The income gap between rich and poor Americans grew to the widest in more than 40 years in 2011 as the poverty rate remained at almost a two-decade high.

The U.S. Census Bureau released figures yesterday that showed median household income fell, underscoring a sputtering economic recovery and struggling middle-class that are at the center of the presidential campaign.

The proportion of people living in poverty was 15 percent in 2011, little changed from 15.1 percent in 2010, while median household income dropped 1.5 percent. The 46.2 million people living in poverty remained at the highest level in the 53 years since the Census Bureau has been collecting that statistic.

Today's first story was posted on the Bloomberg Internet site early yesterday afternoon Eastern time...and I thank Manitoba reader Ulrike Marx for sending it. The link is here.

A ruling in the case of failed futures brokerage Sentinel Management Group could make it more difficult for customers to recoup money lost in the much larger collapse of MF Global, according to Sentinel's bankruptcy trustee.

A federal appeals court on Thursday upheld a ruling that puts Bank of New York Mellon ahead of former customers of Sentinel in the line of those seeking the return of money lost in the 2007 failure of the suburban Chicago-based futures broker.

The appeals court affirmed an earlier district court ruling that the bank had a "secured position" on a $312 million loan it gave to Sentinel, which turned out to have been secured by customer money.

Futures brokers are required to keep customers' funds in dedicated accounts to protect them from being used for anything other than client business.

This Reuters story was posted on their website this past Sunday...and I thank Roy Stephens for digging it up on our behalf. It's a short read...and the link is here.

Wall Street has plenty of worries heading into autumn: the stability of the euro zone, persistent United States unemployment and the historically volatile October stock market...and Goldman Sachs has an additional concern: Greg Smith’s book.

Mr. Smith’s memoir, “Why I Left Goldman Sachs,” is set for publication on Oct. 22. The release date comes just seven months after Mr. Smith publicly resigned from the bank with an Op-Ed page article in The New York Times that detailed his disappointment with Goldman’s business practices that reflected, more broadly, a corrosive culture at the nation’s largest banks.

The article struck a nerve. Within 24 hours, it had more than three million views online. Publishers clamored for the rights to a book. Grand Central Publishing, a division of the Hachette Book Group, secured a deal, offering Mr. Smith an advance of close to $1.5 million, according to people with direct knowledge of the negotiations.

Its depiction as a blood sucking “vampire squid” in a Rolling Stone article captured the public’s imagination, helping to make Goldman a symbol of Wall Street’s dark side.

I would suggest that Mr. Smith's book will do rather well...and it wouldn't surprise me one bit if Matt Taibbi wrote the introduction. If he didn't do that, I'm sure he'll have something to say about it when it does hit the book stores. This story appeared on The New York Times website early yesterday afternoon as well...and I thank Washington state reader S.A. for bringing it to our attention. The link is here.

Bradley C. Birkenfeld, a former banker at UBS, recently served two and a half years in prison for conspiring with a wealthy California developer to evade United States income taxes.

But Mr. Birkenfeld, 47, has a lot to show for his time and effort: The Internal Revenue Service acknowledged on Tuesday that information he had provided was so helpful that he would receive a $104 million whistle-blower award for revealing the secrets of the Swiss banking system.

By divulging the schemes that UBS used to encourage American citizens to dodge their taxes, Mr. Birkenfeld led to an investigation that has greatly diminished Switzerland’s status as a secret haven for American tax cheats and allowed the Treasury to recover billions in unpaid taxes.

For all U.S. citizens with something to hide from the taxman...this falls into the must read category. It was posted over at the nytimes.com Internet site on Tuesday...and I thank Donald Sinclair for sending it. The link is here.

G. Edward Griffin works tirelessly to dispel the notion that the Fed has been a failure. His latest effort was at the just-concluded Casey Research/Sprott Inc. investor summit on Navigating the Politicized Economy, where he told a packed hall that the Fed has been wildly successful at its true mission - to protect the banking system at all costs. According to Griffin, the problem is the American people are footing the bill for these costs through stealth taxation, thanks to the coordinated actions of the Fed and US government.

