We have had no epiphanies yet today, but it is still early.

Floyd Norris discusses a new book by William Draves, called "Nine Shift." The point of the book is that the early 21st century looks a lot like the early 20th century. Both periods were marked by great faith in the future, apparent political and economic stability, and new technologies that seemed to point to a better life for everyone. One hundred years ago, automobiles, subways, internal combustion engines, and electric appliances offered a radical improvement in standards of living. Now, information technology and biochemistry are on the cutting edge.

Both periods were marked by rising stock prices, too, says Draves. In the nine-year period beginning in 1897, stocks went up and down, but ended the period 91% higher than where they began. Since the end of 1996, similarly, U.S. stocks are up 87%, as measured by the NYSE composite index.

And then, as now, people believed that the monetary and economic authorities were ready to deal with any crisis that came their way. The system was different, but no less reliable. The federal government merely deposited money in major banks when they thought the financial system seemed to need it and withdrew it when it looked as though they had too much. But in the Panic of 1907, even the U.S. Treasury did not have enough cash to meet the demand. Depositors were withdrawing so much money - out of fear of a banking collapse - that the U.S. Treasury couldn't keep up. It took J.P. Morgan himself to calm depositors - by putting his personal money into the banking system. Still, stocks ended 1907 with a 38% loss.

According to Draves, U.S. monetary officials were humiliated by the fact that they had to rely on a private banker to avoid disaster. They began laying plans for the creation of the U.S. Federal Reserve System, upon which the entire world's financial system blissfully and confidently relies in 2006. No financial system, and no paper money, lasts forever. We wonder what sort of panic awaits the Bernanke Fed...and when.

*** Gold fell under $530 yesterday. Was it a one-day setback, or the beginning of a major correction? Looking at the charts, it appears to us that gold still needs to correct before marching forward. We expected a correction at least down to the $480 level. We think there is still a fair chance of such a consolidation coming. More on gold, below...

*** Elsewhere in the news, we find both good news and bad news is coming from the pampas. Your editor has just made a large, for him, investment down there. Now he is discovering what he got himself into. He explained it to his old friend, Frank Trotter, who visited yesterday.

"Well, no, we don't know much about cattle ranching. We raised them in the United States and still have some in France, but we've never really known what we were doing."

"Cattle ranching is at least pretty simple," said Frank, who has his own cattle farm in Missouri.

"Not quite as simple as we had hoped. When we tried to figure out what the cattle operation would yield, we just took the number of cows and multiplied by the standards we had been given: each cow has slightly less than one calf per year, with a survival rate of nearly 95%, and a sales price of about $150 after a year. The math was pretty easy. But after we bought the place, we talked to someone who really knew the cattle business in that part of Argentina. You see, it's very poor, dry land. So none of the numbers apply.

"Yes," he told us. "Cows do usually have a calf a year, but not your cows."

"Why not?"

"Because, you're up there in the high country. The cows aren't as fertile...they have to walk around too much, or they don't get as much to eat. And then when they do have calves...the calves often don't survive. It's just too cold, or too dry, or they get taken by wild animals."

"Oh..."

"And then, if the calves survive, they are still skinnier than calves raised on good land. So they don't bring as much when they go to market.'"

"It sounds like we'll never make any money from the cattle operation."

"No, you never will."

"Oh...well, at least our record is unbroken. We can now say we've raised cattle unsuccessfully on three different continents."

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