Oh my...666...the mark of the beast is on us today. It is the 6th day of the 6th month of the 6th year of the 3rd millennium.

We don't know what this portends, but yesterday Ben Bernanke slouched over to Congress. He must have worn lifts. For somehow, he managed to remind the world of old Paul Volcker. We remember when the giant Paul walked the earth over at the Fed. It was a different world back then, with consumer prices rising at double-digit rates and interest rates over 15%. But Volcker stood up and did what a Fed chief is supposed to do: he stopped inflation.

Even recently, speaking to an audience that included an intrepid reporter for The Daily Reckoning, Volcker said he was surprised the country had gotten away with such a long period of credit expansion...without setting off a new round of consumer price inflation. He wondered out loud how it came about and when it might end. But he, like the rest of us, had no sure answer.

And now cometh his successor, Ben. Speaking in public yesterday, the former head of Princeton's economics department sounded if not like an inflation fighter, like an inflation taunter. Inflation, he said, was "unwelcome." Not exactly inflation-fighting words, but it was enough to lead investors to fear that another 0.25% rate increase was coming. Stocks sold off, taking the Dow down by nearly 200 points.

Meanwhile, the European Central Bank seems to have found a touch of Volckerismo, too. "ECB rate hike done deal," says AFP.

"Golden age of liquidity is drying up," adds the International Herald Tribune.

"It turns out that it is not just money that makes the world go round. To cash, add credit and related financial instruments. That equals liquidity, the lifeblood of financial markets from Helsinki to Hong Kong.

"Liquidity surged in the past decade, fueled by relaxed monetary policies of central banks, globalization, new technologies and such exotic financial instruments as derivatives. They in turn drove down interest rates and bond yields and encouraged investors to pump more money into riskier assets, propelling stock markets."

But now...

"The era of under-priced capital in constant supply is ending," adds David Roche, a financial strategist in London.

Our guess is that we will see the results of this fundamental shift toward tighter money over the next decade or two. We also guess that trying to fight this trend by selecting stocks carefully will be like flossing your teeth before the battle of the Little Big Horn.

If we are right, asset prices are going down no matter how much financial hygiene you practice. And it will mean, among other things, fewer Fed chiefs on the cover of Time magazine and fewer U.S. Treasury secretaries from Goldman Sachs. Speculation will cease to pay. In fact, maybe our next U.S. Treasury secretary will come from the legal profession, where he will have made his reputation in Chapters seven and 11.

It was cheap money, as well, that fueled America's property bubble. Now, that bubble seems to be losing gas.

From Las Vegas comes news that takes our breath away. There were 2,992 houses for resale in the city in 2004. The following year there were 10,493. And this year, there are 17,121 - far more than five times as many as there were two years ago.

Including new houses, there are some 20,000 dwellings for sale in Las Vegas right now. And they are still putting them up, with hundreds of new projects still being built out and more than 500 sales offices open for business.

Meanwhile, over to the right, on the Florida coast, comes news from our own family sources that real estate is getting hard to sell.

We recall a realtor quoted in the New York Times only a year ago:

"South Florida,'' he said, ''is working off of a totally new economic model than any of us have ever experienced in the past." Explaining how limited supply and unlimited demand would create a situation in which prices rose forever.

Many people thought so, but now it looks as though this economic model was not so different after all.

"Yes...we missed the top," reported our source yesterday. "Now, we're definitely on the downhill slope. We reduced the price twice already. We're getting plenty of lookers, but no takers. Basically, we'll sell for whatever we can get at this point, even less than we paid two years ago."

And thus we see, dear reader, something interesting. Inflation may be 'unwelcome" in the dewy eyes of the economics professor who now rules the Fed, but the lack of it is terrifying to the wide open peepers of Speculation Nation.

"In a nutshell," explained Joseph Quinlan, chief market strategist at Banc of America Capital Management, "the era of easy and abundant global liquidity is coming to an end - a change in the global monetary backdrop that usually inflicts pain on those asset classes highly dependent on easy money."

But all of America is now highly dependent on easy money. The U.S. government relies upon it to pay for its bread and circuses. Wall Street needs it to keep stock and bond prices elevated. The lumpen need it, too; their house prices will fall without it. And when housing falls, the whole kit and kaboodle comes down with it. The U.S. economy will be in recession within six months.

We suspect that is it Hank Paulson's job to let the Fed chief know.

*** After George W. Bush, what next? Hilary? Al? Jeb?

As time goes by, the Law of Limp decrees that more and more voters will go lame. Government takes two steps forward...and only one backward. Government hiring, spending, boondoggles, wars, giveaways, and promises hit the lumpen in the knees. Gradually, fewer and fewer of them can stand up straight. Instead, they are propped up by money they didn't earn and fed with food they neither grew nor paid for. And finally, the government itself comes to resemble these limping patriots - unable to stand on its own two feet.

H.L. Mencken describes it in a different way: "As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron."

*** How 'bout that gold market? Gold went up again yesterday to $648. Darn! We would have liked something more definitive...a correction below $600, at least. Now we are uncertain. Is the correction over? Is this as low as gold will go? Or was this just a stepping-stone toward a much more severe correction, perhaps below $500? We wish we could tell you.

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