Golden Minerals Company

When Washington Mutual collapsed in 2008, it was the largest bank failure in American history. So the $64.7 million settlement struck last week by federal banking regulators and three former WaMu executives seems like small potatoes indeed.

“Pretty soft,” is how Senator Carl Levin, the Michigan Democrat who heads the Senate’s permanent subcommittee on investigations, characterized the settlement in an interview on Friday.

“Washington Mutual Bank epitomizes everything that went wrong with the banking industry and contributed to the financial crisis, so the F.D.I.C. was right to go after the bank’s leadership,” Mr. Levin said in a statement issued on Tuesday. “Former WaMu executives Killinger, Rotella and Schneider are truly the 1 percent: they got bonus upon bonus when the bank did well, but when they led the bank to collapse, insurance and indemnity clauses shielded them from paying any penalty for their wrongdoing.”

This short piece by Gretchen Morgenson came from the Saturday edition of The New York Times. I thank reader Phil Barlett for sending it along...and the link is here.

If you were stranded on a desert island the past two months and upon your return to civilization tried to learn why MF Global Holdings Ltd.. had collapsed, you might find that some of the standard explanations don’t make much sense.

One scenario is that a catastrophic bet on some European government bonds killed the commodities and derivatives broker. Another story line has it that investors were slow to realize MF had made such a big leveraged wager, and their concerns evolved into fear, leading to a run on the firm.

Neither version of events is satisfactory.

What caused investors to lose confidence in MF in late October? There’s a simple, sensible explanation. Six days before it filed for bankruptcy, MF reported a large quarterly loss, the details of which contained a message: Don’t expect this company ever to be profitable again. The markets responded accordingly.

This op-ed piece by Bloomberg columnist Jonathan Weil was posted over at bloomberg.com last Wednesday. It's well worth the read...and I thank reader Scott Pluschau for sending it to me on the weekend. The link is here.

The eurozone was facing fresh splits today after one of the European Central Bank’s most senior figures said the bank should not be used to fund national debts and that if it was forced to, it would mean the end of the single currency.

Executive board member Juergen Stark, who announced his surprise resignation from the ECB earlier this year, said disagreements over the central bank’s bond-buying programme was behind his decision.

In an interview with German weekly WirtschaftsWoche to be published on Tuesday, Mr. Stark said he did not agree with the way the euro crisis has been handled. He particularly criticised the use of monetary measures, or the wholesale purchase of sovereign bonds by the bank, to contain the crisis.

The statement is in contrast to what the Bank said in September to explain his surprise resignation, which was put down to “personal reasons”.

This story appeared in the Saturday edition of The Telegraph...and is Roy Stephens first offering of the day. The link is here.

The truth is that France is actually 100% correct in telling the world to shift its attention from France and to Britain. So why is this bad. Because as the chart below shows, if there is anything the global financial system needs, is for the rating agencies, bond vigilantes, and lastly, general public itself, to realize that the UK's consolidated debt (non-financial, financial, government and household) to GDP is... just under 1000%. That's right: the UK debt, when one adds to its more tenable sovereign debt tranche all the other debt carried on UK books (and thus making the transfer of private debt to the public balance sheet impossible), is nearly ten times greater than the country's GDP. To call that "game over" is an insult to game overs everywhere.

This story is certainly worth skimming...and the graph is worth the trip all by itself. I thank Matthew Nel for sending this zerohedge.com story along...and the link is here.

In Britain, distrust of Europe goes hand-in-hand with distrust of Germany. Relations between the two countries have cooled following the furore caused by the latest EU summit, and British euroskeptics are once again resorting to old stereotypes.

The London-based Daily Telegraph newspaper has warned its readers against what it calls Berlin's blatant effort to dominate Europe and already sees "a new era of Anglo-German antagonism" on the horizon -- again characterized by two leaders who are bound together in their sincere dislike for each other, like past leaders of the two countries: Helmut Kohl and Margaret Thatcher, or Gerhard Schröder and Tony Blair. Reverend Peter Mullen, the Anglican chaplain to the London Stock Exchange, where he is not popular for his crude views, goes even further. According to Mullen, Germans tried to achieve hegemony in Europe by military force in 1870, 1914 and 1939, and now Merkel is trying to do the same with the weapons of the financial system.

This short essay was posted on the German website spiegel.de yesterday...and I thank Roy Stephens for bringing it to my attention. It's a must read in my opinion...and the link is here.

