The infamous city of Scranton, PA has had financial troubles for a couple of decades - losing population since the end of WWII - but as NPR reported this weekend, the $16.8 million budget gap that Mayor Chris Doherty is trying to fill (and the disagreements between his taxation proposal and the city council's borrow-more-money view) has driven the mayor to an incredible action.

Doherty has reduced everyone's pay - including his own - to the state's minimum wage of $7.25 per hour. In an ironic choice of words, the desperate mayor noted: "I'm trying to do the best I can with the limited amount of funds that I have," Doherty says, "I want the employees to get paid. Our people work hard — our police and fire — I just don't have enough money and I can't print it in the basement."

NPR continues, After paying workers Friday, the city had only about $5,000 left in the bank. More money flowed into city accounts that day, but it was still not enough to pay the $1 million the city still owes to its nearly 400 employees.

This Zero Hedge story from yesterday was sent to me by Casey Research's own John Grandits...and the link is here.

An Iowa-based brokerage CEO who'd been hospitalized after attempting suicide, prompted the National Futures Association to investigate account irregularities at his firm.

Now, via ZeroHedge, we have the details of the complaint: The NFA claims that at a fund wholly owned and directed by the CEO, Russ Wasendorf, executives may have lied about a $220 million shortfall in customer segregated accounts.

Then, today, per the complaint: "NFA made an inquiry with U.S. Bank and learned that rather than the $225 million that PFG had reported being on deposit at U.S. bank just days earlier, PFG had only approximately $5 million on deposit at U.S. Bank." The NFA also found PFG's $200 million shortfall may date back as far as February 2010.

This story was posted on the businessinsider.com website yesterday evening...and is courtesy of reader 'David in California'. I was one of the first to find out about this whole sordid mess yesterday afternoon when Chicago reader J. Ackers sent me an e-mail about it...and it was a few hours after that, that it hit the Internet. It's a must read for sure...and the link is here.

The much-bandied about “Fiscal Cliff” is already here, according to economists and investors, as businesses curb spending in anticipation of the higher tax rates and reduced spending set to be enacted at the end of this year.

“The fiscal cliff is not just a year-end story,” wrote Michelle Meyer and the economics team at Bank of America Merrill Lynch in a report to clients. “We expect the uncertainty shock to be realized in the coming months, escalating before the election.”

The economists argue in the report that businesses have already started to curb investment and hiring plans in the face of this tightening of fiscal policy, further cutting into GDP.

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

Federal Reserve policymakers on Monday laid the groundwork for a third round of bond purchases, saying the U.S. recovery was weak and unemployment far too high.

"We are right at that edge, that if economic data keep coming in below our expectations — and our view is we are not making progress on our mandates, or we don't expect to make progress on our mandates — then I think we would need more accommodation," San Francisco Fed President John Williams told reporters after a speech in the resort area of Coeur D'Alene, Idaho.

But, underscoring the divisions at the U.S. central bank, Richmond Fed President Jeffrey Lacker reiterated his opposition to a new round of stimulus in an interview with Bloomberg Radio.

Another attempt to push on a string? I thank Elliot Simon for bringing this CNBC story to our attention. The link is here...and as Elliot said in his covering e-mail..."Should I laugh or cry? I think I'll laugh - it's better medicine."

Here's a 3:43 minute video interview posted over at the bloomberg.com website yesterday. He finally gets it right. It's worth watching, as he calls it the way it really is for the first time that I can remember...but nothing you haven't heard about in this column already. I thank reader Richard Craggs for sending it...and the link is here.

While we have been surprised by the lack of public consternation within Germany at the real levels of servitude that an ungrateful Europe is trying to shove down the German taxpayer's throats; this week it appears the rubber is starting to meet the road.

As Europe Online reports, German President Joachim Gauck called for Chancellor Angela Merkel to explain why Germany needs save the euro - at great expense to the country‘s taxpayers - and what will be necessary. In a TV interview, Gauck said that Merkel "has the duty to describe in great detail what it means [to stay in the Euro], including what it means for the budget".

