What is an old man but a pile of fading leaves? Like pages from a diary, falling off along the way. Every day the pile grows bigger...while the tree becomes more naked. More fragile. Like old, weathered wood...with withered limbs. Finally, the last leaf falls...and he has nothing but his memories.

This morning, as our feet stirred up the piles of dry leaves along the Champs-Élysées, it reminded us of something many, many years ago. We were only ten years old and had been working in the afternoon... raking up a huge pile of leaves. We were working with a girl from down the road, and then, on a crisp autumn evening with a full moon overhead...we splashed into our pile and lay there looking up. It was there that our heart first leapt from its hole - and headed to the heavens...

Along the Allée Marcel Proust, leading from the Champs-Élysées to the American Embassy, the bums were rising from their benches. At least two of them seem to live permanently in the park. One has taken up residence with a group of suitcases spread around him. He is a middle-aged man...not bad looking...with no outward sign of derangement. Perhaps he used to run a hedge fund...or made his living installing granite countertops. We read in the paper that California alone expects to lose 100,000 jobs in the construction field over the next two years. Maybe he took his retirement early. This morning, he stood in a blue bathrobe, poking through one of his valises as we walked by.

The other full-time resident of the park is a fat woman, also middle-aged, with jet-black hair. She was sitting stark still on her bench in a black leather coat. Only her eyes moved as we passed.

What happened to her, we wondered?

Yesterday, the Dow came close to an all-time high. It provoked another memory - of the late '60s. In 1966, the Dow registered a high; it had been rising since the Korean War. Then came a correction. But two years later, the Dow mounted another peak...in nominal terms. In real terms, however, it failed to beat its previous high. Adjusted for inflation, the bear market had already begun...and it continued for the next 16 years - until finally changing direction in August of 1982. Then, for the next quarter of a century, came the greatest bull market in stocks in history.

A dear reader wrote in with some memories of his own of that period. He had bought gold in 1990 at $400 and held it for the next 16 years...until today, that is. But he noted that he would have gotten a much better return by buying oil stocks. He wondered: was gold really such a good investment?

That is the trouble with history, dear reader. You usually don't have enough of it. Squinting at any particular patch is likely to give you more wrong ideas than right ones.

Gold is certainly not an investment for all seasons. It is for the wintertime alone, when ice storms make the trading roads slippery...and cold returns make the markets disagreeable. In the dark, wintry years of the '70s, gold soared from $41 to over $800.

Those were the days; we recall them well, when investors' eyes were glued to money supply figures. Even a slight rise in M3, beyond what was expected, would send buyers rushing into gold and sellers diving for the Treasury market.

But now, investors pay no attention to M3. And even if they wanted to, they couldn't; the feds have stopped giving out the numbers. And here we have to hand it to the government. They're clear about what business they are in - defrauding the public. And they know how to go about it.

The problem with the usual swindle - printing up more currency and slipping it into the economy as though it were real - is that people catch on fast. "Inflationary expectations" grow...and then the counterfeit dollars lose their purchasing power. And the next thing you know, the economy slumps, as investors, businessmen and consumers realize they've been had.

It was in order to head off inflationary expectations that the Fed began increasing interest rates two years ago. But, at the same time, the feds knew that they also needed inflation to keep the economy bubbling. So what did they do? According to Adrian Van Eck, as reported by Richard Russell, while increasing interest rates very publicly, the feds greatly increased the money supply privately...and then stopped publishing the M3 numbers altogether to cover it up. Van Eck calculates that about $1 trillion dollars of additional money has been introduced since mid-'04. Well, now we know why the economy hasn't already turned down...why gold is over $600 again...and why the Dow is near its all-time high!

Poor Bernie Ebbers went to prison for 25 years for misleading and handful of investors. How many years will Greenspan and Bernanke get for misleading the entire nation?

But back to history...and our distorted memories of it.

It was only in that very same, aforementioned 1982, that the sun finally peeked back up over the horizon and ended winter. And then, gold fell for two decades, while stocks mounted one of the greatest bull runs in history
- from under 1,000 on the Dow to over 11,000. Today, the Dow is still there...six years later.

The problem is that most investors today have no more market memories than what they get from reading the papers from a quarter century of bull market. Today's investors have no use for mittens or scarves; as far as they know, it never gets cold in the investment world. They look back at the last 25 years, and as near as they can tell, stocks are always 'for the long run,' and housing 'never goes down'... except maybe here and there, once in a while.

They wonder why anyone would buy gold - except as a speculation - and can't imagine why put options exist...unless they are to amuse bored hedge fund managers.

But day-by-day, the leaves continue to fall. Housing prices are dropping. Foreclosures are rising. The Russians are pulling their huge new Arctic gas field away from U.S. companies in retaliation for sanctions imposed by the Bush administration. Gold is rising. Oil is up to $63. Hedge funds are going bust.

Pretty soon, all the leaves from the bubble tree will be on the ground...where we can kick them...

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