Speaking in Boca Raton, Fla., at the 2nd Annual Inside ETFs conference on Monday, economist Ed Yardeni told attendees that since there are SDS and SRS ETFs, maybe someone should create an SOS ETF.

We've seen the "bursting" of the greatest credit bubble of all time, which has been "offset by the greatest bailout of all time," Yardeni said. The question is who will win: deflation or reflation? As Greenspan taught us, "The worst way to offset a bubble is to create another bubble."

Most investors of this generation aren't used to an environment like the present one, where you can't profit from bubbles, Yardeni added. But the Fed is working hard once again to create the next bubble and, only in the last few months, have signs surfaced that it may be working. The first round of TARP injections into banks "was a total failure," and Yardeni was highly critical of outgoing Treasury Secretary Hank Paulson. Expressing amazement that Paulson had learned so little in his Wall Street career and lambasting mark-to-market regulations, the economist observed, "If you have no market, how can you mark to market?" He also declared that, "If TARP isn't corruption, I don't know what is."

"In the fourth quarter, the Fed finally figured out they had to lower mortgage rates," and even though the glacial pace of their learning curve was "mind-boggling," they may finally have uncovered a remedy with a chance of success.

Meanwhile, he expects a horrible number for 4Q GDP, with the decline ranging from minus 6% to minus 9%. The good news is that the fourth quarter was "probably the worst" we'll see.

On the positive side, Yardeni believes the U.S. economy will come out of this global recession "sooner and faster" than other countries, and the domestic markets should follow. Meanwhile, the goals of globalization and prosperity continue to be shared by billions of people around the world, even if it is being stress-tested by the recent crises.

On the investment front, Yardeni believes energy and commodities will recover, even though that may take two or three years. "Long-term, electric cars are the only way hundreds of millions of people will be able to become drivers without damaging the environment. "Electric cars could be the next bubble."

But it's going to be hard to go back to bubbles as usual. "Some people say, "If you can't get credit, what's the point of living. Well, you can go shopping" and it's a great time for shoppers.