Golden Minerals Company

President Obama formally notified Congress on Thursday of his intent to raise the nation’s debt ceiling by $1.2 trillion, two weeks after he had postponed the request to give lawmakers more time to consider the action.

Congress will have had 15 days to say no before the nation’s debt ceiling automatically is raised from $15.2 trillion to $16.4 trillion.

In a letter to House Speaker John A. Boehner (R-Ohio), Obama wrote that ”further borrowing is required to meet existing commitments.”

I borrowed this story from Friday's King Report...and it's posted in Thursday's edition of The Washington Post. It's worth skimming...so take the red pill...and then click here.

Private antitrust litigation pitting some five million retailers against Visa, MasterCard, and 13 large banks, has slipped under the radar of many analysts and investors who follow those companies, but the case may deliver a multi-billion dollar shock to bank bulls in the coming months.

Estimates of the potential cost of a settlement of the antitrust case vary dramatically–from a few billion dollars into the hundreds of billions. At least as worrisome to the financial companies, according to Deutsche Bank research, is the risk that a settlement or judge’s ruling could take the 2% “interchange” fees banks and card companies charge retailers on credit card transactions to as low as .5%, That would equal the rate in Australia, but still be higher than the .3% charged in the European Union, according to a report by Sanford Bernstein analyst Rod Bourgeois.

The impact of such a change would be several times as costly as the Durbin Amendment, which caps fees banks can charge on debit cards and is one of the new rules most hated by the big banks.

This story appeared in Forbes on Thursday...and I thank reader 'David in California' for sending it along. The link is here.

Seven months after Hurricane Katrina ripped holes in the Superdome’s roof in 2005, Louisiana State Bond Commission members made what they were told would be “the best of a bad situation” in financing the stadium’s renovation.

Acting against the recommendation of their staff, the commissioners voted for a Merrill Lynch & Co. plan to use debt and interest-rate swaps to pay for the job. While the deal helped keep the National Football League's New Orleans Saints from leaving town -- and the arena got new scoreboards while 12,000 seats were converted to luxury class -- taxpayers became the losers for supporting a winning team.

The cost of financing the work has reached $42 million, almost a quarter of the $187 million spent on Katrina-related repairs and enhancements and three times as much as expected. The deal became so expensive that the state repurchased the debt sold by the New York investment bank to stop the bleeding.

This sounds very similar to what happened to Jefferson County in Alabama. I thank Washington state reader S.A. for this sending this Bloomberg story my way yesterday. Take another red pill and then click here.

There are two stories coming out of New Hampshire. The big story is Mitt Romney. The bigger one is Ron Paul.

Romney won a major victory with nearly 40 percent of the vote, 16 points ahead of No. 2. The split among his challengers made the outcome even more decisive. Rick Santorum and Newt Gingrich were diminished by distant, ­lower-tier finishes. Rick Perry got less than 1 percent. And Jon Huntsman, who staked everything on New Hampshire, came in a weak third with less than half of Romney’s vote. He practically moved to the state — and then received exactly one-sixth of the vote in a six-man contest. Where does he go from here?

But the bigger winner was Ron Paul. He got 21 percent in Iowa, 23 in New Hampshire, the only candidate other than Romney to do well with two very different electorates, one more evangelical and socially conservative, the other more moderate and fiscally conservative.

This op-ed piece was in The Washington Post on Thursday...and I borrowed it from a GATA release yesterday. The link is here.

This was the headline to yesterday's edition of Casey's Daily Dispatch. It's actually the title to the featured article in David Galland's missive yesterday...and it's also your first must read of the day. In fact, it's an absolute must read. I've been around a while...and I never thought I'd read an article such as this, written about the United States...ever!!! This is scary stuff...and the two red pills you took should last you through this essay as well...plus the next one. The link is here.

Everyone knows that the US government is bankrupt and has been for many years. But I thought it might be instructive to see what its current cash-flow situation actually is. At least insofar as it's possible to get a clear picture.

So what can you do about it? Well, actually, there is nothing you can do about it. At least as far as changing the course of history is concerned. The best you can do is to speculate intelligently on further, new distortions that will be cranked into the system, as well as others that are inevitably going to be liquidated.

