"The bottom line remains that the U.S economy continues to tread water, staying afloat by a historic expansion of federal debt. I have maintained that the explosion of federal debt was a Bubble, and that our fiscal train wreck would not be avoided through a resumption of private-sector debt growth. The U.S. Household sector does not want to add debt, and the corporate sector does not need to. I have as well noted the disturbing parallels between the eruption of subprime and the Greek debt crisis. From my perspective, at this point it is only a matter of time before the markets begin to impose discipline upon Washington."

Doug Noland is on another tear with this week's edition of his Credit Bubble Bulletin. It's posted over at the prudentbear.com website...and I thank reader U.D. for bringing it to my attention. It's a short read this week, but well worth your time...and the link is here.

Chris Powell writes a rather longish introduction to this King World News blog...and I don't wish to steal his thunder. Your first read of the day is a must read...and the link to the GATA release is here. NOTE!!! Since I wrote the previous sentence, Eric King has provided me with the audio interview...and after you've read Chris Powell's preamble, you can skip the blog...and go straight to the audio track, which is linked here.

“I think the periphery goes into depression. When you look at a country like Greece, it’s now been in recession for three years. GDP is probably down 15% from the top. The stock market is down 90%, which is the equivalent of 1929 to 1932 in the US. This is depression-like.”

“More and more economies will fall into that situation. That creates the problem of people revolting. Right now we have new governments not elected by the voters, the citizens of those countries, but implanted as technocrats by the EU center, by Brussels. So they will be very disliked and I think you will see some revolutions starting or intensifying next year.

Then I expect next year one country, probably three, will exit the euro. That will make 2012 very interesting because there are no rules on how to exit the euro. A country exiting the euro means the next day, when they exit, their banking system is bust. That means the banking system has to be immediately nationalized in a new currency."

This King World News blog is well worth your time...and the link is here.

Europe’s worst financial crisis in generations is forging a new European Union, pushing Britain to the sidelines and creating a more integrated, fiscally disciplined core of nations under the auspices of a resurgent Germany.

The agreement was a clear victory for Mrs. Merkel, and it prompted a sharp rally in stock markets in Europe and the United States. But it is viewed as unlikely to calm fears that Europe is unwilling to muster the financial firepower to defend the sovereign debts of big member states, including Italy and Spain, that have little or no economic growth and have big debt bills coming due soon.

This story appeared in The New York Times yesterday. The original headline read "New Treaty to Save the Euro May Also Divide Europe". The 'thought police' over at the NYT decided on something else. I thank reader Phil Barlett for sending me this story...and the link is here.

What remarkable petulance and stupidity.

The leaders of France and Germany have more or less bulldozed Britain out of the European Union for the sake of a treaty that offers absolutely no solution to the crisis at hand, or indeed any future crisis. It is EU institutional chair shuffling at its worst, with venom for good measure.

It is risky to reach instant conclusions on a fast-moving story but it looks as if the EU may soon be reduced to a shell, with a new union forming among the core.

Ambrose Evans-Pritchard over at The Telegraph plays the part of 'The Grinch' here...and really lets fly. This is Roy Stephens first offering of the day...and the link is here.

With the United Kingdom opposed to Chancellor Merkel's plan for amending EU treaties to increase fiscal integration, Germany and France are seeking a separate agreement among the 17 euro-zone members, that many say might be illegal.

The euro-zone 17 in combination with six other countries quickly began moving forward on their own. But is such a move legal? European Union lawyers have their doubts that the kind of euro-zone fiscal union within the EU would be allowed.

Changes to the EU treaty, after all, must be unanimous. Furthermore, EU officials in Brussels say, because monetary union is regulated extensively in the Lisbon Treaty, reform can only be implemented within the existing legal framework. The legal services experts of the European Commission, the European Central Bank and the European Council, which represents the member states in Brussels, are all in agreement. A treaty concluded only by the 17 euro-zone governments would be illegal, they say.

This story was posted over at the German website spiegel.de yesterday...and is Roy Stephens second offering of the day. The link is here.

Following David Cameron's veto of EU treaty reform, there is plenty of frustration in Europe over Britain's stubborn attitude in the battle against the debt crisis. Prominent members of the European Parliament have strongly criticized the British prime minister and sent him a clear message: Europe doesn't need you.

This story from spiegel.de is another Roy Stephens offering...and the link is here.

The agency cut its ratings on the long-term debt of BNP and Credit Agicole by one notch to Aa3, concluding reviews that began in June and were continued in September. Societe Generale's long-term debt was cut by one notch to A1.

