It has definitely been a tough year for ski bums, massage therapists, and black jack dealers at Incline Village, Nevada. After getting a prodigious eight feet of snow over one weekend at Christmas, there has been nary a flake since then. Hats off to the Diamond Peak ski resort for trucking down enough snow from the higher elevations to keep the bunny slope running.

However, the real estate business is another kettle of fish. After a six-year hiatus, business is now booming in the High Sierras, as it is throughout the West. Until December, my real estate agent had only sold one house since 2007, and that to me, a nice little foreclosure deal where I picked up a beachfront estate for pennies on the dollar. Since then she has sold six residences, half to Chinese buyers for cash, and has another three in escrow. I guess when it rains, it pours.

I was surprised to learn that my neighbor, Oracle mogul, Larry Ellison, has placed on the market his nearby Glenbrook compound for $28.5 million. The property includes a six bedroom, eight bathroom 9,242 square foot main house on 2.6 acres, with 230 feet of frontage on the east shore of Lake Tahoe (click here for the listing).

I guess his existing 7.6 acre estate with 420 feet of beachfront next door is enough. Larry has been accumulating ultra high-end properties all over the world for the past two decades, more than he could ever possibly live in. Who knew these were investments, and not conspicuous consumption? This is the first time I have ever seen Larry sell anything. Is this a tell?

You can?t swing a dead cat in Incline Village without hitting a billionaire, so the public events are incredibly well funded. Junk bond king, Michael Milliken, pays for the Fourth of July fireworks, as the celebration falls on his birthday. On Sunday, the ski slopes were amply planted with plastic eggs, some containing candy, others, free lift tickets. Even the pet hospital here is better equipped than most public hospitals.

So I knew the Easter egg hunt would not disappoint. Perhaps, the eggs contained real gold coins. I have to tell you that it was a total blast wading through 500 hyped up children. Click here for the video of the event and hit the ?PLAY? arrow, if for no other reason than to admire the spectacular Lake Tahoe scenery.

This Can Be Yours for $28.5 Million

?We have 3,500 nuclear weapons left over from the cold war we don?t need, they take 20 seconds to re-aim, we?re not afraid to use them. And by the way, they?re already aimed at you.? That is the approach James Baker III thinks America should take with Iran, Ronald Reagan?s Chief of Staff and Secretary of the Treasury and George H.W. Bush?s Secretary of State.

At the same time we should be talking to the regime in Tehran, while doing everything we can to support the reformers, tighten sanctions, and enlist Europe?s help. Baker does not see a military solution in Iran, even though their potential to create instability in the region is enormous. This was one of dozens of amazing insights I gained chatting with the wily Texas lawyer during an evening in San Francisco.

Baker is happy to take on the ?America Bashers?, pointing out that the US still plays a dominant role in the UN, NATO, the IMF, and the World Bank. It accounts for 25% of global GDP, and its military is unmatched. The US spread globalization, and the spectacular growth of China and India is largely the result of open American trade policies, raising standards of living globally.

But the US can?t take its leadership role for granted. The biggest threats to American dominance are the runaway borrowing and entitlements. US debt to GDP will soar to over 100% in the near future, the highest level since WWII. This is unsustainable, is certain to bring a return of inflation, and unless dealt with, will lead to a long term American decline on the world stage.

Massive trade and capital flow imbalances also have to be addressed. The 82-year-old ex-Marine, who confesses to being the only Treasury Secretary in history who never took an economics class, believes that the advantageous rates that the government now borrows at are not set in stone.

Baker is the man who engineered an end to the cold war with a whimper, and not a bang. He thinks that ?even our power has its limits,? and that there is a risk of strategic overreach.? With the US politically evenly divided, Congress has degenerated from debating teams into execution squads, and consensus is impossible. The media are partly to blame, especially bloggers who propagate wild conspiracy theories, as confrontation sells better than accommodation.

Regarding the financial crisis, we need to end ?too big to fail? and embark on re-regulation, not strangulation. All in all, it was a fascinating few hours spent with a piece of living history who still maintains his excellent contacts in the diplomatic and intelligence communities.