As if it were not strange enough! Microsoft bought a phone company with no phones for $8.5 billion. Then, the public bid up the price of another Internet company, LinkedIn, to the point where buyers were paying more than $20 for every dollar of revenue that came the company’s way. As for profits, they capitalized each one at more than 700 times. At this rate, an investor wouldn’t earn his money back until 2,711AD.

He will need luck. People don’t usually live that long; especially crazy people.

But oddities are so common now; it is as if every man you pass on the street had two heads. One out of every four American homeowners owes more on his house than it is worth. Even in desert cities, such as Las Vegas, more than 70% are underwater. Nationwide, house prices are down 33% from their peak and still falling at 1% per month. That is, the typical homeowner loses about as much on his house as he takes home from his job.

And last week, Dominique Strauss-Kahn was arrested. Who can deny that we live in a remarkable era? Odder than the charge against him was the fact that he was locked up for it. Bankers are used to getting bonuses for that sort of thing. On DSK’s watch, the IMF’s loans outstanding increased 10 times. Poor Greece was stuck with another $42 billion it couldn’t possibly repay. But at least he took the Greeks to dinner!

Richard Nixon changed the world’s monetary system back in 1971, cutting off the dollar from gold. He did it on prime time television. But the US dollar had been a reliable store of value for so long, few people imagined anything else. Only a few hard-bitten cynics, philosophers and monetary historians noticed that something very important had happened. They rolled their eyes and bought gold with both hands.

Allowed to persist, novelty becomes familiarity. Pretty soon, people begin to think that the extraordinary is normal; as for the normal, it begins to seem weird. The new system wobbled for the first 10 years, and then found its footing. Now, 40 years later, it is standing fast. It seems normal. But of all today’s oddities, nothing is odder. If the gold bugs thought the system was headed for destruction in ’71, they should see it now!

In ’71, the money base – as measured by the holdings of the US Federal Reserve bank – was only $800 billion. And it had taken nearly 60 years to get there. Yet, just since 2008, the Fed has ballooned its balance sheet up 200% to $2.5 trillion.

In ’71, the US government seemed to have thrown caution to the winds, with a deficit of $23 billion. Fiscal conservatives gasped and clutched their hearts. They’d better sit down, because today the deficit is expected to top $1.6 trillion this year alone, up 7,000%. Debt per working person rises at the rate of $115 per working day – about what the typical worker takes home.

And yet, the yield on a 10-year US Treasury note was around 6% in 1971. Today, wonder of wonders, it is only 3.13%, as if US finances had improved over the last 4 decades!

Putting ’71 and ’11 side by side you have to admit that one is strange. But which one? Surviving gold bugs – viewing these facts through their bifocals, perhaps from the comfort of their retirement homes – have begun to twitch. The price of gold has risen every year for the last 11 years. But even now, what is remarkable about the gold price is not that it is so high, but that it is so low. It is barely ordinary. Adjusted for inflation, gold sells for less today than it did in 1980. To match its previous high – set when the US ran its penultimate budget surplus and Paul Volcker had already begun to tighten credit – the price would have to climb into the mid-$2000s. But did 1981 justify a $2,500 gold price (in today’s dollars) or does 2011?

Neither quantitative easing nor the Internet had been invented in Nixon’s time. The Internet was advertised as a triumph over abnormality. With the world’s wealth of wisdom at one’s fingertips there was no further reason for mankind to err in sin and darkness. He had merely to turn on the WWW to light his way. Want to know what quantitative easing is all about…or how previous episodes of printing press money, un-backed by gold, have turned out? You have only to consult Wikipedia. It’s free.

Just look for previous examples of successful pure-paper money systems. You won’t find them. Because the gold bugs were probably right all along; removing the gold from the world’s money system is almost sure to be a prelude to disaster. It is just a matter of time. Perhaps lots of time.

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