Here's how it works.
First, traders use the U.S. budget deficit and on the U.S. Federal Reserve's expansive monetary stimulus program to push down the U.S. dollar.
Then they focus on Europe's sovereign debt troubles - Moody's Corp.'s (NYSE: MCO) junky B1 rating for Greek bonds, for example - and tank the European euro.
And occasionally, just for kicks, they turn their ire on Britain's rapidly rising inflation, which is now above 4%, and the strident opposition to the U.K. Prime Minister David Cameron's fairly modest budget cuts and knock down the British pound.
So far, the only major, developed-market currency traders haven't torpedoed is the Japanese yen - even though Japan has more government debt than Greece, in terms of its gross domestic product (GDP).
All this bearish activity illustrates the currency markets' fundamental problem: If all the major currencies are weak and deserve to be shorted, against what do you short them?