The “fiscal cliff” is another hoax designed to shift the attention of policymakers, the media, and the attentive public, if any, from huge problems to small ones.

The fiscal cliff is automatic spending cuts and tax increases in order to reduce the deficit by an insignificant amount over ten years if Congress takes no action itself to cut spending and to raise taxes. In other words, the “fiscal cliff” is going to happen either way.

The problem from the standpoint of conventional economics with the fiscal cliff is that it amounts to a double-barrel dose of austerity delivered to a faltering and recessionary economy. Ever since John Maynard Keynes, most economists have understood that austerity is not the answer to recession or depression.

Regardless, the fiscal cliff is about small numbers compared to the Derivatives Tsunami or to bond market and dollar market bubbles.

This most excellent commentary by Dr. Paul Craig Roberts falls into the must read category...and I thank Phil Barlett for providing today's first story. It was posted on Paul's Internet site on Monday...and the link is here.

The Federal Reserve's bond-buying programs alone cannot bring down too-high unemployment, because there is too much uncertainty holding businesses back from hiring, a top Fed official said on Tuesday.

"Quantitative easing is a necessary but insufficient tool to spark job creation," Dallas Fed President Richard Fisher said at the Gainesville Area Chamber of Commerce. "Employers will not deploy the cheap and abundant capital on hand toward job creation while there is so much uncertainty surrounding final demand for the goods and services they sell."

Businesses are also holding back because of uncertainty over the so-called fiscal cliff, he said, because they do not know what their taxes will be or how government spending patterns will affect them.

This story was posted on the moneynews.com Internet site on Tuesday afternoon...and I thank West Virginia reader Elliot Simon for bringing it to our attention. The link is here.

Fitch warned that the U.S. is more likely to lose its top-notch "AAA" rating if lawmakers cannot agree on how to cut the deficit and avoid the broad government spending cuts and tax increases that go into effect next year if no deal is reached.

But the credit ratings agency said in a report Wednesday that if lawmakers can agree on a deficit-cutting plan, the U.S. would likely keep its "AAA" debt rating. Fitch would then raise its outlook to stable from negative.

"Resolution of the fiscal cliff and an increase in the debt ceiling are pressing issues that the President and Congress must address if the U.S. is to avoid a fiscal and economic crisis," the report said.

This is another story from the moneynews.com Internet site...this one from yesterday...and it's also courtesy of Elliot Simon. The link is here.

The U.S. State Department said on Wednesday its security chief had resigned from his post and three other officials had been relieved of their duties following a scathing official inquiry into the September 11 attack on the U.S. mission in Benghazi.

Eric Boswell has resigned effective immediately as assistant secretary of state for diplomatic security, State Department spokeswoman Victoria Nuland said in a terse statement. A second official, speaking on condition of anonymity, said Boswell had not left the department entirely and remained a career official.

Nuland said that Boswell, and the three other officials, had all been put on administrative leave "pending further action."

An official panel that investigated the incident concluded that the Benghazi mission was completely unprepared to deal with the attack, which killed U.S. Ambassador Christopher Stevens and three other Americans.

I was kind of hoping that Hillary Clinton would tender her resignation as well, but she obviously got others to fall on their swords on her behalf. Too bad. This Reuters piece from late yesterday evening Eastern time is courtesy of Roy Stephens...and the link is here.

Swiss bank UBS has been fined $1.5 billion (£921.1 million) by British, Swiss and U.S. regulators to settle charges of manipulating global benchmark interest rates.

UBS said on Wednesday it will pay $1.2 billion to the U.S. Department of Justice and the Commodity Futures Trading Commission, 160 million pounds ($260 million) to Britain's Financial Services Authority (FSA) and 59 million Swiss francs ($65 million) to Swiss regulator Finma.

A panel of banks submit daily estimates of the interest rates at which they think they could borrow money on the open market.

The FSA said UBS had routinely sought to manipulate submissions to calculate benchmark rates, known as the London Interbank Offered Rate (Libor) and the Euro Interbank Offered Rate and (Euribor), to make its trading positions more profitable and give the appearance the bank was on a stronger financial footing as the financial crisis began unfolding in 2007.

