“The Spanish property market is collapsing!” announced colleague Merryn Somerset Webb this morning.

Our American readers will wonder what the heck Spanish property has to do with them. Ms. Webb explained:

“Only three countries in the world have a serious subprime problem - the U.S., Britain...and Spain. But no country has taken more advantage of low interest rates to build more houses and sell them at prices they don’t deserve to more people who can’t afford them. They just built too many new houses...

“One building company had gone up 1,000% since it listed only a few months ago. It got whacked yesterday...so did the other builders.”

Today our question is, “How much is too much?”

Many people thought you couldn’t build too many holiday homes in Spain...just as you couldn’t build too many hotel rooms in Las Vegas...or pay too much for Chinese stocks...or pay too much to hedge fund managers...or have too much money in private equity...or too many dollars at large in the world financial system.

Since the expression ‘too much’ has been extant in the English language for a very long time, we assume it must mean something. What we’ve been waiting...and waiting...and waiting...to find out is what it means in financial affairs.

The latest figures show that hedge fund manager Jim Simons earned $1.7 billion last year. Is that too much? He takes an unbelievable 5% of his clients’ assets each year, in payment for his services - plus, and even more unbelievable, 44% of profit. Is that too much?

Readers will remark that his $6 billion Medallion fund rose 84% last year (Simons is good with figures). Investors came out ahead more than 40% even after paying the outrageous fees.

Or what about Ed Lampert or Kenneth Griffin, each of whom also earned more than $1 billion last year. Was that too much? We don’t know. But we came back from our vacation, opened our eyes, and thought we saw ‘too much’ everywhere we looked.

Money streams into new investment funds. Even Brian Hunter, who lost $6 billion trading energy for Amaranth, is starting up a new fund. And John Arnold, formerly of the Enron energy-trading desk, earned more than $240 million last year - partly by taking the other side of Hunter’s trades.

Over on the Las Vegas Strip, Goldman Sachs (NYSE:GS) is buying Carl Icahn’s four casinos...for $1.3 billion. Is that too much? Again, we don’t know; but when it comes to excess, what Las Vegas doesn’t already know probably isn’t worth knowing. The place had a total of 35,000 hotel rooms in the 1970s, which seemed like too many to us. Now, it has five times as many - 151,000 - which seems like more than enough.

But ‘too much’ has dropped from the English vocabulary in Nevada...and perhaps the rest of the world, too. The Venetian alone is adding 3,200 new rooms. And over at the old Stardust Casino, the owners judged it too small, so they blew the place up last month...to build a new development, Echelon Place, with more than 5,000 rooms.

Meanwhile, MGM is spending $7 billion putting up the City Center development - the most expensive development in Las Vegas history. Isn’t that a little too much, dear reader?

Who knows? All we know is that throughout the world, a great boom is on.

*** The Shanghai stock market has gone up 37% so far this year. The Chinese cache of dollars has soared; at the present rate, China should add another half a trillion to its reserves this year. Everyone seems to want to own a Chinese bank...recent Chinese bank IPOs found buyers willing to pay twice the P/Es of other large banks in developed countries - despite the fact that Chinese banks offer investors notoriously vague, ambiguous and confusing information on their activities. Still, investors rush to get in before they blow up.

The Dow hit a new record high yesterday - just shy of 13,000. Is that too much?

It was too much for us before it got to 10,000. Have we simply missed an opportunity? Or was the opportunity too risky for a prudent investor? And is it too risky now to buy into the Las Vegas boom?

Again, we don’t know. We don’t know how much is too much. But unlike most investors, we’re convinced that ‘too much’ is out there somewhere; and it may be behind us.

*** The American Century began in the beginning of the 1900’s, when the United States passed Great Britain to become the world’s number one economy, and the U.S. capital market grew to be the largest on the planet. Germany was hard on America’s heels, then, although the Teutonic competition - along with the rest of Europe - was buried in the trenches of World War I. That left the United States as undisputed numero uno.

Toyota (NYSE:TM) surpassed General Motors (NYSE:GM) in worldwide sales in the first quarter...after GM had dominated the world auto market since it passed Ford in 1931.

But last month, still early in the 21st century, another milestone was passed. European capital markets - including Russia - are now bigger than the U.S. capital market. “We may no longer be living in the American century,” writes Simon Pickard.

No, dear reader, it’s probably not the American Century. Other economies are growing faster. Other peoples are saving more money. Other businessmen are making better investments. And other workers are earning more money.

It’s a very big and competitive world - and you don’t win in a competitive world by kicking back. In athletics, you don’t win by lounging in front of a TV; you win by training rigorously. In money matters, you don’t win by throwing around the stuff; you win by rigorously saving, working, and investing.

In China, they build factories. In America, we build casinos and hotel rooms. In China, people save 25% of their piddling incomes. In America, net savings rates are near zero - on the largest incomes in the world. In China, foreign reserves increase by more than $1 billion per day. In the United States, net outflows to foreigners exceed $2 billion per day.

Americans work hard...but how much of this work is actually done in industries that make people wealthier? Americans invest...but how much of the investment goes into productive industry?

This is why, as far as investment strategies go, we tend to steer toward Chris Mayer’s ‘tangible assets that sweat’ line of thought.

“Tangible assets are simply things we can touch and feel, things we can see and count,” Chris reminds us. “These investments include things like buildings, timber, cash, certain machinery, land, vineyards and other unique assets. Industries that are not going away and that are in no danger of the next generation of competitors making them obsolete.

“Contrast this with the most exciting and best-loved investments of the tech boom years. Companies like AOL, Lucent, JDS Uniphase and a host of others that carried billions of dollars in intangible assets on their books - such as ‘capitalized software development costs’ or ‘goodwill,’ among others.

“These assets were on the books because accounting conventions required it, not because they represented value that could be sold or accessed in any direct way. Most of these assets were subsequently written down, leading to billions of dollars in losses for those companies and their shareholders as well.

“Tangible assets seldom lose value like that. Most of the time an asset like timber or unique real estate only become more valuable as time goes on. That's the general idea - I like to be involved in companies where time works in my favor and where the principal assets of the company are things I can touch and feel, that I can count and see.”

Chris has recently added industrial pipe manufacturers, sugar havesters, obscure shipping lines - even a chicken harvester to his Capital & Crisis portfolio. Granted these stocks are nowhere near as exciting as investing in a big name company with favorable earnings reports...but what many investors don’t realize is that earnings can be very deceptive (we think Enron proved that pretty well.)

“Cash flow is the sweat, the streams of actual cash that a company generates,” says Chris.

“Cash flow gives companies options to pursue wealth-generating strategies, to reinvest in the business for future growth, to pay dividends or buy back stock, or to make smart acquisitions. Cash flow means that a company has options.”

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