â�,��"Every dog has his day,â�,� we said to Elizabeth.

We were trying to explain a minor triumph. Our book, Empire of Debt, was named by The Economist as one of the most important financial books of 2005. But when a husband tries to explain his successes to his wife, his arguments are limited. He cannot attribute it to genius, or even to virtue. She knows it isnâ�,��"�t true. All he can do is bark...and roll over.

Woof!

When David Brooks writes in the NY Times about what great people NY Times readers are and how the United States is the worldâ�,��"�s rising power not China, nor India, almost no one laughed...or rolled over. Instead, they perked up their ears and wagged their rear-ends; they liked the sound of it.

But every four-legged empire has its day, too.

The latest employment numbers reinforce this idea: just under one in 21 people are without work.

True: In America today, more people are working more hours than ever before.

False: They are better off for it.

We thank our dinner companion last night, financial strategist Simon Hunt, for pointing something out to us. He drew our attention to Elizabeth Warren, writing in Harvard magazine, who shows that the median family had only one wage earner in the early 1970s, who earned $41,670, in todayâ�,��"�s money. Out of this, he or she paid the familyâ�,��"�s regular, more or less fixed, expenses: taxes, mortgage payments, health insurance, car and gas payments, etc. Typically, these costs rose to 55% of monthly income. This left the family $1,630 to spend on food, clothes, entertainment and so forth.

Now, 30 years later - after the Reagan Revolution, the fall of the Berlin Wall, the disappearance of the last vestiges of the gold standard, and the biggest financial boom in history - the median family has two wage earners who, between the two of them, working nearly twice as much as before, earn around $73,770. But fixed costs have risen to 75% of income, leaving only $1,509 in â�,��"discretionaryâ�,� spending.

Is there any doubt that U.S. economic progress is a swindle?

Itâ�,��"�s not that weâ�,��"�re complaining. The U.S. economy has been good to us. We donâ�,��"�t want to be ungrateful. Itâ�,��"�s thanks to the U.S. economy that we can afford to live in London and put our money into non-U.S. dollar assets! But being grateful doesnâ�,��"�t mean being blind. Nor does it mean forgetting about those other dogs whose day has not come.

The people who suffer the swindle are people who are stuck in the middle of it. For example: American couples, both working - with a large mortgage on a small house - toward the short end of the income stick. Those people, in the bottom 10%, have seen their incomes fall by nearly 2% in the last two years. These poor stiffs now work night and day...and earn less money. Their quality of life must have fallen sharply over the last generation, for they not only have less money, but they also have much less free time. They are the people who have been teased and trapped into carrying debt loads that crush them, who make mortgage payments with minimums that are now being reset, and who pay usurious rates on every dime they borrow.

Of course, it is none of our business, but we guess that even their health has deteriorated. With no one at home to prepare proper meals and no time to exercise, they eat poorly, get fat, and die young.

Again, we donâ�,��"�t mean to appear ungrateful. This weakness in American incomes is not exactly the fault of the U.S. economy itself or its working class lumps. All the worldâ�,��"�s developed economies are being hounded by competition from overseas, where GDP growth rates are three times those of the United States, and where real wages doubled in the last 10 years. India, we read today, has 27 billionaires with a collective net worth of $106 billion. These trends are not likely to come to a halt anytime soon.

Americans work harder and longer than any people on Earth, says Brooks. They expect to rule the world. Alas, people donâ�,��"�t always get what they expect, or even what they think they deserve. They get what theyâ�,��"�ve got coming.

Every dog has his day, we point out again. But the U.S. Empireâ�,��"�s day was probably yesterday.

*** Gold and oil are correcting. Simon Hunt expects the oil price to firm in the second half of 2006, after first falling to $45-50 a barrel. By the end of the year, he thinks oil could be trading at $80.

*** Another correction: In Tuesdayâ�,��"�s issue, we stated, â�,��"It is the yield curve, now inverted, which means that a borrower can score cheaper money in the short term than they can in the long term.â�,� We meant to say, â�,��"A borrower can now score cheaper money in the long term than they can in the short term.â�,� We apologize, dear reader.

*** Byron King, writing from Pittsburgh, tells us that the oil problem is not going away.

It is getting worse:

â�,��"Princeton Geology Professor Ken Deffeyes has come out with a new statement about the timing of Hubbert's Peak. According to his calculations, the world passed the geological peak of its oil production in December of 2005. Although I suppose that there may be some days or weeks in the future in which the world produces a bit more oil than on an average day of the past, I also think that it is time to say to all: â�,�˜Welcome to the future.â�,��"� In his own words, Prof. Deffeyes says, â�,�˜I can now refer to the world oil peak in the past tense. My career as a prophet is over. I'm now an historian.â�,��"�

â�,��"I am sure that you all understand that Peak Oil is not just a geological phenomenon. Sure, it will be necessary to make technical changes in the ways that mankind derives and consumes its energy. There will be, absolutely, less oil and gas. Like it or not, there will be, absolutely, more conservation of a voluntary nature, and much more conservation of an involuntary nature as well. The term â�,�˜demand destructionâ�,��"� will take on entirely new meanings. We will probably use more coal, nuclear, biomass, solar water heaters and electricity panels.

â�,��"We will build different buildings, live in different arrangements, and value an entirely different set of skills and ethics. We will be colder in winter, hotter in summer, and probably hungrier more of the time, if not most of it.

â�,��"In the 20th Century, it was said, â�,�˜distance was conquered.â�,��"� In the 21st Century, distance shall have her revenge, and the world will become a much bigger place.

â�,��"So, Peak Oil will profoundly change life as we know it at the tactile and material level, but Peak Oil will also be a psychological phenomenon. Most of what is familiar will change - probably dramatically and certainly rapidly, as mankind (at least, the â�,�˜modernizedâ�,��"� form of the species) reverts to a much lower average state of available energy. How is one even to begin to think about this?â�,�

The drastic impact the worldâ�,��"�s oil supply will have on the economy is inevitable.

*** The oil market is slippery with uncertainties. What if the United States attacks Iran? What if the world goes into a recession? What if technological breakthroughs reduce the need for oil...or what if new supplies are found? (More on this below...)

Gold, by contrast, stands solid. It is never consumed, and its usefulness derives from the simple fact that it is always there. The worldâ�,��"�s supply increases about 2% per year. Neither ancient alchemy, nor modern science has ever found a way to counterfeit it. Nor has it ever been replaced, at least not for very long, by substitute, ersatz forms of money.

Generally, over the past 200 years, you could buy all the Dow stocks for the equivalent of five ounces of gold. Back in 2000, when the ratio had gone haywire â�,�“ it took more than 40 ounces of gold to buy the Dow â�,�“ we guessed that it would go back to more familiar territory as the years advanced. Now, it takes only about 20 ounces of gold to buy the Dow.

We have been waiting for the Dow to go down to bring itself more in line with gold. So far, the Dow has resisted. Of course, there is no law that says it has to go down. Stocks could remain where they are, while the general price level rises - especially the price of gold. Gold could rise to $2,000 per ounce â�,�“ leaving the Dow unchanged â�,�“ and still reassert the traditional relationship.

Our old friend, Marc Faber, reminds us that stocks can stay flat for a very long time. He says, â�,��"At the market low in 1921, the Dow Jones Industrial Average was no higher than it had been in 1899 â�,�“ 22 years earlier â�,�“ while nominal GDP had increased by 383% and real GDP by 88%. Similarly, by August, 1982, the Dow Jones Industrial Average was no higher than it had been in April, 1964, and was down by 70% in real inflation-adjusted terms.â�,�

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