â�,��"Record sales of sleeping pills,â�,� heralds a NY Times headline.

What worried us, we reported recently, was that we were the only ones worrying. Now, it looks like others are beginning to do their share. More and more of them toss and turn at night, according to the press report. No visions of cherry plums dance in their heads, we would guess. Instead, they are plagued by nightmares of a financial variety.

While we here at The Daily Reckoning worry for fun and profit, others fret for a more practical reason: theyâ�,��"�re going broke. Of course, we donâ�,��"�t really know that for sure. Nor can we know what tomorrow will bring them; for all we know, they really will get rich by leveraging their homes and going to work for Wal-Mart. After all, we donâ�,��"�t get to read tomorrowâ�,��"�s headlines any sooner than any one else.

But today, we make an exception. â�,��"Boom in Going Broke,â�,� is tomorrowâ�,��"�s headline on MoneyWeekâ�,��"�s cover story. We say that because we just wrote it.

MoneyWeek is a London-based magazine. Its editor is out this week, so we offered to help, promising not to lower the editorial quality. The lead story is on debt, or to be more precise, the effects of debt.

Let us pause here and check our five Big Eâ�,��"�s for context. Among them we find the worldâ�,��"�s Experiment with paper money. Hardly had the experiment begun in 1971 when it looked as though it would soon be over. By the middle of the decade, consumer prices in America had begun to soar. â�,��"Inflationâ�,� was in almost every financial headline. We remember friends from the time who were hoarding pennies to capture the copper content. Silver dimes were precious. Desperate, President Nixon did something so lame and stupid it had not been seen in a major empire since the days of Diocletian - he imposed wage and price controls! Naturally, these made the situation worse.

Finally, it took big Paul Volcker to step into the Fed and impose order. It was into that nascent order that our recently retired, dearly beloved and not-yet-forgotten Alan Greenspan crept. Like a sailor on leave sneaking into the sultanâ�,��"�s harem, our man Greenspan found himself in paradise. He cast his eyes left. He cast them right. Everywhere he looked he saw something to make his mouth water: falling rates of inflation, falling interest rates, and rising prices for stocks and bonds Unbelievably, gold was going soft and declining in price, but his own currency, the pure Experimental paper money, was swelling with every passing moment. The dollar was going up!

As long as the dollar stayed up, the chairman of the Fed could enjoy himself. All he had to do was not get caught. He could emit as much new money as he wanted. Other nations had to follow his lead. They either had to match it, or their own currencies would become expensive and their export industries would suffer.

And so, the whole world was caught up in the grand experiment, and a good time was had by all.

We have not checked, but we wouldnâ�,��"�t be surprised to find that sleeping pill sales are strong here in Britain, too. Yesterdayâ�,��"�s headlines told of record bankruptcy rates. The figure topped 70,000 last year, of which, 45,000 declared bankruptcy under a new, gentler legal proceeding.

â�,��"The debt that is feeding this new boom market [in bankruptcy] is staggering,â�,� Brian Durrant tells us in MoneyWeek. â�,��"British consumers have run up two-thirds of all credit card borrowing across the entire European Union. Outstanding household debt now stands at a record high of 1.13 billion pounds (about $2 trillion), well over 140% of post-tax annual income.â�,�

Durrant even recommends shares in a company that makes money by helping people go broke. We thought that was what all finance companies did in the first place, but Durrant is way ahead of us. Heâ�,��"�s not looking at lenders, but at companies that actually help to organize bankruptcy reorganizations and workouts.

Which made us think: Who really pays when people go broke?

We guess that the popular vision of money extinction is as puerile as the popular vision of money creation. â�,��"Easy come, easy go.â�,� Surely, if the Fed can conjure money â�,��"out of thin air,â�,� a bankruptcy court can make it vanish into thin air too, right?

