Golden Minerals Company

There’s no doubt that the banks are happy with this deal. You would be, too, if your bill for lying to courts and end-running the law came to less than $2,000 per loan file.

As for the supposed benefits to the economy, skeptics abound. One of them is Paul Diggle, property economist at Capital Economics in London. In a report last week, he rejected the notion — espoused by both banks and government authorities — that this deal would help turn around the American housing market.

For most homeowners, it will barely move the needle. Forgiving $17 billion in principal “is a drop in the ocean,” Mr. Diggle said, “given that close to 11 million borrowers are underwater on their loans to the tune of $700 billion in total.” Doing the math, $17 billion in write-downs would be about 2.4 percent of the total negative equity weighing down borrowers across the nation now.

This Gretchen Morgenson piece was in the Saturday edition of The New York Times...and it's one I borrowed out of yesterday's King Report. The link is here.

The Federal Reserve set about trying to cheapen the dollar through policies such as quantitative easing—the printing of money—and zero interest rates. The idea was to make the U.S. dollar unattractive to foreign investors and import inflation from abroad through higher import prices. The prospect of inflation would encourage Americans to borrow and spend, and ultimately get the U.S. economy growing. Inflation was being encouraged for the first time in 40 years because it was the key to reducing the real value of America's debt.

This U.S. policy of devaluation and inflation would hurt not only foreign investors but also U.S. savers who held bank accounts, insurance policies, retirement plans, annuities, and other fixed-income investments. All savers and investors, both American and foreign, would be deprived of the value of their savings through U.S. dollar devaluation in order to benefit banks, hedge funds, speculators, and other leveraged investors.

Yet the currency war with China is really a red herring. China may generate an enormous dollar volume of exports to the United States but it is far from the greatest source of value added. Indeed, it is the policy of the United States to devalue against all trading partners, not just China.

I thanks reader Randall Reinwasser for sending me this story that was posted over at the usnews.com website yesterday...and the link is here.

The Fed has degenerated from a by and large passive institution (dealing only in high-quality self-liquidating commercial paper and gold) to an active pursuant of junk, an enabler of wars, a ‘benevolent’ combatant of the depressions of its own creation, a central planner of employment & prices and of course a forgiving friend to inconvenient market follies.

This graphical presentation deserves a few minutes of your time. Washington state reader S.A. sent me this zerohedge.com piece on Sunday...and the link is here.

Slowly but surely, all the voices that speak the truth are disappearing from the main stream media...and Judge Napolitano is the latest in a list of high-profile and very outspoken TV personalities that have been shown the door.

I suspect that the linked youtube.com video was his commentary from last Friday. I've been told that his last commentary on Fox News was yesterday. I thank Casey Research's own Doug Hornig for bringing this video clip to our attention...and the link is here.

Wall Street made its broadest assault yet against new regulation on Monday, taking aim at a rule that has come to define the battle over how to police banks in the aftermath of the financial crisis.

Regulators in charge of writing the Volcker Rule, which would ban banks from trading with their own money, were inundated with complaints and suggestions on Monday, the deadline to comment on a draft proposal. More than 200 letters were expected to be filed by the midnight deadline on the rule, which regulators outlined in October.

Commenters included the rule’s namesake, Paul A. Volcker, the former Federal Reserve chairman, who submitted a strongly worded defense of the rule’s intent in a letter on Monday. Others, like consumer advocates and lawmakers, criticized the draft rule for not being tough enough.

This story was posted on The New York Times website last night...and I thank reader Phil Barlett for being the first through the door with this piece. It's worth the read...and the link is here.

The good doctor was kind enough to interview me again on Sunday over at all-talk radio WAAM 1600 in Ann Arbor, Michigan. The interview runs for about twenty-five minutes...and is posted over at the davejanda.com website. The link is here.

Rating agency Moody's warned on Monday it may cut the triple-A ratings of France, the United Kingdom and Austria, and it downgraded six other European nations including Italy, Spain and Portugal, citing growing risks from Europe's debt crisis.

Moving less aggressively than rival agency Standard & Poor's last month but putting the United Kingdom's rating in jeopardy for the first time, Moody's said it was worried about Europe's ability to undertake the kind of reforms needed to address the crisis and the amount of funds available to fight it.

It also said the region's weak economy could undermine austerity drives by governments to fix their finances.

This Reuters story was posted last night...and I thank Roy Stephens for this must read story. The link is here.

The 199-74 vote was passed amid some of the most serious violence seen on the streets Athens and spread to other Greek towns and cities, including the holiday islands of Corfu and Crete.

More than 45,000 protesters, many facing steep cuts in pensions, wages and a bigger fall in living standards besieged the Greek Parliament in two demonstrations. A minority were met with tear gas by the 4,000 policemen after throwing fire bombs.

The controversial loan and austerity package sets out €3.3bn in wage, pension and job cuts for this year alone, adding to the pain of years of recession, high employment, lower wages and high unemployment.