If you haven't read Ed Griffin's book "The Creature From Jekyll Island: A Second Look at the Federal Reserve"...you should consider yourself uneducated. If I had to pick one book that changed my life forever...this would be the one. You owe it to you, to read it. The link to this 25:50 minute video interview with Ed Griffin is imbedded in yesterday's edition of Conversations with Casey...and is linked here...and is a must watch for sure.

In a historically significant signal for the euro rescue, the German Federal Constitutional Court on Wednesday ruled there are no grounds to stop the country from ratifying the European Stability Mechanism, the permanent euro bailout fund, and the fiscal pact aimed at bringing economic governance to countries in the euro zone. The decision bolstered stock markets in Europe and around the world and also strengthened the euro. However, the justices at the Karslruhe-based court also expressed some reservations.

The court ordered that ratification can only be completed if it is ensured under international law that Germany's current maximum liability of €190 billion ($245 billion) can only be increased with the approval of the German representative in the ESM board, court President Andreas Vosskuhle said. "(No) provision of this treaty may be interpreted in a way that establishes higher payment obligations for the Federal Republic of Germany without the agreement of the German representative," the court states.

This also means that Germany's federal parliament, the Bundestag, must play the leading role in important decisions. Under a German law accompanying the ratification of the ESM treaty, the German parliament must first vote on the positions taken by the German representative in the ESM board before they can act on them. However, it is still unclear at this point whether decisions will require a vote of the full parliament or the significantly smaller budget committee.

This is the first of two stories that I have on this topic. The first is from the German website spiegel.de early yesterday morning...and I thank Ulrike Marx for sending it. The link is here.

Markets breathed a sigh of relief across the world after the Constitutional Court in Karlsruhe ruled that the European Stability Mechanism (ESM) and the EU’s Fiscal Compact are compatible with the country’s Basic Law. The euro surged to a four-month high of €1.29 to the dollar.

The European Parliament leapt to its feet in thunderous applause as the news came through, the verdict removing the final hurdle blocking deployment of the €500bn (£397bn) bail-out fund and consummating Europe’s grand plan to hold monetary union together.

Yet it was a double-edged ruling, with plenty of cheer for the 37,000 citizens who had filed complaints in an outpouring of civic protest, including the neo-Marxist Left Party, the More Democracy movement and a core of eurosceptic professors.

In keeping with rulings on the Lisbon Treaty and earlier rescues, the eight judges issued a “Yes, but” verdict, imposing constraints that greatly reduce Berlin’s room for manoeuvre in the future.

Ambrose Evans-Pritchard has at it in this longish article posted on the telegraph.co.uk Internet site at 8:34 p.m. BST last evening. This story is also courtesy of Ulrike Marx...and it's certainly worth reading. The link is here.

Few problems in economics are genuinely new. Virtually every scenario you care to think of has been played out before in some shape or form. Thus it is with the eurozone debt crisis, which has some striking parallels with the debacle of Britain’s entanglement with the European exchange rate mechanism back in the early Nineties.

Today’s crisis is of course infinitely more complex, intractable and serious, but it shares many of the same characteristics. The central issue – that it is next to impossible to maintain a currency union with Germany unless wholly aligned to the German economic cycle – hasn’t changed.

Frog marching other, structurally very different, European economies towards the imagined prize of German monetary and fiscal discipline is again proving a monumentally destructive process. Britain learnt its lesson early. Others were not so lucky. The consequences of Europe’s folly will echo for generations.

It was 20 years ago this weekend that Britain was forced out of the ERM. At the time, British membership was widely seen to have been a disaster. Certainly, it was a catastrophe for the then Conservative government. Britain’s ignominious exit branded the Conservative hierarchy as economically incompetent, a reputation that was to live with them for much of the next two decades. Associated infighting over Europe confirmed the perception of a party that was unfit to rule.

This is another story from The Telegraph's website yesterday evening...and I thank Roy Stephens for sending it along. The link is here.