In Britain, America, and much of the rest of the world, bankruptcies, seizures, foreclosures and workouts are bound to increase. But whither goes the money? Does it go to money heaven? Does it just get written off of balance sheets as easily as it was once written on? If we had a million dollars and we lent it to the U.S. government (buying a U.S. Treasury note), we are still a millionaire. And when the Department of Defense gives the money to a hustler who offers advice on how to kill people, now the world has two millionaires. And then, the fellow buys a $2 million house with a $1 million mortgage. Now, the guy who sold the house also has more money (he bought it for only $1 million), and all of them start throwing money around all over town. We began with one guy with $1 million. Now, we have three millionaires, at least, all spending money at a jumped-up pace.

Is there no end to it? And what happens when the hustler loses his contract and cannot pay his mortgage? What happens if his asset - the house - declines in price? Will that unpaid mortgage simply vanish, no harm done?

We are about to find out, dear reader.

*** Here in London, the property market has sprung a distinct leak. But still, there are places where the good earth might make a healthy addition to a diversified portfolio, only youâ�,��"�ll have to turn your eyes far, far south of El Norte...to the land of sultry tangos and solitary gauchos.

Our friend, Barb Perriello, writes to us that great investment opportunities still abound in Argentina for the careful investor. In Buenos Aires, capital of the fiery dance, property prices in the best areas are no longer sizzling, but they are still a tenth of comparable prices in Paris or London...and in the more bohemian neighborhoods, bargains can still be had.

And there are many other possibilities. With the mushrooming of Chinese demand for wood, Argentinean hardwoods, which grow nearly 65% faster than hardwoods here and re-sprout on their own after harvesting, look like they might make a recession-proof investment.

Or there is bargain wine terroir close to Mendoza, Patagonian ski country bungalows, or in nearby Uruguay, the glamorous beaches of Punta del Este, the Latin Monte Carlo, to choose from. With the peso still weak as the country pulls itself out of a slump - "briskly," according to Credit Suisse - your money might be more secure south of the Rio de la Plata than north of the Rio Grande.

*** Gold was hit hard yesterday. Weâ�,��"�ve been waiting for a correction for such a long time weâ�,��"�ve forgotten what we expected the price to correct to. Below $550? Below $500? We donâ�,��"�t know how low the price will fall, but when it gets there we hope we remember to buy.

*** Hereâ�,��"�s an interesting tidbit to get you in the mood for tax season...a recent report conducted by the federal National Taxpayer Advocate Service shows that the IRS froze 120,000 refunds last year, citing suspicion of fraud - and never let the taxpayers know why they didnâ�,��"�t receive their refund.

The taxpayers in question? Working parents and those who applied for the earned-income tax credit, two groups of people whose median income ranges between $13,330 and $11,956. To add insult to injury, the report showed that 80 percent of these people in question deserved either a full or partial refund of the amount they had originally claimed, which they received over eight months later.

When asked for comment, IRS Commissioner Mark Everson said that the agency would reconsider stalling tax refunds without notifying filers. And, he continued, the IRS would â�,��"minimize the number of taxpayers whose refunds are frozen unnecessarily.â�,�

Geez...thatâ�,��"�s nice of him. Of course, Steve Forbes, would counter that this problem could be â�,��"minimizedâ�,� if the Flat Tax were to take effect. Because there would be no IRS. And because, as he outlines in his latest book, The Flat Tax Revolution, he proposes that no one who makes less than $36,000 a year would pay any tax at all.

â�,��"When we met in his well-appointed offices on 5th avenue in NYC,â�,� writes Addison about Steve Forbes, â�,��"he was visibly flummoxed about the confusion over this part of his proposal. He said his 1996 bid for the presidency was torpedoed by then governor of New Hampshire, Steve Merrill.

â�,��"Mr. Merill apparently went around giving speeches to the effect of: â�,�˜Sure you wonâ�,��"�t pay any taxes under the income level of $36,000 a year, but once you make $37,000 youâ�,��"�ll get whacked with a $6,000 tax bill.â�,��"� But thatâ�,��"�s not how the proposal works. Under Steveâ�,��"�s plan you would only be taxed on the money you make above and beyond $36,000. Effectively giving everyone a tax holiday on the first $36,000 of their income.â�,�

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