It is raining again today. We don't know how much more of this vacation we can stand…

We've had one big up day this week in the stock market. Then, one little up day. And then one little down day. What does that tell us? Nothing.

The stock market has not corrected. Nor has there been much real movement elsewhere. Oil is still near $70. Gold is still around $666.

The dollar has risen, however. Instead of paying nearly $8 for a gallon of gas in France, we now pay only about $7.86.

Big whoop, as the kids say.

Meanwhile, no one seems the least bit interested in the really big news:

This boom is a fraud.

The Theology of Capitalism is a false god.

And the prosperity that Americans enjoy today is a swindle.

We've been saying so for the last eight years. (Yes, this month marks the eighth anniversary of The Daily Reckoning…which is why we're taking a two-week vacation; we're tired!) But now it's official - the New York Times said so - the average American earned less in 2005 than he did in 2000. Incomes went down only one single year in the last half of the 20th century. But never five years in a row! And this was when the housing boom was in full bubble mode.

Let's see, the average guy went further into debt during the period…while his income went down. If he isn't poorer, who is?

And yet, the average guy thinks he is getting richer. He's got more stuff…including a bigger house…and more cars. And practically the whole world thinks the United States has a dynamic, prosperous economy. But if the average guy gets poorer during the biggest boom in history…what kind of prosperity is that?

Allow us to answer our own question: It is flim-flam prosperity. It is the kind of prosperity you feel when you've just bought a doublewide trailer with a subprime ARM. It is the kind of prosperity you get when you take a trip to Europe on your credit cards, expecting to refinance your house when you get back in order to pay off the debt. It is the kind of prosperity that turns you into a pauper.

Not only is the average guy unaware that he is being swindled, so is the average investor. He sees nothing wrong. In fact, what he sees is that nothing CAN go wrong. (But he is ever in for a rude awakening…check out the full report on the lies Washington tells to keep us spending into oblivion here.

We were shocked yesterday when a fund manager, on vacation in France, stopped by the house to chat.

"Do you really think we can have a major correction?" he asked. "I think it is almost impossible. A major correction requires a fall in the supply of money and credit. But every central bank is putting out more and more money and credit. And they've shown that they will put out as much as is needed to keep things moving along. I don't think we'll have a major correction any time soon."

He has become a true believer in the Theology of Capitalism. He thinks the old-timed religion, with its fire and brimstone…the capitalism of delirious booms and cranky busts… has been replaced by a kinder, gentler variety…in which central bankers make sure no one suffers, ever.

An investor's Valhalla…a speculator's Elysium…a debtor's Eden…right here on planet earth. Gone is the nasty business cycle. Banished are bear markets. Forbidden are credit crunches, bank failures and rising unemployment.

Oh, dear reader…we can stop writing The Daily Reckoning right now… Our moment of rest has come. There is nothing more to be reckoned with.

*** Twice as many houses were foreclosed in July '07 as July '06. Default notices were sent to 180,000 people. Repossessions are up 93% from a year ago. House sales are at their lowest point in four years…and there are expected to be 2 million foreclosures this year.

Could it be that the poor, average American will be finally awakened from his dumb sleep by the sound of the housing crunch?

Deutschebank reports that the average house went up 52% in real terms between '92 and '06. This does not sound like much compared to the stories coming from Manhattan, La Jolla, and Miami Beach…but it represents a huge increase in the apparent wealth of America's families, whose main asset is the leaky roof over their heads and the flooding basement beneath their feet.

But that increase did not come out of nowhere. The lending industry provided mortgages to people who previously did not qualify. This pushed up demand for housing at the bottom - which had the effect of raising up the entire nation's housing stock. The middle-class homeowner was able to move into a McMansion because some bad credit risk bought his old house at a premium price.

Now, that extra demand from subprime borrowers is being withdrawn - by more cautious lenders, by rising rates, by defaults and foreclosures. It is not unreasonable to expect that the real increase in housing prices the nation enjoyed from '92 to '06 will become a real decrease. Possibly half the previous increase will be erased…possibly the whole thing.

What will the average American think then?

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