Bankster alert: Tom Harkin introduces Glass-Steagall bill in Senate

The push to restore the Glass-Steagall banking act has returned to the U.S. Senate. 

Sen. Tom Harkin on Thursday introduced S. 985, which would rebuild the wall that had once separated commercial banking from brokerage and investment speculation. The Iowa Democrat’s bill came on the 80th anniversary of the original 1933 Glass Steagall Act.

The text of S.985 was not posted on the Senate website as of Friday afternoon, but it is believed to resemble HR 129, introduced by Reps. Marcy Kaptur, D-Ohio, and Walter Jones, R-N.C. Their measure has 62 bipartisan sponsors in the House.

Meantime, 20 state legislatures are considering resolutions urging Congress to reinstate Glass-Steagall. Lawmakers in four states -- South Dakota, Maine, Indiana and Alabama – have passed such measures.

This news item was posted on the examiner.com Internet site yesterday...and I thank Bill Gebhardt for today's first story.

This Is No Ordinary Scandal: Wall Street Journal

We are in the midst of the worst Washington scandal since Watergate. The reputation of the Obama White House has, among conservatives, gone from sketchy to sinister, and, among liberals, from unsatisfying to dangerous. No one likes what they're seeing. The Justice Department assault on the Associated Press and the ugly politicization of the Internal Revenue Service have left the administration's credibility deeply, probably irretrievably damaged. They don't look jerky now, they look dirty. The patina of high-mindedness the president enjoyed is gone.

Something big has shifted. The standing of the administration has changed.

As always it comes down to trust. Do you trust the president's answers when he's pressed on an uncomfortable story? Do you trust his people to be sober and fair-minded as they go about their work? Do you trust the IRS and the Justice Department? You do not.

This op-ed piece by Peggy Noonan showed up in The Wall Street Journal on Thursday...and I found it in yesterday's edition of the King Report.

Surprise! Inflation is too low almost everywhere on earth

The leading economies of the industrialized nations may not have a lot in common, but they are all afflicted by this: Inflation is too low.

That was the astoundingly consistent theme out of a range of data released Thursday. Prices rose 1.1 percent over the 12 months that ended in April in Germany, 0.8 percent in France and 1.3 percent in Italy. In the United States, the consumer price index rose 1.1 percent over the last year. Japan reported surprisingly strong first-quarter growth this week as its aggressive new stimulus policies took effect, but that came against a backdrop of continued falling prices; its consumer price index fell 0.9 percent in the year that ended in March.

The below-trend inflation is partly attributable to falling commodities prices, and just as policy shouldn’t overreact when a short-term commodity blip causes inflation, it shouldn’t make the same mistake in reverse. But even excluding food and energy, U.S. CPI was up only 1.7 percent, still below the level of inflation the Federal Reserve is aiming for. And the situation in Europe is particularly worrisome; if the euro zone is going to have any hope of rebalancing its economy without a prolonged depression, it will need higher inflation in core European countries like Germany and France, offset by lower inflation in countries like Greece and Spain. Instead, prices are rising too slowly even in the core, and there is deflation, or falling prices, in Greece.

The biggest conclusion to draw from all of this is that warnings that massive quantitative easing efforts would spark explosive inflation are turning out to be as wrongheaded as can be. In the United States and Japan, central banks now have open-ended policies of printing money to buy assets. But while the money seems to be finding its way into asset markets, such as for stocks and corporate debt, it isn’t being circulated so widely as to drive up prices for consumers.

This article, along with some excellent charts, appeared in The Washington Post on Thursday...and it's courtesy of West Virginia reader Elliot Simon.

Doug Noland: Financial Euphoria

From my perspective, the global nature of excesses and fragilities is the most worrying aspect to the current Financial Euphoria. Essentially, the entire world faces acute financial and economic instability. The entire world suffers from a widening gulf between inflating asset prices and mounting economic vulnerabilities. Seemingly the entire world suffers from an increasingly protracted period of near-zero rates, aggressive central bank monetary stimulus and a desperate search for market returns. The entire global financial “system” is an over-liquefied speculative Bubble – stoked by central bankers responding desperately to acute financial and economic fragilities.

As noted above, find a speculative Bubble and there will be an underlying source of monetary disorder. From my perspective, Bubbles are at their core about a self-reinforcing over-issuance of mispriced finance. Major market misperceptions are integral to fueling Bubbles – and these misperceptions are often associated with some form of government support/backing of the underlying Credit financing the boom.

These days, the dynamic of over-issued, mispriced finance is a global phenomenon – the U.S., Europe, Japan, China, Asia and the “developing” economies. The perception that central bankers will ensure ongoing asset inflation is an unprecedented global phenomenon. The collapse in yields and risk premiums in debt markets across the globe is unlike anything I’ve ever witnessed or studied historically. These days, asset inflation, speculation and Bubbles prevail virtually everywhere. Moreover, the gulfs between inflating assets and weakening economic fundamentals seemingly widen everywhere, as Financial Euphoria engulfs debt and equity securities markets around the world. As noted this week by the great market watcher and historian Art Cashin: This market is unlike anything we’ve ever experienced.

Doug's Credit Bubble Bulletin, posted on the prudentbear.com Internet site every Friday, is always a must read...and yesterday evening's edition is no exception.  I thank reader U.D. for sending it along.

Study Indicates That America's Driving Boom is Over

The "driving boom is over," or so says a new study of American attitudes toward the automobile.

After decades of adding more cars to their household fleet while moving further and further out into the suburbs, Americans are waiting longer to get licensed, driving less and increasingly turning to alternatives such as mass transit or car-sharing programs, according to a new study by the U.S. Public Research Interest Group, or PIRG.

Declaring the boom in automotive transportation "over," the study stresses that, "the time has come for America to hit the reset button on transportation policy—replacing the policy infrastructure of the driving boom years with a more efficient, flexible and nimble system that is better able to meet the transportation needs of the 21st century."

This very interesting CNBC article appeared on their website early in the afternoon on Wednesday...and I've been saving it for today's column.  I thank Elliot Simon for bringing it to our attention.

Doug Casey: The Virtues of Capitalism

What can be said of Doug Casey? His life and career are the stuff of legend among investors and speculators, especially in the junior resource space.

Doug is a friend and mentor to Chris and I. For over 25 years I've read his monthly missives, devoured his books and attended his   workshops. I credit Doug with leading me to my first big score, and imparting enough wisdom to make me see the sense of holding onto that winner as long as it made sense to. The value of that lesson was something that can never be repaid.

Doug was one of the key people, along with my friend "Dave" with whom I credit for arming me with the confidence to leave my comfortable life in the States, family, friends and business partners to experience the broader world and invest and speculate in the frontier markets.

Although he isn't always right, and has been early on many of his calls, his viewpoints are always enlightening and entertaining!

This interview with Doug was posted on the zerohedge.com Internet site on Thursday...and is definitely worth reading.

A Brazilian WTO chief could prove painful for the West

Late last Tuesday, after months of intense lobbying, and campaigning visits to 47 countries, Roberto Azevedo was confirmed as the next director general of the World Trade Organisation.

Amidst the Queen’s Speech and the resignation of a certain football manager, Azevedo’s appointment barely flickered on the U.K. news radar. Yet it was an event of some significance that could have major implications for the future shape of the global economy.

While less well-known than the International Monetary Fund, the WTO is the most important economic multilateral on earth. With 159 member states, this Geneva-based organisation can be likened to a vast and highly specialised international court, designed to arbitrate on complex trade disputes between governments that come into conflict, so as to keep protectionism in check.

If a nation feels another is unfairly blocking its exports, it complains to the WTO. Ranks of in-house lawyers then interpret international trade rules and issue an independent judgment. If countries found guilty don’t comply, then all members are meant to stop trading with them and close ranks — although it very rarely comes to that.

This story appeared on the telegraph.co.uk Internet site last Saturday...and it's been sitting in my in-box since then, awaiting a spot in today's column.  I thank Roy Stephens for his first offering of the day.

BoE policymaker Martin Weale douses hopes of monetary stimulus when Mark Carney arrives

Martin Weale, a member of the rate-setting Monetary Policy Committee, warned that more stimulus risked a damaging surge in inflation because price rises have already been higher than the Bank's 2pc target for most of the past four years. The persistent overshoot, he said, “is a constraint on my freedom of action”.

“Failure to damp sufficiently any new shock pushing up on inflation would result in inflation expectations becoming more entrenched. That, in my view, limits the scope we have to support demand at the current juncture,” he told the British-American Business Council Transatlantic Conference in Birmingham.

George Osborne appointed Mr Carney on a ticket of “monetary activism” to help boost growth. The Chancellor has also asked the MPC to investigate how it might use “forward guidance” as an additional tool. But Mr Weale, who has been sceptical about the policy, suggested there is little it can achieve.

This Roy Stephens offering showed up on The Telegraph's website early yesterday afternoon BST.

Outside View: Europe's permanent recession

On May 6, I wrote Europe was in danger of falling into a permanent recession -- a depression.

Now, the European statistical agencies report France joined Italy and Spain's recessions during the first quarter and economic activity across the entire eurozone continued to contract.

The straightjacket imposed by euro-think -- allegiance to a failed experiment in a common currency, ill-conceived and overzealous austerity measures and halting and inadequate labor market reforms -- caused continued economic contraction across the entire eurozone.

This commentary was posted on the upi.com Internet site yesterday...and it's definitely worth your time.  I thank Roy Stephens again.

Nuclear Headache in Germany: Task of Decommissioning Plants Is Herculean

The dismantling of Germany's nuclear power plants will be one of the greatest tasks of the century as the country moves to phase out atomic energy. It will take at least until 2080 to complete the job. But what happens if energy utility companies who own the facilities go bust before the work is done?

When politicians put far too much pathos into their speeches, people should be on their guard -- with a notable exception. There is one issue where no comparison is overinflated and no superlative appears exaggerated: Winfried Kretschmann, for instance -- the governor of the southern German state of Baden-Württemberg and a member of Germany's Green Party -- spoke of "theological timeframes" that now need to be decided upon.

The issue is nuclear waste and its safe disposal. Germany will have to build a storage facility deep underground that can survive the ravages of wars, revolutions and even another ice age. Indeed, the remains of the nuclear age will have to be kept in a final repository for 1 million years -- longer than the human race has existed.

This very interesting and very profound 2-page essay was posted on the German website spiegel.de on Thursday, May 10th.  Marshall Angeles sent it to me on the Tuesday...and it's been waiting for a place in today's column.

Russia slammed by U.S. for sending anti-ship missiles to Syria

The Obama administration denounced Russia on Friday for providing Syrian President Bashar Assad's regime with anti-ship missiles, saying the weapons would only worsen a war that Washington and Moscow have been promising to work together on stopping.

Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, criticized what he called an "unfortunate decision that will embolden the regime and prolong the suffering." He spoke at a news conference after the New York Times reported that Russia recently delivered an advanced version of Yakhont anti-ship cruise missiles to Syria.

"It's ill-timed and very unfortunate," Dempsey said.

Defense Secretary Chuck Hagel also urged Russia to rethink its military aid, saying that the U.S. and Russia both wanted to stabilize Syria after more than two years of civil war but that the Kremlin's military support makes the situation even more dangerous.

If this isn't a clear-cut case of the pot calling the kettle black, then I don't know what is.  This AP story, posted on the foxnews.com Internet site yesterday, is a must read for all students of the "New Great Game"...as are the next two stories. I thank Marshall Angeles for his second offering in a row.

In Diplomatic Escalation, Russia Publicly Exposes the CIA Station Chief in Moscow

Earlier this week, the CIA's Russian outpost was deeply humiliated when (in a calculated move following accusations that the U.S. had not gotten appropriate Russian information on the two Boston bombers, and following the visit of John Kerry whose primary objective was to, unsuccessfully, get Russia to relent on Syria) Russia's FSB exposed and broadcast on live TV the arrest of its agents caught while attempting to recruit a Russian spy.

Back then we suggested to "expect a prompt retaliation by the US" however it turns out Russia was not nearly done with embarrassing the US in what is becoming an obvious campaign to humiliate the US intelligence service, this time by going where very few clandestine operations go, at least during peacetime detente: by publicly exposing the head counterparty US spy.

As The Telegraph reports, "Russia's Federal Security Service has publicly revealed the identity of a man it calls the CIA station chief in Moscow, in what experts say is a serious breach of intelligence protocol."

This Zero Hedge article was posted on their website early yesterday afternoon Eastern Daylight Time...and it's a must read...as is The Telegraph story to which it is linked.  I thank 'David in California' for finding it for us.

FSB: CIA crossed ‘red line’ with agent Fogle

The CIA has crossed a certain ‘red line’ in professional ethics of intelligence as American spy Ryan Fogle attempted to recruit a Russian agent, an FSB operative told Russia Today.

“In case with Fogle, the CIA crossed the red line and we had no choice but to react observing official procedures,” a representative of the Russian Security Service, the FSB, said in an interview with RT. 

The spy story broke earlier this week after it was made public that Fogle – who had worked under the guise of a third secretary at the U.S. Embassy in Moscow – was detained after being caught red-handed trying to recruit a Russian intelligence officer for the CIA. Following the incident he was expelled from Russia.

As early as by autumn 2011, the FSB was aware that the CIA was pursuing a goal to get an informer within the Russian special services, the agent told RT.

This story was posted on the Russia Today website in the early afternoon Moscow time...and it's another offering from Roy Stephens.

Pakistan: Geopolitical conundrum

Sixty-six percent of Pakistan's 185 million people are under the age of 30 and almost all of them say they are worse off today than when they were 21.

They also say they would rather have a "strong leader" or one with a "strong hand" than a democracy.

Now they have what they wish -- Nawaz Sharif, 63, a former prime minister who was ousted in 1999 in Pakistan's fourth military coup since independence in 1947.

Thus, Pakistan has been ruled by the military for 33 years, or half of its life as an independent nation.

This is upi.com news item is definitely worth your time...and is an absolute must read for all "New Great Game" students.  Roy Stephens sent it to me on Wednesday...and I've been saving it for today as well.

Drones...and the Rivalry Between the U.S. and China

This week the Navy will launch an entirely autonomous combat drone — without a pilot on a joystick anywhere — off the deck of an aircraft carrier, the George H. W. Bush. The drone will then try to land aboard the same ship, a feat only a relatively few human pilots in the world can accomplish.

This exercise is the beginning of a new chapter in military history: autonomous drone warfare. But it is also an ominous turn in a potentially dangerous military rivalry now building between the United States and China.

The X-47B, a stealth plane nicknamed “the Robot” by Navy crews, is a big bird — 38 feet long, with a 62-foot wingspan — that flies at high subsonic speeds with a range of over 2,000 miles. But it is the technology inside the Robot that makes it a game-changer in East Asia. Its entirely computerized takeoff, flight and landing raise the possibility of dozens or hundreds of its successors engaged in combat at once.

It is also capable of withstanding radiation levels that would kill a human pilot and destroy a regular jet’s electronics: in addition to conventional bombs, successors to this test plane could be equipped to carry a high-power microwave, a device that emits a burst of radiation that would fry a tech-savvy enemy’s power grids, knocking out everything connected to it, including computer networks that connect satellites, ships and precision-guided missiles.

This op-ed piece showed up on The New York Times website last Sunday...and is another story that had to wait until today's column.  It's also had a change in headline...and now reads "Pilotless Planes, Pacific Tensions".  It sounds almost benign now...but it's an eye-opener...and a must read.  I thank Roy Stephens for sending it.

Psychopaths: The market...and life...Stephan Verstappen

Defense Against the Psychopath is a documentary excerpted from chapter one of my book; The Art of Urban Survival. It teaches people how to recognize and defend against our society's most dangerous predators, psychopaths. 

The first line of defense against these people is acknowledging their existence.

This very disturbing 39-minute video falls into the absolute must watch category.  Ever since I was aware of their presence, I run everyone I have medium to long-term dealings with, through this "sociopathic filter"...and, dear reader, you should do precisely the same thing.  I thank reader "Steve in Las Vegas" for bringing this first rate educational video to my attention...and now to yours.

Five King World News Blogs

1. Andrew Maguire [#1]: "Physical Demand Shows Gold in Massive Bull Market".  2. Egon von Greyerz:  "Coming Collapse, Massive Global Debt and the Bernanke Fed".  3. Art Cashin [#1]: "Shorts Being Squeezed and Market May Go Parabolic". 4.  Andrew Maguire: [#2]: "Bullion Banks Are About to Exploit Gold and Silver".  5. Art Cashin [#2]: "Money Supply Going Parabolic, Gold and Inflation".

$625K in gold stolen at Miami International Airport

A box containing $625,000 in gold arrived at Miami International Airport early Tuesday but disappeared about an hour and a half later, Miami-Dade police say.

An American Airlines plane arrived at Miami International Airport from Guayaquil, Ecuador, and docked at Gate D3 at 4:42 a.m. Tuesday, according to a Miami-Dade Police Department incident report. A group of employees unloaded the plane -- including the box containing the gold -- and moved it to the other side of the plane about 5:15 a.m.

A tug arrived at the plane from Gate D6, according to the report. It then drove away with the cart holding the plane's cargo at 5:22 a.m. Surveillance video showed the tug continue to D37 before it entered an alley and disappeared from the video.

This story is a couple of days old, but I didn't have space for it until now...and I thank Marshall Angeles for sending it along.

Gold Seen Crushed as Credit Suisse Forecasts $1,100 in Year

Gold, down 17 percent since January, is poised to lose 20 percent in a year as inflation fails to accelerate and with the worst risks to the global economy waning, Credit Suisse Group AG said.

Gold will trade at $1,100 an ounce in a year and below $1,000 in five years, according to Ric Deverell, head of commodities research at the bank. Lower prices are unlikely to lure more central-bank buying, said Deverell, who worked at the Reserve Bank of Australia for 10 years before joining Credit Suisse in 2010.

“Gold is going to get crushed,” Deverell told reporters in London today. “The need to buy gold for wealth preservation fell down and the probability of inflation on a one- to three-year horizon is significantly diminished.”

This Bloomberg article was posted on their website late Thursday morning MST...and if you believe this 'analyst'...then I have a bridge I'd like to sell you.  I thank Ken Hurt for sharing it with us.

Gold Bears Revived as Rout Resumes After Coin Rush: Commodities

Gold bears are dominant again after prices resumed their slump and billionaire George Soros joined investors selling holdings in exchange-traded products that have retreated to a two-year low.

Seventeen analysts surveyed by Bloomberg expect prices to fall next week, with eight bullish and three neutral, the highest proportion of bears in two weeks. The analysts were divided a week ago after gold rebounded as much as 13 percent from the two-year low of $1,321.95 an ounce on April 16. ETP holdings slid 16 percent to 2,207.1 metric tons this year, the lowest since July 2011, data compiled by Bloomberg show. 

“The momentum has slowed significantly,” said Jeremy Baker, a senior commodities strategist who oversees about $800 million of assets at Harcourt Investment Consulting AG in Zurich and who forecasts prices may drop as low as $1,200 in six months. “The safe haven has definitely lost its gleam. We are in a declining phase here.”

This Bloomberg story is from yesterday...and another offering from reader Ken Hurt.  Along with that bridge, I have some swamp land in Florida for sale as well.

Sprott's Thoughts: Where is the Gold Coming From?

We have tried to balance supply and demand figures in the gold market to answer a 15 year old question - “where is the supply of gold coming from?” In 1998, Frank Veneroso first suggested that it was the Western Central Banks that were supplying the market and we’ve been looking for a smoking gun ever since.

We have published our research several times, but none has got more attention amongst gold-watchers than our two pieces on the activities of Western Central Banks. In the Markets at a Glance entitled “Do Western Central Banks Have Any Gold Left Part II” we surmised that more than 4,500 tonnes of gold was exported by the United States between 1991 and 2012. Further, we postulated that it must have come from the US Government as they would be the only viable provider of metal in this quantity.  There is no other seller in the market that could explain the discrepancy in these import/export figures. Let’s review the updated figures and then examine some expert opinions.

This short commentary by Eric Sprott and David Franklin was posted on the sprottgroup.com Internet site yesterday...and is definitely worth reading.

How Iran Benefits From an Illicit Gold Trade With Turkey

Turkish prime minister Recep Tayyip Erdoğan has arrived in Washington, D.C. for a much-anticipated summit with President Barack Obama. The timing of the visit -- amid reports of chemical weapons usage in Syria and an attack against a Turkish border town by alleged Syrian agents -- will make it hard to talk about anything other than the civil war in Syria.

But some members of Congress want to draw attention to a less-obvious issue. Last month, a bipartisan group of 47 members of Congress penned a letter to Secretaries John Kerry and Jack Lew calling for clarification on Turkey's financial dealings with Iran. Under the initiative of South Carolina Republican Representative Jeff Duncan, the letter expressed deep concerns over Turkey's gold dealings that have helped Iran skirt Western sanctions designed to curtail Tehran's illicit nuclear program.

This short essay was posted in The Atlantic early yesterday morning EDT...and I thank Manitoba reader Ulrike Marx for her first of three stories in a row in today's column.

Mine union threatens to bring South Africa to 'standstill'

The leader of South Africa's biggest platinum mining union threatened on Friday to bring Africa's No. 1 economy "to a standstill" and demanded a meeting with President Jacob Zuma, ramping up the rhetoric in an 18-month labor crisis.

The rand, which tumbled to a four-year low against the dollar on Thursday on fears of a strike at Anglo American Platinum (Amplats), extended its slide on concerns about further disruptions to an already struggling economy.

The currency fell as low as 9.4334, its lowest since April 2009 when emerging markets were still reeling from the effects of the global financial crisis.

A protest strike called for Friday by at least two AMCU officials failed to materialize as all workers reported for the morning shift as normal.

This Reuters story was filed from Rustenburg, South Africa...and posted on their Internet site early yesterday morning EDT.

Anti-gold campaign at play in India?

It could have posed as a model scheme to curtail gold imports. In order to stifle India’s appetite for gold, the government has introduced inflation index bonds. The first tranche amounting to around $364 million (R20 billion) is to be introduced on June 4.

