Manufacturing unexpectedly contracted in November to its lowest level in more than three years, as companies worried about whether lawmakers in Washington could reach a budget deal in time avert a crisis that many fear could lead to a recession.

The Institute for Supply Management (ISM) said on Monday that its index of national factory activity fell to 49.5 in November from 51.7 the month before. The reading was shy of expectations of 51.3, according to a Reuters poll of economists.

The figure was the softest since July 2009 when the U.S. economy was struggling in the aftermath of the financial crisis. Economists said the November slide may have been aggravated by Super storm Sandy, which devastated the U.S. east coast in late October, as well as uncertainty over budget negotiations in Washington.

This story was posted on the moneynews.com Internet site yesterday morning...and I thank West Virginia reader Elliot Simon for providing the first story of the day. The link is here.

Strikes in the ports of Los Angeles and Long Beach that began last Tuesday are delivering a blow to the U.S. economy.

Clerical workers from the International Longshore and Warehouse Union (ILWU) Local 63 have been without a contract for 2.5 years, and negotiations between them and the ports broke down last Monday.

The ILWU has accused management of trying to outsource clerical jobs to overseas workers that are paid far less and receive fewer benefits.

This story from the businessinsider.com was posted on their Internet site early yesterday afternoon Eastern time...and I thank Roy Stephens for this first offering of the day. The link is here.

Even as U.S. government debt swells to more than $16 trillion, Treasuries and other dollar fixed- income securities will be in short supply next year as the Federal Reserve soaks up almost all the net new bonds.

The government will reduce net sales by $250 billion from the $1.2 trillion of bills, notes and bonds issued in fiscal 2012 ended Sept. 30, a survey of 18 primary dealers found. At the same time, the Fed, in its efforts to boost growth, will add about $45 billion of Treasuries a month to the $40 billion in mortgage debt it’s purchasing, effectively absorbing about 90 percent of net new dollar-denominated fixed-income assets, according to JPMorgan Chase & Co.

“The shrinking amount of bonds in the market is lowering rates and not just benefiting the Treasury, but providing lower rates for private-sector decision-makers as well,” Zach Pandl, a senior interest-rate strategist in Minneapolis at Columbia Management Investment Advisers LLC, which oversees $340 billion, said in a Nov. 30 telephone interview. “The Fed is not creating this scarcity to help out the Treasury, it’s primarily to get the economy going.”

More paper games. This Bloomberg story showed up on their website yesterday morning Mountain Standard Time...and it's Elliot Simon's second offering of the day. It's certainly worth skimming...and the link is here.

DO we have another Fannie or Freddie on our hands — another mortgage giant headed for a rescue?

Like Fannie Mae and Freddie Mac before it, the Federal Housing Administration is suffering in a mortgage hell of its own making. F.H.A. officials say they won’t need taxpayers’ help, but we’ve heard that kind of line before.

The F.H.A. backs $1.1 trillion of American mortgages and, by the look of things, it’s in deep trouble. Last year, its mortgage insurance fund was valued at $1.2 billion. Today that fund is valued at negative $13.48 billion.

Gretchen Morgenson tees up the F.H.A. in her Saturday column in The New York Times. I thank Phil Barlett for bringing this story to our attention...and the link is here.

America’s now-nationalized student loan industry just reached a value of $1 trillion, according to Citigroup, growing at a 20 percent-per-year pace. Since President Obama nationalized the industry (a tacked-on provision of the Obamacare bill), tuition has gone up 25 percent and the three-year default rate is at a record 13.4 percent.

With many young people unable to pay their loans (average graduating debt is about $29,000), Citigroup and others are speculating that this industry might be ripe for a bailout.

To pay off all the current defaults, Citigroup says it would cost taxpayers $74 billion. However, this number doesn’t include those who will default in the coming years, and, when the government rewards the defaulters, it will encourage more borrowers not to pay their debts.

And liberals in Congress have proposed forgiving all student loans via “The Student Loan Forgiveness Act 2012,” costing taxpayers $1 trillion.

This story was posted on the breitbart.com Internet site last Thursday...and I thank 'David in California' for bringing this story to our attention. The link is here.

The median net worth of American households has dropped to a 43-year low as the lower and middle classes appear poorer and less stable than they have been since 1969.

According to a recent study by New York University economics professor Edward N. Wolff, median net worth is at the decades-low figure of $57,000 (in 2010 dollars). And as the numbers in his study reflect, the situation only appears worse when all the statistics are taken as a whole.

According to Wolff, between 1983 and 2010, the percentage of households with less than $10,000 in assets (using constant 1995 dollars) rose from 29.7 percent to 37.1 percent. The “less than $10,000″ figure includes the numerous households that have no assets at all, or “negative assets,” which is otherwise known as “debt.”

