The "fiscal cliff" impasse is raising the odds that Congress will fail to meet a year-end deadline to avert steep tax hikes and budget cuts that could push the nation into another recession.

With talks between President Barack Obama and House of Representatives Speaker John Boehner at an apparent standstill, analysts said on Friday that it was increasingly likely that Washington won't be able to reach a deal before January 1.

"It's time to contemplate a plunge off the cliff," Potomac Research Group analyst Greg Valliere wrote in a research note.

This Reuters story was posted on The New York Times website during the East Coast lunch hour yesterday...and I thank Phil Barlett for today's first story. The link is here.

In a little under three minutes, CNBC's Rick Santelli clarifies (in a much-needed manner) that we do not live in a monarchy or dictatorship (hoping for benevolence) - no matter how many Democratic senators and congressmen believe the President was given a mandate leaving him "holding all the cards" - we live in a republic (where the sovereignty rests with all individuals) and removing 'debt ceiling' checks and balances (for example) is a ride down a slippery slope. The chagrined Chicagoan then goes on to discuss the fact that the Fed, having unloaded another package of potentially infinite unsterilized money-printing, was actively discussing its exit strategy. Put simply, Santelli notes, "mark my words" the market will decide that exit - and the Fed had better be ready when it comes.

This 2:43 minute CNBC video clip was embedded in a Zero Hedge piece on Thursday...and it's a must watch as Rick pretty much exposes QE4 as the debacle it already is...and will become in the future. I thank Casey Research's own Bud Conrad for sending it our way...and the link is here.

Investors in Treasury securities will have to get used to yields lower than the U.S. inflation rate, according to Andrew Garthwaite, a global strategist at Credit Suisse Group AG.

As the chart of the day shows, the so-called real yield on 10-year notes is less than zero for the second consecutive year. That hasn’t occurred since the 1970s, according to data compiled by Yale University Professor Robert J. Shiller. The real yield is calculated by subtracting the 12-month percentage change in consumer prices from the notes’ yield.

“Negative real rates will remain in place for at least a decade -- and maybe a generation,” Garthwaite, who is based in London, wrote two days ago in a report.

Give this guy a cigar...as he's nailed it! This very short Bloomberg story [with embedded chart] was posted on their Internet site late Thursday evening...and is well worth two minutes of your time. I thank Manitoba reader Ulrike Marx for sharing it with us...and the link is here.

"You can check out any time you like...but you can never leave"...Hotel California...The Eagles

During his Wednesday press conference, chairman Bernanke downplayed the significance of the change from “twist” to outright balance sheet inflation. Wall Street analysts have generally downplayed this as well. Truth be told, no one has a clear view of the consequences of taking the Fed’s balance sheet from about $3.0 TN to perhaps $4.0 TN over the coming year or so. It’s worth noting that in previous periods of rapid balance sheet expansion, the Fed was essentially accommodating de-leveraging by players (hedge funds, banks, proprietary trading desks, REITs, etc.) caught on the wrong side of a market crisis. Does the Fed’s next Trillions worth of liquidity injections spur more speculation in bonds, stocks and global risk assets? Or, instead, will our central bank again provide liquidity for leveraged players looking to sell (many increased holdings with the intention of eventually offloading to the Fed)? It’s impossible to know today the ramifications of the Fed’s latest tack into uncharted policy territory. It will stoke some inflationary consequence no doubt, although the impact on myriad Credit Bubbles around the globe is anything but certain.

Clearer is that the Fed has again crossed an important line. There has been previous talk of Fed “exit strategies.” I’ll side with the Dallas Fed’s Richard Fisher, who Friday warned of “Hotel California” risk. There has also been this notion that the U.S. economy is progressing through a (“beautiful”) deleveraging process. Yet there should be little doubt that the Fed has now resorted to blatantly orchestrating a further leveraging of the U.S. economy. It will now become only that much more difficult (think impossible) for the Federal Reserve to extricate itself from this Inflationary Process.

Doug Noland at the top of his game. His Friday commentaries, when he writes them, are must reads for me...as is this one. It was posted on the prudentbear.com Internet site yesterday evening...and the link is here.

The Obama administration overruled recommendations from within the US Department of Homeland Security and implemented new guidelines earlier this year that allow the government to gather and analyze intelligence on every single US citizen.

