Golden Minerals Company

The debt is projected to fall within $100 billion of the current cap by December 30, when the United States has $82 billion in interest on its debt and payments such as Social Security coming due. President Barack Obama is expected to ask for authority to increase the borrowing limit by $1.2 trillion.

I stole the headline from zerohedge.com...but there was no story attached. Here's a Reuters piece courtesy of reader Scott Pluschau...and the link is here.

Legislation meant to help the United States government locate overseas assets of American tax cheats created little stir when it was quietly slipped into a jobs bill last year.

But the Foreign Account Tax Compliance Act, or Fatca, as it is known, is now causing alarm among businesses outside the United States that fear they will have to spend billions of dollars a year to meet the greatly increased reporting burdens, starting in 2013. American expatriates also say the new filing demands are daunting and overblown.

The law demands that virtually every financial firm outside the United States and any foreign company in which Americans are beneficial owners must register with the Internal Revenue Service, check existing accounts in search of Americans and annually declare their compliance.

This story was posted in the Monday edition of The New York Times...and I thank reader Rob Bentley for sending it along. If you're an expat U.S. citizen, this is a must read...and the link is here.

On Christmas Day the US Senate voted 86 - 14 to pass the National Defense Authorization Act of 2011 which allows for the indefinite military detention of American citizens without charge or trial. Now, Montanans have announced the launch of recall campaigns against Senators Max Baucus and Jonathan Tester, who voted for the bill.

Montana is one of nine states with provisions that say that the right of recall extends to recalling members of its federal congressional delegation, pursuant to Montana Code 2-16-603, on the grounds of physical or mental lack of fitness, incompetence, violation of oath of office, official misconduct, or conviction of certain felony offenses.

Montana residents William Crain and Stewart Rhodes are spearheading the drive, according to SNC. Mr. Crain is an artist. Mr. Rhodes is an attorney, Yale Law School graduate, and the national president of the organization Oath Keepers, who are military and law enforcement officers, both former and active duty, who vow to uphold their Oath to the US Constitution and to disobey illegal orders which constitute attacks on their fellow citizens.

This story was posted over at the economicpolicyjournal.com website on Monday...and I thank reader Julius Adams for bringing it to our attention. The link is here.

Japan and China will promote direct trading of the yen and yuan without using dollars and will encourage the development of a market for companies involved in the exchanges, the Japanese government said.

Japan will also apply to buy Chinese bonds next year, allowing the investment of renminbi that leaves China during the transactions, the Japanese government said in a statement after a meeting between Prime Minister Yoshihiko Noda and Chinese Premier Wen Jiabo in Beijing yesterday. Encouraging direct yen- yuan settlement should reduce currency risks and trading costs, the Japanese and Chinese governments said.

China is Japan’s biggest trading partner with 26.5 trillion yen ($340 billion) in two-way transactions last year, from 9.2 trillion yen a decade earlier. The pacts between the world’s second- and third-largest economies mirror attempts by fund managers to diversify as the two-year-old European debt crisis keeps global financial markets volatile.

This Bloomberg story was something I borrowed from a GATA release...and the link is here.

China's biggest provincial borrowers are deferring payment on their loans just two months after the country's regulator said some local government companies would be allowed to do so.

Hunan Provincial Expressway Construction Group is delaying payment on 3.11 billion yuan ($490.5 million) in interest, documents governing the securities show this month. Guangdong Provincial Communications Group Co, the second-largest debtor, is following suit. So are two others among the biggest 11 debtors, for a total of 30.16 billion yuan, according to bond prospectuses from 55 local authorities that have raised money in capital markets since the beginning of November.

"When companies start to roll over debt they're not retiring debt, and banks aren't retrieving their capital, so you're crowding out new lending," Patrick Chovanec, a professor at Tsinghua University in Beijing, said in a Dec 13 interview. "This is a problem that's going to start to bite next year."

This story showed up on the chinadaily.com website on Monday...and is another offering from 'David in California'...and the link is here.

This is a review of Jim's new book that showed up in a posting over at usatoday.com website on Monday. It's not overly long...and certainly worth running through...and the link is here.

The Government is considering plans to restrict the flow of money in and out of Britain to protect the economy in the event of a full-blown euro break-up.

The preparations are being made only for a worst-case scenario and would run alongside similar limited capital controls across Europe, imposed to reduce the economic fall-out of a break-up and to ease the transition to new currencies.

