Daily Reckoning sufferers will get a little break today. We're rushing to a meeting…not much time to write.

We barely had enough time to read the news…and make our head swim.

First, the big news is that China is investing $3 billion in the giant buy-out firm, Blackstone. Remember how we wondered what China would do with all those dollars it has accumulated? It has enough to buy, say, the entire state of Illinois, if it wanted. But now we know…and it confirms two suspicions we have held for many months: the world financial system has gone mad…and the Chinese are simpletons.

In China, people line up to open brokerage accounts. Stocks soar. And when people want to exchange real money for paper (stocks, bonds, hedge fund accounts…) there are plenty of people ready to operate printing presses. So, we read in today's Financial Times that there is a "Surge in Emerging Market IPOs."

And now the Chinese government is taking its own money and investing it in the Blackstone magic…which consists of buying companies, putting them deeply in debt, cutting them up, charging huge fees, and selling them to the public - or at least to the other players in the market.

Of course, Blackstone couldn't do this unless there were plenty of people with plenty of money to throw around on this sort of stuff. We have not only more evidence of that in today's news…we also have an explanation.

For the evidence, we have a report from last week's art sales - that hit new records of absurdity. Can you imagine paying $70 million for one of Andy Warhol's slick inventions? Well, someone did. And others spent millions more on other works of art. How did they know they were valuable works of art…and not just silly pieces of pop trash? Ah…ah…ah…how did they know these objects had VALUE…and not merely prices? Ah…ah…ah…

As we said, our head is swimming…and we feel as though we might have to lie down.

But let us return to China's purchase of a $3.3 billion share of Blackstone, which the papers tell us is a 'historic event'…and the source of all this restless, reckless cash. Without all this money, Blackstone would have to settle down…all these wheelers and dealers would have to cool their heels…all these art buyers would have to restrain themselves…and all these emerging market companies would have to actually make money before they could sell IPO paper to the public. And now cometh the UN's OECD with a pronunciamiento on where this money is coming from: from China and Japan's lax money policies, sayeth the august institution.

Of course, that is what we've been saying for many months. But, at least we had the good grace to give credit where credit was due, by remembering that China and Japan are largely reacting to excesses pushed upon them by the United States of America. But since we are in a hurry this morning, we will leave that subject, and merely report that the OECD says China and Japan are responsible for the buy-out fervor. They allow institutional borrowers to get their hands on so much money, at such low interest rates, that Blackstone and the others are able to do all the deals they want.

In other words, when China finally comes to its senses - and stops goosing up its money supply at such a hell-bent speed - the buyout business will become a lot less interesting…and its shares in Blackstone should fall back to what they are actually worth.

But in the meantime, everyone has something to celebrate. The dead artists are happy - they meant to put one over on polite society. Now they have done it. China is happy too. Now the communists are full-fledged members of the Inner Circle…the crème de la crème of 21st century capitalism. And of course Blackstone is delighted. Having the Chinese government as a partner opens up a whole new world of corrupt, insider deal making.

Oh…and we're happy too. Of course we are. Who would have thought that watching the financial markets could have been so entertaining?

*** USA TODAY tells us that another historic event happened last week. For the first time in more than a quarter of a century, Americans are cutting back on their driving.

We don't know the cause of this big trend reversal. The pundits are blaming high gas prices. Apparently, prices at the pumps are also hitting records - up to $3.18 per gallon on average.

If drivers really are cutting back because of the price of gasoline, it suggests that the consumer is weakening. A poll of consumer confidence says that the poor consumer's spirits have fallen to an 8-month low. And the housing problem seems in no hurry to go away. "Gloom settles over housing market," announces a weekend headline.

It appears that the world is in the grip of two major and contradictory trends. At the top, money has never been easier to get…nor have rich people ever been more eager to get rid of it. Money changes hands so fast…and in such volume…the markets and bankers are having trouble keeping up with it. Institutional investors have so much money they don't know what to do with it.

Meanwhile, down in the Lower Depths…the poor lumpen can't even afford to drive to the store to rent a movie. They're not earning any more money…while their costs continue to rise. Every year, we get a notice that a college has raised its tuition. Our insurance and health care costs seem to go up annually. Every time we fill up our tank…or eat in a restaurant…we get a nasty shock. True, the cost of fuel and food is higher in Europe than in America, but the trends go in the same direction. Thanks to our Dear Readers we have enough income to keep up with these expenses; but we wonder how most people are able to do it. Maybe this latest news on U.S. driving habits tells us something…that they can't.

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