Since the spring, a little-know intelligence agency outside of Washington, DC has been able to circumvent the Fourth Amendment to the US Constitution and conduct dragnet surveillance of the entire country, combing massive datasets using advanced algorithms to search and seize personal info on anyone this wish, reports the Wall Street Journal this week.

There’s no safeguard that says only Americans with criminal records are the ones included, and it’s not just suspected terrorists that are considered in the searches either. The National Counterterrorism Center (NCTC) has been provided with entire government databases and given nearly endless access to intelligence on everyone in the country, regardless of whether or not they’ve done anything that would have made them a person of interest. As long as data is “reasonably believed” to contain “terrorism information,” the agency can do as they wish.

What’s more is the NCTC can retain that information for years, reviewing it whenever they’d like to take a look.

This very disturbing essay was posted on the Russia Today website on Thursday evening...and it's Roy Stephens first contribution to today's column. If you live in the United States of Amerika...this might be worth your time. The link is here.

The failure of Europe and the United States to meet next month's deadline on tougher bank capital rules won't derail the global accord, regulators said after they themselves were unable to agree changes to one of the new rules.

The Basel Committee on Banking Supervision concluded a two-day meeting on Friday saying 11 countries were ready to start phasing in its Basel III bank capital and liquidity rules.

The committee is made up of nearly 30 countries but major financial centres like the European Union and United States are delaying the start of the world's main regulatory response to the 2007-09 financial crisis.

Here's another Reuters story that showed up on The New York Times website during the East Coast noon hour yesterday...and it's Phil Barlett's second offering in today's column. The link is here.

European leaders agreed on Friday to press on with further steps to tackle their debt crisis but German Chancellor Angela Merkel threw out a proposal to boost risk-sharing with a fund to help euro zone states in trouble.

Germany's rejection of an idea strongly backed by France showed the potential for more tensions over crisis management, a day after the bloc clinched a deal on euro zone-wide banking supervision and approved long-delayed aid to Greece.

After more than eight hours of late-night talks, leaders promised to push ahead with setting up a mechanism to wind down problem banks and launched talks on how to make countries stick to economic targets with the help of a common fund.

But at an early morning news conference, Merkel made clear that proposals for a substantial "shock absorber" fund and common unemployment insurance were off the table, setting out a far more restrained carrot-and-stick vision.

This Reuters article was filed from Brussels early yesterday morning Eastern time...and I thank Ulrike Marx for her second story in today's column. The link is here.

By the time the 27 heads of state and government arrived in Brussels on Thursday evening, such ambition had been forgotten. It could be pre-Christmas exhaustion that got the better of the EU leaders, but enthusiasm for reform was nowhere to be found. One after another, they insisted that they would merely hold nonbinding talks about the deepening of the currency union. "A relaxed round on the future of the EU," is how Finnish Prime Minister Jyrki Katainen called it.

After nine hours of talks, the summit agreed on a five-page paper that, while called a "roadmap," is little more than a vague outline for the next six months. Indeed, the most concrete date mentioned is June 2013 -- by then, European Council President Herman Van Rompuy is to have worked out a solid timeline for the establishment of closer fiscal policy coordination among euro-zone member states. He is also to examine how bilateral reform treaties between the European Commission and individual common currency members could look in order to make reforms recommended by Brussels more binding. The creation of a fund -- referred to vaguely as "solidarity mechanisms" at the insistence of Germany -- that could be used to reward those countries serious about reform is also to be examined.

This spiegel.de article is very similar to the previous Reuters story, but the way it's written makes you wonder whether you're reading about the same event or not. This story is also courtesy of Ulrike Marx...and the link is here.

As in other struggling European economies, the youth of France face dire prospects. Some 26 percent are unemployed, and almost as many live in poverty. Though the problem has been there for decades, ambitious political programs have improved little.

Beyond France's ailing economy, there is another disastrous statistic at play. Some 23 percent of the country's 18- to 24-year-olds live in poverty, according to a study by the National Institute for Youth and Community Education (INJEP). These are mainly high school or university dropouts who have little to no access to health care and limited chances of improving their situations.

This short read was posted on the German website spiegel.de yesterday...and I thank Roy Stephens for providing another story for today's column. The link is here.

Egypt goes to the polls on Saturday in the first round of a referendum that will shape the future of the regime there and perhaps even the course of the Arab Spring in general.

Amid continuing clashes and extraordinarily high tensions - including allegations of fraud in early voting of expatriates in embassies across the world - Egyptians are set to approve or reject a controversial new constitution that draws heavily on Islamic law. The instability could have wide-ranging consequences, and even scenarios such as an army coup or an Islamist dictatorship are not out of question.