In a somewhat shockingly honest (for a European leader) comment he said that the political establishment has struggled to explain why it is vital for Germany to do its part to save Europe's currency union. Perhaps reflecting Juncker's Modus operandi, Gauck added that "sometimes it‘s hard to explain what this is all about. And, sometimes, there‘s a lack of effort to openly tell the populace what is actually happening."

This story was posted over at the zerohedge.com Internet site on Sunday...and I thank reader 'David in California' for sending it. The link is here.

Euro area finance ministers agreed early Tuesday on the terms of a bailout for Spain's troubled banks, saying that €30 billion ($36.88 billion) can be ready by end of this month.

The finance ministers for the 17 countries that use the euro as their official currency will return to Brussels on July 20 to finalize the agreement, having first obtained the approval of their governments or parliaments, eurozone chief Jean-Claude Juncker said early Tuesday morning.

As part of the agreement with Spain, finance ministers from all 27 European Union countries are expected Tuesday to approve a one-year extension, until 2014, of Spain's deadline for achieving a budget deficit of 3 percent.

I am already underwhelmed. This story was posted on The New York Times website late yesterday evening...and I thank reader Phil Barlett for sending it along. The link is here.

Signs are growing that Europe's economic and monetary union may be fragmenting faster than policymakers can repair it.

Euro zone leaders agreed in principle on June 29 to establish a joint banking supervisor for the 17-nation single currency area, based on the European Central Bank , although most of the crucial details remain to be worked out.

The proposal was a tentative first step towards a European banking union that could eventually feature a joint deposit guarantee and a bank resolution fund, to prevent bank runs or collapses sending shock waves around the continent.

But the rush to put first elements of such a system in place by next year may come too late.

This is another CNBC story from Elliot Simon...and the link to that is here.

The undisputed champion of European political ranting (UKIP's Nigel Farage) discussed the sad reality of Europe's inevitable demise with the reigning US chief of non-hype Rick Santelli in a no-holds-barred cage-match of like-minded skeptics.

That's the opening sentence in this posting over at zerohedge.com from yesterday. The imbedded CNBC interview runs for just 4:32 minutes...and is a must watch. I thank reader Mark Childers for digging it up for us...and the link is here.

China's imports rose 6.3 percent last month from a year earlier, the customs administration said on Tuesday, less than half the 12.7 percent increase forecast in a Reuters poll as domestic demand flagged in the world's second biggest economy.

The June imports number, which is likely to stoke concerns that monetary and fiscal policy easing conducted by Beijing since the autumn of last year has failed to head off the risk of a hard landing for the economy, was also down sharply from the 12.7 percent annual rise in May.

Exports grew 11.3 percent in June from a year earlier, faster than market expectations for a 9.9 percent increase though easing from May's surprisingly strong rise of 15.3 percent.

This Reuters story was posted on the CNBC website late last night...and it's definitely worth skimming. I thank Phil Barlett for his second offering in today's column...and the link is here.

Premier Wen Jiabao of China warned on Sunday of “huge downward pressure” on the Chinese economy, in the clearest expression yet of concern at the top of the country’s leadership about a sharp slowdown in recent months.

During a weekend inspection tour of east-central China, Mr. Wen called for the government to “preset and fine-tune its policies in a more aggressive manner,” using fiscal and monetary tools to offset the economic slowdown as much as possible. But he also tried to reassure the public, saying the economy was “running at a generally stable pace,” said Xinhua, the official Chinese news agency.

Mr. Wen largely attributed the slowdown to weak demand from overseas, particularly Europe with its faltering economies. But in separate remarks on Saturday, he reaffirmed a government policy of making real estate prices more affordable by banning real estate speculation.

This story appeared in the Sunday edition of The New York Times...and I thank Phil Barlett once again. The link is here.

China is on the cusp of a deflationary vortex.

This was signalled late last year by the sharpest contraction in the (real) M1 money supply since modern records began. The hard data is now confirming the warnings.

Consumer prices have been falling for the last three months, producer prices have been falling for four months. This is not a food cost story. It is systemic.

"While an economy-wide generalized deflation is yet to be seen, the deflationary spiral looks to have started in some industrial sectors, attesting to considerable stress with the economy. Persistent deflation can be poisonous," said Xianfang Ren from IHS Global Insight in Beijing.

