Inevitably, politicians pander to the living in order to get votes, and inevitably the next generation gets the bills.

The dark side of the oil boom is that the oil exporters not only sell oil; they use it, too.

Ben Bernanke and the other central bankers challenged the gods, pretending that they could control the markets and the business cycle. Over and over again the Fed reached up its sleeve and slipped out an ace. Now, Mr. Market is watching carefully; if sees that old, tattered ace of spades, there’s gonna be bloodshed.

How do you take advantage of the boom in Latin America without getting whacked by a downturn in commodities?

The dollar is America’s leading (and highest margin) export. This has forced foreign central banks to create more of their own currencies to buy up the dollars. And so, the whole world is being smothered in paper.

A few years ago, nobody cared about the cost of tea in China. But now, prices are rising all over the world, and people are nervous.

What we are watching in the financial markets is a war between inflation and deflation. One side gets beaten up. Then, the other side gets walloped. Even when one gets an advantage, it comes at a high price.

Stagflation is a devilish mixture: one part slump, one part inflation, and one part who-knows-what. Of course, the feds are eager to put more inflation into the brew.

The monetary system of planet earth, circa 2007, is simple. Arab nations export oil. Europe exports luxuries. Asia exports autos and gadgets. America exports dollars. Yes, dear reader, the buck gets around. It has more stamps in its passport than we do.

As near as we can remember, the lesson of the ‘70s was that monetary inflation doesn’t always work. At some point, adding more money and credit becomes counterproductive.