The downgrades were driven by the increasing difficulties the banks were having in raising funding and the worsening economic outlook, Moody's said.

The news comes a day after the European Banking Authority (EBA), warned the region's banks must find €114.7bn of extra capital in order to withstand the euro zone debt crisis and restore investor confidence.

This is another Roy Stephens story, this one from yesterday's edition of The Telegraph...and the link is here.

Three years after going bankrupt, Iceland has defied predictions by getting its finances back under control. But mountains of private debt have left thousands hopeless and skeptical of any salvation that could come from joining the European Union and adopting the euro.

Iceland has returned to the international money market in record time. This summer, the government issued bonds for the first time since the crisis. Iceland's budget deficit is at 2.7 percent of its gross domestic product (GDP). The unemployment rate has fallen to roughly 6 percent, the Icelandic economy is expected to grow by 2.2 percent this year, and the krona is relatively stable, with inflation at 2.7 percent.

Nevertheless, tens of thousands of Icelanders are still deeply in debt -- and will be paying for the excesses of the boom years for decades to come.

This story was posted over at spiegel.de on Thursday...and once again I thank Roy Stephens for bringing it to my attention. The link is here.

India's fiscal situation is getting out of hand. The country's fiscal deficit reached almost 71% of its full-year target in the first half of the year. This cast doubts over the government's ability to meet budget goals as federal finances feel the pressure of squeezed revenues and slowing growth. The government is set to fall short of its fiscal deficit target of 4.6% of GDP for 2011-12 by at least 1% and this will take the deficit to 5.6%, higher than the 5.1% deficit seen in 2010-11.

The Reserve Bank of India (RBI) has been consistently warning the government about the worsening fiscal situation. But the government has so far ignored the RBI's warning and has failed to implement any kind of reforms with respect to food, fuel, fertiliser and power subsidies. It has also made no progress in improving the tax to GDP ratio. The government subsidy bill in the current fiscal is likely to go up by a massive Rs 1 trillion from Rs 400 bn on account of higher outlays towards fertiliser, food and oil.

But what is more worrying is the worsening fiscal situation of states. The states' fiscal position is also getting into a mess with expected losses of Rs 1 trillion of SEBs (State Electricity Boards) having to be borne by state governments. State level fiscal deficit will exceed 2.2% of GDP projected for 2011-12 if the SEB losses are taken into consideration. As a result India's total debt to GDP ratio is expected to increase from 65% to more than 70% in FY12.

This story was posted over at in.finance.yahoo.com yesterday morning...and I thank Nitin Agrawal for sending it along. The link is here.

The Bonn conference on Afghanistan aimed to paint an optimistic future for the war-torn country. But the country's inhabitants have no illusions: They know that their military cannot protect them, and that the warlords are jockeying for position. Meanwhile, the Taliban are just waiting for the Americans to leave.

The Afghans themselves have withdrawn into despair, mistrust and conspiracy theories, amid whispers of magical numbers like the evil 39, or talk of a secret conspiracy between the Americans and the Taliban. They see civil war brewing and they don't want the foreign troops on their soil, and yet they want them to stay. They see the foreigners' military might, and yet nine out of 10 Afghans don't even know why they are in the country. They see the façade of a government, but behind it they see only the despotism of the powerful who use violence to take what they want.

This 2-page exposé was posted over at spiegel.de on Monday...and is Roy Stephens last offering of the day. It's also a must read as well...and the link is here.

Yesterday's edition of Casey's Daily Dispatch contained an "excerpt from a book written in 1955 by Milton Mayer, a reporter who studied the lives and attitudes of ordinary Germans leading up to and through the Hitler regime."

"While one particular paragraph from the book has been widely quoted - you will probably recognize it - the longer excerpt reprinted below provides critical context to how everyday Germans transitioned from a civil society to a truly heinous police state, and did so with hardly a whisper."

I've been sitting on this story all week, mainly because of its length...and the subject material...which is better suited for a weekend than a weekday, as we all lead such busy lives. The other reason, which was just as important, was that David asked me not to post it in my column until he had the chance to post it in his Friday missive...and I was only too happy to oblige him.

The subject matter is stunning, a real awakening for me...as it will be for you. The author's writing style is unlike anything I've seen before. I was totally blown away by this man's ability to put his thoughts into words. I thought I was pretty good at it after years of writing this column, but Milton Mayer pretty much buries any pretense that I had about my literary skills.