Officials fear that if one member state left the euro, investors in both that country and other vulnerable eurozone nations would transfer their funds to safe havens abroad. Capital flight from weak euro nations to the UK would drive up sterling, dealing a devastating blow to the Government’s plans to rebalance the economy towards exports.

This story was posted in The Telegraph on Monday...and is Roy Stephens first offering of the day. The link is here.

The resource-rich South American economy has surged on exports to China, unhampered by the 2008 financial crisis that has hit growth in the UK.

CEBR chief executive Douglas McWilliams said: "Brazil has beaten the European countries at soccer for a long time, but beating them at economics is a new phenomenon. Our world economic league table shows how the economic map is changing, with Asian countries and commodity-producing economies climbing up the league while we in Europe fall back."

The CEBR forecasts that the UK will be the eighth largest economy by 2020, with France in ninth spot, Germany in seventh spot and Russia and India in fourth and fifth place.

This story from Monday's edition of The Telegraph is also courtesy of Roy Stephens...and the link is here.

Spain's economy will shrink in the last quarter and faces a bleak outlook for the coming months, its new economy minister said on Monday, heightening fears of a fresh recession.

Luis de Guindos dampened already gloomy expectations for the economy as the new conservative government got to work on its programme of tough spending cuts.

"This quarter the Spanish economy will surely see a downturn and we will return to negative growth," he told a news conference.

"Make no mistake, the next two months are not going to be easy, neither from a growth nor a jobs point of view," he said at a ceremony for his top ministry staff taking office.

This is another story from the Monday edition of The Telegraph...and once more I thank Roy Stephens for sending it along. The link is here.

Just before Christmas, the European Central Bank flooded the financial markets with 500 billion euros -- a move that may not ultimately have the desired effect of stabilizing banks. Instead of passing that money on in loans to businesses to spur the economy, European banks have redeposited the money with the ECB at low interest rates.

The sum of overnight deposits at the European Central Bank (ECB) is often considered to be an indicator of the level of fear brewing within the financial sector. The greater the degree of distrust between banks, the more money banks tend to deposit on a daily basis with the ECB, where interest rates are low, but deposits more secure. This week has seen the level of deposits at the ECB's overnight facility rise to close to €412 billion ($538.4 billion) -- the greatest amount seen since the euro's introduction, and representing a single overnight increase on Monday of €65 billion.

Normally banks tend to lend any excess funds to each other. By doing so, they can make more money -- especially given that interest rates at banks are currently twice as high as those offered by the ECB. But the interbank market has been disrupted for weeks now, prompting concerns that the credit crunch last seen after the collapse of Lehman Brothers has returned. European banks no longer trust each other because it is unclear to what extent individual banks are exposed to government bonds from countries hit by the debt crisis, and whether those institutions are in jeopardy. Instead, they are turning to the ECB as a safe haven for their money.

This story was posted at the German website spiegel.de yesterday...and is well worth the read. I thank Roy Stephens for this, his last offering in today's column...and the link is here.

Greece used to have an extensive public health care system that pretty much ensured that everybody was covered for everything. But in the last two years, the nation’s creditors have pushed hard for dramatic cost savings to cut back the deficit. These measures are taking a brutal toll on the system and on the country’s growing numbers of poor and unemployed who cannot afford the new fees and co-payments instituted at public hospitals as part of the far-reaching austerity drive.

At public hospitals, doctors report shortages of all kinds of supplies, from toilet paper to catheters to syringes. Computerized equipment has gone unrepaired and is no longer in use. Nurses are handling four times the patients they should, and wait times for operations — even cancer surgeries — have grown longer.

Access to drugs has also been affected, as some drug manufacturers, owed tens of millions of dollars, are no longer willing to supply Greek hospitals. At the same time pharmacists, afraid that the government might not reimburse them, are asking for cash payments, even from those with insurance.

This story was posted in The New York Times yesterday...and I thank reader Phil Barlett for sending it along. It's worth reading if you have the time...and the link is here.

GoldMoney founder and GATA consultant James Turk gave King World News his forecast for the precious metals for 2012 on Monday. Turk says the contrived takedowns of the precious metals haven't changed anything about the insolvency of both Western Europe and the United States, and he still thinks the metals could rise strongly in the early part of the new year.

