Ben Bernanke seems to have what it takes to be a high-level functionary - he doesn't seem to mind wasting time.

So far, he has spent the last two days gabbing to Congress and feeding the old pols what they expected to hear: Yes, the U.S. economy is robust...blooming... getting healthier by the minute. Yes, the last quarter was a disappointment, but the recovery to stronger rates of growth should be swift and sure. And yes, further rate increases could be necessary.
The new Fed chairman even stooped to admonish the Chinese. They ought to loosen up, he said.

They had better loosen up, Senator Charles Schumer adds sternly. If they don't let their currency rise against the dollar, we should impose trade restrictions, quotas and sanctions!

The trade deficit, the senator figures (almost on target, we believe), "indicate a slow bleeding at the wrists economically for the United States." Schumer proposes not bandages or even a tourniquet, but immediate surgery. "To protect American jobs," he says, we have to force China to revalue its currency upwards, thus making exports to the United States more expensive. He must figure that more New Yorkers are likely to vote to save their jobs than are likely to vote to save Everyday Low Prices at Wal-Mart. He could be right about that, but what he is certainly wrong about is the way the world works. His hypothesis is that he can make Americans better off economically by passing a law. Many are the people who believe this. Many are the times it has been tried. And countless are the laws on the books already, designed to make people richer. But the instances in which passing a law actually made people richer are few, and those only worked because they undid other laws that made them poorer.

A politician hates to admit that there are things beyond his control. He prefers to think that the lights turn on because of his sage legislation. In his private imaginings, he even wonders if the sun only rises because of some act of Congress passed years ago and now forgotten. Of course, the last thing the voters want to hear is the truth.

"Look," he might say, if he were put under the influence of a truth serum, "it's not our fault the Chinese work for $1 an hour. It's not our fault they make things cheaper and better than we do. It's not our fault capitalists want to make things in China. And so, it's not our fault that real wages for most Americans are going down. And guess what else? There's nothing we can do about it. At least, nothing that won't make the situation worse."

That is not a speech we are likely to hear any time soon. Instead, as the effect of our Big Es become more widely understood, we are likely to find more and more attempts to stop them.

President Bush has already outlined a loopy plan to deal with the effects of higher Energy prices.

The Economy doesn't seem to pay attention; it seems, instead, to be headed toward its inevitable cyclical downturn. The yield curve is still inverted, and the home-building industry seems to be in the early days of a major slump. On Tuesday, KBHomes said cancellations might force a revision - downward, of course - in its estimates for 2006. Toll Brothers had already told us that orders were running 29% below last year. Its share price has dropped almost 20% so far this year. And mortgage applications are at their lowest level in three years.

Of course, today's press is still filled with whoopee. It tells us that housing starts soared in January - growing at their fastest pace in almost 33 years. But they don't tell us why this is good news for housing. For it isn't. Supplies of new, unsold houses are already rushing onto the market at the fastest clip in 21 years. Inventories are piling up. The paint on "for sale" signs is beginning to peal and blister. It looks like the last thing this market needs is any more new houses. But not to worry, dear reader. To try to stop the inevitable from happening, Ben Bernanke stands by ready to print up more money and, if necessary, drop it from helicopters

And while the Exodus of wealth and power from West to the East continues, Mr. Schumer will not be the only pharaoh to try to stop it.

China's economy doubled in size over the last 10 years. It is now bigger than Britain. India is booming, too. More than likely, the rapid growth in Asia will carry on, and more than likely, relatively if not absolutely, Mr. Schumer's voters will lose ground.

And what of the U.S. Empire? No empire lasts forever. No bubble remains un-popped. The only questions are when and how. The same is true for our Experiment with pure-paper money. The dollar may fascinate traders and speculators today. On some tomorrow, it will only fascinate historians.

But can't something be done? The question came up just the other day. "Well, if you were head of the Fed, (the speaker left out 'Mr. Smarty Pants,' but we know what he was thinking), what would you do?"

And there is the problem. What can be done? Nothing. If we were not human, we could resist the temptation to destroy our own paper currency. If we had no natural arrogance, no instinct to over-reach or no normal stupidity, we could avoid ruining the Empire. But we are what we are; we will do what we always do. From yin to yang...boom to bust...victory to defeat...the best we can hope for is to do it with grace and beauty and to enjoy the show.

Bill Bonner, back in London with more opinions...

*** Gold futures closed higher today, at $553.90 an ounce, its highest level since Monday, spurred on by a new threat of violence in Nigeria and continued tensions with Iran.

"The gold market has been looking for more uncertainty and we are seeing it this morning," Resource Trader Alert's Kevin Kerr, told MarketWatch today.

"Investors are looking at gold as more of a buying opportunity after its steep decline than a commodity preparing to crash, "and this is prudent," he said.

"After all nothing has fundamentally changed for gold and now technically we have had the correction we needed to see and new buying can pour back in."

*** Single women are buying more houses than single men. Owning a house used to be considered an unwelcome burden on an unmarried woman. It was not just the expense, but also the upkeep that kept women away. Last year, one out of every five houses was sold to a single woman. Women (and men) wait longer to get married. Then, the average marriage has about a 50/50 chance of enduring 'til death them do part.

What's more, men still die sooner than women, leaving widows who still need a place to live.

Women seem to like to buy houses. Men are more nomadic. We have no explanation for it; it's just an observation.

Next week, we go back to Paris. Elizabeth wants to buy an apartment, where we will live after we leave London this coming summer. Your editor would just as soon rent. Prices have gone up already quite a bit in Paris. Renting is marginally cheaper and gives us a little more flexibility; we could always simply up and leave, if we wanted. But that is precisely what Elizabeth doesn't want. She might take away our passports...if she could.

*** Syria announced that it was switching to the euro. Henceforth, it will hold its foreign reserves in the European currency.

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