Inflation Indexed Bonds (IIBs) are a new category of debt instruments to be introduced in India, where the coupon and principal amount would be linked to the rate of wholesale price inflation with a lag of four months. The authorities have said the objective of introducing such bonds is to channelise savings into productive sources of instruments from unproductive ones like gold.

Slowly but surely, there seems to be an anti-gold campaign that is at play in India. The concerted effort by the Indian government to discredit gold by imposing several curbs, and channelise consumers away from the precious metal, indicates a desperation that has not gone unnoticed by savvy investors.

This very interesting article was filed from Mumbai...and posted on the mineweb.com Internet site yesterday.  It's Ulrike's third and final offering in today's column.

John Butler – QE and a Misesian crack up boom

Alasdair Macleod chatted with John Butler, author of The Golden Revolution and the Amphora Report investment newsletter.

John briefly details his motives for writing his book, before the discussion moves onto the latest knockdown in gold against the current news stories regarding global demand.

From weak hands to strong, from West to East, from paper to physical, once a floor is found and the physical supply becomes tight, both Alasdair and John agree that the market will then start to clear at higher prices.

This 27-minute podcast, posted on the goldmoney.com Internet site on Thursday, is certainly worth your time.  I thank Elliot Simon for digging it up for us.

'Naive' to think gold isn't manipulated too, fund manager John Butler says

Fund manager John Butler, interviewed by Max Keiser on "The Keiser Report" on the Russia Today network, remarks that it's "naive," amid all the acknowledged manipulation of markets going on today, to think that the gold market is not being manipulated too. Keiser's interview with Butler begins at the 14:25 mark in the video posted at the youtube.com Internet site...and I thank Chris Powell for wordsmithing the above preamble.

David Stockman..."FDR: Sowing the Seeds of Chaos"

The long-lasting imprint from FDR’s famous “Hundred Days” did not stem from the bank holiday, national industrial recovery act, the farm adjustment act, the Tennessee Valley Authority, or the public works administration.

Instead, it is lodged in the footnotes of standard histories; namely, FDR’s April 1933 order confiscating every ounce of gold held by private citizens and businesses throughout the United States. Shortly thereafter he also embraced the Thomas Amendment, giving him open-ended authority to drastically reduce the gold content of the dollar; that is, to trash the nation’s currency.

These actions did not constitute merely a belated burial of the “barbarous relic.” In the larger scheme of monetary history, they marked a crucial tipping point. They initiated a process of monetary deformation that led straight to Nixon’s abomination at Camp David, Greenspan’s panic at the time of the 1998 Long-Term Capital Management crisis, and the final destruction of monetary integrity and financial discipline during the BlackBerry Panic of 2008.

This longish absolute must read is an excerpt from David Stockman's book "The Great Deformation: The Corruption of Capitalism in America".  It was posted on the mises.org Internet site on Thursday...and I thank Elliot Simon for today's last story.

Big Banks Get Break in Rules to Limit Risks

Under pressure from Wall Street lobbyists, federal regulators have agreed to soften a rule intended to rein in the banking industry’s domination of a risky market.

The changes to the rule, which will be announced on Thursday, could effectively empower a few big banks to continue controlling the derivatives market, a main culprit in the financial crisis.

But critics worry that the banks gained enough flexibility under the plan that it hews too closely to the “pre-crisis status.”

“The rule is really on the edge of returning to the old, opaque way of doing business,” said Marcus Stanley, the policy director of Americans for Financial Reform, a group that supports new rules for Wall Street.

The Dodd-Frank Act now exists in name only, as it's basic tenets have been gutted.  This is just another, if not the last, brick in the wall for what the bill stood for originally.  This article was posted on The New York Times website late on Wednesday afternoon...and I thank reader Clive Sutherland for today's first story.

Alex Pollock: Forget Too Big to Fail Banks — It's Time to Break Up the Fed

By the Federal Reserve's own logic about breaking up banks that are too big to fail, it's time to break the Fed apart for the same reasons, according to a blistering analysis by Alex Pollock of the American Enterprise Institute.

Pollock, in a note to American Banker, said St. Louis Fed President Jim Bullard recently laid out four simple ways to determine when a bank is too big and needs to be split up — namely, if its assets are too voluminous, if it's too leveraged, if it has too much short-term funding of longer term assets and if it creates too much systemic risk.

Pollock said the Fed's current operating status could be accurately characterized by the following: It's too big, with over $3.3 trillion in assets, it's too leveraged at 60 to 1, it's extremely short-funded and it's "a frequent contributor through its interest rate and money-printing action of gigantic systemic risk."

"Therefore, it follows pretty clearly from the same logic that we should break up the Fed," said Pollock, former CEO of the Federal Home Loan Bank of Chicago.

All in favour say aye!  This story was posted on the moneynews.com Internet site during the East Coast lunch hour yesterday...and it's courtesy of Elliot Simon.

Exiting Q.E. could 'undermine the recovery', IMF warns

Central banks, including the Bank of England, strayed into “unchartered waters” by cutting interest rates to near-zero and launching billions of pounds of quantitative easing, and they will find the exit “difficult to control”, the IMF said. “The market response [to a rise in interest rates] will be less predictable ... possibly for several months or even years.”

Long-term interest rates could spike as investors dump over-priced bonds and banks could face a fresh round of losses on both their gilt portfolios and loan books as borrowers struggle to meet higher monthly payments, it added.

For the economy more broadly, though, the IMF said the risks were considerable. “The risk is interest rate volatility and overshooting in the adjustment of long-term rates. The potential sharp rise in long-term interest rates could prove difficult to control, and might undermine the recovery (including through effects on financial stability and investment),” it wrote in a policy paper.

It also argued that there was clear evidence of “diminishing returns” in continuing with existing policies like QE. The most effective policy now, it suggested, was “conditional guidance” of the sort used by the US Federal Reserve and under review by the Bank. It has also been championed by incoming Governor Mark Carney.

This news item appeared on the telegraph.co.uk Internet site at 4:00 p.m. BST yesterday...and it's Roy Stephens' first offering in today's column.

Now Venezuela is running out of toilet paper

First milk, butter, coffee and cornmeal ran short. Now Venezuela is running out of the most basic of necessities , toilet paper.

Blaming political opponents for the shortfall, as it does for other shortages, the embattled socialist government says it will import 50 million rolls to boost supplies.

That was little comfort to consumers struggling to find toilet paper on Wednesday.

"This is the last straw," said Manuel Fagundes, a shopper hunting for tissue in downtown Caracas. "I'm 71 years old and this is the first time I've seen this."

This AP story showed up on the philly.com Internet site yesterday...and I thank Phil Barlett for bringing us the first story of any real importance in today's column.... )

Nigel Farage flees barrage of abuse from Edinburgh protesters

Perhaps for the first time in his political career, Nigel Farage, the scourge of British politics, found himself in retreat on Thursday evening as dozens of protesters hounded him out of central Edinburgh.

The Ukip leader was finally whisked away in a police riot van under a tirade of abuse from a crowd of about 50 young demonstrators – students, anti-racist campaigners and activists in the radical left pro-Scottish independence movement – after being forced to retreat not once, twice or three times, but four times.

Farage was first forced out of the Canon's Gait pub on the Royal Mile after the landlord took fright as the demonstrators disrupted his casual press conference with shouts of "racist", "scum" and "homophobe". Out on the street, as the fingers pointed and taunts escalated, he was rejected by one taxi and turfed out of a second.

This story appeared on the guardian.co.uk Internet site early yesterday evening BST...and I thank reader Bob Visser for sending it along.

Heroic Spain is damned if it does, and damned if it doesn't

The Telegraph has been accused by Spanish newspapers of launching a "brutal attack", succumbing to "Hispanophobia", leading an Anglo-Saxon assault, and otherwise trying to divert attention away from Britain's own lamentable condition. Spanish readers might be comforted to know that we are even more brutal with our own leaders.

Since I was in Madrid last week as a guest of the Spanish government, let me add my half-penny to the debate. Spain has already done all that can reasonably be expected of any nation, enduring its "calvario" with dignity and fortitude. It has slashed internal consumption by 16 percentage points of GDP without triggering a social explosion - "no mean feat", said one minister.

Whether the country proves to be solvent or insolvent by mid-decade depends almost entirely on the future actions of the European Central Bank and the northern creditor powers. Nothing is pre-determined.

Ambrose Evans-Pritchard is on the defence here...and the article from yesterday's edition of The Telegraph falls into the must read category.  I thank Roy Stephens for his second offering in today's column.

World from Berlin: 'Austerity Is Making European Economy Sicker'

The European common currency zone has now been in recession for six straight quarters, with three of the bloc's four largest economies now suffering persistent negative growth. Could the Continent's pursuit of austerity be backfiring? German commentators believe the answer is yes.

The European Union statistics office on Wednesday noted that nine of 17 euro-zone member states are now in recession, with France being the newest significant member of that club. Furthermore, the common currency zone, with bloc-wide declines in economic output for six straight quarters, is now struggling through its longest recession ever, worse even than the downturn in the immediate wake of the 2008 financial crisis.

The contraction was not huge; the euro-zone economy shrank by just 0.2 percent in the first three months of this year. And the German economy narrowly avoided recession, posting growth of 0.1 percent. But the situation in large economies such as Italy and Spain, both of which saw contractions of 0.5 percent in the first quarter of this year, is worrisome.

The currency area's persistent stagnation has raised concerns that Europe could be facing a "lost decade" like the one Japan recently lived through. Klaas Knot, head of the Dutch central bank and member of the European Central Bank board, is just one of many significant voices sounding the warning.

This article appeared on the German website spiegel.de early yesterday afternoon Europe time...and once again I thank Roy Stephens for bringing it to our attention.

Israel Hints at New Strikes, Warning Syria Not to Hit Back

In a clear warning to Syria to stop the transfer of advanced weapons to Islamic militants in the region, a senior Israeli official signaled on Wednesday that Israel was considering additional military strikes to prevent that from happening and that the Syrian president, Bashar al-Assad, would face crippling consequences if he retaliated.

“Israel is determined to continue to prevent the transfer of advanced weapons to Hezbollah,” the Israeli official said. “The transfer of such weapons to Hezbollah will destabilize and endanger the entire region.”

“If Syrian President Assad reacts by attacking Israel, or tries to strike Israel through his terrorist proxies,” the official said, “he will risk forfeiting his regime, for Israel will retaliate.”

This news item was posted on The New York Times website on Wednesday sometime...and I thank Marshall Angeles for bringing it to my attention...and now to yours.

Russian warships enter Mediterranean to form permanent task force

Warships from Russia’s Pacific Fleet have entered the Mediterranean for the first time in decades. Russia’s Navy Chief says the task force may be reinforced with nuclear submarines, as the country starts building up a permanent fleet in the region.

“The task force has successfully passed through the Suez Channel and entered the Mediterranean. It is the first time in decades that Pacific Fleet warships enter this region,” the Pacific Fleet spokesman, Capt. First Rank Roman Martov told RIA.

The vessels are now heading to Cyprus and will make a port call in the city of Limassol, he added.

The group includes destroyer “Admiral Panteleyev,” two amphibious warfare ships “Peresvet” and “Admiral Nevelskoi,” as well as a tanker and a tugboat.

This article was posted on the Russia Today website early yesterday evening Moscow time...and it's another story from Roy Stephens.

China premier says little room for policy stimulus: media

China has limited room to use government spending and policy stimulus to boost its economy, China Premier Li Keqiang was quoted as saying on Wednesday, dashing hopes among some investors that Beijing may take steps to foster growth.

Li was quoted in the state-owned China Securities Journal as saying that though the economy faces considerable headwinds and uncertainty, China should allow market forces to do their work.

"If there in an over-reliance on government-led and policy driven measures to stimulate growth, not only is this unsustainable, it would even create new problems and risks," Li was quoted by the paper as saying indirectly.

His remarks were made at a meeting of the state council, or China's cabinet, on Monday after a series of data showed a recovery in the world's No. 2 economy faltered in April.

This Reuters story, filed from Beijing, was posted on their website in the wee hours of Wednesday morning EDT...and it's a little something I found in yesterday's edition of the King Report.  It's definitely worth reading.

Japan storms back on weak yen, but Asia trembles

Japan’s economy has roared back to life as the radical reflation policies of premier Shinzo Abe drive a surge of consumer spending, but fears are growing that the tumbling yen could set off a broader Asian crisis.

Growth jumped to a 3.5pc rate in the first quarter, vindicating the government’s efforts to break Japan’s deflation psychology and lift the country out of its 20-year ice age. “Abe’s kick start appears to have succeeded,” said Flemming Nielsen from Danske Bank.

Retail sales are soaring as a “wealth shock” electrifies the economy. The Nikkei index has risen has 70pc since November, with foreign hedge funds among the first to jump on the bandwagon.

The weaker yen is already delivering a powerful punch, accounting for almost half the growth. The currency has dropped 30pc against the dollar and China’s yuan since August, and 37pc against the euro.

This Ambrose Evans-Pritchard commentary was posted on the telegraph.co.uk Internet site early yesterday evening BST...and I thank Manitoba reader Ulrike Marx for sharing it with us.

Three King World News Interviews

The first interview is with Rick Rule...and it's headlined "This Is What I am Doing With My Own Money Right Now".  Next is this commentary by Keith Barron. It's entitled "Premiums Soaring as Massive Run on Gold and Silver Continues".  And last is this interview with Citi analyst Tom Fitzpatrick...and it bears the title "Five Incredibly Important Gold and U.S. Dollar Charts".

U.S. seizes funds of largest bitcoin exchange, charging money transfer violation

The seizure of funds of the largest bitcoin exchange, Mt. Gox, was triggered by an alleged failure of the company to comply with U.S. financial regulations, according to a federal court document.

The U.S. District Court in Maryland on Tuesday ordered the seizure of Mt. Gox's funds, which were in an account with Dwolla, a payments company that transferred money from U.S. citizens to Mt. Gox for buying and selling the virtual currency bitcoin.

A copy of the seizure order was provided on Wednesday by a spokeswoman for the U.S. Immigration and Customs Enforcement (ICE), the investigative arm of the Department of Homeland Security.

This article was posted on the pcworld.com Internet site on Wednesday...and I found it in a GATA release yesterday.

Soros Joins Gold-Stake Cuts Before Bear Market Drop

Billionaire investor George Soros joined Northern Trust Corp. and BlackRock Inc. in cutting holdings of exchange-traded products backed by gold before a bear market in prices last month, while John Paulson maintained a stake that lost about $165 million in the first quarter.

Soros Fund Management LLC lowered its investment in the SPDR Gold Trust, the biggest such fund, by 12 percent to 530,900 shares as of March 31, compared with three months earlier, a Securities and Exchange Commission filing showed yesterday. Funds run by Northern Trust and BlackRock showed reductions of more than half, according to earlier filings. Paulson & Co., the largest investor in SPDR, held 21.8 million shares, while Schroder Investment Management Group bought 2.1 million.

This Bloomberg story was posted on their website early yesterday afternoon MDT...and it's courtesy of reader Ken Hurt.

Soros Reports Over $239mm In Gold Positions, Buys $25mm In Call Options On Juniors

In a 13-F release issued by the SEC after market close yesterday, it was reported that Soros Fund Management LLC, founded and chaired by billionaire financier George Soros, significantly increased its gold related holdings, most notably, through the purchase of over $25 million dollars worth of call options on the GDXJ Junior Gold Miners index.

This stunning move by one of the world’s top performing hedge funds, suggests a powerful surge ahead for gold equities. It should be noted, that in the forty years prior to 2010, the Soros Fund averaged a 20% annual rate of return.

This very short posting over at the bullmarketthinking.com Internet site yesterday, is definitely worth reading...and I thank Phil Barlett for pointing it out.

The World's Central Banks Added To Their Gold Stockpiles Even As Prices Tumbled

A new report from the World Gold Council shows that central banks bout 109 tonnes of gold in the first quarter.

This was the seventh straight quarter in which they purchased over 100 tonnes of gold.

Central banks held 31,735.4 tonnes of gold as of May 2013. This was up from 31,694.8 tonnes as of April 2013.

According to the WGC, Russia and South Korea were among the biggest buyers of gold.

This businessinsider.com story from yesterday was posted on their Internet site late yesterday morning...and I thank Roy Stephens for sharing it with us.

From Petrodollar to Petrogold: The US is Now Trying to Cut Off Iran's Access to Gold

The US is moving to broaden its 'blockade' efforts of Iran to the movement of pure gold into the Islamic Republic. The US-led embargo of Iranian crude succeeded in slowing the flow of petrodollars into the nation but as Foreign Affairs committee chairman Edward Cohen remarked, there is "no question that there is gold going from Turkey to Iran."

While the official line from US elite such as Bernanke remains that 'gold is not money' it appears that increasingly other nations would disagree, as Cohen admitted, "in large measure what we're seeing is private Iranian citizens buying gold as a protection against the falling value of Iran's currency."

It would seem somewhat self-evident that the US is admitting, by attempting to embargo this gold flow, that outside the US, the Dollar is becoming increasingly irrelevant (see China's gold demand); and that for many countries the petrodollar no longer exists, having been replaced by 'Petrogold'.

This Zero Hedge posting from yesterday was sent to me by Marshall Angeles...and it's worth reading.

Gold Demand in One Chart: Physical vs. ETF

China's demand for gold jumped 20% to 294 tonnes in the first quarter of 2013, while global gold demand overall slid 13% thanks to the dramatic rotation of demand from paper to physical. Chinese demand in gold bars and coins grew to 109.5 tonnes - more than double the five-year quarterly average of 43.8 tonnes.

Central banks added 109.2 tonnes of gold to their reserves in Q1 2013, the ninth consecutive quarter of net purchases. But it was the Q1 ETF outflows of 176.9 tonnes, equating to a 7% decline in total gold ETF holdings that obscured the strong rise in investment for gold bars and coins at the retail level. In the face of the huge 'paper' gold ETF outflows, 'physical' gold demand surged to its highest in 18 months...

The charts are incredible...and this Zero Hedge story is a must read...and it's the second story in a row from Marshall Angeles.

Jeff Nielson: Not the World Gold Council but the World Paper Council

The World Gold Council would more properly be called the World Paper Council, Jeff Nielson of Bullion Bulls Canada writes today, since the council facilitates ownership of paper promises of gold rather than ownership of gold itself. In doing so, Nielson says, the council is just a tool of major banks. His commentary is headlined "The World Paper Council" and it's posted at the Bullion Bulls Canada Internet site.

Jeff has it exactly right, of course.  As Chris Powell has said on many occasions over the years...the real reason that the World Gold Council exists in its present form, is to ensure that a real World Gold Council never comes to be.  I found this story posted on the gata.org Internet site yesterday...and it's worth reading.

Gold’s dichotomy: Investment demand plunges, but consumers keep buying

Today’s gold market is being defined by two trends: aggressive selling by investors in North America through exchange-traded funds, and aggressive buying by consumers in Asia.

“When the hedge funds and other investment funds turn negative, it just overwhelms the physical demand,” said George Topping, an analyst at Stifel Nicolaus.

Given that April was the most volatile month for gold since 2008, investment demand could wind up being even worse in the current quarter.

The ETF sell-off masked the fact that underlying physical gold demand has been strong. And in the case of China and India, it has been remarkably strong.

This news item showed up on Canada's financialpost.com Internet site late yesterday afternoon...and I thank Roy Stephens for his final offering in today's column.

Growth in demand for gold in India higher than China

Gold consumption reflected a strong revival over last year as Indian households flocked retail outlets to purchase gold jewellery owing to a fall in price of the yellow metal. As against a decline of 13% in global demand for gold, India reported a 27% increase in Q1 2013, surpassing China's demand growth of 20%.

While demand for jewellery increased by 15% to 159.5 tonnes as compared to Q1 2012, investment demand witnessed a significant rise of 52% at 97 tonnes in the January to March period this year, said a recent report released by the World Gold Council (WGC). The government on Thursday also slashed the import tariff value of gold to $466 per 10 grams from $472 per 10 grams.

"Demand growth was largely driven by rural households whose incomes benefited from a good late harvest," the report said. A 4% decline in local gold prices over the quarter further prompted jewellery purchase during the wedding season. Gold prices fell by Rs 500 to a one-month low of Rs 26,800 per 10 grams in the capital on Thursday. While domestic prices fell by over 3% during Q1, in April alone, gold prices fell by nearly 18% due to global factors.

This story showed up on The Times of India website early Friday morning IST...and it's definitely worth reading.  I thank Ulrike Marx for digging this story up for us.

'Fundamentals always win eventually' -- but who will define 'eventually'?

Market analyst John Rubino remarks on the futility of technical analysis in a manipulated market like gold.

Rubino writes: "When big players with regulatory immunity can move an asset's price -- and can see resistance/support levels and moving averages just as clearly as anyone else -- smaller traders don't stand a chance."

"Fundamentals always win eventually," he adds, and maybe they do, but the question lately on the minds of gold investors may be whether fundamentals always win within the course of a normal human lifespan. As long as many gold investors -- including some very big ones -- buy paper gold, which can be created to infinity, instead of real metal; as long as the gold mining industry is so oblivious to the rigging of the price of its product and does nothing to defend itself; and as long as mainstream financial news organizations have no interest in committing actual journalism, central banks won't have to worry about any threat to their totalitarian power.

Those are the variables on which GATA continues to work.

Rubino's commentary is headlined "The Golden Bull's Eye" and it's posted at the 24hGold.com Internet site.

No surprises here, dear reader, as I've been saying this for years...and Chris Powell's opening preamble above is definitely worth reading more than once.  As you have probably already figured out, I found this very short must read essay in a GATA release yesterday.

The Tulip Harvest is in!

