 5% of the US economy. Now Paulson's banking bail-out charade will sit atop a government deficit already equal to more than 7% of this year's GDP.

Small wonder, then, that the "strong Dollar" has vanished from official speeches and comment. But the damned thing keeps turning up everywhere else.

Paulson repeated Bob Rubin's phrase so often from late 2006 to mid-July this year, even Ben Bernanke got on the train in May '08. Come June, and the Fed chairman raised the rhetoric again, dedicating himself to "ensuring that the Dollar remains a strong and stable currency."

Real US interest rates, however - which deduct Consumer Price inflation from the Fed's own target rate - were then sinking to pay savers their worst negative return since 1980.

Hell, satire this sharp even saw George W.Bush get with the program, telling Fox News last November that "if people would look at the strength of our economy, they'd realize why...you know...I believe that the Dollar will be stronger."

The president said it again - no word of a lie! - at a White House press conference in Feb. 2008 ("We believe in a strong Dollar policy") and in March, he said it to CNBC too, adding that "Our policy has not changed.

"We're for a strong Dollar."

Whether or not the Three Stooges ever meant it, their joke of a currency is now out-stronging the Yen - itself nearly 30% stronger since summer 2008, thanks to $6 trillion in wealth all trying to get home at once, squeezing its way through the forex markets as Japanese savers panic out of their Euros, Pounds, Reals and Zlotys.

Versus the Hungarian Forint - formerly a great destination for Japanese cash fleeing 0% interest at home - the Yen has gained nearly one-half in the last 12 weeks alone. It's added 5% since Wednesday, despite an emergency rate-hike by the Magyar Nemzeti central bank.

Why? Because not even a 300-basis point hike to 11.5% can stop hot money escaping when it runs for the exits. For that, you need exchange controls and guns.

• Hiking UK interest rates from 10% to 15% inside one day failed to stop the British Pound collapsing in Sept. 1992;
• Two years later, not even a yield of 40% on Mexican bonds could attract foreign cash into D.F.'s coffers;
• In 1997 the Korean Won lost half its forex value despite 30% interest rates;
• During 1932, the Federal Reserve hiked US interest rates to stem the outflow of gold reserves, but US citizens responded by simply hoarding gold for themselves for fear of a devalued Dollar. (They got it, too - but not before F.D.R. banned private gold ownership in 1934.)

Back to the future, and Hungary's domestic economy stands fit to collapse thanks to this new run on hot money. "Foreign currency loans made up 62% of all household debt at the end of the second quarter," reports Bloomberg, "up from 33% three years earlier."

Now all that money wants out - forcing the IMF in - as Budapest's bubble goes bang. The International Monetary Fund is awful busy already, struggling to keep Iceland, Serbia, Ukraine, Pakistan and Belarus afloat as today's strong Yen (and the yet-stronger Dollar) reverse the last five years and more of easy loans, easy terms.

Of course, the IMF - that lender of last resort to lenders of last resort - exists to avoid repeating the mass currency crises of the Great Depression. So just like Ben Bernanke's four-decade study of the US depression, the world's about to find out if the central banks' central bank is up to the task.

The Dollar's put on 30% vs. the Mexican Peso since the summer; it's gained one-third from its floor versus even sensible things like the Canadian Loonie and Aussie Dollar. Together with the continued shutdown in credit, the pace and breadth of this bounce is quite literally destroying the global economy. Industrial production is collapsing in the US, Germany and Japan; the failure rate for small UK businesses has risen seven times over since summer '07. And the strong Dollar is also destroying everyone's pension as well, just as surely as the banking collapse devoured mom 'n' pop savers during the '30s depression.

Germany's stock-holders are down 44% so far in 2008. The Bovespa in Sao Paolo has been cut in half since mid-June. Moscow's stock market plunged by one-fifth on Oct. 6th. The Nikkei index in Tokyo stocks has dropped one-third of its value in the last month alone.

State-side, the Pension Benefit Guaranty Corp. has watched more than $3 billion of its $63bn portfolio evaporate as Wall Street sinks. All told, America's 500 top stocks have cost investors 31% of their money since the Dollar turned higher in mid-July.

Yet "a strong Dollar is in our nation's interests. It is in the interests of the global economy," claimed George W.Bush as climbed aboard Air Force One this June. He was just as wrong there as he was on Saddam's deadly arsenal, and with similarly disastrous results. But he then repeated this line to a journalist as he flew to Slovenia for a US-European summit.

"We want the Dollar to strengthen. Relative evaluations of economies will lead to that Dollar strengthening."

Read that again, and ask - as nobody did when the joke was still funny - How could a strong Dollar possibly be in the best interests of the US or global economies if it comes thanks to anything other than a reduction in America's trade and budget deficits? What good can a strong Dollar do if it appears instead thanks to a run on over-geared investment worldwide?

The Decider himself knew this as early as Nov. 2004 - back when the Euro was worth only a little less than it is today. "The best way to affect those who watch the Dollar's value is to make a commitment to deal with our short-term and long-term deficits," the president said to reporters attending the 21-nation Apec conference in Chile that year.

And what a commitment he's made since then!