This Ambrose Evans-Pritchard blog was posted on the telegraph.co.uk Internet site yesterday...and is Mark Childers' second story in today's column. It's worth running through...and the link is here.

The first is with John Embry...and it's headlined "Hang On Because The Chaos is Going to Accelerate". The second blog is with Michael Pento. It's entitled "$15 Trillion To Be Added To Money Supply & Gold To Ascend". The last blog is with Citibank analyst Tom Fitzpatrick...and it's headlined "Euro Under Pressure, Ready to Collapse".

Here's gold commentary from Casey Research's own Jeff Clark yesterday...and I'm including it in today's column, as you may not be a subscriber to Casey's Daily Dispatch, which is free. The link to the article is here.

Christopher Barker over at The Motley Fool website writes an excellent piece on this subject...and it's worth the read.

But that's not the real reason that I'm posting this piece. It's the first sentence of this paragraph that really made me stand up and take notice...

"I am utterly convinced, for example, that gold and silver prices have been routinely manipulated by certain banks to deflect attention from the weak condition of the major paper currencies. We know that a subsidiary of JPMorgan Chase is under investigation for alleged energy-market manipulation. And a slew of banks have been implicated in a municipal bond-rigging scandal that, in the words of Rolling Stone reporter Matt Taibbi, reveals "the astonishing inner workings of the reigning American crime syndicate."

Those "certain banks" would be JPMorgan et al. Michael's blog is posted over at the dailyfinance.com website...and the link is here.

Cheviot Asset Management Investment Director Ned Naylor-Leyland seemed to make his fellow panelists on CNBC Europe very uncomfortable yesterday as he asserted that the gold and silver markets have been manipulated just as the LIBOR interest rate was manipulated, and for the same reason -- to disguise trouble in the world financial system. Naylor-Leyland also said that market manipulation was also the purpose of the British gold sales of a decade ago. Looks like the gold and silver manipulation issue is becoming irresistible.

I borrowed this story from a GATA release yesterday...and I thank Chris Powell for writing the preamble for us. Naylor-Leyland's interview is not quite five minutes long and it's posted at the CNBC video archive here.

In this week's edition of his "Things That Make You Go 'Hmmm'" letter, Grant Williams argues that if the LIBOR interest rate, probably the most important financial data point in the world, could have been manipulated for so long even as suspicions about it were expressed openly, manipulation of the gold and silver markets may not be crazy "conspiracy theory" after all.

Williams writes: "If the long-stated claims about government-sanctioned, bank-led manipulation of precious metals markets put forward so eloquently by the likes of Ted Butler, Bill Murphy and Chris Powell at GATA, as well as Messrs. [Eric] Sprott, [Jim] Sinclair, [Ben] Davies, et al. are eventually proven to have any validity whatsoever, the fallout from the LIBOR scandal will prove to be (to use the words of Jamie Dimon) just another "tempest in a teapot," as the precious metals are the very underpinnings of the entire global financial system. Conspiracy or no, it would be a blessed relief to get closure no matter what the truth turns out to be."

I borrowed the title...and the wonderful preamble from another GATA release...but the first reader through the door with this story yesterday was West Virginia reader Elliot Simon. It's a longish 37 pages, but it's a must read...and Williams' letter is posted in PDF format at the gata.org website here. This file may take a bit of time to load, so be patient.

MineWeb's Lawrence Williams today reports about market analyst Paul Mylchreest's new Thunder Road Report, which describes gold as being in "lockdown," presumably by central banks straining to maintain their market-rigging power.

Williams says Mylchreest "believes we are heading into a truly mega-financial crisis. He foresees the financial decimation of the middle class and reckons the crisis is going to result in the transition to a new financial system as the current one implodes. His best guess is that it will be either happening or perfectly obvious that it's going to happen within six to 12 months."

Williams' report is headlined "'Idiots' Controlling the World's Economies -- Gold in Lockdown". The link to it, and Mychreest's commentary is contained in this GATA release from yesterday...and the link is here.