In my attempts to understand the world, I often pause to assess whether I am making any progress. This dubious exercise requires me not only to decide whether I truly understand the world at all, but also to decide whether I have improved. That many people point at Warren Buffett's exemplary ability to tell you when he thinks he has failed only highlights how rarely anyone says so. I avoid this problem to some extent by concluding that I have greater and greater clarity on how little I know. My last good big thought came last winter. Walking & talking with French Eric, I stated that the USA economy has evolved from agrarian, to industrial to technological, as most people would agree. Where perhaps the majority and I diverge is with my argument that the USA stands midway--at least--in its transition to a finance-based economy. As the Simpsons Brad Goodman once said, "Folks, I'm often asked about my qualifications. Well, I may not have a lot of "credentials" or "training"...". Brad made air quotes all the way, but I won't. I lack training, education and credentials in finance and economy. I have only the quantities of finance news and commentary I read, mostly on the web. Years ago, if you read only the web, you wouldn't know much. These days, it's amazing what you can learn and who's willing to publish to the world for free. So it was with some joy that I read in the November letter from Bill Gross, the Managing Director at PIMCO, write "Because the U.S. economy has evolved into a highly levered finance-based economy, it stands to our reason that this modern day version is more sensitive to changes in interest rates than those of years past." Not only does Gross spends no more time in the essay on the notion the USA has become a financial economy, he furthers the argument by pointing to the vast financial leverage at work. The US economy sits on the brink in so many ways, it shows perhaps best how our two parties have moved so close together that the notion of a loyal opposition no longer exists. Our personal rate of savings has gone negative, our current account has been negative for years, our budget deficit grows, and our Congress proposes to solve it by cutting taxes. The world is losing faith in the US economy and objective measures show it. Gold has risen from around $425 to $500 an ounce in the last 12 months, beating the dollar (obviously) and the S&P 500 for gains. What's true for a family is true for a country, no matter how much either one would rather ignore it. Live within your means and save cash for a rainy day.