If the correction in gold is over - gold fever is about to hit. Sub-growth has become the norm in the United States…inflation is just a fact of life. The Century of the Emerging Markets…a new gold rush in California…and more!

Yesterday, the Dow rose 41 points. Oil and the dollar held steady. But the big news today - the price of gold went back over $900. This morning, the yellow metal is trading at $910.

Is the correction in gold over? Seems so… Will gold fever soon take over?

We interrupt our look at the gold market with the following song lyrics from the Rolling Stones:

Who wants yesterday’s paper?
Who wants yesterday’s girl?
Who wants yesterday’s paper?
Nobody in the world.

What prompts this musical interlude is a thought: U.S. stocks are yesterday’s news. Maybe the U.S. economy is yesterday’s news too. Maybe the United States itself is yesterday’s news.

But what we reckon with today is not a dreary story of the decline and fall of the American empire. No, today…we bring you a cheerful message of hope for the future.

Our Trade of the Decade - buy gold, sell stocks - has done pretty well…though not as well as expected. Gold has almost quadrupled. U.S. stocks went down…then came up. Now, they’re back to about where they were 10 years ago. In real, inflation-adjusted terms, however, they’re down about 30%.

Of course, the decade is not over and we’re expecting to squeeze a lot more juice out of this trade before 2010. Still, we’re already looking ahead to the Trade of the NEXT Decade. We’ll take a peak at that below…but first, let’s look at the broad sweep of history. What was the number one success story of the 20th century? America. Oh…yes… there were more frightening stories…and stories with more suffering and more sturm and drang in them. WWI brought down the leading families in Europe - the Hohenzollerns in Germany…the Hapsburgs in Austro-Hungary…the Romanovs in Russia, not to mention the Ottoman Empire in what is today Turkey. Then, the Soviet Union lost 25 million people in the Great Patriotic War, known in the West as WWII…the Chinese lost tens of millions in Mao’s purges and famines. But as for stories with a happy ending, there was none bigger…and none happier…than the story of the United States of America.

And now, Will Hutton writes in The Observer that the United States will stay ahead of China in the 21st century, because it has more knowledge and brainpower…more universities…and a commitment to new technologies. Maybe Mr. Hutton is right. We had the same idea ourselves, when we were about 14 years old. We recall thinking that America was unbeatable…because she had created an almost perfect meritocracy, in which the brightest people - among whom we immodestly counted ourselves (remember, we were just 14 years old) - would always rise to top positions in government and business. These people could go to public schools and state universities, learn all the latest ideas and useful knowledge, and then apply what they had learned in their careers. The system was self-perfecting all the time.

Later, we realized that the brightest people are capable of making the greatest errors and suffering the biggest delusions…and that even the best systems are inevitably gummed up by self-seeking parasites and corrupted by time. We are, as Aristotle put it, a “deathward going tribe.” All our institutions age…decay…and die.

Universities are just are part of the lifecycle…from birth to decadence. Universities follow money and power, not the other way around. People get rich; then they build universities to celebrate and eliminate their wealth. People who could be doing good work on assembly lines or road crews are shunted off to ivy-covered campuses, where they undertake discussions of the role of gender in Egyptian history…or a metaphysical interpretation of the cinematic experience in, say, Dude, Where’s My Car?

Universities impoverish society; the scholars inevitably reduce the net knowledge of the population with foolish ideas and preposterous plans. After a few generations, the professors have introduced not only gender studies and film interpretation, but Social Security, ethanol, Medicaid, central banking, option pricing models, wars on terror, tax rebates, subprime mortgages, progressive taxation, direct election of senators - and all the other bugaboos and balderdash of modern societies.

Naturally, all these humbugs cost a lot of money. Yesterday, USA Today gave us an accounting. In the last year alone, it figured, the real deficit of the federal government increased $2.5 trillion. USAT did what we have done many times before - it looked at government finances as if it were a business. Sharp pencils in hand, it found that the federal government has net unfunded obligations of $57.3 trillion - or about half a million dollars per household. Add in state and local budget shortfalls, and you get to $61.7 trillion. This year alone, Medicare added $1.2 trillion to federal obligations. Social Security made the situation worse by $900 billion…and veterans’ benefits tacked on another $34 billion.

The last time we looked, the average American household had net assets of only about $70,000. How is it going to pay more than $500,000 to support government’s promises? In effect, the typical family is broke, with liabilities far greater than its assets.

We only bring this up to explain how it is possible for such a great nation - with so many great universities - to fall into decline.

And now, looking ahead, Bloomberg says the “sub-par growth is the New Normal in the US.”

Naturally.

When you reach a certain maturity, with so many burdens on your back, you slow down.

Here in London, Mervyn King, head of the Bank of England, has noticed the same thing. The “NICE” 10 years are behind us, he says. By ‘NICE’ years, he means the years of Non-Inflationary Continuous Growth.

Now, inflation is a fact of life. Central banks have to fight it with higher rates - which cause slower growth.

*** Back to our good news. If the U.S. boom was yesterday’s boom…what is today’s and what will be tomorrow’s boom? What will our Trade of the NEXT Decade be?

Well, we don’t know. But we’re beginning to think our colleague, Manraaj Singh, is right. This is the Century of Emerging Markets.

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