The economic establishment in this country has come to the conclusion that it is not a matter of "if" the United States must intervene in the bailout of the euro, but simply a question of "when" and "how". Newspaper articles and editorials are full of assertions that the breakup of the euro would result in a worldwide depression, and that economic assistance to Europe is the only way to stave off this calamity. These assertions are yet again more scare-mongering, just as we witnessed during the depths of the 2008 financial crisis. After just a decade of the euro, people have forgotten that Europe functioned for centuries without a common currency.

The euro was built on an unstable foundation. Its creators attempted to establish a dollar-like currency for Europe, while forgetting that it took nearly two centuries for the dollar to devolve from a defined unit of silver to a completely un-backed fiat currency note. The euro had no such history and from the outset was a purely fiat system, thus it is not surprising to followers of Austrian economics that it barely survived a decade and is now completely collapsing. Europe's economic depression is the result of the euro's very structure, a fiat money system that allowed member governments to spend themselves into oblivion and expect that someone else would pick up the tab.

This short "Texas Straight Talk" piece by the good doctor was posted over at the safehaven.com website yesterday...and I thank Roy Stephens for bringing it to our attention. The link is here.

The global economy faces a depressing prospect for the year ahead after a recent spate of gloomy results for countries and corporations and the failure of European leaders to convince the markets that the eurozone's debt crisis is close to being resolved.

Forecasts by the International Monetary Fund and leading banks have been revised downcast almost on a monthly basis. A year ago the IMF saw the global economy growing by 4 percent in 2012, cut to 2.7 percent in June and its latest assessment is much worse.

"The world economic outlook at the moment is not particularly rosy. It is quite gloomy," IMF head Christine Lagarde said at the U.S. State Department last week.

Ms. Lagarde has a keen grasp of the obvious...and I thank Roy Stephens once again for bringing this UPI story to my attention. It was filed from Paris yesterday...and the link is here.

Here's a Reuters piece that was posted over at their Breakingviews.com website on Friday. They discuss how a global competition to devalue currencies can be avoided. Gold plays a prominent part in this interview. This 9:45 minute video is an absolute must watch...and I thank reader "Erik C" or sharing it with us. The video is posted over at youtube.com...and the link is here.

Economist and former banker Alasdair Macleod, writing at GoldMoney, reports on a study that finds the U.S. dollar's "true money supply" going parabolic and carrying the price of gold with it. Macleod's commentary is headlined "Money Supply Explosion Will Lead to Accelerating Inflation" and it's posted at GoldMoney Internet site.

I thank Chris Powell for providing the introduction. I've read Alasdair's short essay. It's a must read for sure...and the two graphs are worth the trip. Macleod's commentary is posted at the GoldMoney Internet site...and the link is here.

GoldMoney founder, Free Gold Money Report editor, and GATA consultant James Turk writes that the U.S. government has long passed its "Havenstein moment," as it now spends 58 percent more than it takes in on a monthly basis, that 58 percent constituting debt monetization and a guarantee of hyperinflation. But we might add -- and Turk probably would agree -- that, in the United States, the imperial power and proprietor of the world reserve currency, the new Havenstein moment also guarantees, even before hyperinflation, more and more repressive interventions to subvert markets from manifesting hyperinflation. That is, for starters, what the gold price suppression scheme long has been about.

Turk's commentary is titled "More Deficits, More Debt," and it's posted at the fgmr.com site. This is also a must read and, once again, I stole the introduction from Chris Powell. The link is here.

Gordon Kerr, founder of consultancy firm Cobden Partners, talks about banking industry risks and the European sovereign-debt crisis. He speaks with Linzie Janis and Elliott Gotkine on Bloomberg Television's "First Look."

Kerr sort of reminds me of a British version of Kyle Bass. This interview, courtesy of Elliot Simon, runs 6:22...and is posted over at youtube.com. This is worth watching...and the link is here.

This bear-type story is typical of the main steam media's coverage of this engineered price decline by the Commercial traders in the Comex futures market.

This Reuters piece was posted over at iol.co.za website in South Africa on Saturday. This drivel is accompanied by a photo of a gold dragon the will knock your socks off. For that reason alone it's worth the trip. I thank Matthew Nel for digging it up on our behalf...and the link is here.

It's one thing for $1.2 billion to vanish into thin air through a series of complex trades, the well-publicized phenomenon at bankrupt MF Global. It's something else for a bar of silver stashed in a vault to instantly shrink in size by more than 25%.

