It’s the Ultimate Fighting Event - Worldwide Economic Mud Wrestling! See it now! First, the Honey Hun … German Chancellor Angela Merkel took on a whole pack of central bankers and economists, charging that they were going to make the situation worse by spending money they didn’t have… and causing inflation.

Then, historian Niall Ferguson - Professor Punchy - took a jab at the meddlers in the pages of the Financial Times. His point was simple enough - that the feds were spending trillions of dollars without really knowing what they were doing. If they borrow money to stimulate the economy they are just taking money out of the private economy and diverting it to public spending. There’s no gain in that, he said.

Watch out Niall! The Nobel Knucklehead - economist Paul Krugman - hit back.

We’ll return to this grapplefest. But first, let’s take a look at what is happening

The markets are looking over the worst spending slump in 60 years…that planet’s first Worldwide Bailout… And look at that - we’re back to the ‘deficits don’t matter’ stance…the more the Fed tries to fix the problem, the worse it gets… Savers are losing a couple of percent per year to inflation…investors are losing money in every asset class…and more!

The rally seems to be continuing. The Dow rose 70 points yesterday. Oil slid up to $44. Commodities went up too. And gold shot up $34 - to $808.

The markets must be “looking ahead”…right over the worst economic news in 60 years.

It’s the “worst spending slump since ‘42,” says a headline at Bloomberg. In ‘42, the United States was at war with Japan and Germany. And it looked for a while as though we might lose! No wonder spending collapsed…the economy was shifting to a ‘war footing.’

And now spending is collapsing