Letâ�,��"�s see how our major trends are holding up...

The days of cheap energy are over. Kuwait confessed that it has about half the oil it once claimed. And like a fat lady in the pastry section before a snowstorm, China is buying up oil reserves wherever it can find them - in Nigeria, in Ecuador, and in Syria.

Meanwhile, wealth leaks rapidly out of the West and into the East. Bloomberg tells us that Chinaâ�,��"�s economy grew at 9.9% last year, overtaking Franceâ�,��"�s in total output. That puts China in the number five position, just behind Britain, Germany, Japan and the United States. Economists expect China to run past Britain this year. Then, it will be snapping at Germanyâ�,��"�s heels.

The U.S. Empire loses ground against China and the rest of Asia, too. Its domestic economy grew only about a third as fast last year, and not half as well. China is growing, albeit in a reckless and dangerous way, by building more productive capacity. Thatâ�,��"�s real growth...growth that can add to its wealth. America, on the other hand, is â�,��"growingâ�,� by consuming its wealth, like a man who sells the family business in order to buy a beach condo. He seems richer. He feels richer. He gets a new girl friend and a tan. At least, he looks healthy and happy when he arrives in bankruptcy court.

â�,��"The American economy heads into 2006 with a full head of steam,â�,� claimed the empireâ�,��"�s chief executive. Neither war, nor high oil prices, nor hurricanes could keep it from its rendezvous with destiny, he went on. He is surely right; but how much destiny does a decadent empire have?

According to the LA Times, polls show that half the public â�,��"thinks the economy is in bad shape and that Bush is doing a bad job of managing it.â�,� One survey showed that 30% of the population believes the United States is in a recession. And the bankruptcy figures show that for many people, the United States might as well be in a slump; they donâ�,��"�t seem to be able to make ends meet. After energy, health care, and housing cost increases, they have less than nothing left over. But at least they have plenty of that! They spent more than they made last year. And now comes news that Ford is getting rid of another 30,000 decent-paying jobs.

Oh Alan, Alan ...what have you done? You have lured a whole generation into a debt trap from which they cannot get out. Debt service, as a percentage of income, is at a record high. Even with Mom and Dad both working, family expenses exceed income. What can the lumpenhouseholders do but pray for a miracle...file for bankruptcy...or cut back even more?

And what can your successor at the Fed do? The poor man is already checking out helicopters. He figures he might have to drop $100 bills from the air in order to keep Americaâ�,��"�s bubbles inflated. Heâ�,��"�s probably right. A credit expansion must be followed by a credit contraction. Under Greenspanâ�,��"�s leadership, credit expanded in the homeland even faster than waistbands. Now, the big trend is in the other direction. In terms of real money (gold), asset values all over the world are going down. They may be going up in local currency terms, but gold is going up even faster.

Yes, gold is still edging up toward $560 an ounce. Yes, the dollar fell yesterday. And yes, the latest experiment with paper money is beginning a new phase. It was relatively simple for a central bank to shepherd a paper money when it was rising against real money; the bankers could simply print more of it. Everyone was happy. Now, we will see what happens when the paper money falls. Will investors be so ready to loan out dollars? Will they buy Treasuries at todayâ�,��"�s low yields? Will housing prices go up when yields rise? Without higher house prices, how will consumers continue consuming?

Alan Greenspan entered the Fed with room to maneuver, for Paul Volcker had broken the consumer price inflation of the â�,�˜70s. Gold was going down. Consumer debt was less than half what it is today, while asset prices were low. And the esteem in which central banking was held was - let us say - moderate. All he had to do was to make money easy to get. But poor Ben Bernanke comes upon the scene with everything running against him. Money has been too easy...for too long. People already have too much credit, too many debts, and too many expenses. But Bernanke - battling a forest fire with a woodpile - plans to give them more. We are already pulling up a comfy chair and buying popcorn; it will be fun to watch the show.

*** Whatâ�,��"�s wrong with El Paso? We donâ�,��"�t know. But according to Local Market Watch, itâ�,��"�s the cheapest major city in the United States to buy a house. The typical hovel in the Texas border city costs only $127,000. In Santa Barbara, California, by contrast, it will cost you $573,000.

We visited El Paso many years ago. We donâ�,��"�t remember it. But it couldnâ�,��"�t be that bad.

Advice to Daily Reckoning readers who live in Santa Barbara: Sell and move to El Paso. Put the left over money into gold. Let us know how it works out.

*** The French are getting fat. According to a study reported in the International Herald Tribune, if the French keep porking on the pounds at the current rate, theyâ�,��"�ll be as fat as Americans by 2020. The French are determined not to let that happen. Theyâ�,��"�ve begun a national campaign to stop the â�,��"epidemicâ�,� of obesity.

It is still rare to see a really fat person in France. In America, you see people who can barely walk everyday and think nothing of it. We feel sorry for them. The French are more judgmental, more demanding, and more critical. They are likely to turn up their noses. â�,��"Fat slob,â�,� they say to themselves - or even out loud. Even though health authorities advertise it as a disease, the average Frenchmen still regards it as moral and esthetic failing.

But why are the French getting fat? Probably the same reasons Americans got fat. More wives now work. They no longer have time to shop daily for fresh vegetables or to cook them properly. Meal times are shorter and less regular. People eat whatever is fast and convenient.

But that is just the strange and perverse nature of the pursuit of happiness in the modern world. People work harder, longer...so that they can enjoy the rewards of their labors and a better life. Instead, they get fat and die young.

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