That, in essence, is what's happening to investors whose bars of silver and gold were held through accounts with MF Global.

The trustee overseeing the liquidation of the failed brokerage has proposed dumping all remaining customer assets -- gold, silver, cash, options, futures, and commodities -- into a single pool that would pay customers only 72% of the value of their holdings. In other words, while traders already may have paid the full price for delivery of specific bars of gold or silver -- and hold "warehouse receipts" to prove it -- they'll have to forfeit 28% of the value.

This short piece showed up in Barron's on Saturday...and the first one through the door with it was West Virginia reader Elliot Simon. It's certainly worth your time...and the link is here.

Here's a youtube.com video clip about how they make doré bars at silver mines. It was obviously videotaped at a First Majestic Silver mine, as their privately minted bars figure prominently in this video. Matthew Nel sent it to me on the weekend. It runs for a hair over five minutes and is definitely worth watching. The link is here.

Here's a GATA release where Chris Powell has written a preamble that I'm not about to cut and paste. The title is pretty much self-explanatory...and is a must read. The link is here.

Physical gold buying saw a significant upsurge last week after prices slumped in the wake of global concerns. “I was resigned to the fact that the physical buying in our market (Dubai and UAE in the wider sense) had finished for the year, and then came Thursday, 15th December. We saw excellent buying from customers which reminded us very strongly of the heydays in August/September,” Gerhard Schubert, Head of Precious Metals at Dubai-based Emirates NBD, said in his weekly precious metals report.

Emirates NBD’s Schubert does not share Gartman’s pessimistic opinion on the future price of bullion. “There are quite a lot of analysts and commentators who are predicting the end of the bull market, but we do not subscribe to this scenario, at least not yet. The situation in the US, and more importantly in the Eurozone, will stay relevant for some time to come. The world economic picture looks a little brighter, but the looming recession in the Eurozone makes it difficult to view this as more than a temporary phenomenon,” said Schubert.

“We saw our second-best single day last Thursday and I am encouraged to applaud our customers, who obviously view the prices under $1,600 as a bargain,” said Schubert.

This story was posted on the emirates247.com website on Sunday...and I thank reader 'David in California' for sending it my way. The link is here.

“My outlook has not changed a bit. The underlying fundamentals have not changed a bit. The domestic and global financial systems, however, appear to be on the brink of massive instabilities. This environment is one where prudent investors—in a U.S. dollar-denominated world—should be looking to preserve their wealth and assets, using assets that are liquid and that preserve the purchasing power of invested funds.

Accordingly, gold, and related hedges such as silver; and stronger currencies such as the Swiss franc, Australian dollar and Canadian dollar; should be held for the long term. Irrespective of short-term market instabilities, such assets will prevail as the system falls into disorder.

This is a King World News blog that Eric sent me last night...and the link is here.

Eric King sent me a Jim Rickards interview yesterday. It's so long that he's had to post it in two parts. I haven't had time to listen to either one, but it will be on my 'to do' list when I get up later this morning.

Their both posted over at the King World News website. I would think that they're both a must listen. The link to Part I is here...and Part 2 is here.

There's wide agreement that gold's charts now do indeed look gruesome. The situation was well summarized on Friday by Pring.com's Weekly InfoMovie report: "Gold has now completed a massive head-and-shoulders top. The share ETF has also completed a smaller distribution pattern. ... Lower prices look likely in the next few weeks. For the record, the head-and-shoulder objective for the gold price calls for an eventual move to the $1,300 area."

But could this be excessive panic? GCRU, the short-term gold-trading service started by gold veteran Harry Schultz and now operated by the Aden Forecast, thinks so.

Very bravely, it issued a special alert on Thursday afternoon overriding its stops: "Our stop loss was triggered today on both gold and silver."

"DO NOT SELL. Instead, we recommend keeping your gold and silver positions. ... The markets are nearing a bottom, and now is not the time to sell."

This story was written by Peter Brimelow over at marketwatch.com yesterday...and I stole it from a GATA release. It's a must read from start to finish...and the link is here.

The 2-paragraph comment that I cut and paste from Ted Butler's Friday missive has now been posted in the clear...along with the entire essay. Chris Powell has written an extensive preamble to Ted's commentary...and there's no way that I can improve on it...and it's too big to cut and paste, so I'll gladly let Chris do the heavy lifting on this one.

The essay is headlined "SLV Short Position Update"...and the link to the story is posted in this GATA release. It's a must read, so click here.