Amsterdam...March 1637 (Ruyters): The latest Dutch tulip harvest is in, and experts confidently predict another bumper year for tulip growers and tulip investors alike. Billionaire hedge farmer Jon Paulsen is rumoured to have added hyacinths to his multi-strategy offering and has just launched a fund denominated in daffodils. Tulip stocks climbed by a few millimetres, as they are prone to every day if they grow at their normal organic rate; Couleren bulbs rallied another 2 guilders in heavy Antwerp trading; Rosen and Violetten bulbs ended the trading session more or less unchanged, albeit a bit squashed, and at record highs. The market has been further buoyed in recent weeks by a tide of manure issued by the leading tulip advocate Pol Kruygman from his op-ed column in the New Amsterdam Times, ‘Witterings of a Tulip Fanatic’. Kruygman promised to keep the manure coming, whether anybody wanted it or not.

The popularity and rising value of this colourful perennial plant evidently know no bounds and this is surely a golden age that is never likely to end. Future generations will evidently marvel at the effortless wealth on offer to investors committing their capital unreservedly to tulips today. Dutch housewives bedecked in tulip hats, tulip scarves, tulip dresses and tulip shoes danced gaily in the streets of Tuliptown (formerly Amsterdam) whilst smoking tulip cigarettes, slurping tulip soup, and drinking tulip beer from tulip beer glasses with tulip straws. Given that the anthocyanin Tulipanin is toxic to horses, cats and dogs, the inhabitants of Amsterdam have long since stopped rearing horses, cats and dogs; they have chosen to rear tulips as pets instead.

Many Dutch households have also abandoned the traditional export trades in herring, gin and cheese in order to concentrate their energies where the action is: tulips.

That just about sums up the state of economic, financial and monetary affairs of the entire world today.  Just add 376 years.  This excellent 3-page commentary is from PFP Wealth Management in the U.K...and certainly falls into the must read category...and I thank London, U.K. reader Jonathan Lavy for today's first 'story'.

Another Amazing 'Fat Tuesday' on Wall Street

The Dow Jones Industrial average closed Tuesday at a new all-time high with a triple-digit surge of 123 points.

And it’s fitting that the Dow hit a new high of 15,215 on a Tuesday because it’s the 18th straight Tuesday that the industrials have finished the day higher than where they began.  This 18 for 18 streak started all the way back on January 15.  The Dow since then is up more than 1700 points. And according to the statistical gurus at Bespoke Investment Group over 1400 of the 1700 plus points gained since then on the Dow have come on, you guessed it, Tuesday. That’s 83 percent of all the gains in stocks since then coming on this one day of the week.

This story was posted on the abcnews.com Internet site shortly after the markets closed on Tuesday...and I found it in yesterday's edition of the King Report.

Acting Chief of I.R.S. Forced Out Over Tea Party Targeting

President Obama announced Wednesday night that the acting commissioner of the Internal Revenue Service had been ousted after disclosures that the agency gave special scrutiny to conservative groups. Attorney General Eric H. Holder Jr., meanwhile, warned top I.R.S. officials that a Justice Department inquiry would examine any false statements to see if they constituted a crime.

Speaking in the White House’s formal East Room, Mr. Obama said Treasury Secretary Jacob J. Lew had asked for and accepted the resignation of the acting commissioner, Steven Miller, who as deputy commissioner was aware of the agency’s efforts to demand more information from conservative groups seeking tax-exempt status in early 2012.

“Americans have a right to be angry about it, and I’m angry about it,” Mr. Obama said. “It should not matter what political stripe you’re from. The fact of the matter is the I.R.S. has to operate with absolute integrity.”

Integrity?  What would the president know about that?  Just asking.  Well, they didn't waste any time picking a fall guy.  One wonders what else will develop going forward.  This story was posted on The New York Times website last night...and I thank Roy Stephens for his first offering of the day.

Elizabeth Warren Confronts Eric Holder, Ben Bernanke And Mary Jo White On Too-Big-To-Jail

Elizabeth Warren is one of the few Senators out there pushing to understand why the federal government has created an untouchable class of criminals in America that can do whatever they want whenever they want and, not only get away with it, but also get bailed out when they make mistakes.  Now she has written a letter to Ben Bernanke, Eric Holder and Mary Jo White.  My favorite line is: “If large financial institutions can break the law and accumulate millions in profits and, if they get caught, settle by paying out of those profits, they do not have much incentive to follow the law.”

This Zero Hedge piece is short...as is the Elizabeth Warren letter...and I thank Marshall Angeles for sharing it with us.

Why Hedge Funds’ Criticism of the Fed May Be Right

The economics world has been having a lot of fun with hedge fund managers.

After several such managers at a recent conference denounced the aggressive money-printing policies of Ben S. Bernanke, the Federal Reserve chairman, the economic blogosphere rose up to mock them.

Many hedge fund managers have been predicting that high inflation and fleeing creditors would send interest rates skyrocketing. Stanley Druckenmiller, Paul Singer, J. Kyle Bass and David Einhorn — all big names in the investing world — have warned against the supposedly runaway central banker. Mr. Druckenmiller said that Mr. Bernanke was “running the most inappropriate monetary policy in history.”

This essay appeared on The New York Times website during the New York lunch hour yesterday...and I thank Phil Barlett for sending it.

Treasury to suspend state, local securities sales

The Treasury Department on Friday will suspend sales of state and local government Treasury securities until further notice, the first action to avoid hitting the U.S. debt ceiling. The debt ceiling is expected to be reached on May 18, but the Treasury had been expected to take steps like this one in order to keep paying bills. Treasury Secretary Jacob Lew said last week that the U.S. will be able to avoid the debt limit until Labor Day. The Congressional Budget Office said Tuesday that the deadline could be as late as November.

This 1-paragraph story showed up on the marketwatch.com Internet site late yesterday afternoon EDT...and I thank reader "David in California" for bringing it to our attention.

Cameron's Conservatives table EU referendum bill

The British Conservative Party has tabled legislation that would guarantee an EU in/out referendum before the end of 2017.

The bill, released on Tuesday (14 May), is expected to be sponsored as a private member's bill by a backbench Conservative MP.

It has the support of Prime Minister David Cameron but will not be tabled as a government bill because of the coalition agreement with the pro-European Liberal Democrats.

The question to appear on the ballot papers is “Do you think that the United Kingdom should remain a member of the European Union?"

This news item, filed from Brussels, was filed on the euobserver.com Internet site yesterday morning Europe time...and I thank Roy Stephens for his second offering in today's column.

U.K.'s Petrol price 'rigged for a decade'

Motorists may have paid thousands of pounds too much for their petrol over the last decade, after two of Britain’s biggest companies were raided on suspicion of manipulating oil prices.

MPs and energy experts have raised fears motorists have been “taken for a very expensive ride”, after officials searched the offices of BP and Shell for evidence of price-rigging.

The companies are suspected of distorting the oil price since 2002, meaning drivers have potentially been ripped off for more than 10 years.

European investigators, who raided the London offices of BP and Shell, said the alleged price-rigging could have had a “huge impact” on the cost of oil, including the price of fuel for consumers.

This story was posted on the telegraph.co.uk Internet site late Wednesday evening BST...and it's courtesy of reader "David in California".

As Thieves Troll Spanish Farmland, Villagers Begin Patrols

José Briá finds it hard to sleep these days. Sometimes when he wakes up in the middle of the night, he drives out to his farmland a few miles from the center of this tiny village just to make sure everything is all right.

He has been robbed three times already this year: Once, chickens were taken. Then, some tools vanished. The last time, eight rabbits disappeared.

The farmers in Albelda have gotten so worried about thieves that they have taken to patrolling their fields at night, their cars bumping along between rows of peach and pear trees. They have found strategic spots that overlook the fertile valley here in northeastern Spain, and from there they peer into the dark, watching for headlights or flashlights, or any signs of intruders.

Such vigilance has helped, they think. But for many, it is a sorry state of affairs. For a long time, many of Spain’s small, isolated farming communities seemed all but immune from the economic crisis. The fields still needed to be plowed and the animals tended. Prices were not that great, but no one was really out of work. Now, however, many of the farmers believe the problem is at their doorstep.

This article was posted on The New York Times website on Tuesday...and it's another story courtesy of Phil Barlett.

German growth too weak to lift eurozone from recession

The eurozone economy continues to shrink as Germany's economy grew by a meager 0.1 percent in the past three months, while France slid back into recession, according to data from the EU statistics office Eurostat published on Wednesday (15 May).

Shrinking by 0.2 percent in the first three months of 2013, the eurozone economy has now been in recession for the past one and a half years, the longest period since 1995, when Eurostat started collecting the data.

The worst off are Greece - whose economy shrunk by 5.3 percent - and Portugal (-3.9%) compared to the same period last year.

France is also officially back in recession, after its economy shrank by 0.2 percent over the past six months, amid unemployment rates of over 10 percent and low business and consumer confidence.

This news item showed up on the euobserver.com Internet site very late in the afternoon Europe time...and is courtesy of Roy Stephens.

Battling the Crisis: Disunity Plagues E.U. Banking Union Talks

European leaders had hoped to quickly finalize plans for an EU banking union to regulate bank bailouts and provide a roadmap for unwinding insolvent financial institutions. But with the German election looming, Berlin is wary of moving forward. The result could be a lengthy delay.

The pledge was made almost a year ago. European leaders announced in the summer of 2012 that they were working on a plan to break the vicious cycle between the need to prevent banks from collapse and the surge in sovereign debt such efforts caused. In the future, they said, insolvent banks would not be saved by last-second, taxpayer-funded bailouts. Rather, troubled financial institutions would be propped up by a European banking union or they would be unwound in an orderly fashion.

Since then, leaders have been discussing what, exactly, such a banking union should look like. On Tuesday, European Union finance ministers met in Brussels for fresh talks in an attempt to reach agreement on the degree to which bank shareholders, creditors and savers should be involved in bailouts.

This article appeared on the German website spiegel.de yesterday...and it's courtesy of Roy Stephens, of course.

Three King World News Blogs

The first one is with Hong Kong hedge fund manager William Kaye...and it's headlined "Gold to Soar as West Enters a Frightening Economic Ice Age".  Next is John Embry.  It's entitled "This Catastrophic Situation is Entering the Terminal Phase".  The third interview is with Dan Norcini...and it's titled "Incredibly Important Developments in Many Key Markets".

CFTC's Gensler, Chilton's Positions May Not Be Renewed

Positions held by Commodity Futures Trading Commission Chairman Gary Gensler and CFTC Commissioner Bart Chilton are up for renewal, but so far neither official has had their position renewed, which suggests new blood may come into the agency, said an futures industry official on Wednesday.

In addition to Gensler’s and Chilton’s positions being up for renewal, CFTC Commissioner Jill Sommers is leaving soon, said Walter Lukken, chairman of the Futures Industry Association on Wednesday in Chicago. Sommers has said in interviews she would not leave until the last set of Dodd-Frank financial regulatory rules are in place.

“We may be faced with a set of new commissioners who will oversee a complex set of rules,” Lukken said, regarding the implementation of the Dodd-Frank rules. Lukken spoke to members of the futures industry at a luncheon to discuss the view from Washington.

No loss as far as I'm concerned.  If they did have good intentions at the beginning, they just didn't have the gonads to do what was right...or someone told them to toe the line, or else.  They, like the organization they work for, are controlled by the CME Group and JPMorgan.  This article appeared on the kitco.com Internet site yesterday...and I thank reader "Rocky R" for sending it along.

Gold and Bitcoin: Currencies of the Future—James Turk

Europe, says James Turk, founder and chairman of GoldMoney, is in the midst of two crises—one in the banking sector, the other related to economic activity, and capital is needed to solve both. As to the allegedly strong dollar, Turk, in this interview with The Gold Report, suggests comparing it to the price of gold rather than other fiat currencies for a better picture. And the world's newest currency—Bitcoin—has a lot in common with one of the oldest—gold.

This interview with James was posted on theaureport.com Internet site yesterday.

Lonmin's strike ends but, Amplats now in brace position

A two-day wildcat strike at Lonmin's South African platinum mines ended on Thursday, but a union official said workers might walk out at larger rival Anglo American Platinum (Amplats) to protest company plans to axe thousands of jobs.

Lonmin shares jumped more than 3 percent after the world's third-largest platinum producer said 86 percent of its workers had reported for duty, easing fears of prolonged unrest at the mine, the epicentre of months of industry turmoil last year that hit growth in Africa's largest economy.

This Reuters story was posted on the mineweb.com Internet site in the wee hours of this morning.

Indian gold premiums double amid fears of cut in supply

Gold premiums in India, the world's biggest buyer, more than doubled on speculation that government restrictions on bullion imports by banks to rein in a record current-account deficit would reduce supplies.

The fees jewelers pay dealers for bars jumped as high as $40 an ounce today from $17 to $18 yesterday, Bachhraj Bamalwa, a director at the All India Gems & Jewellery Trade Federation, said by phone from Kolkata. The Reserve Bank of India on May 13 limited imports by banks on a consignment basis to only those required to meet the genuine needs of exporters.

The biggest slump in prices in three decades last month led to shoppers crowding retail outlets across India to buy jewelry and coins, deepening concern that the nation's current-account deficit, the broadest measure of trade, would widen from an all-time high. The rush to buy bullion caused a shortage of physical supplies, prompting importers to charge a hefty premium over London prices, according to Bamalwa.

This Bloomberg news item, filed from Mumbai, was posted on their Internet site in the wee hours of yesterday morning Mountain Daylight Time...and I found it a GATA release.

'Lost City of Gold' found deep in Honduras rain forest?

New images of a possible lost city hidden by Honduran rain forests show what might be the building foundations and mounds of Ciudad Blanca, a never-confirmed legendary metropolis.

Archaeologists and filmmakers Steven Elkins and Bill Benenson announced last year that they had discovered possible ruins in Honduras' Mosquitia region using lidar, or light detection and ranging. Essentially, slow-flying planes send constant laser pulses toward the ground as they pass over the rain forest, imaging the topography below the thick forest canopy.

What the archaeologists found and what the new images reveal are features that could be ancient ruins, including canals, roads, building foundations and terraced agricultural land. The University of Houston archaeologists who led the expedition will reveal their new images and discuss them Wednesday at the American Geophysical Union Meeting of the Americas in Cancun.

This interesting item was posted on the foxnews.com Internet site yesterday...and I thank Marshall Angeles for bringing it to my attention...and now to yours.

Charles Schwab complains of Fed's manipulation of markets

To commemorate its 40th anniversary last month, Charles Schwab Corp. created an interactive exhibit that is traveling to its major employment centers, including San Francisco, its headquarters and home to 2,300 of its 14,000 workers.

Here's part of the Q&A that appeared in the article...

Q: How do you feel about the robo-traders who have come to dominate stock trading?

A: They add nothing to the marketplace. They are scalpers. In times of crisis they suck out liquidity. They would argue they add liquidity. I don't think so.

Q: What should be done?

A: If I was czar, you would have the real marketplace here and let them go there and play in their dark pools like it's a video game or a lottery. There is no leadership in the SEC to do that. There is no leadership in government to do that. So consequently we have these unbridled frontiers.

This very interesting 2-page story was posted on the San Francisco Chronicle website early on Monday evening...and I found it tucked away in a GATA release yesterday.

Donations, lobbying by high-speed traders on the rise: report

High-frequency trading firms increased their campaign contributions to federal lawmakers by 673 percent from the 2008 to the 2012 election cycle, according to a report that sheds light on their political connections in Washington and efforts to impact policymaking.

The report by the Washington-based nonprofit watchdog Citizens for Responsibility and Ethics in Washington (CREW) comes as U.S. financial market regulators mull whether new rules should be adopted to rein in high-speed traders, whom some critics accuse of harming smaller investors.

This Reuters story, filed from Washington, was posted on their website early Monday afternoon...and I found it in yesterday's edition of the King Report.  It's definitely worth reading.

Attorney General Eric Holder Orders a Criminal Investigation Into the IRS Scandal

Attorney General Eric Holder said on Tuesday that he recused himself from a case involving a Department of Justice decision to subpoena phone records from Associated Press reporters and editors.

Holder also said that the Justice Department has ordered a criminal investigation into the IRS' targeting of different conservative groups applying for tax-exempt status. Holder called it "outrageous and unacceptable." He said the Justice Department and FBI were coordinating to determine if any laws were broken.

On the AP phone probe, Holder said that the leak being investigated was one of the "top two or three" leaks he has ever seen, claiming it put the American people at risk.

Well, he's talking the talk...now let's see if he actually walks the walk.  This businessinsider.com news item was posted on their website early yesterday afternoon...and I thank Roy Stephens for sending it our way.

Jon Stewart Totally DESTROYS Obama Administration Over IRS Scandal

This 6:21 youtube.com video clip is "X" rated for language...however, all the naughty bits have been bleeped out...but I'm sure you're quite good at reading lips by now.  It's definitely worth watching...and if you're interested, I'd watch it right away before it gets pulled for copyright reasons.  Watch it to the very end.  Roy Stephens was kind enough to send it our way.

Sales Tax Bill Threatens Economy

The impact of the Marketplace Fairness Act (the so-called Internet Sales Tax Bill) which passed the Senate on May 6 received limited coverage in a May 10 Numismaster column. However, it deserves a much more detailed discussion. The negative effect it will have on numismatic and precious metals transactions will be dwarfed by the potentially disastrous economic fallout throughout the U.S. economy.

As former Congressman Jimmy Hayes explained at the American Numismatic Association’s National Money Show in New Orleans last week, the label of “Internet Sales Tax” is completely inaccurate. The bill applies to all forms of remote selling, including by mail, telephone, television, radio and Internet. Nowhere in the bill does the word “Internet” appear.

Here are some of the potential financial pitfalls that lurk if the bill is enacted: The bill enables every jurisdiction that charges sales tax to audit sellers. That includes 45 states, the District of Columbia, 740 American Indian tribes, and thousands of local governments across the country. Maybe a business can absorb the costs of an audit by one or two governments, but what if 20 entities came to audit? Although these audits would be conducted by the state government where the seller lives, the overhead costs of audits could put some smaller sellers out of business.

This essay was posted on the numismaster.com Internet site.  West Virginia reader Elliot Simon, who sent me this article and has some expertise in this matter, says it's a must read for all Americans...so, being Canadian, who am I to argue.

Pew Study: Europeans Rapidly Losing Faith in Europe

Europe's ongoing economic crisis and lasting currency woes are beginning to rapidly erode faith among Europeans in the EU project. That is the result of a new survey undertaken by the renowned Pew Research Center in Washington D.C. and released on Monday evening.

The institute polled 8,000 people in eight European Union member states in March and arrived at some disturbing results. In just one year, the share of Europeans who view the European Union project favorably plummeted from 60 percent in 2012 to just 45 percent this year. Furthermore, only in Germany does a majority continue to support granting more power to Brussels in an effort to combat the ongoing crisis.

"The European Union is the new sick man of Europe," read the survey's opening lines. "The effort over the past half century to create a more united Europe is now the principal casualty of the euro crisis. The European project now stands in disrepute across much of Europe."

This spiegel.de story, filed from Washington yesterday, is worth reading as well...and my thanks go out to Roy Stephens for his third contribution to today's column.

Letter From Berlin: Anti-Euro Party a Growing Challenge for Merkel

German Chancellor Angela Merkel wanted to ignore the Alternative for Germany. But with the anti-euro party gaining ground, many among her conservatives say it is time to change strategy. They are concerned that the currency heretics could cost Merkel her re-election.

Germany's center-right has long been in a luxurious position. Whereas conservatives across Europe have been struggling in recent years with the rise of right-wing populist parties eating into their base, Chancellor Angela Merkel's Christian Democrats have had little to worry about. Though the German left is splintered among three, or even four, parties, the right is a monolith. There is the CDU, its Bavarian wing known as the Christian Social Union, and its favorite coalition partner, the Free Democrats (FDP).

But this election year is different. With the birth of the anti-euro party Alternative for Germany (AfD), Merkel is facing competition from within her own clientele. Furthermore, though her preferred strategy has been that of maintaining complete silence about the AfD so as not to lend it credibility, there are many in Merkel's party who disagree with that approach. And they are increasingly giving voice to their displeasure.

This is another story from the German website spiegel.de.  This one was posted on their website mid-afternoon Europe time...and it's another offering from Roy Stephens.

Luxembourg says NO to new E.U. tax law

Luxembourg, one of the EU's smallest but richest countries, has said No to a new law against tax evasion.

Its finance minister, Luc Frieden, told press in Brussels on Monday (13 May): "We won't agree tomorrow to the savings tax directive with an extended use because there's still some need for clarification."

He added: "At the moment we lack precision about a number of questions that need answers … We don't know how this will be written into European law and we're not sure that all the loopholes have been closed, in particular a number of trusts don't seem to be covered."

It also contains a big hole on Austria and Luxembourg.

The two financial centres are exempt from automatic exchange until such time as five non-EU tax havens - Andorra, Liechtenstein, Monaco, San Marino and Switzerland - agree to it as well.

Luxembourg, home to just half a million people, has a GDP per capita which is almost three times the size of the EU average. Its wealth comes mainly from financial services. Its banking sector is worth 22 times the size of its economy.

And you though Cyprus was bad.  Luxembourg is far worse.  No wonder they're opposed to this new tax.  This must read story, filed from Brussels, was posted on the euobserver.com Internet site early yesterday morning Europe time...and my thanks go out to Roy Stephens once again.

Cyprus gets €2bn despite money laundering concerns

The E.U. on Monday (13 May) said many Cypriot banks do not know who their customers really are, but wired Nicosia €2 billion anyway.

Commenting on a recent study on money laundering in the Mediterranean island, eurozone finance ministers said in a joint communiqué that it must do better on "customer due diligence by banks" and must fix "the functioning of [its] company registry."

Dutch finance chief Jeroen Dijsselbloem, who chairs the ministers' meetings, added: "This report shows that while the legal [anti-money-laundering] framework is OK, the implementation is really lacking."

This is another story from the euobserver.com Internet site.  This one was filed minutes after midnight Europe time yesterday.  It's definitely worth the read...and my thanks to Roy Stephens for his final offering in today's column.

Jim Rickards: Japan is Taking the World Down With Them

This CNBC Asia video clip with Jim runs for 4:49 minutes...and was conducted on Monday evening in North America...Tuesday morning in Hong Kong.  It's definitely worth watching...and I thank reader Harold Jacobsen for sharing it with us.