It seems to me that this is a trend that can no longer be turned around. The US government's budget is, in fact, the biggest thing in the world; it won't be turned around, because it's like a gigantic snowball rolling down a hill. It will only stop when it smashes into the village at the bottom of the valley. The best thing you can do is capitalize on it as well as you can...and get out of its way while you do.

Doug has been preaching this message ever since I heard him speak for the first time about ten years ago. It was excellent advice then...and even more critical today, especially if you live in the United States. This is another absolute must read...and do it before the effects of the pills wear off.

I thank West Virginia reader Elliot Simon for sending me Doug's essay. It's posted over at the Casey Research website...and the link is here.

The latest grumblings (or lack thereof) from the lawmakers on Capitol Hill suggest that they're coming around to the idea that the latest anti-piracy efforts in the House and the Senate might've been a little hasty. Patrick Leahy, a senator from Vermont who co-authored the PROTECT IP anti-piracy bill, posted a press release on Thursday, confessing that his legislation needed "more study" before implementation. It's a sure sign that's he's starting to cave to political pressure -- much of which is coming from the unexpectedly increasingly politically powerful Reddit -- and other lawmakers could follow suit.

Then again, they could not. Take Lamar Smith, the Texas congressman who authored the Stop Online Piracy Act (SOPA) which is the House's more incendiary and more draconian version of the Senate's PROTECT IP. News broke on Thursday that Smith himself engaged in some questionable copyright practices in building his personal website. The Texas congressman had used a photo that he didn't necessarily have the right permissions for, and in an unapologetic report, Vice's Jamie Lee Curtis Taete put him on the spot with a report unapologetically titled "The Author of SOPA Is a Copyright Violator." The photo thing was a small thing by any measure and probably not something that would get the man thrown in jail. But nobody likes a hypocrite.

Legal scholars -- including one well known Harvard Law professor Lawrence Tribe -- have called the bill unconstitutional, an assault on Americans' First Amendment rights. The Senate's PROTECT IP is, in many ways, a watered down version of SOPA, but it's also a bill that aim to solve a problem that Congress has more or less admitted it doesn't understand. So it's not a surprise at all that Senator Leahy would blink when confronted with the challenge of pushing the legislation forward.

This very interesting story was posted on The Atlantic Wire website yesterday...and I thank 'David in California' for sharing it with us. The link is here.

Here is a piece that reader Tariq Khan found on the salem-news.com website yesterday. It's written by Sarcha Faal in Moscow.

The editor of the newspaper, Tim King, put this warning at the front of the story for his mostly hot-blooded American readers...but there's nothing in this piece that surprised Tariq Khan or myself. Here's the second paragraph of Tim King's warning..."But just remember this when the inevitable begins: your country did it to you. U.S. politicians are militant, terrible people, and their motivations are dark, and this applies to almost all of them. Religious and political leaders in America don't like peace, the Iranians and Russians seemed to do fairly well with the concept, but they are pushed into a corner by the Americans time and time again and now perhaps it is too late, maybe it was always too late. So read on, swallow your bitter pill fellow Americans."

As a foreigner living next to The Empire, it's sad to see it come to this. As I mentioned above, it's posted over at the salem-news.com website...and the link is here.

The Obama administration warned Iran's supreme political-religious authority closing the Strait of Hormuz would trigger a U.S. response, U.S. officials said.

The administration, using a secret communications channel officials would not describe, warned Iranian Supreme Leader Ayatollah Ali Khamenei that closing the narrow, strategically important strait between the Gulf of Oman and the Persian Gulf would be considered crossing a "red line" that would not be tolerated, the officials told The New York Times.

The officials would not say if Khamenei or any other Iranian official had replied to the unusual contact between the two countries, the Times said.

This UPI story was posted in the wee hours of yesterday morning...and I thank Roy Stephens for sending it along. The link is here.

Stock markets and the single currency fell sharply as Standard and Poor’s cut France’s AAA rating.

Italy saw its long-term rating drop by two notches, along with Spain, Portugal and Cyprus. Austria, Malta, Slovakia, and Slovenia had their ratings lowered by one notch.

The move triggered a backlash from European politicians and led to calls for Britain to be downgraded too.

It represents a further loss of confidence in the single currency and the agency’s move also threatens to torpedo the main European bail-out fund set up to support struggling countries such as Greece and Portugal.

