America's trade gap is growing while foreign countries buy less US government debt — a bad mix for the dollar, bond investors, and anyone hoping cheap borrowing continues.

• The US goods trade deficit jumped 17%, the widest in over a year, as tariffs failed to slow imports.
• Foreign countries dumped more than $70 billion in Treasury bonds in one month, led by Japan, the UK, and China.
• Confidence is fading because the US has frozen other countries' assets and threatened trading partners, including Canada.
• Interest payments on the national debt now top a trillion dollars a year, forcing more borrowing to pay for old borrowing.
• Inflation is still near 4%, and the Fed under Kevin Warsh has no painless choice: hike rates and debt costs explode, hold steady and the dollar keeps sliding.

Outlook: The Fed's Jackson Hole meeting is the next flashpoint, with rate hikes openly on the table and no option that avoids pain.