Seven King World News Blogs/Audio Interviews

1. Ron Rosen: "This Key Chart Tells You All You Need to Know About Gold".  2. Egon von Greyerz: "The Move to Global Hyperinflation is Now Accelerating".   3. Richard Russell: "We Are Witnessing Unprecedented Events".  4. William Kaye: "How a Criminal Syndicate of Banks is Raping the Gold Market".  5. William Kaye audio interview Part One...and Part Two.  6. James Turk audio interview.  7.  Andrew Maguire audio interview.

Sprott's Thoughts: Rick Rule...Uranium’s Wounds Are the Making of a Bull Market

Today’s Sprott’s Thoughts relate comments made by Sprott USA Chairman Rick Rule in the May 2013 issue of Bonner & Partner’s Family Office Strategic Review .

“Natural resource speculators know that past uranium bull markets offered some ’explosive’ (pun intended) upside. I have been fortunate enough to experience two uranium bull markets: the 1970s bull market, which saw a tenfold increase in the uranium price and a hundredfold increase in some uranium equities, and the bull market of the last decade, which saw a repeat of the earlier performance. If past is prologue, the stage may be set for a third uranium bull run.

“Conditions have changed so completely since the 1970s that a thorough examination of that market teaches us little that is relevant today. But one thing about the 1970s bull market is instructive -the market collapse was partially caused by two catastrophic plant failures: at Chernobyl and Three Mile Island.

The bull market of the 2000s, he says, gives fodder to the case for higher uranium, because the bear market that preceded it is similar to conditions we experience today.

This commentary was posted on the sprottgroup.com Internet site yesterday...and it's worth your time, if you have some.

Government and Reserve Bank of India are again getting it all wrong on Gold

The Indian consumer — that’s us — is currently public enemy No. 1. We are apparently responsible for leaving the nation’s balance sheet in a shambles with our insatiable lust for gold.

If [the] government and the Reserve Bank of India (RBI) had their way, anyone spotted buying gold would be flayed. Luckily, we are still not that sort of country.

But both are doing everything possible to punish us. We can’t wear our own jewellery above Rs 1 lakh on an overseas holiday. We can’t buy coins easily. The paperwork at a jewellery store is designed to turn away everyone except the most determined. The higher customs duty intends to make gold prohibitively expensive.

Plus, jewellers are being bludgeoned out of business. They can’t import gold. Gold will be rationed through government-owned banks, which will cater only to “genuine” demand. And they are being threatened with draconian laws.

This must read commentary was posted in The Economic Times of India early this morning IST...and I thank Mumbai reader Avi Raheja for finding it for us.

Gold buying becomes frantic in India, strongest since 2008

Accelerating gold imports contribute to the current account deficit, which analysts say is one of the biggest concerns for the Indian economy. The government has tried to curb India's appetite for gold with import duties while the central bank has imposed restrictions on the import of the metal, but buyers don't care. They are actually rushing to buy before the authorities clamp down on gold.

 On Monday's Akshaya Trithiya festival, the demand was so high that some jewellers opened their shops at 7 am. People stood in queues for hours to buy coins, bars, and ornaments, hoisting sales to the brisk pace last seen in 2008 when gold prices were half of the current level.

The sudden surge in demand has prompted the World Gold Council to say India's imports this year will exceed earlier estimates of 865-965 tonnes, said the council's managing director, Somasundaram PR.

"Consumers are buying both coins and jewellery. Since coins can be bought on the spot, they are flying off the shelves quickly. Orders for jewellery are being placed which may be delivered at a later date," he said.

This is another story from The Economic Times of India.  This one was posted on their website on Tuesday...and I found it in a GATA release.

Wildcat strike at Lonmin platinum mine raises fears of unrest

South African workers of world No. 3 platinum producer Lonmin launched a wildcat strike on Tuesday, halting all of the company's mine operations and reigniting fears of deadly unrest that rocked the industry last year.

The platinum belt towns of Rustenburg and Marikana, which saw a bloody Lonmin strike last year, are a volatile flashpoint of labour strife and tensions are running high with job cuts and wage talks looming.

The share price of Lonmin slid over 6 percent and the rand currency hit 3-week lows, underscoring investor jitters over a potential repeat of the 2012 mines turmoil, which hammered platinum and gold production and triggered credit downgrades for Africa's largest economy.

This Reuters story, filed from Johannesburg yesterday, was posted on the mineweb.com Internet site...and I thank Manitoba reader Ulrike Marx for her first story in today's column.  It's worth reading.

$1 billion of gold has been shipped from New York to South Africa this year

Examining U.S. trade data, we were surprised to see that South Africa’s $402 million trade surplus with the United States in January had turned into a $689 million deficit by March. Why? 

It turns out the $1.1 billion swing is entirely due to unusual shipments of gold from the US to South Africa in February and March. So far this year, 20,013 kg of unwrought gold, worth $982 million, has left John F. Kennedy International Airport (JFK), in New York, for somewhere in South Africa, according to the US Census Bureau’s foreign trade division. (Unwrought gold includes bars created from scrap as well as cast bars, but not bullion, jewelry, powder, or currency.)

The shipments from JFK were the only unwrought gold to leave the US for South Africa in 2013; another large shipment occurred in September 2012.

This story was sent to me on Monday by reader Federico Schiavio...and I really didn't know what to make of it.  But it spread like wildfire on the Internet yesterday...and this is what James Turk had to say about it...

"The Rand Refinery is one of the largest in the world. South Africa used to mine 1,000 tones per year, all of which was refined at Rand Refinery. South Africa now mines less than 1/3rd of that weight. So there is a lot of unused fabricating capacity at the Rand Refinery. Given that the Swiss refiners are working 24/7 and backlogged, it is not surprising to me that someone would send gold to the Rand Refinery for fabricating, whether Krugerrands, kilobars, tael bars or whatever."

"That exports from JFK are rising is not surprising either. The US economy continues to do poorly, so a lot of old jewellery and stuff is being sold for cash, to help make ends meet. So these growing shipments from JFK is just part of the now well-established trend that gold is being shipped from west to east."

This very interesting essay, with some excellent charts, was posted on the qz.com Internet site yesterday...and I thank reader Federico Schiavio for bringing it to our attention.

Record High Gold Bullion Sales at the Perth Mint

The Perth Mint of Australia achieved record breaking sales for gold bullion products in April, as lower precious metals prices spurred a huge leap in demand. Silver bullion sales also jumped to the highest level in six months.

The Perth Mint began publicly reporting its monthly gold and silver bullion sales in March 2012, providing a window of insight into demand for physical precious metals. Sales spikes have occurred in September 2012 to coincide with the release of the new designs and last month to coincide with the decline in metals prices.

For the month of April 2013, sales of gold as coins and minted products reached 111,505.06 troy ounces. This amount was more than double the previous month and up by an astounding 534.43% from the year ago period when 17,575.64 troy ounces were sold.

This article is well worth your time and was posted on the coinupdate.com Internet site yesterday...and I thank Elliot Simon for bringing it to our attention.

Bank of Portugal says no Cyprus-style gold sales

Portugal will not replicate a deal that allowed Cyprus to sell its gold reserves under its bailout, Bank of Portugal Governor Carlos Costa said on Tuesday, adding that its reserves were unchanged at 382.5 tonnes.

"It is not applicable in Portugal," he told reporters. "What happened in Cyprus (on gold reserves), just like a lot of other things there, cannot be replicated in Portugal."

"If we can say today that the Bank of Portugal is among a small group of central banks with adequate risk provisioning ... is mostly because we have significant gold reserves," Costa said. The value of Portugal's reserves rose 3.6 percent last year to 15.51 billion euros due to gold price fluctuations, but Costa said the actual quantity remained the same.

This Reuters news item was posted on their website early yesterday morning EDT...and I thank Ulrike Marx for digging it up on our behalf.

Used Gold Supply Heads for 2008 Low as Sellers Balk

Consumers will sell the least used gold in five years after prices tumbled into a bear market, curbing a source of metal that typically accounts for about one in every three ounces of global supply.

Refiners will handle about 1,550 metric tons of old jewelry and other discarded metal this year, 4 percent less than in 2012 and the least since 2008, Toronto-based TD Securities Inc. estimates. The amount is valued now at $71.4 billion, from $84.5 billion at this year’s peak. Recycling more than doubled in the decade through 2011 as prices rose to a record. A majority of the 38 analysts surveyed by Bloomberg last month said gold’s streak of 12 consecutive annual gains is over.

“April was the worst month in memory,” said Arthur Abramov, the owner of Manhattan Buyers Inc., a cash-for-gold operator in New York that saw volumes drop to 300 ounces a month from 500 ounces. “A lot of people were shocked, and a lot of people were standoffish about selling.”

This Bloomberg story, filed from New York, was posted on their website late yesterday morning Mountain Daylight Time...and I thank Ulrike Marx for her third and final offering in today's column.

No Mo' PoMo? - James Howard Kunstler

Whenever the Federal Reserve wants to tweak the dials of the economy -- or pretend that it can -- it turns first to its sock puppet at The Wall Street Journal, John Hilsenrath, and "leaks" a rumor of policy change. They like to do this late on Fridays when financial markets are about to close, so that market players will have a whole weekend to ponder the Fed's actions like medieval viziers reading goat entrails.

Last Friday's puddle of steaming guts was a supposed preview of the Fed's "exit strategy" from its reckless policy of "quantitative easing" or "money" creation (or "liquidity," if you like). In other words, they supposedly intend to stop juicing the financial markets with fake wealth, i.e. capital not accumulated from real productive activity, but just fictively created on computer hard drives. For the past year they have been doing this to the tune of $85 billion a month, "buying" US Treasury bonds and bills and an assortment of miscellaneous securities (mostly trash that can't be pawned off on anyone else) through their so-called "primary dealer" bank cohorts, the too-big-to-fail usual suspects, who "earn" hefty transaction fees in the process of conveying all these pixels from Point A to Point B. These interventions are called Permanent Open Market Operations, or PoMo.

The theory all along has been that this $85 billion a month would seep down to Main Street to provoke spending (increasing the "velocity of money) and therefore "jump start" the economy. The theory has proven itself to be complete horseshit, of course. All it has done is suppress interest rates on bonds, depriving old people of income off their savings by so doing. It also artificially jacked up reckless lending on loans for houses, cars, and college degrees, juiced the share price of stocks, and boosted food prices. Meanwhile, an increasingly former middle class languishes in a purgatory of foreclosure, penury, and desperation. The Fed can't really do anything to help them. It can only burden them with more easy-credit debt, especially their college-age children. But ours is a financialized economy and finance is too abstruse for most ordinary people to understand, so they just muddle along in a fog of dashed hopes and repossession.

Wow!  Mr. Kunstler lets it all hang out...no shades of grey at all...and a Matt Taibbi-style 'pithy prose' warning is in effect here.  I hate to start out with a must read, but that's what it is...and I thank reader Richard Sypher for today's first story.

Investors can’t beat the machines: Computer-dominated trading takes over

“Before the era of computer-dominated trading, it was slightly easier to identify winning advisers in advance, because you could more easily understand and evaluate what they were doing,” says Lawrence G. Tint, chairman of Quantal, a risk-management firm for institutional investors, and former U.S. CEO of Barclays Global Investors. reason why machines are winning is our inability to process lots of financial data, which is getting more complex and voluminous every year.

Terrance Odean, a finance professor at the University of California, Berkeley, has extensively studied the behavior and performance of individual traders. He points out that there used to be another human being on the other side of the trade when an individual bought or sold a stock. “Now it’s a supercomputer you’re competing with,” says Odean.

“Individuals are no longer playing against Grandmasters; they’re playing against Deep Blue,” he says, referring to the famous battle in the 1990s between chess’s Grandmasters and International Business Machines’ supercomputer Deep Blue. Individual investors “will almost certainly lose.”

This commentary by Mark Hulbert was posted on the marketwatch.com Internet site on Friday afternoon EDT...and I thank reader U.D. for sending it along.

IRS Conservative Witch-hunt Started In 2011 With High-Level Officials Involved

The IRS conservative targeting scandal is going from bad to worse.

Following the Friday revelations that despite all prior appeals to the contrary, the IRS did in fact apply political bias and prejudice in targeting conservative groups who had applied for exempt status (and who knows what other prejudice when targeting non-liberals entities - perhaps it is time to do an analysis of what the ratio of conservatives to liberals audited each year is?), culminating with the farcical response by an IRS official during the Friday press meeting...

... this may be just the beginning of a major political scandal which in addition to tangential fallout crushing the alleged "impartiality" of the Obama administration, additionally validates many of the heretofore right-wing "conspiracy theories." And as Zero Hedge has shown time and again, it is not a conspiracy theory if it is a conspiracy fact.

What makes things worse for the IRS, the US Treasury, its then-head Tim Geithner, and of course, Barack Obama, is that according to a draft report prepared by the Treasury Department's inspector general for tax administration, expected to be released this week, and seen by AP, is that senior IRS officials knew agents were targeting tea party groups as early as the spring/summer of 2011, well before the 2012 election as we announced before. What makes matters worse, is that it was not only "low-level" employees as the IRS tried to justify its prejudice on Friday, but high level personnel, among which at least one head of division that oversees tax-exempt organizations, and likely  all the way to the very top, that were well aware of the witch hunt.

This news item was posted on the Zero Hedge website on Saturday evening...and it's courtesy of Marshall Angeles.

Fed, Treasury Investigating Bloomberg Client Surveillance

As reported on Friday, the most recent example of a breach in informational Chinese walls was confirmed at Bloomberg, where it was discovered that reporters have the same degree of client surveillance as workers on the API/terminal side. The reason why this is problematic is that since Bloomberg is a monopolist in the financial terminal industry, with such competitor attempts as Reuters' Eikon being massive failures, virtually every finance professional needs a terminal (even if the rate of sale of such terminals is slowing down as a result of the ongoing financial margin headaches). Which means that Bloomberg journos, an increasingly competitive service to the likes of Dow Jones, Reuters and AP, may have had an unfair advantage when it comes to tracking their "pray" - Bloomberg's own clients.

According to Reuters, such client surveillance may have been what tipped of Bloomberg about Bruno Iksil's behavioral patterns while at JPM: "At JPMorgan, the bank's public relations staffers also fumed to one another last year that reporters called repeatedly to inquire whether Bruno Iskil, the "London Whale" trader who was part of a team that lost more than $6 billion in losses, had left the bank because he had not logged onto his terminal in several days, a source with direct knowledge of these discussions said. JPMorgan did not formally bring the matter to Bloomberg's attention, the source said. Bloomberg said it had no record of a complaint."

And now, following the original Goldman complaint which Bloomberg said ended such informational commingling, it is the turn of the Treasury and the Fed to complain.

Wow...the rot goes right to the core.  This is simply unbelievable.  You have to know that the whole system is compromised when you see must read articles like this one.  This is another posting from Zero Hedge...this one from late Sunday morning...and is the second offering in a row from Marshall Angeles.

Watergate Was For Amateurs: Justice Department Spied For Months On Associated Press Reporters

And so the final curtain falls on the myth of what was supposed to be, in its own words, the "most transparent administration" in history.

As it turns out, the big Friday story of Bloomberg journalists snooping on clients was just amateur hour compared to what the AP was about to serve. In fact, the Watergate affair may soon appear like a walk in the park compared to the First Amendment shitstorm that is about to be unleashed following the just reported news that the US Department of Justice had "secretly obtained two months of telephone records of reporters and editors for The Associated Press in what the news cooperative's top executive called a "massive and unprecedented intrusion" into how news organizations gather the news."

First amendment? Freedom of speech and press? Surely not when it comes to the Nobel-peace prize winning President and those who dare to expose his secret ways.

And what's worst, is that the AP breach has all the makings of a spiteful hack driven by personal vengeance against one of America's premier news outlets.

Wow!  The rot continues...and these are only the things that we know about.  Rest assured, dear reader, that it's probably far worse than this, as one can only imagine the stuff that's going on that we don't know about.  This news item is another from Zero Hedge...this one from late yesterday afternoon...and the third article in a row from Marshall Angeles.

CFTC launches broad investigation of energy and metals derivatives

A top US financial regulator has launched a broad inquiry into the legitimacy of more than 1 million energy and metals transactions by the biggest traders in commodities markets over the past two years.

The Commodity Futures Trading Commission has issued a "special call" asking Wall Street banks and other traders to provide documents that would prove recent derivatives transactions known as "exchanges of futures for swaps" were legal. Lawyers at the CFTC enforcement division are also scrutinising the trades for possible violations.

"They are looking at a huge amount of trading," an industry lawyer said.

The CFTC push shows how authorities are clamping down on previously unregulated derivatives dealing in markets from commodities to interest rates after the financial crisis. The CFTC this week is set to impose new trading rules for over-the-counter markets, even as the Group of 20 industrial countries seeks to shift more derivatives to electronic platforms.

Another meaningless investigation, as the CFTC's fifth anniversary of the silver price fixing investigation approaches. This article appeared in the Financial Times of London yesterday...and it's posted in the clear in this GATA release.

Sam Zell says sell

Legendary investor says stock market is in state of "euphoria," while economy is still in the dumps.

At least one notable investor thinks we may be in bubble trouble again.

Sam Zell on Thursday at the SALT hedge fund conference in Las Vegas said stocks are due for a fall. The legendary real estate investor thinks the market is out of touch with what is really going on in the economy.

"Right now you are buying at an all-time high," says Zell. "And there are times when stocks hit a high, and then go higher, but that's when you have a good economy."

This must read commentary was posted on the finance.fortune.cnn.com Internet site early on Friday morning...and is an article I found in yesterday's edition of the King Report.

Argentina’s Deadbeat Special: Buy a 4% Bond or Go to Jail

President Cristina Fernandez de Kirchner wants tax evaders hiding about $160 billion in dollars to help finance Argentina’s oil-producing ambitions. Her offer: Buy a 4 percent bond or face the prospect of jail time.

The tax authority announced the plan May 7, highlighting its information-sharing agreements with 40 nations and warning Argentines who don’t use the three-month amnesty window that they risk fines or arrest. Evaders have two options for their cash and the only one paying interest will be a dollar bond due in 2016 to finance YPF SA, the state oil company. The 4 percent rate is a third the average 13.85 yield on Argentine debt and less than the 4.6 percent in emerging markets.

A year after seizing YPF, Fernandez is funneling more money into the nation’s energy industry as the government struggles to boost production from the world’s third-biggest shale oil reserves. With Argentina already committed to pumping $2 billion of central bank reserves into a fund for energy investments and the highest borrowing costs in emerging markets keeping it from issuing debt abroad, the government is eyeing the billions of undeclared dollars that Argentines hold to help shore up reserves that have dwindled to a six-year low.

Such a deal...!  Why would anyone refuse?  This story showed up on the Bloomberg website early Friday morning Mountain Daylight Time...and I thank Marshall Angeles for his last offering in today's column.

EU targets tax evasion on savings

The European Commission wants to tighten tax loopholes on savings of EU citizens who hold accounts in member states and in Switzerland, Andorra, San Marino, Monaco and Lichtenstein.

"We are looking for an ambitious approach by member states. In our view, a strong and united approach from the European Union against tax havens is very important," European Commission spokeswoman Emer Traynor, told reporters in Brussels on Monday (13 May).

Current EU legislation under the 2005 savings tax directive aims to tackle cross-border tax evasion through an information exchange system for tax authorities among member states. The system helps authorities identify people that receive a savings income but in a member state where they do not live.

This story, filed from Brussels, was posted on the euobserver.com Internet site late yesterday afternoon Europe time...and I thank Roy Stephens for his second contribution to today's column.

Spanish prelate fears 'mutual hatred' over euro crisis

The Catholic Primate of Spain has called for a profound shift in Europe's debt crisis policy to avert social collapse, warning that soaring unemployment in Spain and across southern Europe has become "very dangerous".

"We have to change direction, otherwise this is going to bring down whole political systems," said Braulio Rodriguez, the Archbishop of Toledo.

"It is very dangerous. Unemployment has reached tremendous levels and austerity cuts don't seem to be producing results," he told The Telegraph.

"There is deep unease across the whole society, and it is not just in Spain. We have to give people some hope or this is going to foment conflict and mutual hatred."

Europe's Catholic bishops have been careful not to stray into the political debate or criticise EU economic strategy but the Archbishop said the current course is untenable.

This Ambrose Evans-Pritchard offering was posted on the telegraph.co.uk Internet site on Sunday afternoon...and I thank Roy Stephens for bringing this article to our attention.

Global Financial Leaders Avoid Public Rift With Japan

policies driving down the value of its currency, while keeping up pressure on Germany to help lift growth in Europe.

At the end of two days of talks among the Group of 7 finance ministers outside London, other nations appeared to accept — at least for now — Japan’s explanation that its new monetary efforts were meant to stimulate its domestic economy, rather than to drive down the yen on international currency markets.

The chancellor of the Exchequer in Britain, George Osborne, said on Saturday that ministers from the G-7, made up of the United States, Germany, Japan, Britain, Italy, France and Canada, had reaffirmed earlier commitments on exchange rates and agreed to make sure policies are “oriented towards achieving domestic objectives.” Other officials described the talks as in-depth and positive. Last week, the dollar breached the 100-yen mark for the first time in over four years.

This article was posted on The New York Times website on Saturday...and I thank Phil Barlett for bringing it to our attention.

Chinese Power Consumption Collapses: Economic Growth Slowest Since Early 2009

Not much to add here. If there still is any confusion why China is desperately manipulating its economic data, so blatantly in fact that virtually everyone has now noticed, this chart should put all doubt to rest. According to CLSA's Chris Wood using NEA data, China's monthly power consumption (the most accurate proxy for underlying economic strength according to the current premier) growth slowed from 5.5% YoY in Jan-Feb 2013 to 1.9% YoY in March, the slowest growth rate since May 2009.

This Zero Hedge news item was posted on their website late yesterday morning EDT...and my thanks go out to reader 'David in California'.

