Whoa! What happened yesterday?

The Dow boomed up 391 points. Gold, meanwhile, got whacked – down $33 to close at $887.

Oil held steady at $100; the dollar rose against the euro – to $1.55.

This morning, markets in Asia have already popped up. The banking crisis is over, says a headline on Bloomberg. The bad news is already priced in. If you believe the report, the departure of UBS chief Marcel Ospel marked the absolute bottom of the decline in the financial sector. It’s all up from here.

What do we make of this?

Well, let’s step back and take a look.

The danger, of course, is that the markets are signaling that we are dead wrong. Stocks are healthy...gold is not. That’s what yesterday’s news could be telling us. If that is so, we want to close out our Trade of the Decade right now, hole up in a monastery somewhere, and rethink our whole Weltanschauung. In the thin air and dim light, with no alcohol available, perhaps we’ll be able to see things more clearly. We’ll come to realize, finally, that paper money really is a good thing; that Alan Greenspan and Ben Bernanke are not only geniuses, but saints too; that Wall Street labors night and day for the betterment of mankind; and that now is the time to dump gold and buy stocks.

Maybe.

First, we have to recognize that no matter what is the long-term trend, it’s not going to announce itself like the new ambassador to the Court of St. James. Instead, it’s going to sneak in like a thief in the night. We’re not even going to realize it has been here until we wake up the next morning and find the silver missing.

Looking around, we see a strange and marvelous scene. On the cover of yesterday’s Independent newspaper, for example, there is a photo of a long line of people lining up for food stamps in New York.

“The Great Depression,” says the headline. “Food stamps are the symbol of poverty in the U.S. In the era of the credit crunch, a record 28 million Americans are now relying on them to survive – a sure sign the world’s richest country faces economic crisis.”

Again, we see the sad evolution of the U.S. of A. since the end of the ’60s. Then, fewer than five million people received food stamps. Now, nearly six times that number are living on them...after, what was supposed to be the biggest boom the world has ever seen. Of course, dear reader, we know that the boom was a phony. It made Indians and Chinese much, much richer. But Americans were left out. They got to spend their wealth, not make more of it. And now, nearly 26 years after the boom began, Americans find that they owe more money to more people in more places than any people ever did. What’s worse...while wages shot up among our old adversaries – Russia and China, in the 50 states, the average person earns about the same thing, in real terms, as he earned during the Carter administration.

And now, to make matters worse, he faces an economic downturn.

Comparisons with the ’30s keep coming up. The last time there was a nationwide drop in the housing market was in the ’30s. Not since the ’30s, has there been such a crisis in the finance sector. And the last time there was such a hubbub of pressure to reform Wall Street was – you guessed it – the ’30s.

And yet, for all the talk of ‘depression’ – where is it? It is nowhere. So far, the depression is as phony as the boom that preceded it.

In the real Great Depression of the ’30s, thousands of U.S. banks failed. How many have failed recently? One out of every four working people (usually men, in that era) was out of a job in the Depression. Now, the unemployment rate is one out of every 20. In the Great Depression growth went negative. In nominal terms, GDP was almost cut in half during the ’30s. But so far as we know, U.S. GDP growth is still positive. The IMF, always a little behind the times, says the United States will post a 0.5% growth in ’08.

And what about the stock market? The Dow hit its peak on Sept. 3, 1929, at 381...collapsed...rebounded...and sank again. By the time it was over, the Dow and sunk to 41. So far this time, the Dow is off 7%. And yesterday, it shot up more than the entire Dow value in ’29. U.S. stocks still trade at 18 times earnings – compared to barely 8 at the bottom in the ’30s.

Obvious question: Where’s the depression?

Obvious answer: There ain’t one...at least, not yet.

Obvious next question: Then what’s causing so much trouble?

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