As the Fed's critical H.4.1 weekly update shows (which is leaps and bounds more accurate than the Treasury's TIC international fund flow data), in the week ended December 28, foreign investors sold the second highest amount of US bonds in history, or $23 billion, bringing total UST custodial holdings to $2.67 trillion, a level first crossed to the upside back in April.

This zerohedge.com posting is courtesy of West Virginia reader Elliot Simon...and the link is here.

To date, and with just one week left in, investors have withdrawn a whopping $135 billion from equity mutual funds, which we are 100% certain is an all-time record for any year in which the S&P closed even nominally positive for the year, proving that nobody believes this farce known as a market any longer.

This is another zerohege.com posting...this one from Phil Barlett. The link is here...and the chart is worth the trip.

Highland Park, Michigan — When the sun sets in this small city, its neighborhoods seem to vanish.

In a deal to save money, two-thirds of the streetlights were yanked from the ground and hauled away this year, and the resulting darkness is a look that is familiar in the wide open cornfields of Iowa but not here, in a struggling community surrounded on nearly all sides by Detroit.

Cities around the nation, grappling with what is expected to be a fifth consecutive year of declining revenues and having exhausted the predictable budget trims, are increasingly considering something that would once have been untouchable: the lights.

This story was posted in The New York Times on Thursday and, once again, I thank reader Phil Barlett for sharing it with us. The link is here.

Since its inception, the euro zone has been built on lies, the most grievous of which is the idea that the common currency could work without political union. But Europe's politicians are currently suffering under a different but equally fatal delusion -- that they have all the time in the world to fix the crisis.

This 2-page article showed up over at the German website spiegel.de yesterday...and is Roy Stephens first offering of the day, for which I thank him. It's worth the read...and the link is here.

Hungary’s parliament has adopted a set of controversial laws increasing political influence over the judiciary and the nation’s central bank, prompting critics to warn that the country is drifting towards a “more authoritarian political system”.

Critics say the measure -- which prompted the European Union and International Monetary Fund to walk out of talks this month on a possible bailout for Hungary worth 15-20 billion euros ($20-25 billion) -- will increase government influence over monetary policy...and could see the central bank disappear as a separate institution altogether.

Roy Stephens sent me this, plus two the other stories below, in the wee hours of the morning. This AFP story is posted over at the france24.com website...and the link is here.

Spain’s new government warned Friday that the country’s budget deficit will be higher than anticipated this year as it unveiled a first batch of austerity measures that include surprise income and property tax hikes.

Following the new conservative government’s second Cabinet meeting, the budget deficit for this year was revised up to 8 percent of national income from the previous government’s forecast of 6 percent.

Alongside the upward revision, which comes amid predictions that the Spanish economy will soon be back in recession, the government, which is headed by Prime Minister Mariano Rajoy, announced further measures to get a handle on its debts, including €8.9 billion ($11.5 billion) in spending cuts.

This AP story is Roy's second offering from the france24.com website...and the link is here.

Japan's headline Nikkei-225 index finished 2011 at its lowest year-end level since 1982, despite rising on Friday thanks to upbeat US data.

The Nikkei index of the Tokyo Stock Exchange finished at 8,455.35, down 17.34 percent, or 1,773.57 points, from the 2010 close of 10,228.92, with the March 11 earthquake and tsunami taking its toll on share prices.

It was the worst year-end figure since 1982, when the index saw out December at 8,016.67.

This AFP story, also posted at the france24.com website, is also courtesy of Roy Stephens...and the link is here.

This Lars Schall interview with John Maldin is posted over at the goldswitzerland.com website...and is well worth reading. I thank Australian reader Wesley Legrand for sending it along...and the link is here.