William Kaye: Disappearing Gold Inventories, Financial Collapse and the Fed [Parts 1 & 2]

Outspoken Hong Kong hedge fund manager William Kaye spoke with King World News about disappearing gold inventories, financial destruction and the Fed.  Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions and who is the founder of Pacific Group, had this to say in Part I of an extraordinary written interview series which will be released today.  Part 2 is linked here.

Frank Holmes: Three Reasons to Buy Gold Equities Today

A strong stomach and a tremendous amount of patience are required for gold stock investors these days, as miners have been exhibiting their typical volatility pattern.

That’s why I often say to anticipate before you participate, because gold stocks are historically twice as volatile as U.S. stocks. As of March 31, 2013, using 10-year data, the NYSE Arca Gold BUGS Index (HUI) had a rolling one-year standard deviation of nearly 35 percent. The S&P 500’s was just under 15 percent.
 
I believe the drivers for the yellow metal remain intact, so for investors who can tolerate the ups and downs, gold stocks are a compelling buy. Here are three reasons...

This commentary by Frank was posted on the usfunds.com Internet site on Friday...and I thank West Virginia reader Elliot Simon for sending it.

Al Korelin interviews John Embry on gold and silver market manipulation

Gold and silver market manipulation is a topic of Korelin Economics Report, wherein Al Korelin interviews Sprott Asset Management's John Embry. The interview is 10 minutes long and can be heard at the Segment 3 section of the Korelin Internet site.

I found this interview embedded in a GATA release on Saturday...and it's posted on the kereport.com Internet site.

Pacific Group's Bill Kaye: Gold plunge was an operation by Fed, big banks

April's abrupt plunge in the gold price was an operation of the Federal Reserve and major banks to protect the Fed's "quantitative easing" and paper gold shorts that can't deliver the metal they have sold, Pacific Group founder and fund manager William S. Kaye writes in the May market letter of Pacific Group's Greater Asian Hedge Fund.

Kaye, who in January announced his fund's commitment to a major purchase of gold, adds that gold exchange-traded funds are being used to manipulate the gold price and essentially are being looted by the banks that are short the metal. He expects paper gold to default this year and the gold price to be reset upward.

By Pacific Group's kind permission, Kaye's letter is posted at gata.org Internet site on Saturday...and it falls into the absolute must read category.  I thank Chris Powell for wordsmithing the preamble.

Mike Kosares: The hidden crisis in the gold business

Mine production won't be doing much to meet gold demand for many years, Mike Kosares of Centennial Precious Metals writes on Saturday. The sudden interruption of Barrick Gold's giant Pascua-Lama mine project on the border of Chile and Argentina is a case in point, Kosares observes. His commentary is headlined "The Hidden Crisis in the Gold Business" and it's posted on the Centennial's Internet site.  Once again I thank Chris Powell for writing this paragraph of introduction.

Alasdair Macleod: GLD and SLV are not havens against crisis

GoldMoney research director Alasdair Macleod writes about how his inquiry to the United Kingdom's Financial Services Authority produced an acknowledgment that the custodianship of the metal nominally held by the gold and silver exchange-traded funds GLD and SLV is not regulated by government.

As a result, Macleod concludes, there is enormous counterparty risk for GLD and SLV investors, in a financial crisis central banks more easily can seize metal held by bullion banks, and the two ETFs should not be considered havens against such a crisis. His commentary is headlined "The Role of GLD and SLV" and it's posted at GoldMoney's Internet site.

Akshaya Tritiya: Gold coins with Sachin’s face, signature available for Rs 34,000

A limited edition Sachin Tendulkar gold coins, with the senior cricketer’s face and signature embossed on them, were launched today on the auspicious day of ‘Akshaya Tritiya’.

Valuemart Gold and Jewels launched one lakh Sachin Tendulkar gold coins, each weighing 10 grams, in the senior cricketer’s presence here.

The 24 karat gold coin is priced at Rs 34,000 and will be available on valuemartgold.com and leading jewellery stores across the country. The company had signed up Tendulkar as its brand ambassador for a three-year period in February this year.

Indian cricket star Sachin Tendulkar would be the equivalent of Tiger Woods to golf enthusiasts in the United States.  My guess is that they'll sell a lot of these 10 gram coins.  This story, filed from Mumbai, was posted on the firstpost.com Internet site on Monday IST...and I thank Mumbai reader Avinash Raheja for sending it along.

India Trade Deficit Deteriorates As Gold Imports Soar 138%

India's economic boogeyman, the monthly trade deficit, continues to rear its ugly head, this and every time, driven be the country's insatiable desire for gold which is so powerful, the country took full advantage of the plunge in gold prices, and saw business imports of gold soar by 138% y/y in April, forcing the trade deficit to hit a 3 month high of $17.8 billion as more fiat left the country in return for bringing in more of the "barbarous relic." Gold imports more than doubled on both a Y/Y and sequential basis, with gold accounting for $7.5 billion, or 18% of total imports, compared to $3.1 billion in March.

As long as the price suppression of paper gold prices continues, don't expect any notable changes to both of the above trends.

This Zero Hedge posting from early yesterday morning is courtesy of Phil Barlett...and is definitely worth reading.

Gold Bears Pull $20.8 Billion as BlackRock Says Buy: Commodities

Hedge funds increased bets on lower gold prices after investors pulled a record $20.8 billion from bullion funds this year while BlackRock Inc., the world’s biggest money manager, said it’s still bullish.

Gold is having its worst start to a year since 1982 after dropping 14 percent and sliding into a bear market in April. Holdings in exchange-traded funds backed by bullion tumbled to the lowest since July 2011 even as central banks print money on an unprecedented scale to boost growth. BlackRock’s President Robert Kapito said May 9 he would still buy the metal, echoing billionaire John Paulson, who’s sticking with a bullish view even after losing 27 percent in his Gold Fund last month.

This Bloomberg article was posted on their website early yesterday afternoon MDT...and I thank reader Ken Hurt for bringing it to our attention.

Why Peter Grandich is Still Telling His Wife Gold Will Hit $2,000/oz

Many junior mining investors have run off with their tails between their legs. And who can blame them when even the portfolios of market veterans like Peter Grandich, publisher and editor of The Grandich Letter, have taken a beating? But before you cash in, you might want to read why Grandich still has hope for $2,000/oz gold, and which companies he believes have the mojo to make it through this trough in this interview with The Gold Report.

Rick Rule: This Is Fun

Rick Rule is the founder and chairman of Sprott Global Resource Investments Ltd. As many readers know, he's one of the most successful resource investors in the world, so our own Jeff Clark interviewed him to get his take on the recent crash in gold. In the process, he found out why Rick thinks the capitulation process may not be over, what catalysts he believes could turn the industry around, and why he's thrilled about this market.

Read on to learn why Rick thinks a lifetime buying opportunity is shaping up in the junior resource sector…

This commentary by Rick was posted in the Monday edition of The Casey Daily Dispatch...and the above introduction was written by Casey Research's Senior Metals Investment Strategist, Louis James.

Strikes, closures cost South Africa 750,000 PGM ounces in 2012

Top global platinum producer South Africa lost at least 750,000 ounces of output last year to strikes, shaft closures and government-ordered safety stoppages, metals refiner Johnson Matthey said in a report on Monday.

The estimate is higher than other forecasts and highlights the gravity of a wave of illegal strikes, rooted in a union turf war, that hit the sector last year and triggered violence which killed over 50 people.

A government safety drive that saw several mine stoppages early in the year also curtailed output.

This Reuters story, filed from Johannesburg, found a home on the mineweb.com Internet site yesterday...and I thank Manitoba reader Ulrike Marx for bringing it to my attention...and now to yours.

Paul Craig Roberts: Gold market rigging exposes a gangster state

Yesterday, former Assistant U.S. Treasury Secretary Paul Craig Roberts condemned the rigging of the gold and silver markets by the Federal Reserve as emblematic of a gangster state protecting banks at the expense of the public. Roberts' commentary is headlined "Gangster State America" and it's posted at his Internet site.  This is a must read for sure...and I found it posted over at the gata.org Internet site.

The Hilsenrath "Tapering" Article Is Out

On Thursday, the rumor turned out to be a joke. Today, there was no rumor, but as we warned four hours ago, it was only a matter of time. Less than four hours later, the time has come, and Jon Hilsenrath's "Fed Maps Exit from Stimulus", conveniently appearing after the close, has just been released.

From Hilsy, and one of his final attempts to remain relevant, pointing out what everyone already knew: Federal Reserve officials have mapped out a strategy for winding down an unprecedented $85 billion-a-month bond-buying program meant to spur the economy—an effort to preserve flexibility and manage highly unpredictable market expectations.

Don't expect an imminent announcement.

Officials say they plan to reduce the amount of bonds they buy in careful and potentially halting steps, varying their purchases as their confidence about the job market and inflation evolves. The timing on when to start is still being debated.

This article was posted on the Zero Hedge website early yesterday evening...and will certainly move the markets on Sunday evening when Tokyo opens, so it's definitely worth reading.  I thank Phil Barlett for today's first story.

Student Debt Slows Growth as Young Spend Less

The anemic economy has left millions of younger working Americans struggling to get ahead. The added millstone of student loan debt, which recently exceeded $1 trillion in total, is making it even harder for many of them, delaying purchases of things like homes, cars and other big-ticket items and acting as a drag on growth, economists said. 

Consider Shane Gill, a 33-year-old high-school teacher in New York City. He does not have a car. He does not own a home. He is not married. And he is no anomaly: like hundreds of thousands of others in his generation, he has put off such major purchases or decisions in part because of his debts.

Mr. Gill owes about $45,000 in federal student loans, plus another $40,000 to his parents. That investment in his future has led to a secure job with decent pay and good benefits. But it has left him with tremendous financial constraints, as he faces chipping away at the debt for years on end.

This short essay was posted on The New York Times website yesterday...and it's the second offering in a row from Phil Barlett.

Doug Noland: Thoughts on the Electronic Printing Press

Traditional printing press or the newfangled version, monetary inflations always have unintended consequences. Incentivizing speculation is a prominent flaw in current (inflationist) central bank doctrine. And the larger and longer that speculative Bubbles are nurtured, the more precarious they become. This is a major part of the trap that global central bankers have fallen into. And the more fragile maladjusted global economies become the more aggressively they resort to the electronic printing press. The upshot has been increasingly unstable market Bubbles on a globalized basis – which translates into only greater systemic fragilities.

Highly speculative markets become really unpredictable affairs. Greed, fear and gamesmanship take over. Short squeezes, dislocations and melt-ups wreak havoc with market stability. “Greater fool” dynamics take on a life of their own. And never has there been such a massive pool of highly sophisticated speculative finance seeking to extract wealth from an equally massive pool of unsophisticated “money” searching for markets returns - on a global basis. On the one hand, years of manipulated interest rates, markets backstops and interventions ensured that sophisticated market operators accumulated astronomical wealth and assets under management. And, going on five years now, Fed zero interest rate policy has pushed the unsuspecting saver out into the risk market jungle.

A must read every week.  That's what Doug Noland's Credit Bubble Bulletin is for me.  It was posted on the prudentbear.com Internet site yesterday evening...and I thank reader U.D. for sharing it with us.

The Stockholm Syndrome and Printing Money

We are hostages to the destructive actions of central banks. Printing money destroys value. The puzzle is not economic, but rather psychological. Why do we allow Central Bankers to make us poorer and endanger us physically?

The answer lies in our non-rational brains. One aspect of our psychology, labeled the Stockholm Syndrome, is the human propensity to develop positive feelings towards captors in a form of traumatic bonding.

Nils Bejerot coined the phrase after a 1973 Stockholm bank robbery where four hostages were held for close to a week. Even after being released, the hostages showed sympathy for the robber, and blamed the police. The most famous U.S. incident is that of Patty Hearst, who joined the organization that kidnapped her and took part in a bank robbery with her abductors.

The phrase "economy supported by central banks" generates more than half a billion Google hits. Can it really be true that printing money is going to make us rich? No.

This short essay by Terry Burnham is well worth reading...and was posted on the pbs.org Internet site on May 8th.  It's courtesy of West Virginia reader Elliot Simon.

Banking: Protect the Value of Your Cash Assets

Cyprus was a game changer. Almost overnight, anyone who was paying attention learned (or re-learned) that money deposited in a bank is not without risk and that deposited funds are not the property of the depositor.  Uninsured depositors in Cyprus’ two largest banks received haircuts of up to 80% of their account value.  Not only were these “bail-ins” of customer deposits authorized, but it was revealed that euro-zone ministers had adopted bail-ins as an acceptable strategy for failing European banks.  Further disclosures included bail-ins as a component of the proposed Canadian budget for 2013, for “systemically important banks.”  A message for Americans is that if one of our “too-big-to-fail” (TBTF) American banks is in danger, the threat of deposit confiscation is real, especially for depositors with accounts containing money in excess of FDIC coverage limits.

What does the FDIC cover?  The Federal Deposit Insurance Corporation is a quasi-government agency responsible for protecting bank depositors from loss in the event of bank failures.  Coverage is generally limited to $250,000 per account, per bank.

Recommendation:  Use multiple banks to stretch protection for accounts exceeding FDIC coverage limits.  If the amount of money to be protected exceeds the number of viable banks, you could consider foreign jurisdictions (even though additional reporting is required).

This commentary is very informative...and I thank reader Wayne Peterson over at familybusinesssoffice.net for bringing it to my attention.

Sorry Congress, Defense Dept Sticking With Russian Helicopter Deal

Despite protests from a bipartisan group of lawmakers in late March, the Defense Department is buying Russian military helicopters whether they like it or not.

“The Department of Defense has notified Congress of its intent to contract with Rosoboronexport for 30 additional Mi-17 rotary-wing aircraft to support the Afghanistan National Security Forces (ANSF) Special Mission Wing,” Pentagon spokesman James Gregory told RIA Novosti in emailed comments.

A team of 10 lawmakers sent a letter to new Secretary of Defense Chuck Hagel on March 25, urging him not to purchase additional helicopters from the state-owned Russian arms dealer Rosoboronexport. They argue that the company has continued to transfer weapons to Syria’s government, which is in the midst of a civil war.

This very interesting read was posted on the Forbes website a bit over a month ago...and I thank reader Bill Busser for finding it for us.

In Hours, Thieves Took $45 Million in A.T.M. Scheme

It was a brazen bank heist, but a 21st-century version in which the criminals never wore ski masks, threatened a teller or set foot in a vault.

In two precision operations that involved people in more than two dozen countries acting in close coordination and with surgical precision, thieves stole $45 million from thousands of A.T.M.'s in a matter of hours.

In New York City alone, the thieves responsible for A.T.M. withdrawals struck 2,904 machines over 10 hours starting on Feb. 19, withdrawing $2.4 million.

On Thursday, federal prosecutors in Brooklyn unsealed an indictment charging eight men — including their suspected ringleader, who was found dead in the Dominican Republic last month. The indictment and criminal complaints in the case offer a glimpse into what the authorities said was one of the most sophisticated and effective cybercrime attacks ever uncovered.

This story was posted on The New York Times website on Thursday...and it's courtesy of reader Michael Cheverton.

Master of doom Marc Faber is feeling gloomy about Canada

Marc Faber, editor and publisher of The Gloom, Boom and Doom Report, was late to arrive to our Tuesday live discussion at Inside the Market alongside David Rosenberg. But we posed some of the questions you left for him in a later telephone conversation.

Before we did, however, we couldn’t resist asking him about his views on Canada. Not surprisingly, the famed economist known for his contrarian and often pessimistic bent didn’t exactly offer an uplifting view.

“I think Canada is a case where you have huge leverage in the private sector and where the economy is slowing down, where you have a strong currency and where the price levels are now relatively high,” Dr. Faber told us from Thailand. “I don’t think Canada is very inexpensive any more. I travel there all the time, it’s rather on the expensive side. I think there’s significant risk to the Canadian economy.”

This news item was posted on theglobeandmail.com Internet site on Wednesday...and I thank Elliot Simon for his second offering in today's column.

Ruling on Tymoshenko must not derail Ukraine ties

The European Union stands on the edge of a decision that may have profound implications for the continent and on relations between the European Union and Russia, not to mention the United States.

What will the European Union decide? And in particular, will that decision be made on the basis of the fate of one famous individual?

Of all the countries to emerge from the former communist bloc, the most important (besides, obviously, Russia) is Ukraine. The future course of the so-called "borderland" (which is what "Ukraine" means) as a bridge between Europe and Russia is of crucial importance to both sides.

Ukraine's current government under President Viktor Yanukovych hasn't locked in a final commitment to either orientation. Moscow offers Ukraine immediate full membership in a Customs Union comprised of Russia, Belarus (Ukraine's neighbor), and Kazakhstan. The European Union would like to sign an Association Agreement) with Ukraine, as well as a free trade pact -- but only if certain conditions are met before the end of this month.

This UPI story from yesterday falls into the must read category for any student of the New Great Game...and I thank Roy Stephens for his first offering in today's column.

Pepe Escobar: Israel rescues Mujahid Obama

Just when the red line charade was reaching fever pitch - but still buried in the sand - and he had to choose between the US "exercising restraint" or "directly involving itself" in the Syrian war, (see The Syria-Iran red line show, Asia Times Online, May 2, 2013) President Obama was saved by Bibi Netanyahu's Israeli government.

The temptation was oh so great for Obama to replay Ronald Reagan and gloriously wear the mantle of Obama The Syrian Mujahid, just as Reagan did in the 1980s with his beloved freedom fighters of the Afghan jihad. That will have to wait - perhaps not too long.

Let's cut to the chase. Israel's bombing of Syrian army installations at Jamraya near Damascus is a provocation and an act of war. Israel acted as a Washington proxy - which may have even provided the list of targets. And Washington - not to mention those useless puppets in Brussels - won't condemn the bombing, which for the umpteenth time makes a mockery of international law.

Not one to guild lilies, or suffer fools gladly, Pepe calls it the way it is in this must read commentary...and especially a must read for all serious students of the New Great Game.  This essay was posted on the Asia Times website on Tuesday...and I've been saving for it today.  It's courtesy of Roy Stephens, of course...and I thank him on your behalf.

Pakistan High Court: US Drone Strikes Illegal

Pakistani High Court Chief Justice Dost Muhammad Khan has issued a ruling today declaring the ongoing US drone strikes against the tribal areas illegal under international law, adding that they amount to a “war crime” when they kill innocents.

Khan said that the government was obliged to ensure that no future drone strikes take place against Pakistani territory, and ordered the Foreign Ministry to bring a resolution to the UN Security Council demanding their halt. He added that if the US vetoed the resolution the government ought to consider severing diplomatic ties with them.

The ruling came as the result of a case filed by an Islamabad legal aid charity on behalf of victims of the March 2011 attack on government officials and tribal elders in North Waziristan.

This very short story...and you've already read the important bits...was posted on the antiwar.com Internet site on Thursday...and I thank Michael Riedel for bringing it to my attention...and now to yours.

DISPATCHES FROM AMERICA: And then there was one

It stretched from the Caspian to the Baltic Sea, from the middle of Europe to the Kurile Islands in the Pacific, from Siberia to Central Asia. Its nuclear arsenal held 45,000 warheads, and its military had five million troops under arms. There had been nothing like it in Eurasia since the Mongols conquered China, took parts of Central Asia and the Iranian plateau, and rode into the Middle East, looting Baghdad. Yet when the Soviet Union collapsed in December 1991, by far the poorer, weaker imperial power disappeared.

And then there was one. There had never been such a moment: a single nation astride the globe without a competitor in sight. There wasn't even a name for such a state (or state of mind). "Superpower" had already been used when there were two of them. "Hyperpower" was tried briefly but didn't stick. "Sole superpower" stood in for a while but didn't satisfy. "Great Power," once the zenith of appellations, was by then a lesser phrase, left over from the centuries when various European nations and Japan were expanding their empires. Some started speaking about a "unipolar" world in which all roads led... well, to Washington.

To this day, we've never quite taken in that moment when Soviet imperial rot unexpectedly - above all, to Washington - became imperial crash-and-burn. Left standing, the Cold War's victor seemed, then, like an empire of everything under the sun. It was as if humanity had always been traveling toward this spot. It seemed like the end of the line.

This longish must read essay by Tom Engelhardt is another article from the Asia Times website earlier this week...and I thank Marshall Angeles for digging it up for us.

Four King World News Blogs/Audio Interviews

1. Andrew Maguire [#1]: "Stunning 40+ Tonnes of Gold Bought on Price Dip".  2. James Turk: "Incredible Chart, Look For $12,000 Gold and $600 Silver".  3. Andrew Maguire [#2]: "Perfect Storm in Gold as LBMA and COMEX Collapsing".  4. The audio interview is with John Hathaway.

This Is What Could Drive Platinum Higher, Very Soon

The likelihood of strikes this May and June by workers in South Africa's strategic mining sector may curb output from the world's largest supplier of platinum, presenting an upside risk for the precious metal, analysts said.

The catalyst for any upswing may come as early as this week when Anglo American Platinum (Amplats) - the world's top platinum producer and a unit of Anglo American - reveals the outcome of talks with the government and unions about restructuring plans that may involve cutting up to 14,000 jobs and mothballing two mines in South Africa.

"Whenever someone mentions restructuring to me, I get a bit nervous," Jonathan Barratt, editor and founder of commodities newsletter Barratt's Bulletin, told CNBC Asia's "Squawk Box"on Monday.

This news item was posted on the cnbc.com Internet site early yesterday evening EDT...and I thank Elliot Simon for his last offering in today's column.

Sprott's Thoughts: The Golden Answer to Chinese Import Data

When we strip out the ‘gold effect’, we find that 37% of the increase in imports over the last 12 months into China is due to the massive amount of gold that’s being imported. In Table A, gross imports increased by $82 billion, but $30 billion of this increase was from gold alone.  Put another way, more than one third of China’s import growth has been solely from its citizens’ desire to own gold and not from a growing domestic economy.

