"You cannot step twice into the same river, for other waters are continually flowing in," said Heraclitus, circa 500 BC.

Heraclitus, we suspect, would have been astounded at the spectacle of the United States in 2006 AD. Up and down the imperial nation, people insist they can step into the same water, not only this year, but the next year and every year after. They persist in believing that nothing can possibly change...especially for the worse. After all, they reason, American jobs have always paid the most, America's industry and science has always led the world; the American dollar has always been the world's reserve currency. It has always been thus. Will it not always continue to be so?

But, our theme this week, as it has been for many, is the delusion of thinking that change - or history - comes to a shivering halt just because we want it to. With two billions hungry workers in Asia eager for a job, Americans and Europeans must know by now that new waters are flowing in to the river - every second.

But jobs are not the only things in flux today. Other things are changing rapidly too - pensions, retirements, savings...and even life expectancy. We imagine that the landscape is going to look shockingly different on a number of fronts in the few next decades, whether we want to believe it or not.

At any rate, it seems that gold believes it. It has been warning us about something. But what?

According to an expert quoted in the Financial Times last week, the supply of gold might be peaking out...just like oil.

Yes. Mine production is beginning to flatten out and decline, explains the expert. There's only so much gold near the surface. Most of the world has been well explored; there's been no major gold discovery for many years. The low hanging fruit has already been picked. Plus, it costs a fortune to start up a mining operation. Result? The supply of newly mined gold may go into decline - just as the supply of credit, cash, and paper-based capital is exploding. Maybe this is what the gold market is telling us? Or maybe it is warning of inflation...or of recession and defaults? Or, perhaps the dollar really is on the verge of collapse.

We don't know exactly what it is saying, we don't speak the language, but gold is definitely trying to tell us something. Yesterday, the metal screamed; the price of June contracts ran over $600.

We bought gold from under $300 up to $500. Each time, we set a target price...and waited for the price to dip below it before buying. We felt smart. Then, the price rocketed over $500 and we couldn't keep up with it. We waited for the correction to come. The price should have dropped below $500. When it didn't, we finally moved our target price to $550...and even that was too low. Gold just didn't want to go down. Now we feel stupid. A hundred dollars was added to the gold price while we sipped our tea and watched the world's leading economy degrade, degenerate and decline. Didn't we know the dollar was doomed? Didn't we know that gold had to go up? Didn't we say so over and over again?

Yes, but we still don't know exactly what gold is telling us. We know gold is on the move but we don't know how far or how fast it will go. We can only guess.

Our guess is that gold is looking ahead and seeing a number of things it doesn't like: recession in America, defaults, and a slow-down in the world economy. Normally, these things wouldn't cause the price of gold to go up...but this really is a new era in many ways. Never before have so many people in America been so vulnerable to an economic downturn. And never before have so many foreigners held so much U.S. debt. Our guess is that the dollar and the U.S. economy will turn down together, like the two corners of a mouth as it changes from a smile to a frown...

But what to do about gold now? Could it still correct back to $500? Or will it go to $1,000 or $2,000 first?

Oh, dear reader, ask us something easier! We don't know where the price will go in the weeks and months ahead. But we're willing to guess about where it will be a year or two from now - higher. So, you can try to buy gold smartly - on dips - and take the risk of feeling stupid, when the market doesn't cooperate. Or you can just buy it. Either way, the more you accumulate, the happier you're likely to be a few years from now.

Bill Bonner, with more thoughts, opinions...etc...

*** "The value of a thing varies inversely with its availability," we told our audience in Paris on Monday night. We were giving a little speech at the stock exchange - to a group of dear readers (yes, the DR is translated into French).

"The trouble for central bankers is age-old and insoluble," we continued. "They can control the quantity of the currency...or its quality, but not both at the same time."

And then we made our point: "Since Mr. Greenspan let the quantity of dollars run wild, his successor, Ben Bernanke, will be haunted by quality concerns."

"But isn't Europe pretty much in the same boat?" one of the attendees wanted to know.

"Debt levels per capita are not that much lower in Europe...."

"It's not the same at all," replied colleague Philippe Bechade. "The debt numbers are not that different, but we don't have so many people living so close to the edge. We never had a mortgage refinancing boom. We never had a consumer spending boom. And now we have one thing that Americans don't have. We have savings. In fact, many economists worry that we save too much. Our economy grows slowly...but it grows.

"And it doesn't seem to be in any danger of a debt-driven collapse. Part of the explanation for this is that the ECB [the central bank of Europe] did not favor quantity over quality...at least not to the extent of our American friends. Many we just have more history of currencies going bad. But the ECB has always tried to preserve the value of the euro...even if it means high unemployment."

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