I borrowed the introduction from Chris Powell...and the link to the KWN blog is here.

China should further diversify its foreign-exchange portfolio and make more gold purchases when the metal's price dips but is still at a relatively high level, a senior central bank official said on Monday.

"The Chinese government should not only be cautious of the imported risk caused by rising global inflation, but also further optimize its foreign-exchange portfolio and purchase gold assets when the gold price shows a favorable fluctuation," said Zhang Jianhua, director of the research bureau affiliated with the People's Bank of China (PBOC).

He made the remarks in an article in the Beijing-based Financial News, a newspaper run by the PBOC.

This story showed up on the chinadaily.com.cn website on Monday...and I borrowed it from a GATA release. The link is here.

It appears that the free market in gold is starting to scare China as well.

Gold exchanges in China outside of two in Shanghai are to be banned, authorities said in a statement released today.

Gold exchanges have mushroomed across China, from the northern port city of Tianjin to Guangxi bordering Vietnam, as spot prices in the precious metal have soared to record highs and speculation has boomed.

"No local authority, institution, or individual is allowed to set up gold exchanges," said the notice dated December 20 and jointly issued by the People's Bank of China, the Ministry of Public Security, and other regulators.

The notice -- published on the central bank website -- said the Shanghai Gold Exchange and the Shanghai Futures Exchange are enough to meet domestic investor demand for spot gold and futures trading.

This Reuters piece was posted in a GATA release yesterday...and the link to this must read story is here.

The functioning of China's much awaited Pan Asia Gold Exchange (PAGE), suffered a setback as China's central bank turned against it.

In a statement issued along with China's Public Security ministry and a group of regulators, PBOC said Shanghai Gold Exchange and the Shanghai Futures Exchange are the only authorised gold exchanges in the country.

The statement said they will work together to create healthier atmosphere in Chinese bullion market.

However, the statement didn't mention anything about the Pan Asian Gold Exchange.

I expect to have more to report on this turn of events in tomorrow's column. I thank Christopher Cathis for sharing this story that was posted over at the bullionstreet.com website yesterday...and it's a must read as well. The link is here.

Gold, the most trusted investment for centuries, may well become an acceptable asset class for the insurance regulator after nearly a decade of lobbying, but that could push up the price of the ever-rising precious metal, taking it beyond the reach of many.

The investment committee of the Insurance Regulatory and Development Authority (Irda) will soon decide on whether insurance companies who raise investible surplus of more than 2.5 lakh crore a year should be allowed to invest in gold or not, three people familiar with the proposal said. Other proposals include buying credit default swaps (CDS), an insurance against loan default, and commodity derivatives.

"We are seeing whether insurers should invest in gold in physical form, or in any other form of financial instruments such as exchange traded funds, or other derivatives,'' said an executive at the regulator who did not want to be identified. "We have to see if we reach a consensus."

This story, filed from Mumbai on Monday, was posted in the Economic Times of India. It will be of great interest to see if this actually does come to pass. I thank reader Avinash Raheja for digging this up on our behalf. It's another must read...and the link is here.

Here's an interesting blog that was posted over at King World News yesterday. It's not an overly long read...and the link is here.

Economist and former banker Alasdair Macleod, who spoke at GATA's Gold Rush 2011 conference in London in August, wrote on Christmas Eve that five factors will push the United States into hyperinflating the dollar. Macleod states that: "Essentially, money will be printed at an accelerating rate to buy time rather than face the three realities of government default, an over-indebted private sector, and a bankrupt banking system. The Keynesians are belatedly aware of the dangers and see no alternative to printing as much money as is required to defer these problems. The monetarists in the central banks are hesitant, torn between Keynesian fears of outright deflation and worries about the rate of monetary expansion so far."

Macleod's commentary is headlined "Gold Price Set for Hyperbolic Increase" and it's posted at the goldmoney.com website...and the link is here.

For whatever reason, this particular edition of Casey's Daily Dispatch [December 19th] ended up in my junk e-mail file...and I just found it on the weekend when I was cleaning out my e-mail folders.

Here is Casey Research's Senior Metals Investment Strategist, Louis James...and BIG GOLD editor, Jeff Clark in a tag-team match about gold and silver. There's some solid investment advice in here...and unless you've already done so, it's a must read from start to finish...and the link is here.