Many analysts have attributed China’s increasing imports as signs of a healthy manufacturing sector, or increasing investments in infrastructure and property. Our simple analysis shows that more than one third of the increase in imports is due to China’s increasing gold consumption. We expect this will only increase in the near future when the explosion of gold buying in April is accounted for. New reports have suggested that Chinese housewives (affectionately known as ‘aunties’ according to the Beijing Daily newspaper) have purchased as much as 300 tons of gold in the past three weeks alone, worth almost $16 billion USD.³ This new gold buying could have a significant impact on Chinese import statistics and force analysts to reconsider the strength of the Chinese domestic economy.

This short essay was posted on the sprottgroup.com Internet site on Friday...and it's definitely worth reading.

The Number of U.S. Citizens on Disability is Now Larger Than the Population of Greece

The number of people in the U.S. on SSDI now exceeds the entire population of Greece. The aging of the population has nothing to do with the increase. In 1968 there were 51 workers for every person on disability. Today there are 13 workers for every person on disability. Even the most Pollyanna would agree that medical advancements since 1968 have been significant. These medical advancements would argue for less people being on disability and unable to work. Workplace safety measures have been increased exponentially since 1968, so that also argues for less disabled workers. The good old ADA law forced all workplaces to become disabled friendly. That argues for less people on disability. The country has transitioned from a manufacturing society to a service society. Workers don’t work on dangerous assembly lines anymore. Robots do the dangerous stuff. This should have dramatically reduced worker injuries and disabilities.

Everything I’ve pointed out is true. The tremendous increase in people on SSDI is nothing but a gigantic fraud, perpetuated by the Federal government and slimy lawyers.

This interesting Zero Hedge piece from yesterday contains an excellent chart...and I thank Matthew Nel for today's first story.

Air Force Strips 17 Officers of Authority to Control and Launch Nuclear Missiles

The Air Force stripped an unprecedented 17 officers of their authority to control — and, if necessary, launch — nuclear missiles after a string of unpublicized failings, including a remarkably dim review of their unit's launch skills. The group's deputy commander said it is suffering "rot" within its ranks.

"We are, in fact, in a crisis right now," the commander, Lt. Col. Jay Folds, wrote in an internal email obtained by The Associated Press and confirmed by the Air Force.

The tip-off to trouble was a March inspection of the 91st Missile Wing at Minot Air Force Base, N.D., which earned the equivalent of a "D'' grade when tested on its mastery of Minuteman III missile launch operations.

When I first saw this headline, I thought it was from the National Enquirer...but no, it was an AP story from yesterday that was posted on the businessinsider.com Internet site.  It's definitely worth reading...and I thank 'David in California' for sending it.

Jim Grant: "Confidence In Bernanke Is Utterly Misplaced"

"Inflation is a state of affairs in which there is too much money," Jim Grant notes in this Bloomberg TV interview, however, "It's not too much money chasing too few goods," he corrects the misnomer, "the thing this money chases is variable." Whether it is Iowa farmland, housing, stocks, or bonds, central banks are stuffing us with it.

Yes, equities are high, but Grant explains, "beneath the surface of things or not so far beneath the surface of things," it is not at all good, adding that, "Central bank 'original sin'," is akin to Revolutionary France, and he shows no concerns over Gold's recent dip, noting "a general fatigue animus towards gold," that seems predicated on more confidence in central bankers; to Grant, "that confidence is utterly misplaced!"

The Bloomberg TV interview runs 6:06 minutes...and is embedded in this Zero Hedge piece from yesterday.  I haven't had the time to watch it myself, but I would guess it's more than worth your time.  I thank Phil Barlett for sharing it with us.

Billionaire investors take aim at Fed's policies at Sohn event

Wealthy money managers bashed Federal Reserve Chairman Ben Bernanke's easy money policies at a closely watched annual investment conference and charitable event on Wednesday.

The Sohn Investment Conference, which raises money for pediatric cancer research, gets big name hedge fund managers to share their "best ideas" with other wealthy investors. This year's conference was sprinkled with criticisms of the Fed's $85 billion in monthly purchases of Treasuries and mortgage securities in an attempt to stoke the economy.

"Ben Bernanke is running the most inappropriate monetary policy in the history" of the developed world, said Stanley Druckenmiller, the retired head of Duquesne Capital Management.

The criticisms of Bernanke come as investors have begun to speculate when the U.S. Federal Reserve could slow or stop its monthly bond purchases, a policy designed to keep long-term interest rates low in order to spur spending and job creation.

This must read Reuters piece from Wednesday is a little something that I found tucked away in yesterday's edition of the King Report.

Argentina: Dollar kept climbing on Wednesday and reached 10.45 Pesos

The blue dollar jumped past the key psychological barrier of 10 Pesos on Tuesday in thin trade, reflecting persistent demand for greenbacks amid tough currency controls.

Meanwhile, the official rate remained unchanged at exchange offices in Buenos Aires at Pesos 5.16 (buying price) and Pesos 5.22 (selling price), with the gap between the two markets over 100%.

In a context of high inflation, negative interest rates or other options to defend the value of the Argentine currency, Argentines are increasingly taking refuge in the US dollar. To this must be added an overall feeling of distrust and uncertainty which can have a greater impact that what stats can present.

This news item was posted on the mercopress.com Internet site early yesterday morning...and I thank Casey Research's own Louis James for sending it around.

Argentina offers tax amnesty to head off devaluation

Argentina's latest effort to tease out billions of U.S. dollars said to be held by citizens through sweeping tax breaks and interest earnings received lukewarm response, though this may change.

Argentine citizens are said to be holding the greenback in illegal stashes as a hedge against the Argentine peso's unstable performance, a runaway inflation and general distrust of the government's fiscal and monetary policies.

Official estimates say at least $160 billion is held in cash at home and abroad by Argentines who have yet to declare their holdings.

This UPI story was filed from Buenos Aires on Wednesday evening local time...and I thank Roy Stephens for his first offering in today's column.

G7 finance chiefs to discuss bank reform push

Some of the world's most powerful finance chiefs will meet in an English stately home on Friday and Saturday to try to speed up banking and finance reforms, with Cyprus' near meltdown fresh in their minds.

Finance ministers and central bank governors from the Group of Seven industrialized economies probably will not break new ground on how to fix the weak world economy as discussions at the International Monetary Fund took place just three weeks ago.

Officials from two of the G7 economies said the talks - on Friday and Saturday at a 17th-century country house 40 miles northwest of London - were likely to focus more on the slow progress of reforms to banking and finance around the world.

"It's very rare for a G7 to focus on financial regulation," one of the officials said, speaking on condition of anonymity.

But some of the officials said they said they did not know why Britain, which is chairing the G7, had called the meeting. "I am really annoyed that I've got to give up my weekend for this," one complained, adding the talks could have taken place on the sidelines of IMF's meetings in Washington in mid-April.

One has to wonder why this meeting was called in such haste. Maybe news will leak out on the weekend once this emergency meeting is done.  This Reuters story was filed from London yesterday morning BST...and I thank reader 'David in California' for his second contribution to today's column.

Europe Inches Closer to Establishing a Banking Union

Europe inched closer Wednesday to establishing a European banking union for the Continent’s largest lenders after the German cabinet approved legislation that would grant to the European Central Bank oversight of such institutions.

The decision by the cabinet of Chancellor Angela Merkel came a day after Finance Minister Wolfgang Schäuble, indicated that he supported moving ahead with efforts to create a banking union, despite Germany’s official stance that the step would ultimately require changes to European treaties.

The legislation, which awaits action by the German Parliament, would grant the E.C.B. the authority to oversee the Continent’s largest lenders: those worth more than €30 billion, or $39.5 billion, or the three largest banks in each of the 17 European Union countries using the euro.

As part of efforts to help resolve the debt crisis in the euro zone, E.U. leaders agreed last year to establish a banking union with the aim of preventing overly indebted states from having to bail out failing banks.

This article was posted on The New York Times website on Thursday...and it's Roy Stephens' second offering of the day.

Britain faces 'sink or swim moment' in global economic race, says David Cameron

The Prime Minister said the Government is driving through tax reductions, welfare reforms, infrastructure investment and trade deals to ensure the UK stays competitive globally.

He vowed to "stand up and defend" the UK's financial services industry, particularly against damaging legislation from Brussels. The City is a "massive advantage" to the UK, he said, and warned that "we shouldn't spend our time in politics bashing banks."

He said that European leaders shouldn't be "surprised" that the UK has opposed efforts to cap bonuses and introduce a financial transaction tax since London hosts 40pc of the EU's financial services sector.

This news item was posted on the telegraph.co.uk Internet site late yesterday morning BST...and I thank Roy Stephens once again for sending it along.

Tax Fraud: Court Upholds Guilty Verdict against Berlusconi

Silvio Berlusconi's legal woes worsened significantly on Wednesday after a Milan appeals court upheld a conviction and four-year prison sentence against the former Italian prime minister on tax fraud charges. The ruling would also ban Berlusconi from holding public office for five years.

A lower court had convicted Berlusconi and his media empire Mediaset of the charges in October, a ruling Berlusconi appealed. In Italy, court decisions do not become valid until all appeal options are exhausted, and the former leader still has one more instance to go before he is threatened with any penalties. Under Italian law, however, it is unlikely he will spend any time in jail. A furlough law would likely be applied to commute three years, and people with one-year sentences aren't normally sent to prison in Italy.

During his time as prime minister, Berlusconi created several laws in an attempt to shield himself and his company Mediaset from several legal proceedings.

This story was posted on the German website spiegel.de during Europe's lunch hour yesterday...and it's also courtesy of Roy Stephens.

China may not overtake America this century after all

Doubts are growing about whether China can pass the US to become the world's biggest economy this century amid warnings that the country’s 30-year miracle is nearing exhaustion. 

The world's tallest tower should have been built by now. Officials said last year that the great edifice with 220 floors would be erected in three months flat in China's inland city of Changsha by March, snatching the crown from Dubai's Burj Khalifa.

The deadline has come and gone, yet the wasteland sits untouched. It now looks as if the fin d'époque project – using prefab blocs – may never be approved. Even China knows its limits.

Prime minister Li Keqiang has asked the State Council to clamp down on the excesses of the regions. Not before time. A top regulator says local government finances are "out of control".

Mr Li aims to cut China's economic growth to a safe speed limit of 7pc next year and rein in rampant investment – still a world record 49pc of GDP – before it traps the country in a boom-bust dynamic of frightening scale.

This longish Ambrose Evans-Pritchard commentary was posted on The Telegraph's website mid-afternoon on Thursday...and is certainly worth reading.  It's Roy Stephens final offering in today's column.

Four King World News Interviews

1. John Hathaway: "The Physical Gold Market is on Fire Right Now".  2.  Doug Pollitt: "The Single Most Important Chart For All of 2013".  3.  Rick Rule: "Key Trades in the Gold and Silver Markets and What it All Means".   4. Jeffrey Saut: "This is Stunning, I Haven't Seen Anything Like This in 43 Years

The KWN interviews with Doug Pollitt and Jeffrey Saut are absolute must reads.

U.S. Mint to limit purchases of "America the Beautiful" silver coins

The U.S. Mint will limit dealers' purchases of its "America the Beautiful" five-ounce silver bullion coins when they go on sale next week because strong demand exceeds the mint's inventory.

The mint has been allocating sales of its more popular American Eagle silver bullion coins to its authorized dealers since late January following a brief suspension.

When "America the Beautiful" coin sales begin on May 13, the mint will distribute half of its inventory equally between its authorized dealers, and the other half based on each dealer's volume of "America the Beautiful" coin sales in the last two years, it said on Wednesday.

That's all there was to this very brief Reuters story that was posted on their website on Wednesday afternoon EDT.  I thank West Virginia reader Elliot Simon for bringing it to my attention...and now to yours

Consumers Snap Up Gold and Silver Jewellery

According to The Telegraph there are rumours that retailers have removed stock from the shelves in order to wait until the value increases.

Since gold bars are in short supply in the UAE investors are purchasing jewellery as a substitute.

Even though cities like Dubai and Qatar are renowned for their vending machines filled with gold bars, one consumer wrote to a Dubai newspaper that they were struggling to find gold.

“When my husband went to the Sharjah Gold Souq, known as Central Souq, the salesmen there said that they don’t have any in stock,” she commented.

This GoldCore.com precious metals commentary from yesterday was posted on the zerohedge.com Internet site...and my thanks go out to Marshall Angeles for finding it for us.

Jeff Gundlach: Have an Inflation Hedge, But Make it Silver, Not Gold

DoubleLine bond guru Jeff Gundlach was talking bonds on CNBC yesterday afternoon, and as he’s wont to, he’s wading into some other markets too like MLPs and, of course, Apple stock. Notably he says (somewhat begrudgingly) that in this “wacky” era of quantitative easing you need to have some sort of inflation hedge in your portfolio, but that it should be silver, not gold.

“I think silver is the way to do that,” Gundlach says, urging investors to ”avoid gold, don’t short it” and warning that metals yield nothing and are “dead money unless the price goes up.”

This 2-paragraph story is all there is...and it was posted on the barrons.com Internet site very early Thursday afternoon EDT.  Ted Butler told me that he heard Jeff say these words during the CNBC interview mentioned above, so it's obviously the real deal.  Ted couldn't find the CNBC video clip on this, so he sent this Barron's piece instead, for which I thank him.

What does it take to get gold 'experts' to look at the proof?

In a market letter for his subscribers that has been republished by Casey Research, financial writer Chris Martenson reviews evidence recently reported by Sprott Asset Management that the U.S. government may have secretly leased 4,500 tonnes of gold.

Martenson is inclined to think that there is something to it, and if there is, he writes, then "the gold slam begins to smell like an operation designed to shake as much gold as possible out of weak hands so that the bullion banks can begin to recover it to square up their accounts. GLD, the gold exchange-traded fund that so many small investors participate in, is one large, obvious target, as it was sitting on 1,350 tonnes as of January 2013. The most recent figure I have shows that GLD has coughed up close to 175 tonnes and will certainly lose more in the coming days, as long as the price of gold is held down or even dropped further."

But the preface to Martenson's commentary, written by Dan Steinhart, managing editor of The Casey Report, seems oblivious to the extensive documentation confirming gold market manipulation and published by GATA.

This commentary by Chris Powell was posted on the gata.org Internet site yesterday...and is definitely worth reading.

Ted Butler: The Worst Regulator

Sticking with the theme of milestones, we’ve just crossed a few important anniversary dates that relate to silver that taken in proper perspective point to a disturbing conclusion. That conclusion is that the US commodities regulator, the CFTC, has done more public harm than good over the past few years. Simply put, the public and our markets would have been better off had the agency not been run by the commissioners in place, specifically including Chairman Gensler and Commissioner Chilton. In fact, rarely has so much promise for genuine regulatory reform been squandered as badly as has been the case over the past few years.

Just so there is no misunderstanding about the issues involved; it’s really quite simple when viewing the official data. JPMorgan holds such a large concentrated short position in COMEX silver that it is automatically manipulative to the price. Even after a reduction in this concentrated short position of nearly 50% over the past few months, JPMorgan is short 126% of the entire total commercial net short position in COMEX silver futures. In other words, without JPMorgan’s net short position of 18,000 contracts (90 million oz), there would be no commercial net short position in COMEX silver (all data as of COT of April 30). It was precisely JPMorgan’s concentrated short position that caused the CFTC to start the formal silver investigation in September 2008 and it is still JPM’s concentrated short position that backs my allegations to this day.

Throw in the daily HFT trading scam and it’s easy to see that the price of silver is not taking its cue from real supply and demand. Rather it is the crooked COMEX dictating prices to the real world. Of all the regulators around, the CFTC knows this better than anyone, yet they refuse to do anything about it. This is what makes the agency the worst regulator possible.

I quoted part of this commentary by Ted in my column yesterday...and he saw fit to post the entire essay over at the silverseek.com Internet site late yesterday morning MDT.  It's an absolute must read, or course...and I thank Marshall Angeles for being the first one through the door with it.

Fed Council Warned of Credit Risk, Asset Price Bubble

A Federal Reserve panel of bankers warned policy makers in February that record stimulus was pushing financial institutions to take on more credit risk and creating a “bubble” in the price of U.S. farmland.

“The margin pressures that the low-rate environment has put on financial institutions, coupled with dramatically increased compliance and other infrastructure costs, have caused many to seek higher returns by accepting greater interest-rate or credit risk,” the bankers said on Feb. 8, following a Federal Open Market Committee meeting on Jan. 29-30.

The minutes of the meeting by the Federal Advisory Council trace how the 12 bankers’ views evolved from opposition to the Fed’s announcement of new bond buying in September to support for Fed efforts in February to boost an economic expansion beset by a “drag” from fiscal tightening.

This Bloomberg story was posted on their website late on Tuesday evening MDT...and I thank Manitoba reader Ulrike Marx for today's first story.

Obama may back FBI plan to wiretap web users

The Obama administration, resolving years of internal debate, is on the verge of backing a Federal Bureau of Investigation plan for a sweeping overhaul of surveillance laws that would make it easier to wiretap people who communicate using the Internet rather than by traditional phone services, according to officials familiar with the deliberations.

The F.B.I. director, Robert S. Mueller III, has argued that the bureau’s ability to carry out court-approved eavesdropping on suspects is “going dark” as communications technology evolves, and since 2010 has pushed for a legal mandate requiring companies like Facebook and Google to build into their instant-messaging and other such systems a capacity to comply with wiretap orders. That proposal, however, bogged down amid concerns by other agencies, like the Commerce Department, about quashing Silicon Valley innovation.

The 'thought police' over at The New York Times changed the headline to read a more friendly "U.S. Weighs Wide Overhaul of Wiretap Laws".  It was posted on their website yesterday...and I thank U.A.E. reader Laurent-Patrick Gally for sending it along.

Gun crime plunges, though most Americans think it has risen

Gun-related homicides and other crimes involving guns have fallen sharply over the last two decades in the United States, but most Americans believe firearms crime is higher now than 20 years ago, according to an analysis and a separate poll released on Tuesday.

Some 11,101 gun-related homicides were reported in the United States in 2011, a figure that is down 39 percent from the 1993 peak, the Justice Department reported. Nonfatal firearm crimes declined by 69 percent to 467,300 in the same period.

Amid an intense national debate about gun control - which flared anew in the wake of a December shooting at an elementary school in Newtown, Connecticut, that left 26 people dead - some 56 percent of Americans believe that gun crime is higher now than it was 20 years ago, the Pew Research Center said its poll showed.

This Reuters piece was posted on their website late Tuesday afternoon EDT...and I found it in yesterday's edition of the King Report.

In Argentina, More Official Lying About Basic Economic Facts

How much inflation is there? Who can buy dollars legally? Who really runs the economy? All are simple questions, but in Argentina they can be major puzzles.

Lately they’ve tripped up even some top officials who are otherwise well-trained at giving shifty answers to uncomfortable issues.

Last Friday it was Angel Toninelli, one of the directors general of the Administración Federal de Ingresos Públicos, the national tax agency, who breached the government’s wall of silence. The black-market rate for buying U.S. dollars is 90 percent higher than the government rate, which means that foreign currency obtained at the official rate is a prized commodity.

Yet, speaking at a conference in the northwestern province of Tucumán that brought together top tax-agency officials and accountants from across the country, Toninelli admitted that he did not really understand the inner workings of the approval process for obtaining foreign currency to travel abroad.

“It is a formula that changes periodically,” he said in answer to a question. “It contains ingredients that come from the central bank, the A.F.I.P., and others that come from God,” he explained, adding, “It isn’t the Coca-Cola formula, but it’s very similar.”

This rather amusing story appeared on The New York Times website early yesterday morning...and now sports a shiny new headlined..."Lie to Me".  I thank Phil Barlett for sharing it.

Nigel Lawson calls time on the three-pint Eurosceptic heroes

The former Tory chancellor is right about leaving the EU, and closet sceptics will have to accept it, says Ukip's leader.

It’s a lot less lonely now. When a group of unknown political players set up Ukip in 1993, the idea that the UK might someday re-establish its independence and leave the European Union was at best a minority pursuit. Now, no less a man than Lord Lawson advocates the idea, and validates Ukip’s arguments. Clearly nobody now doubts that it is a valid position. The reaction to Lord Lawson’s view has been to ask what damage it will do internally, to David Cameron’s embattled Conservative Party, and there has been speculation about the timing of the statement.

Famously, “Dave” told his troops that they shouldn’t “bang on about Europe”. He was trying to defang an issue that had bedevilled the Tory party since the Maastricht days. But now, with this intervention, and the last week or so of headlines, the genie is well and truly out of the bottle. He might not be banging on about Europe, but everybody else decidedly is. Lord Lawson’s intervention has just added to the legitimisation of the debate and has highlighted the historic split.

This must read commentary by Nigel Farage was posted on the telegraph.co.uk Internet site on Tuesday evening...and I thank Roy Stephens for bringing it to our attention.

Stodgy Netherlands is nation that'll blow up the euro

Which euro-zone country is most deeply in debt?  The profligate Greeks, with their generous state-funded pensions?  The Cypriots and their banks stuffed with dodgy Russian money?  The recession-hit Spaniards...or the boom-and-bust Irish?

None of the above.  Actually it's the sober, responsible Dutch. 

Consumer debt in the Netherlands has hit 250% of available income, one of the highest levels in the world. In Spain, by comparison, it has never gone above 125%.

The Netherlands has turned into one of the most heavily indebted countries in the world. It has slumped into recession and shows very little sign of coming out of it. The euro crisis has been dragging on for three years now but so far has only infected the peripheral nations within the single currency. But the Netherlands is a core member of both the euro and the European Union. If it can’t survive in the euro zone, then the game really will be up.

This very alarming story appeared on the marketwatch.com Internet site early Wednesday morning EDT...and I consider it a must read.  I thank Casey Research's own Louis James for sending it around yesterday.

ECB looking at buying bad loans from southern Europe: report

The European Central Bank is looking into buying bad loans from southern Europe to relieve the pressure on banks in crisis-stricken countries, the German newspaper Die Welt reported.

The ECB wants to revive asset-backed securities (ABS) which allow banks to pass at least some of the credit risk on to other investors as they try to boost their capital and liquidity buffers to adapt to new regulatory standards - one reason for their reluctance to lend.

