“Elizabeth thought I’d lost my mind, the first time I brought her up here,” we explained to friends as we made our way up to the ranch. “The terrain gets worse and worse, more and more desolate, more and more empty. We got up to this high valley, and she said she couldn’t see why we’d come all this way. What was the point? There is nothing here.”

After we’ve been driving for three hours or so, we began to wonder too.

You spend about half your life trying to make money; the other half you spend trying to get rid of it. For help with the latter, we’ve turned to the high plains of the Andes.

But judging by what is going on in the U.S. economy, most people will not need help. And judging by the falling dollar, neither will we.

The average American has only gained wealth in the last five years because his house rose in price. Now even that is going away. And unfortunately for him, and for the U.S. economy generally, he already spent the wealth that is now disappearing. Each year, the MEW (Mortgage Equity Withdrawal) grew higher until it reached a peak in 2005/2006. Consumer spending rose too – and pushed GDP growth for the economy. Housing contributed 90% to 100% of the gains from the last five years, according to some estimates. But this year, MEW has been cut in half and house prices nationwide are falling, for the first time since the Great Depression.

While wages in the USA haven’t risen in 30 years, in Asia they’re going up about 10% per year. The Asians are making money and getting richer. And in the process they’re accumulating huge stacks of dollars. Many of those dollars end up in the new Sovereign Funds, immense private equity funds owned by governments. Lenin said that capitalists would sell the ropes that he’d use to hang them. Well, the communist Chinese are ready for a buying spree. Currently, those funds have about $2 trillion in them. They’re expected to have about $17 trillion by 2010, enough to buy every publicly-listed company in America with change left over.

What will they do with all that money? Well, what would you do?

Yesterday, the dollar hit new record lows. The euro (EUR) rose to nearly $1.42. Since we live in Europe and pay our bills in euros but earn our money in dollars, every day your editor loses more than he makes. His dollar assets go down. He’s getting tired of it. Surely, other dollar holders/earners are too – including foreign treasuries. What will they do? They will try to trade their dollars for something solid, while they still can. Companies. Land. Gold.

Whatever they can get.

What they will do is to use their paper U.S. dollars to buy America’s valuable assets.

The dollars, of course, are essentially worthless. The United States can create as many as it wants at negligible cost. But the companies, the factories, the land, the resources – those are really valuable. When the foreigners gain ownership, Americans’ own wealth, and independence, is reduced.

What did you expect? “The borrower is slave to the lender,” it says in the Bible. Welcome to captivity.

But we don’t have time to worry about that now; we’re on our way to our own desert oasis.

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