Yesterday, oil rose over $86. Gold shot up too, to $756. Gold has risen more than 19% so far this year.

The commodity index also hit a new record high, over 450.

“This place is going to boom, I can feel it,” said old friend Doug Casey over dinner last night.

“This place” is Argentina. We were having dinner at the Puerto Madero, a section of town where the old docks and depots along the waterfront have been renovated into sleek restaurants and loft apartments. We looked out across the water and saw the neon lights of various corporate headquarters and the glass and steel office buildings that house them.

“It’s going to boom because it has no debt and it is a major producer of food. And not only that, it’s already made almost every mistake you can make. It’s had socialism, hyper-inflation, price controls, debt, coups d’etat, military governments – you name it.”

“Yes, but there’s no reason why it couldn’t make the same mistakes again,” suggested another person in our group.

“Yes, and it will, but it’s ready for a little catch-up first. These things always go in cycles. This place is ready for an up-swing; I can feel it.”

Things always go in cycles. Short cycles. Long cycles. Bicycles. Motorcycles. Wash, dry and spin cycles.

But what you never quite know is where you are in the cycle.

We have bought a little property in Argentina because it is cheap and we like the place. Even if Doug is wrong about the cycle, we won’t be unhappy. We bought value. We’re tempted to buy more. Argentina’s economy is growing nearly three times as fast as the United States. It is coming off a major depression, when GDP growth went negative for a year and a half, when the local currency lost two-thirds of its value, and in which the economy actually shrank as much as 16% in a single quarter.

Now, credit is rare in Argentina. Finally, with the accumulated mistakes of many years washed away, people can build on a new, more solid foundation. In fact, it may be finally coming back after more than 50 years of backsliding.

“Challenge for the USA, the retirement of the baby boomers.”

La Nacion reports on another reason why it is probably late in the cycle for the United States: the country has obligations it cannot meet. The first baby boomer, a woman named Kathleen Casey, who was born on January 1, 1946, will turn 62 in three months. If we read the article correctly, she’ll be able to begin to collect Social Security. Behind her are 84 million others, almost every one of them counting on getting something from the government – either Social Security, Medicare or Medicaid.

“How about you, Bill?” asked a friend last night. “Are you going to go for partial payments at 62 or wait until 65 to get the whole enchilada?”

We had never thought about it. We always assumed that we would get nothing at all. And we still can’t quite imagine that we will get anything. Anyway, we don’t need it and don’t really want it. But we have a few years to go before we’ll be ready to apply; who knows what will happen?

The problem looming up with baby boomers’ retirement is a mathematical one. When the Social Security system was set up, there were 42 people working for every one who was getting benefits. In 2030, when the boomers are drawing their checks, the ratio will fall to 2 to 1. The system will go broke. Everyone knows it.

Obviously, benefits will be cut, either by act of Congress or by act of inflation. The latter is our guess.

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.