We wonder how long they will put up with it. When will average Americans stop envying the rich and decide to eat them?

When it really starts to hurt, is our guess.

You'll recall, dear reader, that the economy is said to be growing at a decent pace. But the typical family has been losing ground. Real household disposable income is going down for the sixth year in a row in 2005. Hourly wages, adjusted for inflation, have not increased for three decades, and yet, we are told, this is the world's most dynamic economy.

Where to begin to explain this picture? The figures lie - they've been bent and beaten by the government's statisticians. But even if they are straightened out, it doesn't help America's middle classes. GDP is not really growing as fast as reported. Most families really are getting poorer. Bankruptcies have more than doubled, for example, since the first Clinton term. Savings rate have dropped to a new record: minus 1.5% in the third quarter of this year.

Wage rates are getting globalized - good and hard. This makes some businesses more profitable; they have been able to take advantage of lower earnings in Asia. But it leaves homegrown labor struggling to make ends meet. The only way they've been able to put the two ends of the budget together has been with debt. It is a “plastic safety net” for America's middle and lower classes, say economists. When they reach in their pockets and find no coin or paper, they pull out plastic. Average credit card debt has grown to $8,650 per family, say recent surveys.

Four things have enabled this growth in consumer debt: Asian lenders, the Fed's low rates, imaginative debt mongers, and the housing bubble. None of these things are guaranteed by the Constitution. But they allowed consumers to pull $160 billion out of their houses this year alone, according to Merrill Lynch. Without that easy lucre, the ready credit, the I.O. and Neg Am mortgages, many people would be in bigger trouble than they are now.

“Although the economy has been better than expected,” write James Welsh, “the stage is set for a consumer letdown in the first half of 2006. Consumers are facing increases in adjustable-rate mortgage payments, higher minimum credit-card payments, elevated costs to heat their homes especially in the Northeast, less home-equity extraction, and lower rates of home appreciation.”

In other words, it is about to hurt. That is the problem with the plastic safety net. It only works if you bounce back quickly. The more you jump on it, the less elastic it becomes, the deeper you sink, and the harder it is to climb out, because each time, you carry a heavier burden on your back.

“There are risks in the strategy of getting by crises on plastic and mortgages,” writes Thomas G. Donlan in Barron's. “The biggest risk is that times will get worse, and won't get good again. Even the loosest issuers of sub-prime debt will draw the line somewhere, and the natural result is seen in that bankruptcy tally of 1.8 million families in 2004. The second biggest risk is the virtual certainty that home prices will cease to accommodate endless cash-outs of endless increases in home equity.”

*** The GDP numbers hide a fraud and a shame. About the fraud we have written much - the numbers are so twisted even their own mothers wouldn't recognize them. About the shame we have something to say today. It is a shame that America's middle and lower classes are getting poorer. This is no one's fault in particular; it is just an inevitable result of globalization and empire. Americans pay the immense cost of keeping a cop on the global beat - the U.S. military budget is bigger than all other countries' put together - while hustlers all over the world rise up to compete with their own merchants and working stiffs.

What little real financial progress there is, sticks to the upper levels of American society like mud on a Mercedes fender. While the proles' labor is marked down, the capitalists' assets are marked up. Their work - as doctors, lawyers, developers, and promoters - is less subject to Asian price-cutting. Even at GM, upper management connives to raise its own compensation at double-digit rates while the typical wage-slave has not had a real raise since 1975.

Mass man is a loveable jackass, of course. For the moment, he is docile. He doesn't know what is going on. He has been gulled by easy money and the property bubble. For the most part, he doesn't begrudge the rich their fancy cars or mansions; he still believes that these gaudy treasures are not that far out of his own reach. He doesn't set fire to his neighbor's Mercedes, in other words, because he still thinks he might have one himself - if this property bubble continues long enough. As many as half the mortgages written in the last 18 months were drawn up based on “stated income,” rather than income that was actually checked by the lender. This makes is possible for a person to buy a McMansion, not on his income from his vocation, but his income from his prevarication. And a new car? They practically give them away!

It is too bad there are limits. If only we could live forever. If only we had two stomachs and the metabolism of a jet engine. If only we could borrow...and borrow...and borrow. But nature is against us. There comes a time when you have to borrow less, not more. When that happens, you have to spend less. And when you spend less, the people who were counting on you to buy things are disappointed, and then they have to spend less, too. Then, all those nice people who lent you money when times were good get a severe look on their faces and ask for it back!

We have no quarrel with this system, or even with nature herself. We figure she has her reasons. But neither do we have a huge mortgage on a McMansion or a bunch of credit card bills to pay. We can afford to look at the situation philosophically. We doubt Mr. Average Wage Earner will be so relaxed. Instead, he will look around for someone to blame. He will see people driving around in big Mercedes and he will resent it. He will read about people getting fat salaries and he will feel cheated.

In some tawdry office somewhere, right now, there must be an aspiring demagogue practicing his speech. He is wondering whether he should raise his arm or hammer down on the podium with his fist, when he says, “It's just not fair that we (and here, he will stretch the facts a little to include himself among the victims of globalization) lose our jobs, our houses, our health care and our retirement benefits so that a handful of very rich people can live like pharaohs.”

He will reflect on the statement a moment, and he will decide to emend it slightly. ‘These morons won't know what a ‘pharaoh' is,” he says to himself. ”The only pharaoh they know is at Las Vegas.”

*** Gold rose again...to $517 (Feb. contracts). Could that be right? $517?

The problem with a real bull market is that it tends to leave you behind. At first, it moves up hesitantly, reluctantly, and almost apologetically...giving you plenty of opportunities to buy on corrections. But when it reaches a more advanced stage, it races ahead. You wait for a correction, but it doesn't come. Instead, the price roars ahead, leaving you in the dust.

Are we at that stage of this gold bull market? Have our buying target prices been made irrelevant? Will gold ever trade below $500 again in our lifetimes?

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