This story was posted in The Telegraph yesterday morning...and is Roy Stephens second offering of the day. The link is here.

It is clear that Germany’s finance minister Wolfgang Schäuble wishes to expel Greece from the euro, calculating that Euroland is now strong enough to withstand contagion, and that the European Central Bank’s `Draghi bazooka’ for lenders has eliminated the risk of a financial collapse.

“We can’t keep sinking billions into a bottomless pit,” he said on Friday.

Any slippage by Greece will be seized upon as a pretext to withhold the EU loans.

It is certainly arguable Greece has no hope of clawing back viability within monetary union and should therefore return to the Drachma.

This Ambrose Evans-Pritchard story appeared in The Telegraph on Sunday night...and is Roy's third offering of the day. The link is here.

Lucas Papademos was suitably apocalyptic. If the terms of the second Greek bailout were not approved, the Greek prime minister warned over the weekend, there would be a "disorderly bankruptcy that would create conditions of economic chaos and social explosion.

"The savings of the citizens would be at risk. The state would be unable to pay salaries, pensions, and cover basic functions, such as hospitals and schools, and … the country - public and private sector alike - would lose all access to borrowing and liquidity would shrink.

"The living standards of Greeks would collapse. The country would drift into a long spiral of recession, instability, unemployment and prolonged misery. These developments would lead, sooner or later, to exit from the euro."

Up to a point, these warnings are of course all true. Much less clear is whether the enforced penury of continued euro membership which Greek MPs eventually voted for on Sunday night amounts to a better alternative. Any analysis of the economics suggests powerfully that it does not.

This is another story from yesterday's edition of The Telegraph...and is Roy Stephens' fourth offering of this column. The link is here.

Last week the Tehran Times noted that the Iranian oil bourse will start trading oil in currencies other than the dollar from March 20. This long-planned move is part of President Mahmoud Ahmadinejad's vision of economic war with the West.

"The dispute over Iran's nuclear programme is nothing more than a convenient excuse for the US to use threats to protect the 'reserve currency' status of the dollar," the newspaper, which calls itself the voice of the Islamic Revolution, said.

"Recall that Saddam [Hussein] announced that Iraq would no longer accept dollars for oil purchases in November 2000 and the US-Anglo invasion occurred in March 2003," the Times continued. "Similarly, Iran opened its oil bourse in 2008, so it is a credit to Iranian negotiating ability that the 'crisis' has not come to a head long before now."

This story was posted on The Telegraph's website late on Sunday night...and I plucked it from a GATA release. It's a must read...and the link is here.

Armored anti-riot vehicles cluster outside the police station in Awwamiya in Saudi Arabia’s oil- producing eastern region, where unrest is turning violent.

“We have enough police force to deal with any criminal or prohibited situation,” says Brigadier-General Yousef al-Qahtani as he drives through the town. In nearby al-Qatif, graffiti scrawled on a cemetery wall criticizes the Al Saud family, founders of the kingdom eight decades ago, and calls for the removal of their fellow Sunni Muslim monarchs in Bahrain. Black Shiite flags adorn religious centers in the back-alleys.

Clashes between police and armed Shiite protesters in the two towns have intensified since October, when 11 police were injured in an attack. Since then, seven Shiites have been killed by security forces, according to figures provided by Saudi Arabia’s Human Rights First Society.

It’s in such places that tensions between the Gulf’s Sunni nations and Shiite-led Iran may spark violence inside Saudi Arabia, the world’s biggest oil exporter. Shiites here have cultural and family ties with Iran, and also with Bahrain, where Saudi troops helped crush Shiite-led protests that broke out a year ago today. Saudi authorities accuse Iran, which is under growing western pressure to back down over its nuclear program, of stirring up unrest in both cases.

This Bloomberg story was sent to me by West Virginia reader Elliot Simon yesterday...and the link is here.

GDP data out today showed economic output fell 0.6pc in the fourth quarter, twice as big a drop as analysts' forecast.

The fourth-quarter drop also marked the fourth contraction in the last five quarters, ending a year when Japan was hit by an earthquake, tsunami and the worst nuclear power accident since Chernobyl in 1986.

Economic output for all of 2011 fell 0.9pc, the first full-year slide since the global financial crisis in 2009. That translated into heavy losses for some of Japan's biggest exporters, including Sony.

"This is a contraction driven by external demand. Exports have fallen a lot because of a triple shock from Europe, the strong yen and floods in Thailand," said Hiroaki Muto, senior economist at Sumitomo Mitsui Asset Management in Tokyo.

This Reuters story was posted in The Telegraph yesterday...and is Roy's fifth offering today. The link is here.

The Bank of Japan surprised markets Tuesday by implementing new easing policies and moving closer to an explicit price target, the latest sign of growing worries around the world about the ripple effects of the European debt crisis on the global economy. With interest rates already close to zero, the BOJ has relied in recent months on asset purchases to stimulate the economy. In Tuesday's meeting, the central bank expanded that plan by ¥10 trillion, or about $130 billion. The facility, which includes low-cost loans, is now worth about ¥65 trillion, or $844 billion."

