The experts could not imagine that a day would come when we’d be worried about the whole dollar-based financial structure. But here we are, and gold is rising. And people are starting to wonder how high the price will go and where they can buy Krugerrands.

You can’t really make people wealthy by resorting to “Zimbabwe economics.” A society grows rich by producing things, and saving money. There is no other way. Cheaper credit won’t do it. More consumption won’t help. Printing money – and dumping it from helicopters – is a losing proposition.

The current action began in 1971, when Richard Milhous Nixon snuck in and stole the gods’ golden fire. Gold’s record for maintaining steady prices was second to none. But modern political economists wanted a different kind of price stability, a stability they could mess with. They would control the value of money themselves.

The boom was a phony. It was a like a polished flim-flam artist who flattered the middle classes with cash and credit – only to pick their pockets. Now they’re facing a serious recession in the worst financial shape of any generation in history.

The big guns came out on Monday. Mr. Market shot down almost every stock in the entire world. He would have caused U.S. stocks to crash and burn too, but it was a holiday behind the American lines.

Oh say does that share-strangled banner yet wave, O’er the land of the free lunch...? We’re talking about our own “Crash Alert” ensign, the one in black and blue colors with a skull and crossbones on it. The poor flag is a bit tattered. A bit faded. A bit lonely.

The rules tell us that if you spend more than you earn you must get poorer. Suddenly, the average homeowner finds himself dangling at the end of a rope. He sees that he spent too much. He sees that he bought more house than he could afford. He sees that his earnings have actually gone down in real terms, while his cost of living has gone up. In short, he sees that he’s been had.

The fight between the inflation and deflation is beginning to resemble the Corrida de Toros we saw in Madrid . That is to say, it does not look like a battle between equal and opposite opponents. It almost looks like the fix is in.

If we are right, that stocks are in a bear market, the wise reader will stop worrying about making money and begin to fret about keeping it. He will wish he had befriended gold when the price was around $300, or $500. He will think twice about taking it in at $900. He will think even a third time on the day after gold goes down $20, as it did yesterday.

There is no magic elixir, no panacea, no free lunch. When you borrow money, you have to pay it back. And when everyone is trying to pay down debt, no one has money to bid up asset prices.