*** Ooh la la... the price of gasoline has risen to over $7 per gallon in parts of England and the continent. Protests are mounting. Lines are said to be forming at stations.

Usually, an ounce of gold buys about 15 barrels of oil. But with the run-up in oil prices, it now takes two ounces of gold to buy 15 barrels. Gold hit a new high for this cycle; December contracts traded for $463.30 on Friday. Why is gold lagging oil? Because inflation is not the problem...not yet, anyway.

*** Used cars are a bargain, says the Chicago Tribune. The automakers are so keen to get rid of new models; the used ones they turn in are plentiful and cheap.

Likewise, it has become so easy to buy a house that rental units are relatively inexpensive. Our advice: get a used car, rent a house, and buy gold.

*** The government needs to spend more, because other sectors of the economy either cannot or will not. Businesses are not investing. They are not hiring. They are not expanding. China builds 20,000 new manufacturing facilities every year; almost none are built in the United States.

Consumers want to spend more, but they can't. They don't have any money. The interest on America's $36 trillion worth of private and public debt must come to about $1.8 trillion per year. After making mortgage and tax payments, and filling up the SUV, American households have very little left over. That leaves only the government. Yes, the Feds already spend about $1 billion per day that they don't have. But the foreigners are still ready to lend on the full faith and credit of the world's only true empire. Only the government can expand spending. Only the government can push the imperial economy forward...and the empire itself closer to the brink.

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