The rub however lies in the total Japanese GDP, which at last check was $6 trillion (give or take), and declining. Which means this announcement was the functional equivalent to a surprise $325 billion QE announced by the Fed.

This story broke in the wee hours of this morning...and I thank Australian reader Wesley Legrand for sending it along...and the link to the must read zerohedge.com article about this, is linked here.

In January, China imported 413,964 tons of copper, up 13.6% from the same month in 2011. The increase is even more impressive when you correct for the Lunar New Year. Due to the holiday, there were four fewer working days in China last month as compared to January 2011. Copper imports, in any event, exceeded consensus estimates.

December was also good for copper bulls. That month, China imported a record high 508,942 tons, an astounding 47.7% increase from the previous year.

China is hoarding copper. The country in Q4 added about 300,000 tons to its already impressive stockpile.

China’s purchases are far in excess of anticipated need. Estimates for growth in refined copper consumption this year are generally in the 6.0-6.6% range, well below 2011’s 8.5% increase and the 11.5% jump in 2010.

Well, dear reader, it sure beat the hell out of holding soon-to-be-debased U.S. dollars. I hope they're doing the same thing in gold and silver on the sly.

Casey Research's own David Galland brought this forbes.com story to my attention...and I'm more than pleased to pass it along to you. The link is here.

Lawrence Summers, former U.S. treasury secretary and president of Harvard, is reported to have remarked the other day that "the gold standard is the creationism of economics":

Of course Summers meant the worst sort of disparagement, to liken gold standard advocates to religious crazies. And yet there are various creationisms and various gold standards.

This Chris Powell offering containing multiple links is posted over at the gata.org website...and is a must read. The link is here.

HANOI, Vietnam -- Stashing gold at home rather than having cash in the bank is a generations-old habit in communist Vietnam, but a recent surge in prices has sparked government attempts to bring the yellow metal to heel.

Last year the country bought more gold per capita than India or China, according to the World Gold Council, and domestic prices soared by 18 percent -- far outstripping the global market's 11 percent increase.

And old habits are dying hard, according to 60-year-old retiree Truong Van Hue, even if an ounce of gold bullion can now cost up to $100 more in Hanoi than anywhere else in the world.

This AFP story was picked up by finance.yahoo.com on Sunday...and it, plus Chris Powell's opening remarks, are contained in this GATA release...and the link is here. Reader Bob Richardson sent me this story many hours before it showed up in the GATA release...and it's a must read.

Sudan's central bank is increasing dollar supplies to local banks to stop a slide of the Sudanese pound after it generated more than $300 million from gold sales, a central bank official said on Sunday.

The African country is undergoing a severe economic crisis after losing three-quarters of its oil production when South Sudan became independent in July under a 2005 peace deal. Oil is the lifeline of both economies.

Sudan has avoided an Arab spring like Egypt or Tunisia but the economic crisis has sparked small protests against high food price inflation.

This Reuters story was filed from Khartoum on Sunday...and I borrowed it from a GATA release. The link is here.

Economist and former banker Alasdair Macleod's new essay "Katastrophenhausse" anticipates from monetary debasement the "crack-up boom" the economist Ludwig von Mises warned against, and he adds that if interest rates finally are allowed to rise again, they "will only bankrupt insolvent governments and other borrowers, and the interest costs would end up being covered by the creation of yet more fiat money." Macleod concludes that "the important point for owners of gold and silver is that rising interest rates should drive prices higher, and not suppress them as commentators might expect."

His commentary is posted at the goldmoney.com website...and I thank Chris Powell for writing the introduction for me. The link is here.

The latest edition of the Market Force Analysis letter, published by GATA board member Adrian Douglas, finds very compelling the question: "Large Move in the Gold Stocks Imminent?" It's posted at GATA's Internet site...and the link is here.

It takes a brave man to suggest that Warren Buffett has missed a point. After all, unless you are Carlos Slim or Bill Gates, a comparison of his bank balance and yours will show that he caught quite a few that you and I saw only when it was far too late.

However, as Mr. B rails against gold in an article for Fortune magazine -- it's tempting to think that he just might have it wrong when it comes to the oldest haven of all. He mounts all the attacks that exasperated non-gold-bugs often go for: The stuff has no inherent value, it underperforms stocks horribly over time, and has merely become a self-inflating bubble in its long climb to record highs.

Perhaps he's right, but, in its enduring relationship with mankind, the yellow metal has a history of humbling very smart people.

This blog was posted over at The Wall Street Journal yesterday afternoon...and it's another story that I found in a GATA release yesterday. The link is here.

GoldMoney founder and GATA consultant James Turk tells King World News today that he's encouraged by gold's holding its big recent gains during a consolidation, and he predicts a "buying panic" when gold regains $1,750.

An excerpt from the interview is posted at the KWN website...and the link is here.