There's something big that hasn't yet made the headlines. Of course, it hasn't made the headlines because it hasn't quite happened yet.

But before we explain, we return to what is making the headlines.

"The outlook both in the US and Britain abruptly changed," writes James Bartholomew in the Telegraph, "The latest inflation figures in the US had been higher than most people expected and, in Britain, house prices seemed to be rising again."

Mr. Bartholomew was attempting to account for recent developments in commodities and emerging markets, which have both fallen sharply, echoed by smaller drops on Wall Street and London. Faced with higher inflation numbers - signaled by spikes in commodity prices - investors have come to believe that central banks might raise rates. Higher interest rates in today's deeply indebted world would cauices - it is not looking so good for the speculators. Except for the Big Daddy of all the world's speculators: Henry Paulson. Mr. Paulson has just landed the job of secretary of the U.S. Treasury. Perhaps no company has made more hay from ZIRP than Goldman Sachs. Maybe no one understands the speculation economy better than its CEO Paulson. But we digress...more about that below.

What kept the U.S. housing boom going was cheap credit, says Evans-Pritchard. And what keeps cheap credit going is ZIRP and the U.S. version of ZIRP: Credit Below the Cost Price of Inflation, or CBCPI. The Fed has taken 16 baby steps toward "normalizing" rates. No longer can you get free money in the United States. And now, the Japanese, who invented cheap credit, are set to shut down ZIRP, too.

All that is left is for the Europeans to come along. And that is in the works. The ECB has warned: "there are immediate inflationary risks emerging." They went on to say, "there's no dispute that a further tightening of monetary policy is needed."

And so, the Europeans Easy Money Policy, or EEMP, may also be coming to an end. With no more easy money, you can expect the bubbles to end eventually - as all bubbles end...badly.

*** Why Hank Paulson? The Law of Limp commands it.

The Law of Limp really only describes the ineluctable process of degeneration. People rush to pleasure, and retreat to respectability with a limp only when they have to. The resulting bias in favor of hedonism over virtue dooms us all. A man eats too much and vows to go on a diet. But while he is quick to pick up a burger, he is slow to put it down. A householder takes giant strides into the mall to buy his new home entertainment center. But he is content to pay for it in baby steps of minimum payments on his credit card. So does this bias wreck a whole economy and a whole empire.

In the beginning of the American republic, the job of Treasury Secretary was typically given to an anonymous man of probity who could count accurately. His job was to make sure funds were taken in and disbursed properly. At the end of his term, he was expected to leave the nation in at least as good shape as he had found it.

Later, as the nation became a major industrial power, the job was given to proven industrialists - men who had shown they knew how to run a major business and make a profit.

And then, as the rot set in, so did the parasites. Often, the Treasury Secretary was a political hack whose real role was not to balance the books, but to lie about it. The last half of the 20th century rarely saw balanced accounts in Washington or a Treasury secretary willing to own up to it. Instead, his labor was spent moving projects "off budget" and cooking the books to look less awful than they really were.

And now, we are in a new stage. We have not a productive economy, but a speculative economy. We have a Treasury secretary to go with it. Goldman's first-quarter earnings report shows that of the firm's total intake of $10.34 billion, $6.88 billion was made largely from proprietary trading and investments. In effect, the firm is a hedge fund crossed with an investment bank. As CEO, Paulson's share of the take was $38.3 million in salary, stock, and options last year alone. And his net worth is estimated at $500 million. But we do not grudge the man or the cream he has licked off the platter. As leader the speculative economy, who else would you want except the leading speculator?

When he interviewed Paulson for the job, we can guarantee you George W. Bush never once mentioned that part of it would be to "balance the books." Nor was there any further discussion of "cooking the books." The kitchen work is now done long before it reaches the top. It's routinely done by wonks and wigglers with GS ratings on their pay slips and sadistic tendencies in their hearts. They stretch the numbers on the racks like medieval inquisitors working on heretics. When they're finished, the figures will break down and babble whatever dogma is current.

No, Mr. Paulson was not hired to balance the books or lie about them. He was hired for the same reason the Astros hired Roger Clemens, to give the team a lift. In the game of speculation, Mr. Paulson is the Babe. Every time at bat, he aims for the bleachers. He leaves his team, the Goldman Sachs, in top form and at the top of the league, in order to help keep Speculation Nation in the game. He, perhaps better than anyone, understands the significance of ZIRP, CBCPI, and EEMP.

Keep the money spinning - that will be his task. There's probably no one better at it.

*** Most economists go to Argentina or Zimbabwe to offer advice. We do so to learn something.

We have not been to Zimbabwe, but we have a feeling that now is the time to go. The country has the highest inflation rate in the world - at about 1,000%. At that rate, a dollar earned in January is worth about 10 cents by December. A few years of this and you will probably find some bargains.

Today, Zimbabwean monetary officials rise to the challenge in the typical way: they add zeros to their notes. The latest offering from the Bank of Zimbabwe is a bill with 100,000 printed on it. We have not seen it, but we imagine it is very impressive. Five of them should get you a cup of coffee in a Starbucks in the capital city. That is, if there were a Starbucks in Harare...and if it had any coffee. The Daily Mail reports, "acute shortages of food, hard currency, petrol and imports."

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