This story was posted in The Telegraph yesterday evening...and is another offering from Roy Stephens. The link is here.

The stakes for Athens are high. The Institute of International Finance is saying the deal on a 50 percent debt haircut for Greece may fail. Time is running out, and a number of key issues remain unresolved. The Greek Finance Ministry, for its part, insists that an agreement could be finalized by the end of next week.

Amid the confusion, however, one thing is clear: Should private investors not reach an agreement with Athens on debt reduction for Greece -- a step agreed to by European Union leaders at a summit last October -- the country and the entire euro zone face a disaster. An uncontrolled insolvency would be the result. In an effort to forestall that eventuality, euro-zone representatives met on Friday to discuss the debt reduction plans, parallel to the talks in Athens.

The hectic negotiations reveal that hopes have been dashed once again for an improved situation in Greece. "When it comes to Greece, it's clear that it's hopeless," said Hans-Werner Sinn, president of the Munich-based Ifo Institute. "It would be better for the country to finally leave the euro and transform its foreign debts to drachma, than to constantly beg for new aid and set itself up for lasting charity."

This story was posted over at the German website spiegel.de yesterday...and I thank Roy Stephens for bringing it to my attention. The link is here.

I posted the Jim Rickards blog in this column yesterday...and Eric King sent me the audio interview in the wee hours of this morning. The link is here.

The overwhelming majority (80pc) of gold mining executives think the price will keep climbing in 2012, with just 6pc anticipating a fall, a survey by PwC found.

Last year, mounting fears over the eurozone crisis helped the "safe haven" metal hit $1,900 in September.

Many analysts believe that the ongoing economic uncertainties mean the price will keep climbing, albeit with further swings expected.

A $2,000 gold price would still be below the inflation-adjusted high the metal reached in 1980 of about $2,500 an ounce, following the oil price shock in the wake of the Iranian revolution.

This short piece showed up in The Telegraph yesterday...and I thank reader David Ball for sharing it with us. It's worth the read...and the imbedded photo makes for terrific eye candy. The link is here.

Did China just overtake India as the world's largest gold consumer?

Little more than a year ago it would have been almost laughable to ask that question. In 2010 India's gold consumption was a full 46 per cent -- or 275 tonnes -- higher than China's, according to data from consultants GFMS published in the World Gold Council's quarterly reports.

Even three months ago it would have been a stretch. In the first nine months of 2011, Indian gold demand totalled 743 tonnes, compared to 612 tonnes for China.

But data released in the past few days suggests that China may have closed the gold gap, inching ahead of India in terms of overall gold demand in 2011.

What makes this story so interesting is the fact that it showed up in London's Financial Times yesterday...an anti-gold newspaper if there ever was one. Reader Richard Murphy sent me the story...and I forwarded it to Chris Powell who posted it in the clear in this GATA release. It's a must read...and the link is here.

Gold traders are the most bullish in two months after mainland China imported the most metal ever from Hong Kong and investors bought U.S. bullion coins at the fastest pace in more than two years.

Eighteen of 23 surveyed by Bloomberg expect the metal to gain next week, the highest proportion since Nov. 11. Mainland China imported almost 102.8 metric tons in November, valued at about $5.4 billion, trade data on Jan. 11 showed. The U.S. Mint said it sold 85,500 ounces of American Eagle gold coins in the first 12 days of January. Full-month sales would reach 213,750 ounces at that pace, the most since December 2009.

Bullion rallied 6.2 percent since plunging to within 1 percentage point of a bear market on Dec. 29, on mounting concern that economic growth is slowing and European leaders are failing to contain the region’s debt crisis. Holdings in exchange-traded products backed by the metal are heading for the biggest weekly expansion since mid-November and are within 2 percent of an all-time high, data compiled by Bloomberg show.

“The thing that’s caught people’s minds is the massive increase in Chinese buying,” said Ross Norman, chief executive officer of Sharps Pixley Ltd., a brokerage handling physical bullion in London. “Gold has demonstrated time and time again its ability to hold purchasing power. It looks expensive and people talk about bubbles, but it’s not.”

Here's another must read story on the same issue...this one from Bloomberg yesterday. It's Roy Stephens final offering of the day...and the link is here.