In an advance copy of a report due to be published on Wednesday, Die Welt said the ECB not only wanted to improve the framework for asset-backed securities but, citing central bank sources, said the ECB's Governing Council was also discussing whether the central bank could itself buy these securities.

This Reuters story was posted on their website early Tuesday morning Eastern Daylight Time...and it's another news item I found in yesterday's edition of the King Report.

Bulgarian Spring: Self-Immolations Highlight a Desperate Electorate

Protests over the last three months in Bulgaria have included several self-immolations meant to draw attention to corruption among political elites with ties to organized crime. But few expect Sunday's parliamentary elections to change much.

At a little before 7:30 a.m. on February 20, Goranov turned up in front of the mayor's office carrying a gas canister and a banner. The city council should resign, he shouted before pouring gasoline over his body and setting himself on fire.

Goranov was not the first or last person to set himself on fire in Bulgaria recently. Five other desperate men have also committed suicide by self-immolation, but the case of the 36-year-old was the most widely publicized. He had long been an activist against corruption and the abuse of power, and his intention had been to protest against the government.

Prime Minister Boiko Borisov was already forced to resign in February in response to pressure from the street. Two weeks ago, a scandal broke that also weighs heavily on the former premier. A wiretapped conversation reveals that he apparently tried to cover up a corruption case. Bulgaria will vote for a new parliament this Sunday, but according to a poll by the news agency Novinite, some 41 percent of citizens are convinced that the election will be rigged. Indeed, there is little hope that it will bring real change. Borisov is running again, but the opposition is seen as being equally corrupt.

This article was posted on the German website spiegel.de yesterday...and is a very disturbing read.  I thank Roy Stephens for his second offering in today's column.

China Opens New Front in Currency War as Yuan Speculation Distorts Export Data

China's central bank signaled on Wednesday it was prepared to change its monetary strategy to fend off inflows of speculative capital, as Beijing struggles to control a tide of cash washing in from overseas markets.

The move came as April exports blew past expectations, which appeared on the surface to indicate that both China's economy and global demand were on the mend. But economists were quick to suspect the figures were artificially inflated by investors who were disguising speculative bets on the yuan currency as trade payments.

Faced with the risk that such inflows could cause the yuan to appreciate so quickly that it destabilizes exports and the broader economy, the People's Bank of China (PBOC) has begun intervening heavily in the domestic currency market this year, buying up dollars and selling yuan.

This moneynews.com article from yesterday was sent to me by West Virginia reader Elliot Simon...and it's worth skimming.

Bank Of Korea Delivers The Latest In A Wave Of Surprise Interest Rate Cuts To Hit Global Markets This Week

The Bank of Korea just unexpectedly cut its key interest rate to 2.5% from 2.75%.

This is pretty remarkable, considering that market economists have already been surprised by two other central bank rate cuts this week.

On Monday, the Reserve Bank of Australia unexpectedly lowered its key interest rate to 2.75% from 3%.

Earlier Wednesday, the National Bank of Poland unexpectedly cut its key interest rate to 3% from 3.25%.

These three surprise rate cuts follow two rate cuts made last week: on Thursday, the ECB cut to 0.5% from 0.75%, and on Friday, the Reserve Bank of India cut to 7.3% from 7.5%.

You've already read most of this very short story that was posted on the businessinsider.com Internet site yesterday evening...but the rest is worth reading as well.  I thank Roy Stephens for his final offering in today's column.

Two King World News Interviews

The first is with Dr. Stephen Leeb...and it's headlined "China Moving to Dominate the World With Gold Purchases".  The second commentary is with Jeffrey Saut.  It's entitled "ECB to Stun the World With Surprise Q.E...and Gold's Next Move".

Vietnamese sees Gold as foreign currency

Lack of inter connectivity for Vietnam's currency, the dong could be the reason for large price gap between global and domestic gold prices, SBV chief said.

According to State Bank of Vietnam governor Nguyen Van Binh, if the foreign exchange market is not interconnected, why should the gold market be interconnected.

The Vietnam dong has not been floated on the international foreign exchange market yet. As a result, the domestic and international foreign exchange markets are not interconnected, Binh said.

Gold, in fact, can essentially be considered a foreign currency here, because by nature Vietnam is a net gold importer.

This very interesting read, filed from Hanoi yesterday, was posted on the bullionstreet.com Internet site yesterday afternoon IST.  I thank Ulrike Marx for her final contribution to today's column.

Chinese women aren't taking Buffett's advice on gold

On Sunday afternoon a microblogger in Beijing logged into Sina Weibo, China's leading social media platform, to gossip about the "auntie" next door. It's a broad term of respect for an older woman, and his followers understood precisely what he meant when he tweeted, "The auntie next door used all of her retirement savings to buy gold. When asked what she'd do if prices keep dropping, she replied that if everyone kept buying gold, the price wouldn't drop. ..."

This might strike a conservative investor as reckless. But in China, where gold has long been a national obsession, a mid-April record crash in global gold prices has been seen as an unprecedented buying opportunity. According to reports in China, Chinese have purchased 300 tons of gold worth more than $16 billion since the crash.

Photos of crowds packing jewelry shops and emptying their shelves are now regular features in the news media. On Monday a police officer in Shanxi province tweeted, in regard to his actual aunt: "My aunt's family has a gold store, and my colleague who's in the market for some gold for his mother asked if I could get him a cheap price. I asked, and my aunt said first come and take a look to see if anything catches your eye. But at the moment the display cases are empty, and they are unable to get new inventory. All I can say is that the power of the Chinese is frightening."

This article, filed from Shanghai, was posted on the Bloomberg website mid-afternoon Mountain Daylight Time yesterday...and it definitely falls into the must read category.  I borrowed it from a GATA release yesterday.

Bill Holter: Yes, Please Investigate

Yesterday (as reported by Zero Hedge) Bart Chilton, one of the CFTC commissioners said that they need to investigate “Bitcoin” because as he put it, “This is not monopoly money – real people have real risk in these instruments.”  Yes very “real” so to speak.  This is a “cyber” currency with no “touchy feely” actual coins, there are no derivatives (yet) like options or futures and as for the “size” of this market we are talking about just north of a whopping $1 billion.  I don’t mean to sound crass here but $1 billion?  Jon Corzine stole $1.6 billion just a couple of years ago.  He took this money from “real people” unless you think of farmers as alien holograms.  Here we are nearly 2 years later and we hear nothing but crickets about MF Global and the dishonorable Jon Corzine walks the streets a free man.  What’s up with this?

No I haven’t forgot about the other investigation, you know… the one nearly 5 years old looking into the forced silver crash of 2008.  I was worried a month or two back that the statute of limitations would run out before the CFTC finished their “extensive” investigation and let the culprits off the hook, that’s no longer a problem as the clock just got reset with the latest blatant manipulation.  How do Bart Chilton and the rest of the regulatory crew explain the 2013 instant replay of 2008?  Price gets crashed from “sellers” yet what supposedly was sold can only be bought at a 30% premium… IF you can find it at all?  We are still waiting… and now “Bitcoin” is on the front burner I’m sure that silver (and gold) will not be addressed until AFTER exchange defaults occur.  For that matter, they won’t be reported on after the fact either because we will then have bigger, MUCH BIGGER problems facing us… like where the next meal will come from.

On Saturday...and again yesterday in his mid-week commentary...Ted Butler railed against the CFTC...taking direct aim at both Gary Gensler and Bart Chilton.  Maybe he'll post his commentary about this in the clear at some point.  But for the time being, this piece by Bill Holter is well worth reading...and spot on as well.  It was posted on the milesfranklin.com Internet site on Tuesday...and I thank Washington state reader S.A. for pointing it out.

Jim Sinclair: Liberation of gold from the paper market is at hand

Jim Sinclair writes tonight that the emancipation of the physical gold market from the fraudulent paper market is at hand. "Cyprus was the key that opened the door to the end," Sinclair writes. "The knuckle draggers at the Comex who are the gold banks have more than shot themselves in the foot with their gold sale. They have taken a direct hit in the head."

The very brief commentary is headlined "Emancipation Of Physical Gold From Paper Gold Is At Hand"...and it was posted on the jsmineset.com Internet site yesterday.  It's another piece that I extracted from a GATA release yesterday evening.

Gold plunge was not natural market event, fund manager Auerback says

The recent plunge in the gold price was not a natural market event but likely the product of "collusion" between bullion banks and hedge funds, market analyst and fund manager Marshall Auerback tells financial writer Lars Schall. The interview was conducted for Matterhorn Asset Management's GoldSwitzerland Internet site.  I thank Chris Powell for wordsmithing this introductory paragraph.

Casey Research: Official Gold Numbers Don’t Add Up...Chris Martenson

Having just put the finishing touches on this month's The Casey Report – for which Casey Research Chief Economist Bud Conrad combed through reams of data to figure out what really caused gold's recent precipitous drop (as well as predict where gold is going next) – the specter of paper-gold market manipulation is fresh in my mind.

This week's article touches on that very topic, examining the possibility that the Fed or Treasury may have leased out over 4,000 tonnes of US gold unbeknownst to the public, and thus holds much less gold than we've been told.

Before I go any further, let me acknowledge the treacherous waters into which I'm wading. I realize that by discussing gold manipulation, I'm begging for controversy. Both sides of this debate feature passionate believers, and personally, I find both sides convincing. But in the interest of full disclosure, I do think gold is manipulated to some extent, if only because every other investment – stocks, housing, bonds (via interest rates) – is too. Why should gold be any different, especially when a rising gold price represents the single most credible threat to the US government's fiat hegemony?

This lengthy commentary was posted in yesterday's edition of the Casey Daily Dispatch.  If you've been in the GATA camp for the last ten years or so, you won't find anything new here, as it's basically a re-hash of other researcher's findings.  But don't let that fact discourage you from giving it the attention it deserves, as it's definitely worth reading...especially Martenson's concluding comments.

MineWeb's Lawrence Williams: GATA gaining credence

MineWeb's Lawrence Williams expresses puzzlement that immense demand for real metal seems to be having no effect on what is quoted as the price of gold. "All this gives more and more credence to the GATAs of this world who genuinely believe that the gold price is suppressed by governments, some central banks, and their bullion bank allies," Williams writes. "Sales of paper gold to suppress the futures market do seem to be key to the current price patterns -- and the amounts of money (admittedly paper again) which are required to do this would seem to suggest some kind of 'conspiracy' to keep the gold price under control as an economic weapon."

Lawrie's commentary is headlined "Mr. Spock Would Definitely Find Current Gold Price Levels Illogical"...and it must have been posted on the mineweb.com Internet site shortly after I filed yesterday's column, or I would have picked it up, as their Internet site is the last news source I check before I hit the 'send' button.  It's another story I borrowed the gata.org Internet site...and I thank Chris Powell for doing all the heavy lifting on our behalf...and It's almost pointless to say that it's a must read from one end to the other.  I consider this essay to be one of the best commentaries that Lawrie has written since I've been following his work.

David Rosenberg: The Fed Is Trying Like Crazy, But Nothing It's Doing Can Save The Economy

David Rosenberg, the veteran Wall Street economist and bearish strategist a Gluskin Sheff, gave an intense presentation last Friday at John Mauldin's Strategic Investment Conference.

Titled "Bernanke: The Wizard Of Potemkin," this presentation offers a sobering look at the anemic U.S. economy, the labor market mess, and the Federal Reserve's controversial efforts to get everything back on track.

Before you can even think about getting bullish, you must consider the eye-opening charts from Rosenberg's presentation.

David's entire presentation is embedded in this businessinsider.com story from yesterday...and I would think that it's well worth your time.  I thank Roy Stephens for today's first story.  This web page takes a while to download, especially if you have an older browser/computer.

IMF Chief Lagarde Criticizes U.S. Government Spending Cuts

International Monetary Fund head Christine Lagarde criticized the U.S. government's budget policies as too tight on Tuesday, in an appearance in Amsterdam that was interrupted by student protestors.

Lagarde said the U.S. government's debt reduction plans are too abrupt, including the $85 billion in federal budget cuts known as the sequester. She said that the current policies would lower the U.S. economy's growth rate.

The IMF's most recent forecast in April said the U.S. economy would expand by 2 percent this year, 1.75 percentage points slower than it would have grown without the tax hikes and spending cuts.

The U.S. "should consolidate less in the short term, but give...economic actors the certainty that there will be fiscal consolidation going forward," she said.

What is this woman smoking?  Whatever it is, she needs to reduce the potency of her next joint.  That's the way I felt about the above comments from Ms. Lagarde in this moneynews.com story from yesterday...as did Elliot Simon in his covering e-mail.

This Is Your S&P...This Is Your S&P Without Tuesdays

Since the mid-November lows, the S&P 500 has gained a remarkable 268 points on the back of faith, hope, and Bernanke/Kuroda charity. But perhaps what is more mind-numbing is that this efficient market has given us more than 50% of those gains on Tuesdays. With 17 up-days in a row, Tuesday is the Monday dip-buyers dream. Since 1/18, absent Tuesdays, the S&P 500 has gone nowhere. Maybe Bob Geldof needs to write a new song for the US investor "I do like Tuesdays", or at least a slightly revised cover version of the Bangles' "Manic Tuesday".

What would we do without Tuesdays?

You've already read all the text.  It's the three charts in this Zero Hedge piece from yesterday that are a must to view...and I thank West Virginia reader Elliot Simon for sending it.

Moody's: 'Strategic Default' Viewed as Less Taboo by Cities

The number of defaults from U.S. municipal issuers rated by Moody’s Investors Service has more than tripled to 4.6 per year since 2007, showing willingness to pay can’t be taken for granted, the company said in a report.

Five municipalities rated by Moody’s defaulted last year, including Stockton, California, which became the biggest U.S. city to seek Chapter 9 bankruptcy protection in June. Wenatchee, Washington, failed to honor a guarantee on an interest payment for a sports arena. The figure doesn’t include issuers such as Vadnais Heights, Minnesota, which “selectively defaulted” on contingent liabilities, the report said.

Last year’s local-government defaults are more examples of political unwillingness to place payments to bondholders ahead of essential governmental services amid dwindling cash, New York-based Moody’s said.

This moneynews.com article was posted on their Internet site late yesterday morning EDT...and it's Elliot's third offering in a row in today's column.

Companies Cook the Books to Meet Tough Targets: Survey

Hard-pressed company bosses across much of the world are under so much pressure to deliver on growth that many have resorted to cooking the books, Ernst & Young said in a survey Tuesday.

One in five of almost 3,500 staff quizzed in 36 countries in Europe, the Middle East, Africa and India said they had seen financial manipulation in their companies in the last 12 months, the accounting and consultancy firm said.

In addition 42 percent of board directors and top managers questioned in the fraud survey said they were aware of "some type of irregular financial reporting."

None of this should surprise you in the slightest, dear reader.  This Reuters story was posted on their website early yesterday morning EDT...and I thank U.A.E. reader Laurent-Patrick Gally for sharing it with us.

Bank deposits of over €100,000 may be at risk

Deposits of over €100,000 are likely to be hit in the event of future European bank collapses, according to a proposal put forward by the Irish presidency of the European Council ahead of a key meeting of finance ministers next week.

Discussions on the controversial bank resolution regime, which is likely to see savers with deposits over €100,000 “bailed in” as part of future bank wind-downs, are due to intensify this week in Brussels, ahead of Tuesday’s meeting, which will be chaired by Minister for Finance, Michael Noonan.

“We will try to get some guidance from Ministers about the possible design of the bailout tool,” one EU official said yesterday.

Under a compromise text proposed by the Irish presidency, uninsured deposits of over €100,000 would be bailed in, in the event that a bank is resolved, but depositors would rank higher than other creditors in the event of a wind-down.

This article was posted on the Irish Times website during the lunch hour in the U.K. yesterday...and I thank reader David in California for bringing it to our attention.  There's also a similar Fox News story about the Finnish Prime Minster saying the same thing...and that story is linked here.  My thanks to Ulrike Marx for that one.

Europe's Depression...and Outside View

The whole of Europe is headed for a permanent recession -- a depression.

Austerity and labor reforms can't save it. Radical measures -- abandoning the euro and deficit spending in Germany -- are the only way out.

Unemployment exceeds Great Depression levels in Spain, many parts of Greece, Portugal and Italy and is rising in northern Europe. Slashing government spending and labor market reforms have neither restored Club Med economies nor their governments to solvency.

Across much of Europe, gross domestic product is shrinking faster than governments can cut spending and sovereign debt burdens are becoming worse, not better.

This op-ed piece, filed from College Park, Maryland, showed up on the UPI website yesterday...and I thank Roy Stephens for sending it along.

Britain and Europe: mistaking plans for Nigel

There is no disputing that Lord Lawson's EU-turn reflects his party's own historic change of view over Europe.

Trouble, thy name is Nigel. Or so it must seem to David Cameron. In a week, the prime minister's authority has been rocked by Nigel Farage, shaken by the Nigel Evans allegations and now openly challenged by the most important Nigel in recent Conservative history. It is 24 years since Nigel Lawson's resignation signalled the endgame of Margaret Thatcher's premiership. And it needs to be stressed that, for most people under the age of 40, the former chancellor is much less of a name these days than his daughter. Nevertheless, Lord Lawson proved this week that, at 81, he is still one of the most articulate figures in politics and has lost none of his sense of theatre. By saying, on the eve of the Queen's Speech, that he thinks Britain should now quit the European Union, he has poured petrol on the flames already licking through the Conservative mansion after last week's local election defeats.

There can be no disputing that Lord Lawson's change of heart on the EU – he voted yes to British membership, along with Lady Thatcher herself, back in 1975 – reflects his party's own historic change of view over Europe, between the Ted Heath era and that of David Cameron. It is representative, too, of the more sceptical mood of the public, judging by the opinion polls. But it goes completely against Mr Cameron's optimism that he can negotiate a new relationship with the EU and win a referendum to endorse that view – and Lord Lawson knows this very well. The former chancellor has therefore chosen his time with malice aforethought, in order to make life much harder for the prime minister.

This commentary was posted on the guardian.co.uk Internet site early yesterday evening...and I consider it a must read.  My thanks go out to Roy Stephens once again.

German Euro-Skeptic Party Gaining Ground

The anti-euro party "Alternative for Germany" (AfD) was officially founded just a few weeks ago, but it has clearly struck a nerve: It already numbers 10,476 members, SPIEGEL has learned -- some 2,800 of which have switched allegiance from Germany's established parties.

As elections loom later this year, Alternative for Germany is making waves with an agenda that includes dissolving the euro currency zone and returning powers from Brussels to EU member-states. Although a survey released on Tuesday showed the party's support is currently barely nudging 4 percent, its rapidly swelling ranks could end up significantly altering the country's political landscape.

The numbers are so far not particularly threatening to the country's largest parties. Just over 1,000 of AfD's freshly minted members previously belonged to Chancellor Angela Merkel's Christian Democrats, while Germany's largest opposition party, the Social Democrats, have seen 558 members defect.

But the threat to smaller parties, particularly the CDU's junior coalition partner, the pro-business Free Democratic Party, is more acute. The FDP has lost 587 members lured by the AfD's slogan: "Straight talk instead of S€datives".

This article showed up on the German website spiegel.de yesterday...and it's another offering from Roy Stephens.

U.S. Accuses China’s Military Directly for Cyberattacks

The Obama administration on Monday explicitly accused China’s military of mounting attacks on American government computer systems and defense contractors, saying one motive could be to map “military capabilities that could be exploited during a crisis.”

While some recent estimates have more than 90 percent of cyberespionage in the United States originating in China, the accusations relayed in the Pentagon’s annual report to Congress on Chinese military capabilities were remarkable in their directness. Until now the administration avoided directly accusing both the Chinese government and the People’s Liberation Army of using cyberweapons against the United States in a deliberate, government-developed strategy to steal intellectual property and gain strategic advantage.

This news item appeared on The New York Times website on Monday...and it's Roy Stephens' final offering in today's column.

Reserve Bank of Australia Cuts Key Rate to Record Low

The Reserve Bank of Australia cut its benchmark interest rate to a record low, driving down a currency that has damaged manufacturing and boosted unemployment.

Governor Glenn Stevens reduced the overnight cash-rate target by a quarter percentage point to 2.75 percent, saying in a statement that the Aussie’s record strength “is unusual given the decline in export prices and interest rates.” Eight of 29 economists predicted the seventh cut in the past 19 months, while money markets had seen about a 50-50 chance.

“The board has previously noted that the inflation outlook would afford scope to ease further,” Stevens said. “At today’s meeting the board decided to use some of that scope. It judged that a further decline in the cash rate was appropriate to encourage sustainable growth in the economy.”

This 2-page news item was posted on the businessweek.com Internet site yesterday...and I thank Manitoba reader Ulrike Marx for her second story in today's column.

Four King World News Blogs/Audio Interviews

1. James Turk: "Extraordinary Delays for Physical Gold and Silver".  2.  Tom Fitzpatrick: "Gold and Silver Setting Up For Spectacular and Massive Surges".  3.  Dan Norcini: "God Help Us All Because This Sure as Hell Will Not End Well".  4. The audio interview is with John Embry.

New Bullion Businesses Squeezed?

With the 10-15 percent drop in gold and silver prices from April 12-15, the number of people liquidating their bullion-priced coins and ingots has dropped significantly. Even more, the number of people cashing in their gold jewelry, sterling silverware and the like has also fallen sharply.

A recent report stated that companies who jumped into the gold buying business over the past few years have seen their purchasing volume decline by more than 50 percent from what it was before April 12. A survey of pawn shops, check cashing places, jewelry stores and other Johnny-come-lately buying businesses shows the owners claiming that volume has disappeared almost as fast as it increased when they added a jewelry-buying service to the rest of their businesses.

Coin dealers who also sell bullion-priced gold and silver are also noticing the fall off in buying inventory from the public. However, at the same time they are enjoying soaring demand for physical gold and silver. This rise in sales masks the fall in purchasing activity.

This short piece by Patrick Heller was posted on the numismaster.com Internet site yesterday...and this is another story courtesy of Elliot Simon.