This Reuters story was filed from London early this morning GMT...and it's certainly worth reading. I thank Ulrike Marx for bringing it to our attention. The link is here.

With their romantic snow-covered pine trees, narrow handwriting and envelopes stamped with the Nazi imperial eagle, the letters arriving at some German households this holiday season are certainly a novelty.

It has taken 71 years for them to reach their destinations, and the addressees of the 86 letters have long since died. They were the friends and relatives of German soldiers stationed on the British island of Jersey in 1941. A batch of letters from the occupying force was secretly held for decades after they were stolen in an act of defiance against the occupiers. They turned up several years ago when an anonymous man donated them to the Jersey Archive, where they were translated and documented. Now, they have finally been sent.

On Tuesday, Mühlheim am Main resident Engelbert Josef Bergmann received the first of the extremely late Christmas greetings, a card written by his grandfather. Nine others were also scheduled to be hand-delivered to the descendants of other senders.

This story showed up on the spiegel.de Internet site yesterday...and its another offering from Roy Stephens. The link is here.

Today Russian lawmakers voted in a new law that banned the adoption of Russian children by American citizens, the New York Times. The broad scope of the law, however, is bringing with wider worries that the "Cold War" is alive and well.

The bill, named after Dima Yakovlev, one of 19 Russian children adopted in the US who died in the last few decades, passed the State Duma with 400 votes for and just 4 against. It will now go before Russian President Vladimir Putin.

The incredible scope of the law, however, suggests it may be not just about adoption scandals, and a retaliatory act against the US. Fred Weir of the Christian Science Monitor notes that in addition to adoption rules, the bill would also "order the closure of any politically-active nongovernmental organization with US funding, and block US passport-holders from working in any nonprofit group that authorities deem connected with politics."

This is a must read for all students of the "New Great Game". It appeared on the businessinsider.com Internet site yesterday afternoon Eastern time...and not surprisingly, it's another offering courtesy of Roy Stephens. The link is here.

Silvio Berlusconi is back in top form. He's heaping flattery on the Italian people and telling political fairy tales just as the former prime minister did in the best of times. It may all seem a bit crude, but it is part of a savvy strategy that could deliver him success and create problems for all of Europe.

Silvio Berlusconi is a man driven by fear, but also one whose political war coffers are flush with cash. He's in control of three TV stations and has hundreds of experts at shaping public opinion at his disposal. That's the starting point for Berlusconi's election campaign. Already, his campaign machine is running at full steam. And although this campaign can at times come across as imbecilic or insane, is actually the product of savvy media professionals. Pollsters measure the mood of the people every day and track what is and isn't working for the Berlusconi camp.

These days, the news they have to share is positive. Berlusconi's People of Freedom Party (PdL) has gained three percentage points in the polls in recent days. Of course, so far only 17 percent of Italians say they are actually prepared to elect the former prime minister again. But that number could grow once the Berlusconi Show gets into full swing.

This spiegel.de story from yesterday is thanks to Manitoba reader Ulrike Marx. It's here second offering in today's column...and the link is here.

German daycare centers are suffering a woeful shortage of teachers. A recruitment agency is hiring Greek kindergarten teachers who are desperate to escape the debt crisis. With as many as 14,000 positions unfilled in Germany, these workers are being welcomed with open arms.

Athanossios Tsokos and his brother run the Axia recruitment agency, which has offices in Munich and Athens and is about to open one in Thessaloniki. He used to find jobs in Germany mainly for doctors and engineers. These days, though, his focus is on teachers for kindergartens, as preschools are called here.

Western Germany's preschools lack some 14,000 teachers. Greece lacks some €345 billion ($457 billion). Indeed, Greece's debt crisis and Germany's kindergarten crisis have merged into a wonderful business opportunity for Tsokos.

Another offering from Roy...and another story from the spiegel.de website yesterday. The link is here.

A little-notice provision in U.S. sanctions against Iran beginning in February is likely to trap payments abroad for its oil exports running into billions of dollars, sapping Tehran of revenue needed to fund the government.

A provision of the law U.S. President Barack Obama signed last summer, which goes into effect on Feb. 6, states that funds being used to pay for oil must remain in a bank account in the purchasing country and can be used only for non-sanctioned, bilateral trade between that country and Iran.