This CBS article from Washington, D.C. was posted on their Internet site early Friday afternoon...and it's a story that I found buried in yesterday's edition of the King Report. The link is here.

U.S. regulators probing potential fraud by China-based companies increased pressure on their auditors by formally accusing affiliates of Big Four firms of withholding documents from investigators.

Deloitte Touche Tohmatsu CPA Ltd., Ernst & Young Hua Ming LLP, KPMG Huazhen and PricewaterhouseCoopers Zhong Tian CPAs Limited have refused to cooperate with accounting fraud investigations into nine companies whose securities are publicly traded in the U.S., the Securities and Exchange Commission said in an administrative order yesterday. BDO China Dahua Co. Ltd. was also named by the SEC in the action.

China-based companies listed on U.S. exchanges have faced increased scrutiny over the past two years after regulators became concerned that some firms may not be providing accurate financial statements to investors. Investigators have struggled to obtain documents central to the probes because auditors, citing China’s laws, have declined to cooperate.

This Bloomberg story was posted on their website early yesterday evening...and I thank Elliot Simon once again for sending it our way. The link is here.

Shin Cheol-soo no longer sees his future in the United States.

The South Korean businessman supplied components to American automakers for a decade. But this year, he uprooted his family from Detroit and moved home to focus on selling to the new economic superpower: China.

In just five years, China has surpassed the United States as a trading partner for much of the world, including U.S. allies such as South Korea and Australia, according to an Associated Press analysis of trade data. As recently as 2006, the U.S. was the larger trading partner for 127 countries, versus just 70 for China. By last year the two had clearly traded places: 124 countries for China, 76 for the U.S.

This AP article, filed from Seoul, was posted on the finance.yahoo.com Internet site Sunday evening Eastern...and I thank Matthew Nel for sending it. The link is here.

Retail inflation for industrial workers climbed to 9.6 per cent in October on account higher prices of wheat and rice, from 9.39 per cent in the same month last year.

The retail inflation, measured by the Consumer Price Index for Industrial Workers, stood at 9.14 per cent in September, as per the official data released on Friday.

The largest upward pressure on inflation came from items such as rice, wheat, wheat atta, milk, tea (readymade) and onion.

This story was filed from New Delhi just after midnight on Saturday morning India Standard Time...and this is the second news item I found in yesterday's edition of the King Report. It's posted on the businesstoday.intoday.in Internet site...and the link is here.

A key judicial body has refused to oversee a December 15 referendum on the new draft constitution as judges effectively went on strike Sunday, suspending work indefinitely, amid mounting tension in the country.

Protests by Islamists allied to President Mohamed Mursi forced Egypt’s highest court to adjourn its work indefinitely on Sunday, intensifying a conflict between some of the country’s top judges and the head of state.

The Supreme Constitutional Court said it would not convene until its judges could operate without “psychological and material pressure”, saying protesters had stopped the judges from reaching the building.

This New Wires story showed up on the france24.com Internet site yesterday...and it's courtesy of Roy Stephens. The link is here.

The downgrading of its debt by Moody's led to a further downgrade of the eurozone's two bailout funds. France is becoming part of the euro's problem, rather than part of a solution.

It has been a bad week for France. The downgrading of its debt by Moody's ratings agency led to a further downgrade Friday of the eurozone's two bailout funds. As the second-largest contributor to the rescue funds, this means France is becoming part of the euro's problem, rather than part of a solution.

Then the government of President Francois Hollande found itself in an unwinnable spat with ArcelorMittal, the giant steelmaker which is losing money at the rate of $200 million a year.

Over-capacity in Europe is the main cause of the losses but the French government last week made some blustering threats of nationalization rather than permit ArcelorMittal to lay off French workers. An attempt to calm the row led French labor unions to accuse their government of betrayal, which French business leaders interpreted the threats of nationalization as yet further proof that the governments doesn't understand the realities of the global economy.

This UPI story was filed from Paris just minutes after midnight on Monday...and I thank Roy Stephens for his second offering in a row. The link is here.

Justine Forriez wakes up early to go onto the computer to look for a job. She calls university friends and contacts; she goes to the unemployment office every week, though mostly for the companionship, and has taken a course in job hunting. She has met with 10 different recruiters since May and sent out 200 résumés.

Ms. Forriez is not poor or disadvantaged, and she holds a master’s degree in health administration. But after a two-year apprenticeship, she is living on state aid and working at off-the-books jobs like baby-sitting and tending bar. She cares for a dog for $6.50 a day. She paints watercolors in her spare time to keep herself from going crazy.