This is an absolute must read from start to finish, as are David's thoughts in his prologue titled "Man Vs. Morlock"...where he uses the movie adaption of H.G. Wells' classic book, The Time Machine as a proxy for events past, present...and probably future.

I remember when I first saw that movie back in the very early 1960s, I must have been 13 or 14 years old at the time...and it scared the living bejesus out of me, as it did David...and I still remember it to this day. All the childhood feelings associated with that movie came flooding back as David spoke of it.

If you read nothing else in this column today...this is the story I would pick. So top up your coffee and then click here.

An HSBC Holdings Plc unit sued the MF Global Inc. brokerage trustee to establish whether he or another person is the rightful owner of gold bars worth about $850,000 and silver bars underlying contracts between the brokerage and a client.

Five gold bars and 15 silver bars underlie eight Comex contracts between the brokerage and its client Jason Fane of Ithaca, New York, the unit of London-based HSBC said in a court filing yesterday. Both parties have asserted claims to the bars, creating difficulties for HSBC, which is storing them, the bank said. HSBC asked a judge to decide who the rightful owner is.

Well, if this isn't a wakeup call for owning physical in hand, or in the hands of a reliable third party, I don't know what is. This story was posted at Bloomberg yesterday...and I thank reader Alan Baer for being the first one through the door with this piece. It's a must read...and the link is here.

That paper gold, in the form of electronic ones and zeros, typically used by various gold ETFs, or anything really that is a stock certificate owned by the ubiquitous Cede & Co, is in a worst case scenario immediately null and void as it is, as noted, nothing but ones and zeros on some hard disk that can be formatted with a keystroke, has long been known, and has been the reason why the so called gold bugs have always advocated keeping ultimate wealth safeguards away from any form of counterparty risk...which in our day and age of infinite monetary interconnections, means virtually every financial entity.

Amen to that, bro'!!! Tyler Durden over at zerohedge.com goes apoplectic about the above Bloomberg story. This, too, is a must read. The latter part of the story is mostly legalese...and if you don't grasp it all, you're probably in very good company. I don't pretend to understand it all myself. I thank Australian reader Wesley Legrand for sending me this piece...and the link is here.

Bay Area Rapid Transit officials revealed Tuesday that copper thieves are bedeviling the system in more ways than stripping cable from its tracks. A project intended to speed trains in Contra Costa County, which was supposed to be done by now, was delayed 10 months after crooks stole hundreds of thousands of dollars worth of metal.

B.A.R.T. officials said they intend to spearhead a task force on metal theft in hopes of reducing a problem vexing numerous public agencies, utilities and businesses, costing millions of dollars a year.

I wish them luck. This story showed up in the San Francisco Chronicle on Wednesday...and I thank West Virginia reader Elliot Simon for bringing it to our attention. The link is here.

BIG GOLD editor Jeff Clark put out this short piece yesterday that's filled with excellent graphs.

As Jeff says..."The current 15.6% gold decline, while considered a "major" correction, is not out of the ordinary, particularly following the late summer spike. And after each big selloff, there was a price consolidation phase that in every instance led to higher prices. The message: hold on, and buy the big dips."

Sage advice.

This short, must read piece, is posted over at the Casey Research website...and I'm embarrassed to say that Australian reader Wesley Legrand was the first one to bring this article to my attention. The link is here.

Edmonton reader B.E.O...in an e-mail to me yesterday...suggested in no uncertain terms that the audio interview was much better than the blog I posted in this column on Friday.

He was absolutely correct. It's a must listen...and the link is here.

Market News International, which, on the basis of confidential sources, reported Thursday that the Bank for International Settlements, Bank of England, and Federal Reserve had sold gold that day to reverse an upward spike in the price as the euro zone financial crisis worsened, has retracted the report.

Word of the retraction comes via GATA's friend Michael Kosares, proprietor of Centennial Precious Metals in Denver and its Internet site USAGold.com, who wrote to the news agency in search of information supporting its report. Kosares today received this reply from MNI's Vicki Schmelzer: "The bullet that was posted was posted in error. We had one contact mentioning that this might be the case, but when we called other, more trusted sources later, they said this was not the case and in fact selling by these institutions was totally unlikely. We put out a retraction shortly after the initial bullet."

All the details are contained in a GATA release from late last night. It's a must read...and the link is here.

Tokyo jeweler Ginza Tanaka unveiled a Christmas tree made of pure gold worth 1.95 million dollars. The store says it's the most expensive Christmas tree they've ever created.

The 53 second video was posted over at the emirates247.com website on November 22nd...and I thank reader Charles Thompson for sharing it with us. The link is here.