Three weeks after President Mohammed Morsi, the democratically elected former leader of the Muslim Brotherhood, assumed powers that would make most Middle Eastern dictators blush, Egypt is aflame. Rival demonstrations of his supporters and opponents are taking place daily, the army has been deployed on the streets, and several people have been killed while untold numbers wounded in the violence.

This essay was posted on the Asia Times website early Saturday morning in Hong Kong...and it's also courtesy of Roy Stephens. The link is here.

The European Union (EU), this Monday in Oslo, received the Nobel Peace Prize for advancing peace, reconciliation, democracy and human rights.

How exciting. Look at the cast selected to receive the award; the spectacularly useless Herman van Rompuy (president of the European Council); the spectacularly mediocre Jose Manuel Barroso (president of the European Commission); and non-entity Martin Schulz, president of the European Parliament. The Rolling Stones may be geriatric, but at least they still know how to work a crowd.

Barroso must have been loaded on Douro wine; he said the EU is "a powerful inspiration for many around the world". Well, the love affair of the Chinese masses with Audi and Prada is not exactly inspired by the EU. He also said the EU is about "the free consent of states to share sovereignty"; well, the Brits are so thrilled with it that an overwhelming percentage of the population wants to leave.

But Barroso may have been on to something when he defended the euro: "We will stand by it."

This longish essay by Pepe Escobar over at the Asia Times was posted on their website earlier this week...and is a must read for all students of "The New Great Game"...and I thank Roy once again for bringing it to our attention. The link is here.

The country’s financial regulator criticised one of the world’s two largest rating agencies for errors in setting and publishing ratings on complex financial derivatives.

“Significant problems were identified with the company’s business operations from the perspective of the public interest and investor protection,” the Financial Services Agency said on Friday.

Credit rating agencies were lambasted for their role in deepening the financial crisis, when mortgage-backed debt they had awarded top ratings to rapidly lost value as US house prices fell. In a ruling in Australia last month, a judge found S&P liable for assigning misleading ratings to debt acquired by local governments in the run-up to the financial collapse.

This story was posted on the telegraph.co.uk Internet site yesterday afternoon GMT...and it is, once again, courtesy of Roy Stephens. The link is here.

Chinese and Japanese aircraft were involved in a standoff in the skies above the Diaoyu Islands yesterday.

The situation remains under control, but Tokyo seems intent on upping the ante, observers said.

A Chinese marine surveillance plane, B-3837, was sent to join vessels patrolling the territorial waters around the islands, which belong to China, yesterday morning, said a statement issued by the State Oceanic Administration on its website.

The plane arrived in the area at about 10 a.m. and conducted joint patrols with a fleet of four surveillance ships.

The fleet ordered the Japanese ships that had entered China's territorial waters to leave the area immediately, the statement said.

Well, nobody want to blink here, as too much "honour" is involved. This is another must read for serious students of the "New Great Game". This is a China Daily story that was picked up by the asianews.net Internet site on Friday...and I thank Ulrike Marx for her final contribution to today's column. The link is here.

For the last two weeks some of the planet’s most oppressive regimes have faced off against some of the most powerful Internet advocates in an effort to rewrite a multilateral communications treaty that, if successful, could have changed the nature of the Internet and altered the way it is governed.

On Thursday night that effort failed, as a US-led block of dissenting countries refused to sign the proposed updates, handing the United Nation’s International Telecommunication Union a humbling defeat.

The United States, which framed its dissent as defending “the open Internet,” was joined by more than 80 other countries, including Australia, Canada, Chile, Costa Rica, the Czech Republic, Denmark, Egypt, Finland, Greece, Italy, Japan, Kenya, the Netherlands, New Zealand, Poland, Portugal, Qatar, Sweden and the United Kingdom.

I found this Forbes story from yesterday morning very difficult to load, so I hope you do better. It's Roy Stephens' last contribution to today's column...and it's worth skimming. The link is here.

When people read about a long-term forecast of world oil supply--say, out to 2030--they often believe that the forecasters are merely incorporating our knowledge of existing fields and figuring out how much oil can be extracted from them over the forecast period. Nothing could be further from the truth. Much of the forecast supply has not yet been discovered or has no demonstrated technology which can extract or produce it economically. In other words, such forecasts are merely guesses based on the slimmest of evidence.

