Let's take a minute, and only a minute because this could be a boring subject otherwise, to discuss regulation and what it means to you.  As I write this, Congress is rushing to finish a new financial regulation bill to "fix" all the bad stuff that they say caused the Great Recession we are living through now.  The theory goes that the current economic disaster was caused by uncontrolled greed on Wall Street and the government needs to regulate it to make it right.  The theory is wrong.

The current crisis, when historians write about it years from now, will show clearly that it was caused by a combination of too much regulation combined with too much borrowing.  The housing bubble that was the catalyst for this mess would have never happened if the federal government had not decided that home ownership was a God given right and then passed laws and put in guarantees to make sure that loans were made to millions of people who had no business getting them in the first place.  Had the government minded its own business, the free market would have continued making mortgages to those who could actually afford them, no bubble would have taken place, and this calamity avoided.

But leave it to politicians to first get the diagnoses wrong and then fix the misunderstood problem with more of the same idiocy that caused the problem in the first place.  I will give you just one example.  Barney Frank of Massachusetts introduced a provision into the new law that allows lawsuits against not only companies that commit fraud but those that did business with them even if they had no part in the fraud.  That's right kids, now a company has to be able to, I suppose, read the minds of who they are doing business with and know without the benefit of being an insider that they are committing fraud and therefore stay away.  Evidently if you do business with a fraudster you are one as well in the eyes of Congress.  So using a simple analogy this is like you being liable for a lawsuit against Wal Mart because you shop there.  Only a trial lawyer could love this sort of thing, but it is in the law.

I believe that the impact of all these new regulations, and my example was only a tiny little piece of it, will be devastating to our economy.  These guys don't get it, but we should and that means, as I have said over and over again, gold, gold, gold.