“Greenspan blamed for double bubbles,” says a headline in the NY Post . At last...finally...they’re on to the old humbug.

Of course, Greenspan is not really responsible – at least, not alone – for today’s huge credit bubbles. As Ben Bernanke explained, there was a lot of money coming into the world financial system from other sources. The Asians, for example, seem to know how to make money but not how to spend it. Thus are they left with billions of dollars of savings. And when the price of oil rose from under $20 to over $70...it put a lot of money in the hands of oil producers. What could they do with all that extra money but put it into investments? And whose investments were better known, more liquid, and more universally accepted than those that were quoted in U.S. dollars?

Naturally and inevitably, people who earned dollars...or who had dollars...or owned dollar-based assets...or who printed up the dollar bills themselves...thought they were hot stuff. Everyone wanted what they had. Prices on Wall Street went up. Wall Street bonuses soared. Hustlers started up hedge funds...private equity funds...and funds of funds to grab some of the loose change.

All this money coming into the United States drove down interest rates. But it wasn’t just the foreign savers who drove down U.S. rates...and it wasn’t just the foreigners who were stuffing American capital markets with cash. After the mini-correction of 2001-2002, Alan Greenspan and George W. Bush panicked. Greenspan cut rates to “emergency” low levels... the lowest rates since the Great Depression...and the federal government jacked up spending while cutting taxes. The result was the biggest wad of new cash and credit ever to come into world capital markets.

What happened next? Boom...Bubble...now, B...ust?

Yesterday, the price of oil hit a new record high at $79.91. Meanwhile, the dollar fell to a new record low – at $1.39 to the euro ( EUR ). Wheat hit a new record high of $9 a bushel – twice what it brought a year ago. And the commodity index registered a new high too. Gold , the ultimate measure of paper currency destruction, held steady...despite estimates that the U.S. money supply has been growing at a fantastic 50% annual rate – following the market shock in the summer!

So much new cash and credit...so little real wealth!

Pity the poor American householder. Just a few months ago he had people lining up to lend him money. Now they’re on the phone wanting it back! He had gotten used to refinancing. But now refinancing is tough...and more expensive.

He goes to the grocery store and finds his bread and breakfast cereal have gone up in price. He gets his health care bill and finds it rising faster than his income. He drives into the gas station – he’s shocked by how much it costs to fill up his tank. He hears on the news that the government says inflation is under control...the federal budget is balanced...and all is well. But then he looks at his own cost of living and realizes that the feds’ numbers are nonsense – they merely left out two of his biggest expenses – food and fuel...and they cheated on the others.

And as for Bush Budget...

...he’s sure the feds are pulling a fast one there too. Look at the numbers more carefully, says Fortune Magazine, and you find a deficit of more than $400 billion...

...and then, he discovers that his adjustable rate mortgage is going to be reset.

Get ready for a ‘deluge’ of resets, says Reuters. So far, only about a third of the subprime ARMs of 2005 and 2006 have been reset... the crest of the wave is still ahead.

Home sales have already crashed...and forecasts are being revised downward every week. They’re already at a 15-year low in Southern California.

And now, the “housing slump is starting to pinch the economy,” says an item at San Francisco Gate . Shopping malls are feeling the pain, adds the New York Times .

And in Detroit, some 700 houses are to be auctioned off between September 21st and 23rd. These houses have been on the market for more than a year. The banks and mortgage lenders who own them are desperate to get them off the books. So this should be interesting...finally, we’re going to see houses marked to market. Some are expected to go for as little as $5,000.

Well, at least the cost of housing is going down...at least in Motown.

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