Perhaps the best ever illustration of this comes from a 2009 presentation made by Glen Sweetnam, a U.S. Energy Information Administration (EIA) official. The EIA is the statistical arm of the U.S. Department of Energy. The following chart from that presentation will upend any notion that we know exactly where all the oil we need to meet expected demand will come from.

The chart shows that by 2030 world output of oil and other liquid fuels from current fields is expected to drop to 43 million barrels per day (mbpd), some 62 million barrels below projected demand of 105 mbpd. (Though prepared in 2009, the chart takes into account known projects expected to be producing by 2012.) This drop is consistent with the observed decline in the worldwide rate of production from existing fields of about 4 percent per year. Certainly, there will be more projects identified in the 18 years ahead. And, many people will say that we already have a large new resource of tight oil (often mistakenly referred to as shale oil) which can be extracted through hydraulic fracturing or fracking. But even if the optimists are correct--and there can be no guarantee that they will be--this source of oil will only add 3 to 4 million barrels of daily production. What Sweetnam's chart tells us is that we must find and bring into production the equivalent of five new Saudi Arabias between now and 2030 in order to meet expected demand even if the volume of tight oil reaches its maximum projected output.

If I had to pick on absolute must read in today's column...this would be the story. It was posted on the Resource Insights on Sunday...and I thank Australian reader Wesley Legrand for sending it our way. The link is here.

The first blog is with Egon von Greyerz...and it's headlined "Two Important Charts for Gold & Silver Investors". The last blog features Nigel Farage...and it's about "The Queen's Tour of Britain's Gold Vault".

The platinum market is forecast to move into a deficit of 400,000 oz in 2012 from a surplus in 2011 according to the interim 2012 Johnson Matthey platinum report released today.

Severe disruption to platinum group metal mining following a series of wildcat strikes and violence on mines that started in August is expected to reduce supplies from South Africa by over 600,000 ounces says the research house.

South Africa constituted more than 70% of global supply of PGMs and the fall in production in the African nation will lead to a 10% decline in output to 5.84 million ounces this year.

This very short story showed up on the mining.com Internet site yesterday...and my thanks go out to Marshall Angeles for digging it up for us. The link is here.

The Revolutionary Armed Forces of Colombia (FARC) and a new generation of drug gangs (known locally as “Bacrims”) are increasingly turning to gold mining to finance their terrorist acts, reveals a report released Thursday by political risk firm Exclusive Analysis.

“FARC and drug gang involvement in gold mining increases extortion and property damage risks, particularly in Antioquia and Putumayo,” said Carlos Caicedo, head of Latin America forecasting.

The expert says that funds coming from mining operations are now the main income source for the revolutionary groups. In some provinces, he added, it has overtaken drug trafficking, especially in areas controlled by the FARC.

This is another story from the mining.com Internet site. This one was posted on Thursday...and I thank Ontario reader Richard O'Mara for sending it along. The link is here.

Standing on a precipice 5,200 metres above sea level, the air is thin and the vistas are long.

Just breathing is difficult at this altitude, with a howling wind disturbing the utter, majestic silence of the snow-capped Andes mountains, threatening to blow you over the edge.

You’d think you were alone at the top of the world.

But what happens up here in Pascua-Lama, where Canadian mining giant Barrick Gold is developing the first open-pit gold mine to straddle two countries, will have a huge impact on the people living in the valleys below on both sides of the border — for better or for worse.

This very long essay can be found on the National Post website...and it was posted there yesterday evening. The photo of the project alone is worth the trip. I thank Carl Lindfors for bringing it to our attention...and it's a must read in my opinion. The link is here.

A substitute teacher from California was found to be the only heir to a fortune of gold coins discovered by a cleaning crew in the home of a reclusive cousin who quietly stashed away a treasure of more than $7-million before he died this year.

A court hearing in Carson City is scheduled Tuesday, when a judge is expected to certify first cousin Arlene Magdon as the lone heir to the treasure valued at $7.4 million found in the home of Walter Samaszko Jr., Carson City Clerk-Recorder Alan Glover told the Nevada Appeal.

Samaszko, 69, lived a quiet life in Nevada’s capital city since the late 1960s and no one apparently knew of his wealth. Records show he withdrew just $500 a month from his stock accounts to pay modest bills, Glover said, who was handling Samaszko’s affairs as public administrator.

This short AP story showed up on the National Post website yesterday...and I thank Richard O'Mara for his second story in today's column. The link is here.