The unfolding catastrophe in the euro zone has not been great for the British economy. It has hit exports to its largest and closest market. It had dented business confidence, slowed investment into the whole of Europe, and undermined faith in banks that already weren’t looking too healthy.

But in one important respect it has been a blessing. It has distracted attention from the dire state of the U.K.’s own economy. When one house is burning down, it is easy not to notice that the one next door has dry rot, weeds on the driveway, and a few holes in the roof where the slates used to be.

But Britain’s troubles may not be invisible to the markets much longer.

As growth stalls, the deficit rises, and government borrowing ticks relentlessly higher, it is inconceivable that the U.K. can remain in the small group of triple-A rated countries much longer. It is now simply a matter of time before one of the big agencies gets around to cutting the rating.

This marketwatch.com story was filed from London just after midnight Eastern time on Wednesday...and I thank Roy Stephens for his second offering in a row. The link is here.

Iran is using a little-known port off the East Malaysia coast to hide millions of barrels of oil from Western sanctions, according to shipping data, industry sources and officials.

A Reuters examination of shipping movements and interviews shows how Iranian crude is shipped to the area and loaded on to empty vessels at night to await potential Asian buyers. Storing the oil on hired tankers operating under the Panamanian flag in the calm waters off the tax-haven port of Labuan - an offshore financial centre about the size of Manhattan - means Iran can keep its own fleet active and ensure the flow of oil money into its struggling economy.

At least two large oil tankers have been unloaded this way in recent weeks and several more Iranian vessels were steaming towards Asia, according to Reuters Freight Fundamentals, which tracks the movement of the global tanker fleet. One was destined for a Chinese port, while three others, carrying as much as 6 million barrels of crude or fuel oil, were sailing to unknown destinations.

While not illegal, the dead-of-night transfer of oil in the South China Sea illustrates the lengths to which Iran will go to keep exporting its oil to skirt Western sanctions aimed at pressuring Tehran's suspected pursuit of nuclear weapons. A European Union oil embargo has virtually halted access around the world to insurance for Iranian crude and oil products.

This very interesting Reuters story was filed from Labuan, Malaysia early yesterday evening Eastern Daylight Time. Its worth reading...and I thank Roy for his third and final offering in today's column. The link is here.

The first blog is with Rob Arnott...and it's headlined "Major Defaults, German Court Decision & Inflation". The second blog is with Dr. Stephen Leeb. It's entitled "$150 Silver & an Ocean of Paper Money to Flood the System". And lastly is this blog with "Mish" Shedlock. It bears the headline "Global Economic Plunge, Money Creation & Soaring Gold".

Ten days ago, when describing the latest casualty of the ongoing South African miner revolution, we said: "Expect more South African mines to shutter, as gold production in the world's third largest gold producer grinds to a halt, and the local workers grasp they had the leverage all along.

Should the South African example spread to other countries, then expect the price of gold to soar regardless of how much printing the central planners engage in the coming weeks and month."

Fast forward to today: "Labour unrest sweeping across South Africa's mining sector hit top world platinum producer Anglo American Platinum on Wednesday, with striking miners blockading roads leading to shafts belonging to the mining giant, police said.

This must read zerohedge.com story from yesterday morning was sent to me by reader Marshall Angeles...and the link is here.

Anglo American Platinum Ltd., the largest producer of the metal, halted its Rustenburg operations as labor turmoil in South Africa’s mining industry disrupted gold and platinum mines.

“In light of the current volatile situation in the Rustenburg area, where our employees, who want to go to work, are being prevented from doing so and are being intimidated by the threat of violence, Anglo American Platinum has decided to suspend its operations” with immediate effect, Chief Executive Officer Chris Griffith said today in a statement. The halt will last until work can safely resume, he said.

The company diverted about 3,000 employees from its mines in the area to an undisclosed “neutral place” for their safety, Mpumi Sithole, a spokeswoman for the Johannesburg-based company known as Amplats, said by mobile phone. They were released at noon after being briefed by management, she said.