Any bank that repatriates the money or transfers it to a third country faces a sanction risk. This could halt most of the flow of petrodollars to Iran, given that the value of its oil exports is far higher than what it imports from its biggest customers - China, South Korea, India and Japan.

This story was posted in The Economic Times of India Wednesday evening India Standard Time...and it's Ulrike Marx's third story in today's column. It's well worth your time...and the link is here.

The Far East has shaken off the deep downturn earlier this year and looks poised to drive a fresh cycle of global growth in 2013. “China appears to have bottomed out,” said the Bank in its regional report.

Asia’s powerhouse economy will rebound with 8.4pc growth next year as credit stimulus and an infrastructure blitz by local governments gain traction, with knock-on effects through East Asia. The region as a whole will grow by 7.9pc, with Myanmar at last starting to catch up as undertakes “formidable reforms”.

The new risk is a return to overheating as ultra-loose monetary policies in the West trigger a “flood of capital into the region that could lead to asset bubbles and excessive credit growth” -- with the risk of sharp reversals later.

This Ambrose Evans-Pritchard commentary was posted on the telegraph.co.uk Internet site yesterday afternoon GMT...and it's Roy Stephens' final offering in today's column. The link is here.

The first blog is with whistleblower Andrew Maguire...and it's headlined "$3.5 Billion of Paper Used to Smash Gold Price". Next comes Dr. Stephen Leeb. It's entitled "Diplomat Admits China is Accumulating Gold to Back the Yuan". And lastly is this chart courtesy of Ron Rosen. The blog is headlined "Most Important & Informative Chart Available Anywhere".

A draft policy document shows the African National Congress has rejected calls to nationalise mines but supports a windfall "resource rent" tax on mining firms.

"The state must capture an equitable share of mineral resource rents and deploy them in the interests of long-term economic growth, development and transformation," the draft of party's economic policies said, as seen by Reuters on Wednesday.

The "resource rental tax" is effectively a windfall levy of 50% that will kick in after investors have made a "reasonable return".

As such, it is meant to leave marginal or junior operations unaffected.

This story was posted on the mg.co.za Internet site early yesterday afternoon local time in South Africa...and I thank Ulrike Marx for her final offering in today's column. The link is here.

In key news that may well be the missing puzzle piece to explain some of the very odd market moves in the past week, we just learned courtesy of CNBC, that Morgan Stanley's Wealth platform unit has finally, after months and months of considerations, pulled the plug on the fund that for the second year in a row is one of the three worst performing in the weekly HSBC report and is now redeeming.

This story was all over the Internet yesterday...and it's my opinion that what MS did, had nothing to do with what was happening with the gold price on the Comex. It's the buying and selling of futures contracts on the Comex...not the sale of GLD shares that affects the price. I would respectfully suggest that the two events are not related for that very reason.

Here's the Zero Hedge version of this MS event...and I thank Elliot Simon for his last offering in today's column. The link is here.

Markets are made of opinions, some better than others.

There are always plenty of opinions about gold. And right now they're clearly making the market. Just not in the way you would think.

"There are too many bulls, including me," warned hedge-fund and commodities legend Jim Rogers to CNBC overnight. He advises caution if you're buying gold on this drop. Unlike most everyone else.

Swiss bank UBS last week kept its 2013 forecast for gold to average $1900 per ounce – a rise of 14% from the 2012 average so far – while fellow London market-maker Barclays now sees gold averaging $1815 next year, a snip off its previous 2013 forecast.

Investment bank Morgan Stanley takes "a bullish view", as does Bank of America. It thinks gold will average $2,000 next year, rising to $2,400 in 2014. Whereas Capital Economics (who have an opinion on pretty much anything and everything) predict a peak of $2,200 in late-2013, some 10% above their previous guesstimate.

This commentary was posted on the mineweb.com Internet site earlier this morning in London...and the link is here.

Yesterday, the German financial writer Lars Schall elaborated on how the Bundesbank keeps refusing to provide candid and complete answers to specific questions about its involvement in the gold market.

I found this story in a GATA release yesterday. Schall's commentary is headlined "The Whole Ball Game: They Can't Talk About It" and it's posted at his Internet site here.