There is one booming sector of the US economy into which colossal sums of cash are still being injected: the sale of tickets and hotel rooms for Barack Obama's inauguration.

The excitement over the January 20 swearing in of America's first African American president is at such fever pitch that tickets for the ceremony - which are distributed for free - are already being touted on the internet for as much as $40,000 each.

Organisers of the event predict that the number of people who descend on Washington could exceed the record 1.5 million that watched the swearing in of Lyndon Johnson in 1965. The 95,000 hotel rooms in the city are already close to sold out and those looking for accommodation are being forced to search in neighbouring Virginia and Maryland.

At the Willard Hotel, one of the grandest in Washington that sits on the inauguration parade route near the White House, rooms have already gone. Several guests have spent thousands of dollars on a special four-night package that entitles them to gifts each evening, including one from Tiffany the jewellers.

The Fairmont Hotel is offering an "eco-inaugural" package, which includes four nights in a suite filled with organic materials, a ball gown from an organic designer and the use of a hybrid car. It costs $40,000.

Organisers believe there will be an extraordinary surge of humanity into Washington in the days before January 20, as hundreds of thousands of African American travel from across the country to try and catch a glimpse of the historic moment.

The US government has printed 250,000 tickets for the swearing-in ceremony, which will be held in bitterly cold weather below the US Capitol. The tickets - which have yet to be released - are given to congressmen and senators to distribute free to constituents. Political offices across America have been inundated with pleading phone calls and e-mails and demand is already far outstripping supply.

Dianne Feinstein, a Democratic senator and chair of the Joint Congressional Committee on Inauguration Ceremonies, said she had heard reports of tickets that will immediately be auctioned off for $40,000 once they are given out.

She is so appalled at Inauguration Day being turned into a thriving black marketplace that she is drafting legislation that would make it a federal crime to sell the free tickets. "This is unconscionable and must not be allowed," she said.

"This inauguration will be the major civic event of our time and these tickets are supposed to be free for the people," she added. "Nobody should have to pay for their tickets."

Tickets that do cost money - and are expected to fetch tens of thousands of dollars on the black market - are for the series of balls spread across Washington on inauguration night. President Obama and the new First Lady, Michelle Obama, will follow tradition and briefly show up at many of them for a dance.

One ball that might not get a visit this time: the Texas black tie and boots event. President Bush's Lone Star state is not quite the draw it was in the past two inaugurations.

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