Hence the American dilemma. How do you convince lenders to lend when you can't even obey your own laws about spending limits? It's one thing to sell short-term debt with a respectable yield, but who will be willing to hold any American obligations - short- or long-term - as the nation's financing needs grow larger relative to its productivity?

In this house, we obey the laws of thermodynamics!

Lenders have been willing to lend up to seven times EBITDA but won't increase leverage unless there has been an increase in earnings - either the owners must have cut costs or grown the business.

The laws is not meant to destroy us. But our disobedience leads to our own destruction.

Unjust laws exist: shall we be content to obey them

Soaring gold and oil prices will be accompanied by soaring interest rates and inflation. The convenient fantasy world where consumer prices don't rise and the dollar doesn't lose purchasing power will collapse. As oil rises in dollar terms ? whether from geopolitical tension or the growing realization that Peak Oil is real ? the run on the dollar will grow. Hard assets like gold won't just be fashionable: They will be indispensable to wealth preservation. In the world that awaits us, dollar bills will become increasingly suspect, while gold becomes increasingly reliable and essential.