The following is from a 1935 book by historian H.A.L. Fisher.

Fisher wrote, "Men wiser and more learned than I have discerned in history a plot, a rhythm, a predetermined pattern. These harmonies are concealed from me. I can see only one emergency following upon another...and only one safe rule for the historian: that he should recognize in the development of human destinies the play of the contingent and the unforeseen...The ground gained by one generation may be lost by the next."

This generation of Americans is now losing ground financially. It owns less of its own houses. It has less in savings. It has less in pension benefits. What it has more of than any generation that came before it is wealth - there is simply more "stuff" around. And it has more credit, so it can use this "stuff" even without actually having the money in hand to buy it. And it has more debt - both personal and government.

Debt levels have gone way up. But "don't worry about it," say many economists. We're richer now...we can afford it. Besides, the U.S. economy is less volatile. Today's two-income families can bear more debt, because even if one of them loses his job, there is still one wage earner left to pay the bills. What's more, the structure of the U.S. economy has changed, they say. When sales go down, as in a recession, factories lay off workers immediately. In the bad old days, the poor working stiffs stayed home and cut their spending. They needed savings to get through these tough times. And the last thing they wanted was a mortgage on the house; if they lost their jobs they might lose their houses, too. But all that has changed. Now, when sales begin to go down, buyers for Wal-Mart simply reduce their orders. So, it's the Chinese who get laid off! In our brave new economy, we have managed to export our cyclical unemployment, say the cheerful economists. So, the two-income family doesn't have anything to worry about. No one loses a job - ever. No spending ever needs to be cut. Nothing bad ever has to happen.

But there's a crack in every bell God made. For the moment, wishful thinking seems to be paying off. Every wish seems to be coming true. If the American middle class really is getting poorer - losing ground that their parents won for them - they don't seem to realize it.

It may be years before the average American realizes he has lost ground. Then again, it could happen tomorrow. In addition to the long imperial cycle, there are much shorter financial cycles. Stocks go up for 15-20 years for example, and then they go down. This market reminds us of the late '60s, when stocks bounced around near their highs for years, and then collapsed. The bear market didn't end until 1982. We also recall that back then people felt like they'd lost ground, even though the basic direction of the national economy was still positive.

*** What worries us is the thought that even we have been caught up in a kind of bubble. We are investing heavily in property, at what appears to be near the top of the biggest worldwide property boom in history. "Yes, but we're buying cheap property in cheap places," we tell ourselves...which isn't exactly true. We're investing in property in France, for example.

"Are you kidding?" said a friend yesterday when we voiced these concerns. "The property you bought here has already gone up nicely. Before it was the English coming over. But they were buying small, cheap properties. Now the Dutch and Belgians are coming. They've got bigger budgets."

Here at The Daily Reckoning, we are perfectly aware that prices go down as well as up. But our investment decisions don't seem to be made by the conscious part of the rational brain. We buy property because we like it; we don't care whether it goes up or not. But why do we like it? Isn't it true that almost every piece of property we ever bought subsequently rose nicely? Deep down in our subconscious do we not expect that what we buy today will go up? Intellectually, we can imagine that it could go down, but emotionally, in the part of the brain that really matters, we wonder if it ever occurs to us?

At least, we do not buy on credit. If it goes down, we will take our losses in good grace. We hope we will not cry in public.

*** Gold went up again, not down. The proximate cause we trace to Ben "Printing Press" Bernanke's elevation to Fed chairman. When Mr. Greenspan leaves in January, Mr. Bernanke will rise from the ranks of mere mortals and walk among the gods. He will be transubstantiated from an even-tempered economist who used to sit on a New Jersey school board, to the captain of the free world's economic ship. He will preach the virtues of the "invisible hand," saying that prices must be set by the market, not fiddled by central planners.

Meanwhile, as head of the U.S. Central Bank, he will apply his own greasy mitts to the world's most important price: the Fed's shortest term money rate. Will he press it down...or up? Down is our bet. Which makes our bet for gold still the same: up.

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