Ms. Forriez, 23, is part of a growing problem in France and other low-growth countries of Europe — the young and educated unemployed, who go from one internship to another, one short-term contract to another, but who cannot find a permanent job that gets them on the path to the taxpaying, property-owning French ideal that seemed the norm for decades.

This is a disease of the entire Western world...as the jobs disappear and new ones never materialize to replace them. I can't see anything on the horizon that will cause this situation to change in my lifetime. This story showed up on The New York Times website on Sunday...and I thank Phil Barlett for sharing it with us. The link is here.

The so-called "Lagarde List" is causing trouble in Greece again, with new reports linking it to the very top levels of political society.

On Sunday two Greek weekly magazines, To Vima and Proto Thema, reported that Margarita Papandreou, mother of former Greek Prime Minister George Papandreou, had been linked to a mysterious Swiss bank account by members of the Financial Crimes Squad (SDOE).

The largest figure on the Lagarde List was a 550 million euro deposit ($714 million) under the name Maria Panteli, but according to reports in To Vima, Nikolaos Lekkas, the Manager-Comptroller of SDOE, said that, “behind the biggest deposit on the list is Mrs. Margarita Papandreou.”

This news item showed up on the businessinsider.com Internet site yesterday afternoon...and it's another contribution from Roy Stephens. The link is here.

Google is increasingly throwing around its power to improve its bottom line. The latest incident is a draft law in Germany that would force the company to share some revenues with newspaper publishers. Meddling in politics is certainly not illegal, but it could be risky.

The timing of the debate in the Reichstag was curious, but it fits perfectly with the story of this contentious draft legislation. On Thursday night last week, at around 11 p.m., the German parliament, the Bundestag, debated the Leistungsschutzrecht für Presseverleger, or ancillary copyright law for newspaper and magazine publishers. Only around 40 primarily younger members of parliament sat in the front rows, but the Twitter community was wide awake. At C-base, a prominent Berlin meeting place for computer buffs, activists even organized a public viewing.

At its core, the proposal concerns the headlines and short teaser texts indexed by search engines -- the so-called snippets.

The bill aims to protect copyrights that belong to newspapers and their publishers. When search engines display those snippets "for commercial purposes," the proposed law would allow the publishing houses to charge a fee. Bloggers, clubs, associations and even company press reviews would not be affected by the current draft version of the law.

This interesting read showed up on the German website spiegel.de yesterday...and it's another offering from Roy Stephens. The link is here.

1. Robert Fitzwilson: "Confiscation, Price Suppression & the True Gold & Silver Price". 2. John Embry: "Here is What Will Break the Massive Silver Short Positions". 3. Michael Pento: "Lucky Horseshoes & Empty Promises Won't Halt This Decline". The first audio interview is with Gerald Celente...and the second audio interview is with Eric Sprott. The Sprott interview is a must listen.

Great resource booms usually end abruptly, catching almost everybody by surprise.

The rhythm is as old as mankind. It is poignantly described Nobel laureate Halldór Laxness through the life of an Icelandic sheep farmer a hundred years ago in Independent People, harrowing because his ruin is so utterly human.

Studies by the World Bank covering two centuries of data sketch a pattern of 10-year supercycles, followed by a slide for the next 20 years or so as excess investment leads to a flood of supply. The long bear market can be cruel for those hanging onto to resource stocks, convinced that the rebound must be nigh.

Mark Ryder, Australian investment chief for UBS, says we are reaching just such an inflexion point as China’s manic construction phase gives way to more sedate growth, and Europe, America, and Japan take their fiscal medicine. "The commodity super cycle’s end is at hand. The scene is set for a momentum shift," he said.

This longish AE-S commentary is a must read...and it was posted on the telegraph.co.uk Internet site on Sunday evening. It's also Roy Stephens' final offering in today's column...and the link is here.

Financial giant Barclays is considering an end to food speculation, a controversial practice linked to sudden, dangerous spikes in global food prices.

Rich Ricci, head of Barclays' corporate and investment banking arm, told British lawmakers on 28 November that public disapproval of food speculation may push his bank, the world's third-largest, to stop altogether.

"Market speculation is playing a role in global hunger. Now that science has made this clear, speculation should be unacceptable," said Yaneer Bar-Yam, president of the New England Complex Systems Institute.

Speculation -- investors betting on food prices -- has existed for decades, but until the late 1990s was restricted to farmers and food producers, who have direct market interests and used bets to offset their risks.

And that's precisely the situation that should exist in all commodities...the precious metals included. This story showed up on the wired.co.uk Internet site yesterday...and is a must read as well. I thank Elliot Simon for his last story in today's column...and the link is here.

