U.S. Will Resolve Debt by Returning to Gold Standard: James Grant

My first story today, posted over at gallup.com, is one I stole from yesterday's edition of the King Report.

Americans' optimism about the future direction of the U.S. economy plunged in March for the second month in a row, as the percentage of Americans saying the economy is "getting better" fell to 33% -- down from 41% in January. It is also down three points from the 36% of March 2010.

Optimism in March essentially matches last year's low points: 32% in July, 33% in August, and 32% in September. However, it remains higher than it was throughout 2008 and early 2009.

There's a lot of good stuff in here...including a lot of graphs...and the link is here.

Today's next story is a posting over at cnbc.com that was sent to me by reader Scott Pluschau.

Inflation, using the reporting methodologies in place before 1980, hit an annual rate of 9.6 percent in February, according to the Shadow Statistics newsletter, written by John Williams.

“Given ongoing inflation problems with food and the spreading impact of higher oil-related costs in the broad economy, reporting risk is to the upside of consensus expectation for March's CPI report,” said Williams, citing a 10 percent jump in gasoline prices in March, in the note.

This is well worth the read...and the link is here.

Roy Stephens provides the next story out of yesterday's edition of The Telegraph.

Debt-laden banks are the biggest threat to global financial stability and they must refinance a $3.6 trillion "wall of maturing debt" which comes due in the next two years, the International Monetary Fund said in its Global Financial Stability Report.

Government debt was generally high...and on a worryingly upward path in many advanced economies, the IMF said. It repeated its warning that the United States and Japan faced particularly dangerous debt dynamics.

This story is certainly worth skimming...and the link is here.

Reader U.D. sent this piece out yesterday...and it's a fairly longish read by columnist Martin Hutchinson...and is posted over at the prudentbear.com website.

Martin states that..."Because of the delusory fiscal and monetary policies of the last few years, the protection Britain and the United States would normally receive from issuing their own currencies will shortly disappear. The two countries will then be revealed as the biggest PIIGS of all."

If you have the time, this is well worth the read...and the link is here.

China is poised to become an "exporter of inflation to the rest of world", according to Legal & General Investment Management [LGIM], which warned that the threat from rising prices in the world's second-biggest economy is underestimated.

This is another story from The Telegraph late last night that's also courtesy of reader Roy Stephens...and the link is here.

Here's a story that was sent to me by Casey Research's resident economist, Bud Conrad yesterday. It's a piece posted at imarketnews.com that was filed from Beijing on Monday.

It's a very short piece...and the headline pretty much says it all. The link is here.

Here's an interesting story that was posted in The Guardian yesterday...and I thank Swiss reader G.B. for sending it along.

US embassy cables released by WikiLeaks have made a huge impact in India. The Hindu began running stories based on the cables on 15 March, resulting in 21 front page scoops. The government has been rocked by some of the revelations, with calls for the prime minister, Manmohan Singh, to resign.

The Hindu's editor-in-chief, N. Ram, says: "The cables we have worked on so far expose the venal and sordid underbelly of India, which is corrupt, non-transparent, and vulnerable to manipulation by the big powers, in particular the United States."

It's a short read...and the link is here.

Here's a Reuters piece that was sent to me by Washington state reader S.A...and was filed from London yesterday.

Demand for gold bars grew strongly last year, helping lift overall physical investment despite weaker inflows into exchange-traded funds, metals consultancy GFMS said in its annual Gold Report on Wednesday.

I added up the four biggest demand areas in this report...China, India, industrial use and investment demand...and it came to 2,455 tonnes. This represents 90% of 2010 mine output.

This short report is a must read...and the link is here.

Following the footsteps of the famous Naina Devi and Chamunda Devi shrines in the state, other major temples in Himachal Pradesh, north India are expected to come up with gold melting plans.

According to state-controlled temple trust, it has come out with a provision that allows temple trusts to melt tonnes of gold and silver lying in their coffers and convert them into coins and mementoes for sale.

This very interesting story is courtesy of reader 'David in California'...and was filed from Simla...and posted at the commodityonline.com website yesterday. It gives an insight into the Indian gold market that not even I've seen before...and it's worth reading. The link is here.

Thanks to Alberta reader B.E.O...here's a story filed from New Delhi that showed up in yesterday's edition of The Wall Street Journal. He found it posted over at sprott.com in the wee hours of this morning. The headline pretty much says it all...and I think that it might be worth your time running through it. This is something Ted Butler has been advocating for years...and he's been right about that in spades...and I'm glad I took his advice. The link is here.

I stole the headline...and the preamble from a GATA release yesterday.

In the KWN interview, market intelligence analyst Jim Rickards makes a couple of compelling observations: Big financial institutions hardly own any gold at all, so the metal can't be in a bubble and, China is trying to get as much gold as it can through mining, getting gold at the cost of mining rather than in the market, where the Chinese bid could double the gold price and cause a lot of problems. Still, the Chinese bid puts a floor under gold.

It's a short blog...and a must read...and the link is here.

Here's a King World News blog with the world-renowned Jim Grant, founder of Grant's Interest Rate Observer.

When asked about gold specifically Grant stated,“To me the gold price takes the form of a very uncomplicated formula, and all you have to do is divide one by ‘n.’ And ‘n’...I’m glad you ask...is the world’s trust in the institution of paper money and in the capacity of people like Ben Bernanke to manage it. So the smaller ‘n’, the bigger the price. One divided by a receding number is the definition of a bull market.

This is a must read from one end to the other...and the link is here.

My last posting of the day is not about gold...but is a must read nonetheless. It's yesterday's edition of Conversations with Casey. I haven't read the whole thing yet, but I can tell you that it's Doug at his finest.

Doug, as always, is interviewed by Louis James, the Editor of Casey Research's International Speculator. This week's topic of discussion is phyles. Louis asks Doug..."What is a phyle, and why does it matter?"

It's a longish read...but well worth your time...and the link is here.