2006 - The Year in Review

The Daily Reckoning: Weekend Edition
December 30-31, 2006
Baltimore, Maryland
by Kate "Short Fuse" Incontrera


As we sifted through 12 months of issues of The Daily Reckoning, we realized that 2006 has been a pretty interesting year. From Greenspan’s departure from the Fed in January, to hybrid car mania and a "record year" for stocks, 2006 never kept us bored.

We did notice, however, as the federal deficits and debt soared, foreclosures reigned and interest rates bumped up, that the general feeling from the average American is that everything in the United States is hunky-dory. But, as we always say in these pages, people believe what they need to believe when they need to believe it – especially in what our fearless leader, Bill Bonner, calls our "late stage of empire."

He writes in "Slouching Toward Empire," "All these conceits and illusions that we find so amusing in The Daily Reckoning, come not from thinking, but from circumstances. As they say on Wall Street, "markets make opinions," not the other way around. The circumstance that makes sense of this strange performance is that the United States is an empire – whether we like it or not. It must play a well-known role on the world stage, just as you and I must play our roles, not because we have thought our way to them, but simply because of who we are, where we are, and when we are."

You can read the rest of this essay, along with eleven others that we’ve chosen to show the passing of 2005, below. In the meantime:

We raise our glass to you, dear reader, and to a New Year filled with health, happiness and prosperity!

Happy 2007!

Short Fuse
The Daily Reckoning

THIS YEAR in THE DAILY RECKONING: You wrote in – we listened. The essays below touched a nerve for many of our readers, and whether you thought they were insightful, entertaining or controversial, we have them all here…

I, Greenspan                                         01/20/06
by Bill Bonner

"Today marks the beginning of our ‘Farewell to Greenspan’ week, where we will explore everything Greenspan: his life, his policies, his infamous ‘Greenspan speak.’ But before we delve into that, we’ll allow him to say a few final words. Take it away, Maestro…"

Suburbistan: Here Comes the Fiscal Firestorm   03/22/06
by Dan Denning

"This year could be the year where we see a silent tipping point in American politics. It will be a point of no return, where interest rates rise as America’s borrowing costs no longer seem so easily manageable."

Shadow Statistics                     04/12/06
by Chris Mayer

"The economy is far weaker than generally portrayed. Most investors ignore the rat’s nest of risks and invest indiscriminately in stocks – without proper due diligence."

Manipulating the Masses           05/04/06
by John Williams

"If you believe the government, annual inflation is running less than 3.5%, unemployment is less than 5%, annual GDP growth is about 3.5%, and the 2005 federal deficit was $318 billion."

Slouching Toward Empire         05/24/06
by Bill Bonner

"Watching the news is a bit like watching a bad opera. You can tell from all the shrieking that something very important is supposed to be happening, but you don’t quite know what it is. What you’re missing is the plot."

The Greater Depression            06/06/06
by Doug Casey

"Wrap this economic environment around the so-called War on Terror, which is rapidly morphing into the War on Islam, which could easily turn into World War III, and you’re looking at the perfect storm."

Inflation, Deflation, or Bust        06/30/06
by Bill Bonner

"At 7:15 p.m. London time came the news we already knew: the Fed raised rates an 18th time – to 5.25%. Inflation will be tamed! Deflation, be damned!"

A Credit Machine Running Amok         08/03/06
by Dr. Kurt Richebacher

"The U.S. economy has become virtually immune to recession. It is widely seen as just a bursting of strength due to ingrained ‘flexibility’ and ‘dynamism.’"

Surf’s Up for Alternative Energy           08/23/06
by Justice Litle

"Wouldn’t it be nice if we could surf our way to energy independence? Complete freedom from fossil fuels is a pipe dream – for the next few decades, anyway. But maybe we can get to a place of significantly less dependence on them."

Big Government Solutions Don’t Work       09/28/06
by Hon. Ron Paul

"At home I’m frequently asked about my frustration with Congress, since so many reform proposals go unheeded. I jokingly reply, ‘No, I’m never frustrated, because I have such low expectations.’"

Suicidal Trade Deficit                            11/14/06
by Dr. Kurt Richebacher

"Looking into 2007, the greatest uncertainty is whether the U.S. housing bubble will end in a hard or a soft landing. A bust would have severe adverse implications for the world economy…"

The Dismal History of Phony Money                 12/05/06
by Addison Wiggin

"The fall of the dollar is like a car accident…you want to cover your eyes and walk away, but you can’t help but watch it with a sense of amazement. And if you look through the history of currencies, you’ll find that all printed money eventually ends up the same way: practically worthless…"

The Daily Reckoning