Is Capitalism failing?

The last month has been about the staggering 14.3 trillion dollar deficit the american economy is facing. Articles after articles have been published as if we are eyeing an impending doom. Gold, silver and commodity prices are touching new highs everyday on fears that American Economy will not pass this test resulting in devaluation of dollar and thereby making gold a "safe haven". Majority view is that Dollar is going to break and lose ground against all the major currencies, it already has lost quite some ground against currencies like Australian Dollars, Singaporean Dollars, Thailands Baht, Indian Rupee, Euro et all. Australian Dollar has risen 24% sgainst the american counterpart, Indian rupee has risen 10% in the same period.

The Per capta american Debt is 45000 U.S. Dollars, whereas recently bankrupted Greece had a per capta deficit of 44000 U.S. dollars. So Greece which now needs bailout from the European Banks that first bought its junk bonds knowing fully well of its junk status has a lower per capta debt than USA. Recently there were huge riots against the newly announced austerity measures passed by the Greek Govt. to curb its deficit. Greeks could retire at 53 with 80% of the pension, just imagine that on top of free education and health, Greece is a model of socialist/capitalist economy where everyone is happy. In 1990s when Greece was in trouble because of its unsustainable expenditures, companies like Goldman Sachs where hired as consultants. They helped Greece sell their junk bonds to the big european banks, these big european banks knew the "junkness" of the greek bonds so they traded/swaped these bonds with companies like the Goldman Sachs. And when companies like Goldman Sachs collapsed because of junk bonds like the one they help create in the first place American Government bailed them out and now the American Govt. which bailed these companies out who in turn bailed countries like Greece out is in the danger of being bankrupt and also the country who was bailed out in the first place has gone bankrupt. So what happened, where did all the money go, how is it that everyone is borrowing yet noone is paying. Even China has a deficit of 139 billion dollars wherein they have trillions and trillions of dollars worth of American Bonds. Now imagine what would happen if the american economy defaults, what would happen to chinese reserves of all these amercan treasury bonds. If american bonds get junked China is going to be the biggest loser along with the Oil barons of the middle east so everyone loses. If China panicks and tries to sell the american bonds it would further damage the valuations of bonds coz a.) there arent so many buyers and b.) freeselling will kill these bonds.

So what is happening with the world economy, i really dont understand, how is the world economy creating debt after debt after debt and just writing it off. If China controls the movement of its currency so can USA and what stops them from priniting as much as they want. If US dollars cheapen doesnt that men american companies will become more competitive and will earn more in the longer run. Is this crisis manufauctured for the well-being of American economy. War on Iraq was definitely for OIL, they were looking for an option for a long time. If one looked at the Libyan economy with free education, guaranteed jobs, social security it looked like a socialist utopia yet it was disturbed by western forces for "democracy". Democracy is now the new tool of Imperialists.

I was just trying to make sense of the world economy, which i obviously am too small to make sense of.

Values are created and destroyed out of thin air. Big corporates create millions of dollars and than wipe their ass of it, we the people have to work like a jackass to get minimum pleasures. Cant make sense of it.

Is capitalism failing?