A week of little real change in the markets as the financial world awaits tomorrow’s Fed meeting. Will he or won’t he? (pause the rate increases). Nobody knows for sure. But it doesn’t matter. As Julius Caesar said, alea iacta est. Greenspan’s great gamble was to blow another bubble to clean up the damage from the first one. It has failed. Economic growth has clearly rolled over without ever getting to the point of being self-sustaining, instead being purely a product of increasing debt. Now we are just sitting around, waiting to find out how bad the hangover is going to be.

No portfolio changes. Some thinking going on about inflation. One of the major symptoms of the secondary bubble has been the rapid rise in commodity prices, including gold. It seems to me that way too many people are invested in seeing these prices increasing further, asuming that additional Fed pumping will continue to inflate them. I wonder. The coming recession will reduce demand. Also, the housing bubble will sop up immense amounts of pumping to replace the money desturction from debt reduction and defaults. So I have to wonder if all the folks sitting in gold and other commodities are truly going to be rewarded. I think blind faith is not the thing, though.

More from Nouriel Roubini: “There will be no soft landing; it will be as hard a landing as it gets.”