GATA figures heavily in the new edition of "The Keiser Report" on the Russia Today television network, which deals with the latest country to start worrying about the security of its gold reserves vaulted abroad, Austria. The pertinent part of the video is contained in the first six minutes...and the link is here. I consider it an absolute must watch...although I should point out that Max goes on a bit of a rant in a few spots... ;-)

Story Number Two:

The theme of official gold that is likely missing is elaborated upon by GoldMoney's James Turk in an audio interview with GoldMoney's Andy Duncan. It was posted over at the goldmoney.com Internet site on Friday...and it runs for 19 minutes. It's certainly worth the listen if you have the time...and the link is here.

Armed men dressed as police boarded a fishing boat Friday in Curaçao and stole about 70 gold bars worth an estimated $11.5 million (£7.2 million), police in the southern Caribbean island said.

The boat's captain was struck in the head in the early-morning assault before the thieves made off with the gold in three cars, police spokesman Reggie Huggins said. Authorities believe there were six men involved in the heist. No suspects are in custody.

The captain and three crew members were from the South American country of Guyana, he said.

Huggins declined to say who owned the boat or to provide any details about the possible source of the gold.

A very interesting story...and I wonder if we've heard the last of this? It was posted on The Telegraph's website just after midnight GMT on Saturday morning...and I thank Scott Pluschau for digging it up on our behalf. The link is here.

A number of market analysts and gold-industry insiders are warning about a possible shortage of gold supply. Barrick CEO Jamie Sokalsky recently stated that since gold production is inelastic (i.e., insensitive to price changes) there will be a very limited increase in supply from gold producers, even during sharp increases in the gold price. Rick Rule, a billionaire and avid gold investor, pointed out that while we're seeing spectacular demand, a number of issues will make supply very tight in the future, especially among retailers.

The issues facing gold miners are well known: depletion of existing mines, lower grades, and fewer new discoveries - especially big and rich ones. Further, miners face increased calls for nationalization, demands from workers for higher pay or from local communities for better infrastructure, and - of course - environmental concerns. Many mining company representatives say it's getting harder to not only find large deposits but to get those deposits into production. Some estimate it now takes twice as long as to go from discovery to production vs. a decade ago.

These warnings aren't always taken seriously, especially by those who see that mine production has been growing. At first glance, they're correct - but only if you look at the short-term picture. The following chart shows that global mine production has indeed been rising since 2008. From 2009 through 2011, output rose an average of 3.9% per year. However, we know that a good chunk of this increase is due to China, and upon excluding its output, you can see how it alters the global picture.

This essay was written by Casey Metals Team Researcher Alena Mikhan...and it was embedded in yesterday's edition of the Casey Daily Dispatch. The link is here.

What changed in the last 30 days? Did the world just wake up to the idea that the only way out of this quagmire is a twisted currency war that appears to have re-ignited thanks to Abe's efforts? Something appears to have snapped in the American psyche as the last 30 days have seen the largest physical gold sales on record. Between the search volume for 'bulk ammo' and this, we fear something is afoot and while Congress fiddles as our economy burns, Bernanke going 'back to work' is perhaps what the physical ''hoarders' are thinking... or maybe they understand, as we noted here, that just as Kyle Bass has confirmed previously, Paper Gold is just like allocated, unambiguously owned physical bullion... until it’s not.

You've just read the one and only paragraph in this very short Zero Hedge story from Saturday. The chart is definitely worth the trip...and I thank 'David in California' for sharing it with us. The link is here.

Two former governors of the Reserve Bank of India warned Saturday against taking tough measures to rein in gold imports -- a major reason for the persistently high current account deficit.

The chairman of the Prime Minister's Economic Advisory Council, C. Rangarajan, said steps like banning gold imports would only push up its smuggling.

Rangarajan, who served as RBI governor, said there are already indications that illegal shipments of the precious metal have gone up in the last three months after the hike in the excise duty.

This story, which I plucked from a GATA release, was filed from Mumbai just after midnight India Standard Time on Sunday morning...and was posted on the indianexpress.com Internet site. It's a must read...and the link is here.

The holiday season means those ever-present Salvation Army red kettles are out in force. That also means the tradition of anonymously slipping gold coins into the kettle has started up again.

At a Sam's Club in southwest Houston, a 1-ounce gold coin that was dropped into a kettle is worth about $2,000. Talk about a pot of gold. A note attached to the coin read, "A child is born, Jesus! Merry Christmas!"

The secret Santas have a tradition that goes back five years in Houston. In Bettendorf, Iowa, where a quarter-ounce gold coin worth $500 was left in a kettle, the annual Yuletide donation has been going strong for 15 years.

This story from The Lookout was picked up by the news.yahoo.com Internet site on Friday sometime...and it's a heart-warming read. I thank Washington state reader S.A. for today's last story...and the link is here.