One Hour With Rick Rule on Broadcast News Network

Rick spent an hour on Market Call Tonight on Canada's Broadcast News Network last night...and he talks about precious metal stocks for the entire time.  I thank reader Ken Hurt for sliding this video into my in-box yesterday.

Mining exploration sinks to new low

According to IntierraRMG, mining exploration fell once more in March, extending a 17-month decline in exploration activity.

According to the group’s online database, there were drilling reports from a total of only 355 prospects (it adds that this figure includes reports from more than one drilling prospect per project). This, it says is compared to “440 in February, 662 in January and (a restated) 367 in December 2012”.

“Gold-exploration has been particularly weak, with activity reported from just 172 prospects in March, compared with 199 in February, 350 in January and 382 in March 2012. Last month’s gold activity is still better, however, than the nadir of 157 prospects reported in December,” the group writes.

While the number of drills turning at gold prospects fell in absolute terms during the quarter, the search for the yellow metal continues to dominate the overall figures. During the quarter 651 gold projects reported drilling activity, IntierraRMG says, as compared to only 192 copper projects, 154 silver projects, 63 zinc projects and 42 lead projects.

This article appeared on the mineweb.com Internet site yesterday...and I thank Ulrike Marx for sending it.

Diplomatic cables show central banks conspiring to rig gold even after demonetization

U.S. diplomatic cables show that three years after the United States canceled the dollar's official convertibility into gold for foreign governments, thereby ending gold's formal role as money, Western governments and central banks were still meeting secretly to scheme about controlling the monetary metal's market price.

The cables, identified this week by GATA's consultant R.M. among thousands published recently by Wikileaks, reiterate that when it comes to governments and gold, "conspiracy" -- that is, planning and acting together in secret -- is not mere "theory" but simple fact and the basic way business is done.

This longish GATA release from yesterday is worth spending some time on...and Chris Powell has much more to say on this issue than just the two paragraphs posted above.

The Enduring Glow of Gold

The recent sharp decline in gold prices has shaken the confidence of many people. Don't worry. The price of gold has dipped, but will rise to new heights soon. In the long term, gold prices will rise far more than inflation. For the masses, gold is the best inflation hedge. It is the best weapon for the little guy to fight central banks that help a few to rob many.

Yes, gold doesn't bear interest. Many, including Warren Buffett, belittle its investment value. But, paintings or antiques don't bear interest either. When money supply is rising, anything scarce tends to rise in value. Gold is the best scarce commodity in the world. There are more artists that can paint more paintings every day. Eighty percent of the world's gold has already been extracted. The remaining 20 percent will be dug up in the next 20 years. The money supply will grow forever. But the gold supply can grow only by 25 percent and no more.

The income growth in emerging economies will vastly increase with gold demand. When people realize how little gold the world has left, the price will skyrocket. If you don't know how to preserve your wealth in an inflationary environment, you should accumulate gold. When the price comes down, just as it did two weeks ago, just buy more.

This exceptional 3-page essay was posted on the caixin.com Internet site...and I consider it a must read when you can find the time.  I thank Elliot Simon for his last contribution to today's column.

Gold Imports by India Seen Topping 100 Tonnes for a Second Month

Gold imports by India, the world’s largest consumer, are set to exceed 100 metric tons for a second month in May as jewelers rush to beat central bank curbs on overseas bullion purchases by banks, a refiner said.

The biggest slump in gold prices in more than three decades on April 15 spurred banks, traders and jewelers to import more than 100 tons last month, said Rajesh Khosla, managing director of MMTC-PAMP India Pvt. Purchases this month will match April’s imports, he said. MMTC-PAMP’s refinery in northern Indian state of Haryana can process 100 tons of gold, 600 tons of silver and make 2.5 million pieces of coins a year, he said.

The Reserve Bank of India, or RBI, will issue guidelines by the end of this month to restrict banks from importing gold on a consignment basis as it seeks to reduce domestic demand and curb a record current-account deficit, the central bank said on May 3. Banks will be allowed to buy on a consignment basis to meet only genuine needs of exporters of jewelry. The bulk of the imports by banks now is on a consignment basis that doesn’t require them to fund the purchase, RBI said.

This Bloomberg story, filed from New Delhi earlier today IST, was posted on their website late last night Mountain Daylight Time.  I found this must read news item on the sharpspixley.com Internet site in the wee hours of this morning.

Gold-hungry China braces for surge in imports

Chinese gold imports are likely to swell further after rising strongly for a second straight month in March, as investors seek safety from economic uncertainty and after prices plunged to a two-year low last month.

"Physical demand picked up significantly over the last couple of weeks. Consumers and industrial users tend to see price drops as buying opportunities," Zhang Bingnan, secretary-general of the China Gold Association, told Reuters.

"Investment demand should continue to stay strong through the rest of the year because of limited investment alternatives," said Zhang, adding that gold sales and processing volumes both spiked in April.

This Reuters story, filed jointly from Singapore and Beijing yesterday, was picked up by the mineweb.com Internet site...and it's definitely worth reading.  I thank Ulrike Marx for digging this news item up on our behalf.

China produces 90 tonnes, consumes 320 tonnes in Q1-2013

World's largest gold producer and second largest consumer China's total gold usage reached 320.54 metric tonnes in the first quarter, China Gold Association said.

According to CGA, purchases of gold bars surged 49% to 120.39 tonnes, while jewelry gained 16% to 178.59 tonnes.

Gold consumption in China soared 26% in the first three months of 2013 from a year ago amid strong bullion sales and rising jewelry demand.

The Association added that country's gold production gained 11% in the same period to 89.91 tonnes.

Here's another must read story...this one was posted on the bullionstreet.com Internet site yesterday afternoon IST...and even if you don't read the article, which is very short, the photo alone is worth the trip!  I thank Ulrike Marx for our last news item of the day.

Colleges In U.S. Offer Highest-Ever Discount to Entice Students

Private nonprofit colleges are offering students tuition discounts of 45 percent, on average, in response to a changing financial environment that stems from the weak economic recovery.

Price reductions, designed to boost attendance, were at an all-time high in 2012 and outpaced the rate during the recession, according to a study of 383 private-nonprofit four- year schools, released today by the National Association of College and University Business Officers.

Some colleges are struggling with enrollment declines even after offering a reduction and enduring price sensitivity is driving the drop, according to chief business officers at institutions that have been affected.

“The expectation that a private institution can maintain or grow enrollment and increase net revenue simply by offering large tuition discounts is no longer valid,” Walda said in a statement. “Price sensitivity, changing student demographics, and a dynamic, competitive landscape all point to the need for increased attention to a strong brand, good marketing, diverse revenue streams, and cost containment.”

This Bloomberg story was posted on their website late yesterday morning MDT...and I thank U.A.E. reader Laurent-Patrick Gally for today's first story.

U.S. regulators eye Bitcoin supervision

Senior officials at a top US financial regulator are discussing whether Bitcoin, the controversial cyber-currency, might fall under their regulatory remit.

Bitcoin "is for sure something we need to explore," Bart Chilton, one of the five commissioners at the Commodity Futures Trading Commission (CFTC), told the Financial Times. A person familiar with the CFTC's thinking said that the regulator is "seriously" examining the issue.

Said Mr Chilton: "It's not monopoly money we're talking about here -- real people can have real risk in these instruments, and we need to ensure that we protect markets and consumers, even in what at first blush appear to be 'out there' transactions."

Bart and the rest of the CFTC should get to the bottom of the gold and silver price management scheme...which is doing real damage in the real economies of so many countries on Planet Earth, before wasting their time and resources on computer generated fantasy money.  This Financial Times story from yesterday is one I found posted in the clear in this GATA release.

Brazil furious with Cristina Fernandez non-kept promises freezes relation

Brazil has virtually frozen political and economic relations with Argentina following serious discrepancies that were confirmed during the recent summit of presidents Cristina Fernandez with Dilma Rousseff who cut short the originally scheduled two-day visit to Buenos Aires.

The bilateral conflict exposes billions of dollars of investments from Brazil, which also happens to be Argentina’s main trade partner, since the government of Cristina Fernandez has not complied with any of the understandings reached in previous meetings referred mainly to limitations, restrictions and other obstacles implemented by the Argentines.

But this time also, according to Argentine and Brazilian diplomatic sources quoted in the Buenos Aires media, there were serious questionings towards Cristina Fernandez latest political decisions ‘on the path of the late Venezuelan leader Hugo Chavez’, the main of which, judicial reform and the advance on the media.

This article appeared on the mercopress.com Internet site on Saturday...and I thank Casey Research's own Louis James for passing it around.

Uruguay admits trade and economic relations with Argentina ‘couldn’t be worse’

Vice-president Danilo Astori admitted on Friday that economic-trade relations with Argentina continue to deteriorate and seriously question Mercosur and Uruguay must therefore speed the search for other alternatives.

“Argentina protectionist policies are flagrantly contradicting the Treaty of Asuncion, (the founding stone of Mercosur), and even when the Argentine government has all the right to decide its policies, those decisions have no support in the Mercosur treaty”, pointed out Astori during a business forum.

He added that the current foreign exchange policy of Argentina which has seen the US dollar reach almost ten Argentine Pesos in the ‘blue’ or informal market with a 90% spread over the official exchange rate, already is seriously harming bilateral trade but “it’s not clear” how it can really affect the Uruguayan real estate market.

“To say this will not have an impact on us is to ignore reality; the issue is how do we behave to mitigate this possible impact, but at the same time even more important find other sources to diversify and improve our trade and economic situation”, argued Astori.

This is another story from the mercopress.com Internet site on Saturday...and the second offering in a row from Louis James.

France Declares Austerity Over as Germany Offers Wiggle Room

French Finance Minister Pierre Moscovici declared the era of austerity over after his German counterpart offered flexibility on deficit cutting amid renewed bickering between Europe’s two biggest economies.

“We’re witnessing the end of the dogma of austerity” as the only tool to fight the euro debt crisis, Moscovici said yesterday on Europe 1 radio. “We’ve been pleading for a growth policy for a year. Austerity on its own impedes growth.”

The gap between the French Socialist finance chief’s view and the election-year positioning of Germany’s Wolfgang Schaeuble underscores the divergence between their economies and the wrangling that has marked the crisis fight since Francois Hollande replaced Nicolas Sarkozy as French leader a year ago.

This story was filed from Paris about lunchtime in Europe...and posted on the Bloomberg Internet site very early yesterday morning.  I thank Manitoba reader Ulrike Marx for sending it along.

German euro founder calls for 'catastrophic' currency to be broken up

Oskar Lafontaine, the German finance minister who launched the euro, has called for a break-up of the single currency to let southern Europe recover, warning that the current course is "leading to disaster". 

"The economic situation is worsening from month to month, and unemployment has reached a level that puts democratic structures ever more in doubt," he said.

"The Germans have not yet realised that southern Europe, including France, will be forced by their current misery to fight back against German hegemony sooner or later," he said, blaming much of the crisis on Germany's wage squeeze to gain export share.

Someone at Casey Research said that this was posturing for votes in the upcoming fall election in Germany.  That may be true, but you should form your own opinion once you've read this Ambrose Evans-Pritchard piece from The Telegraph on Sunday evening BST...and I thank reader 'h c' for sharing it with us.

Small-Town Mayor’s Millions as 'Exhibit A' on Graft in Spain

In the good times, the former mayor of this small, wind-swept village of 5,000 in northern Spain was busy building: the olive oil museum, the wind museum, the museum of life. If that were not enough, there was the new bullring, the sports center with 25,000 seats and the zoo with the exotic-bird park.

The former mayor, María Victoria Pinilla, seemed to be prospering personally, as well. Three stately houses took shape on her family plot. There was an apartment in Madrid, a beach house and a vacation home in the Dominican Republic next to Julio Iglesias’.

Now, however, the fence outside the former mayor’s family compound is in disrepair and half-built housing developments lie abandoned on the outskirts of the village. And last month, Ms. Pinilla, 57, became just one more in a growing throng of political officials in Spain to face corruption charges.

The 2-page essay appeared in the Saturday edition of The New York Times...and is definitely worth reading.  I thank Roy Stephens for bringing it to our attention.

Draghi Says ECB Ready to Cut Interest Rates Again If Needed

European Central Bank President Mario Draghi said policy makers are ready to cut interest rates again if needed after reducing them to a record low last week.

“We will be looking at all the data that arrives from the euro-area economy in the coming weeks and if necessary, we are ready to act again,” Draghi said in a speech in Rome today. “Monetary policy will remain accommodative.”

The euro fell half a cent on the comment to $1.3057 and European stocks pared losses. The Frankfurt-based ECB on May 2 cut its benchmark rate by a quarter point to 0.5 percent, and Draghi said then that officials have an “open mind” about taking the deposit rate, currently at zero, into negative territory.

Money is worthless...cash is trash.  Take your pick.  A lot of customers showing up at our bullion store are saying precisely the same thing.  How has it come to this?  This story was filed from Frankfurt yesterday afternoon Europe time...and posted on the Bloomberg website mid-morning MDT.  My thanks go out to Ulrike Marx for her second offering in today's column.                                                                     

Afghanistan's Karzai Says He Was Assured C.I.A. Would Continue Delivering Bags of Cash

The C.I.A.’s station chief here met with President Hamid Karzai on Saturday, and the Afghan leader said he had been assured that the agency would continue dropping off stacks of cash at his office despite a storm of criticism that has erupted since the payments were disclosed.

The C.I.A. money, Mr. Karzai told reporters, was “an easy source of petty cash,” and some of it was used to pay off members of the political elite, a group dominated by warlords.

The use of the C.I.A. cash for payoffs has prompted criticism from many Afghans and some American and European officials, who complain that the agency, in its quest to maintain access and influence at the presidential palace, financed what is essentially a presidential slush fund. The practice, the officials say, effectively undercut a pillar of the American war strategy: the building of a clean and credible Afghan government to wean popular support from the Taliban.

Instead, corruption at the highest levels seems to have only worsened. The International Monetary Fund recently warned diplomats in Kabul that the Afghan government faced a potentially severe budget shortfall partly because of the increasing theft of customs duties and officially abetted tax evasion.

This short, but very interesting essay, is a must read for all serious students of the 'New Great Game'.  It was posted on The New York Times website on Saturday...and I thank Roy Stephens for finding it for us.

Policy battle rages in China as slowdown feeds 'sense of crisis'

Anti-reform hardliners in China's Communist Party have become seriously alarmed by the sharp slow-down in economic growth, creating a "task-force" to crank up production.

China's Caixin Magazine reports that there is a growing "sense of crisis" not felt since the depths of the global banking crash in 2008-2009.

The State-owned Assets Supervision and Administration Commission [SASAC] has assembled a team to "protect economic growth" and pressure state companies to boost jobs at all costs.

SASAC is the bastion of vested interests and controller of 115 state behemoths with assets above $6 trillion and lock on much of the economy.

The move comes amid further signs that growth is faltering across all fronts. HSBC's gauge of Chinese services fell three points to 51.1 in April, the lowest in almost two years.

This must read story by Ambrose Evans-Pritchard showed up on the telegraph.co.uk Internet site yesterday afternoon BST...and I thank Roy Stephens for his final offering in today's column.

"The Captain" Says Goodbye: The Full Final Edition Of The Privateer

For 727 editions, and nearly 30 years, Bill Buckler, the "captain" of the free market-praising Privateer newsletter provided a welcome escape from a world overrun with "free-lunch" economists, "for-hire" politicians, "crony-capitalist" oligarchs, "heroin-addict" bankers, "the-solution-to-record-debt-is-more-record-debt" Keynesians, and all those other subclasses of that species which Einstein, or whoever, described so aptly in saying that they all expect a different, and happy, outcome when applying the same flawed methods over and over. And for 30 years, Buckler's steadfast determination and adherence to his arguments, beliefs, reasoning and ironclad logic brought him countless followers, all of whom are now able to see past the bread and circus facade of a world every day on the edge of political and social collapse.

Sadly, all good things come to an end, and so does The Privateer. We are delighted to celebrate its illustrious memory by presenting to our readers the final, must read, issue of the newsletter which encapsulates the philosophy and ideology of its author - a man much respected and admired in the free market circles - and thirty years of objective, unbiased market and economic commentary, best of all.

Whether you read it now or later, as it's on the longish side...a 12-page missive in its original pdf format...this is an absolute must read.  I've been reading Bill Buckler for about ten years...and there was none better.  I thank Marshall Angeles for digging this up on our behalf.

Seven King World News Blogs/Audio Interviews

1. Robert Fitzwilson: "The Global Run on Silver and What it Means Going Forward".  2.  Dr. Paul Craig Roberts [#1]: "Former U.S. Treasury Official - Gold, Silver the Fed and Bank Run".  3. Dr. Paul Craig Roberts [#2]: "Former U.S. Treasury Official - Gold, the Police State and More War".  4. John Embry: "This is How Close We Are to Total Collapse".  5. Richard Russell: "Big Money, Fed Gold, God and General Patton".   6. The first audio interview is with Jean-Marie Eveillard...and the second audio interview is with Dr. Paul Craig Roberts.

Woman scams metal buyers out of thousands with fake silver bars

Police are looking for a woman who they say sold several hundred fake silver bars to local metal buyers under the guise that it was real silver.

According to police, a 40-year-old white woman came to the Traverse City, Colorado area in late April and sold these metal bars to at least three different precious metal buyers in the area.

On April 27th, the woman walked into Bay West Antiques and sold 100 silver bars to store owners, Holly Dalley and her husband Pete. Real silvers bars are currently worth just over $24.00 each.

"She came in, she sat down, she had a couple of boxes," said Dalley. "She said there were 50 1-ounce bars in each box. I looked at the first one, I didn't take it out of it's plastic. I just saw that and said everything looked good. There wasn't anything that would have indicated that it was fake at all."

This is another example of caveat emptor.  Unless you know what you're doing, you should always buy from a reputable dealer...and have your guard up if you're buying privately.  You'll note that this person unloaded them at pawn shops or other such places where the persons working there know next to nothing about precious metals.  I thank James Anderson for sharing this story.

Mike Kosares: Silver eagle sales show metal's recognition as safe haven

Mike Kosares, proprietor of Centennial Precious Metals and its Internet site, USAGold.com, has, fortunately for followers of the monetary metals, begun writing regularly, and yesterday he showed that silver in hand is becoming, like gold, recognized as a safe haven for wealth. Kosares' commentary is headlined "Bell Weather American Gold and Silver Eagle Sales Show Safe-Haven Public Mindset".

You can read all about it in this GATA release from yesterday.

Sprott's Thoughts: Rely on Valuations, Not Momentum...Jason Stevens

Investment Executive Jason Stevens joined Sprott Global Resource Investments Ltd. in 2002. A devout student of Benjamin Graham’s value investing thesis, Jason shared with me how he is managing his portfolio right now:

The junior mining sector is highly volatile, in part because trading volumes are minute relative to other sectors’. Companies that get attention in the market -- because of a new discovery, or rumors of a takeover -- may experience share price increases to well in excess of what we would consider fair value for their projects. Conversely, the slightest setback, or failure to meet expectations can result in companies trading at a fraction of an objective estimate of the business’ value.

The key to investing in natural resource equities is to understand the factors that affect a project’s possible outcomes and create a realistic assessment of its value to an investor. The further the price distances itself from the valuation we establish, the more potentially lucrative we perceive the buy or sell opportunity to be.

This short commentary by Jason was posted on the sprottgroup.com Internet site yesterday.

Casey Research: Buy Gold Stocks – When???

Last week, our senior precious metals analyst, Jeff Clark, advised: Buy Gold NOW. So far that has worked out well, but it begs the question: What about gold stocks? When do we back up the truck for them?

My own answer in the current edition of the International Speculator is that no one really knows, but that those who buy value when its price is low should do very well indeed.

Jeff returns this week with a by-the-numbers look at the last two biggest gold stock corrections, comparing them to our market today. This is excellent context we would all do well to remember when asking such questions.

These above three paragraphs of introduction in yesterday's edition of the Casey Daily Dispatch were written by Louis James...and Jeff's commentary that follows is a must read.

Jan.-Feb. data reveals U.S. gold production declining—USGS

U.S. gold mining output was already slowing when on April 10, Kennecott Copper’s Bingham Canyon Mine experienced a massive slope failure temporarily idling the country’s 4th largest gold producer.

Gold production by U.S. mines was down 8% in February from 18,300 kilograms (588,358 troy ounces) in February 2012 to 16,900 kilograms (543,347 ozs) this year, the U.S. Geological Survey reported in its Mineral Industry Survey.

This comes on the heels of a 10% drop in January of this year from 19,800 kilograms (636,584 ozs) in January 2012 to 17,900 kilograms (575,498 ozs).

The rest of this very short story was posted on the mineweb.com Internet site yesterday...and it's worth the read.

GoldMoney's Alasdair Macleod interviewed on 'The Keiser Report'

GoldMoney's research director, economist Alasdair Macleod, was interviewed for 15 minutes last week by Max Keiser on "The Keiser Report" program on the Russia Today network.  He remarked that the world's gold is moving from West to East, that liquidations in the major gold exchange-traded fund, GLD, could signify a shift by investors away from paper gold and into real metal, and that the recent attack on the gold price could have been undertaken by a central bank or a hedge fund. The program has been posted on the youtube.com Internet site...and Alasdair's segment begins at the 11:50 minute mark.

I found this video in a GATA release from yesterday.

Gold to play major role in Italy economic recovery

Majority of Italian's, holder of world's fourth largest gold reserves holder, are against selling some gold from country’s huge reserves to sped up economic recovery.

According to a WGC survey, Only 4% of citizens and business leaders would support the sale of Italy's gold reserves, while 52% of citizens and 61% of business leaders would endorse using, but not selling, national gold reserves.

The study revealed that Italian business leaders (92%) and citizens (85%) overwhelmingly agree that the nation's gold reserves have an important and positive role to play in the country's economic recovery.

This short gold-related news item was filed from London...and posted on the bullionstreet.com Internet site yesterday afternoon India Standard Time...and I thank Ulrike Marx for her final offering in today's column.