Market analyst and mining company consultant Peter Grandich doubled his challenge to Kitco.com's gold market analyst, Jon Nadler -- $2 million, to be donated to charity, betting that gold will reach $2,100 (the price in Grandich's previous challenge was only $2,000) before it ever sinks to $1,000. Grandich is incensed by Nadler's misrepresentation this week of the previous challenge, which Nadler incorrectly said involved a downside target price for gold of $1,500. Grandich's commentary is headlined "I Now Have 2 Million Reasons to Be Bullish on Gold".

Jon is strong with the dark side of The Force. Peter's commentary is posted at his grandich.com Internet site...and the link is here. I thank Chris Powell for providing the above introductory paragraph from the GATA release.

Ron Paul said Thursday that he's eager to find out how much gold the United States really owns.

A supporter at a town hall meeting asked about Fort Knox: "Would you reveal as president whether there's actually gold there?"

Here is Paul's full response:

"Yes, and if I couldn't accomplish that then there's big trouble in this country. I may need to get some help for you. I tried for years to do this. ... I never went to Fort Knox. I made a request when the gold commission came up in the early 1980s. We had a study of the role of gold in the monetary system. There were 17 members, and I couldn't get one other person to endorse the principle that we ought to go to Fort Knox and find out if there's gold.

This story is posted over at the politico.com website...and I plucked it from a GATA release yesterday...complete with the above introduction courtesy of Chris Powell. The link is here.

The other day I posted a KWN blog of John's...and now Eric has provided the audio track for that. It's posted over at his website...and the link is here.

A new taxation law in Japan has triggered a bullion sales spree among gold investors at the end of the year despite sharp falls in gold prices, dealers said.

From Jan. 1, bullion retailers are required to report to tax authorities physical gold and platinum transactions of over 2 million yen ($25,700) with members of the general public, said a senior official with a large bullion house in Tokyo.

Bullion houses stayed open on Thursday, even though it was a public holiday in Japan, to receive investors who wanted to sell their physical gold holdings or swap big chunks of gold for smaller lots, such as coins.

This Reuters piece was posted on the news.yahoo.com website on Thursday...and I lifted it from yesterday's King Report. It's a must read...and the link is here.

China's decision this week to channel all gold trading through Shanghai shouldn't dampen mainland investors' appetite for bullion, even as unauthorized trading platforms are forced to close, according to analysts.

Tightened oversight of the gold market, including a ban on bullion trading apart from that directed through the official exchanges in Shanghai, comes after a year of volatile price moves for gold and silver. Unauthorized trading platforms have proliferated along with the boom in precious metals

Analysts in Hong Kong said the move is likely an attempt to bolster investor safeguards rather than to discourage investment. “This clampdown is to try and avoid situations where the retail investors get burned because a particular exchange doesn’t play by conventional rules,” said Scotia Capital managing director Sunil Kashyap in Hong Kong.

This marketwatch.com story was filed from Hong Kong yesterday...and I stole it from a GATA release. The link to this must read news item is here.

As competition for oil, water and other resources intensify, global power relationships are shifting, providing backdrops for a string of conflicts from Iraq to Libya. Brazilian-born journalist Pepe Escobar, one of the most perceptive analysts of these trends, was interviewed by German Lars Schall.

Here's a journalist who knows it all. I've followed Pepe's work for years now...and consider him to be extremely credible. This is the American Empire with the cover fully ripped off and the internal workings visible for all to see. I particularly enjoyed the part where they talked about gold...and I couldn't agree more with what he had to say. This is a very long read...but an absolute must read from one end to the other.

Australian reader Wesley Legrand sent me this interview earlier this week and, for obvious reasons, I had to leave it until today. I haven't read the whole thing myself as of yet, but it will be right at the top of my 'must read' list this weekend. If you only read one article out of today's column...this should it.

It's posted over at the consortiumnews.com website...and the link is here.

Yesterday I posted Jim's blog about the U.S. going to war with Iran...and what that would do to gold and oil prices. This interview dovetails nicely with the Pepe Escobar interview above.

Eric slid this interview into my in-box just as I was about to hit the send button. It's a must listen...and the link is here.