This Bloomberg story was filed from Johannesburg late yesterday morning local time...and I thank Ulrike Marx for her final offering in today's column. It's certainly worth the read...and the link is here.

Casey Research's Senior Precious Metals Analyst, Jeff Clark, had a short commentary about gold posted on the CR website yesterday afternoon. It's certainly worth reading...and I thank reader Peter Handley for sending it our way. The link is here.

Ed,

I read your Gold & Silver Daily letter every day.

I heard this interview with CME trader Michael Gurka on CNBC this morning. Some interesting tidbits on silver. Start listening around the 2:55 mark. Gurka mentions the "stealth move" in silver - the current move from $26 to $34. Kernen asks him why the move up - QE? Gurka comes back with a "short squeeze up to a $100" comment.

This might be the first public mainstream media hint that JPMorgan is in deep trouble with its massive short silver position. Some of the guys I read believe JPM short position is fix'n to blow, which would make for a massive move up as JPM is forced to cover.

This video is a must watch...and I thank reader J.P. for sharing it with us. The link is here.

Some very curious thoughts ahead of tomorrow's FOMC announcement from none other than Citigroup...

In addition, we are struck by the somewhat skeptical reaction of investors and colleagues to the Fed’s analysis of the benefits from past rounds of QE. In particular the Fed’s benefit calculation explicitly assumes that the level of stimulus is a function of the size of the Fed’s balance sheet, so keeping the Fed’s balance sheet fixed would not result in any diminution of stimulus. Most clients and traders feel that rates would back up significantly if the Fed were to stop expanding the balance sheet. In that world, subsequent rounds of QE just keep rates where they are rather than lower them and the cumulative benefits are much less pronounced. There is a strong view in markets that 1) the Fed have to do a big QE, given the expectations that have been built up, and 2) the added liquidity will have a marginal effect. Taken together this raises the risk that the assets that will benefit are those sensitive to liquidity, such as money substitutes and Treasuries, rather than assets that are sensitive to real business cycle expansion.

More importantly, let's recall that "money substitutes" = gold. So... Citi basically said that tomorrow Ben Bernanke is about to (again) become a goldbug's best friend.

This story was posted over on the Zero Hedge website early yesterday afternoon...and I thank Washington state reader S.A. for bringing it to my attention...and now to yours. The link is here.

Ray Dalio, one of the most successful hedge fund managers of all time, spoke with CNBC's Maria Bartiromo at the Council on Foreign Relations yesterday morning.

The hedge fund god made some interesting comments on gold.

"Gold is a currency. Throughout the history, I won't tell you in length, money was like a check in a checkbook and what you would do was get your gold and gold was like a medium. So gold is one of the currencies-- We have dollars, we have euros, we have yen and we have gold.

To this, Bartiromo asked if he owns gold.

"Oh yeah. I do. I think anybody, look let's be clear, that I think anybody who doesn't have...There's no sensible reason not to have some. If you're going to own a currency, it's not sensible not to own gold. Now it depends on the amount of gold. But if you don't own, I don't know 10%, if you don't have that and that depends on the world, then there's no sensible reason other than you don't know history and you don't know the economics of it.

This businessinsider.com story from yesterday contains a partial transcript of the 1:07 hour video interview. The link to the story...and the embedded interview is here. I haven't had the time to watch it, but from the transcript, I'd guess it's more than worth it. I thank Nick Laird for finding this important story.

Global commodities strategist Don Coxe declares now "is the best climate I have ever seen for an increase in gold prices."

During an address to Denver Gold Forum conference, Coxe urged fund managers, mining analysts, and mining executives to prepare for significantly higher gold prices and higher gold mining stock valuations.

He believes a "lustrous" rally in gold mining stocks will happen before a year passes. "The opportunities ahead are the best I've seen," Coxe declared.

Although Coxe admitted the stock market could be better for junior mining and exploration companies, he feels a new gold rush is ahead for investment in gold mining stocks.

This very short mineweb.com article was filed from Reno, Nevada yesterday...and is a must read in my opinion. I thank reader Neil West for contributing the final story in today's column...and the link is here.