"The credit rating agencies have strongly suggested that further rating cuts are likely if Congress does not come up with a credible long-run plan. Hence, we expect at least one credit downgrade in late November or early December when the super Committee crashes."

This is quite a stunning prediction, mainly because nobody is talking about this. And though the experts were 100% wrong in thinking that a downgrade would increase borrowing costs, it did cause a major market jolt when it happened, leading to a major blow to confidence in August and September.

This story was posted over at the businessinsider.com website...and I thank our own Nick Laird for providing this story. The link is here.

Reuters picked up this story on Sunday as well...and put their spin on it. I thank Washington state reader S.A. for that one, which is linked here.

Federal Reserve Vice Chairman Janet Yellen said a third round of large-scale securities purchases might become warranted if necessary to boost a U.S. economy challenged by unemployment and financial turmoil.

The central bank should also give “careful consideration” to Chicago Fed President Charles Evans's proposal to tie the near-zero interest-rate pledge to specific levels of unemployment and inflation, Yellen said in a speech in Denver on Friday.

It's just a matter of when, not if, the printing presses get shifted back up to high speed. This Bloomberg story from last Friday was sent to me by Australian reader Wesley Legrand...and the link is here.

The move to put the derivatives exposures of Merrill Lynch under the lead bank could be preparatory to a Chapter 11 filing by the parent company. The move by Fannie Mae to take a large junk of loans out of BAC, the efforts to integrate parts of Merrill Lynch into the bank units earlier this year, and now the wholesale shift of derivatives exposure all suggest a larger agenda.

I don’t have any access to inside skinny, but what I see suggests to this investment banker that a restructuring may impend at Bank of America. In the event, that is good news in a sense that this continuing distraction to the financial markets will be headed for a final resolution.

This Reuters story is from a week ago...and I thank Washington state reader S.A. for sending it along. The link is here.

The total of U.S. state debt, including pension liabilities, could surpass $4 trillion, with California owing the most and Vermont owing the least, a new analysis says.

The nonprofit State Budget Solutions combined states' major debt and future liabilities, primarily for pensions and employee healthcare, unemployment insurance loans, outstanding bonds and projected fiscal 2011 budget gaps. It found that in total, states are in debt for $4.2 trillion.

The group, which follows state fiscal conditions and advocates for limited spending and taxes, said the deficit calculations that states make "do not offer a full picture of the states' liabilities and can rely on budget gimmicks and accounting games to hide the extent of the deficit."

It will either get inflated away...or it will all crash and burn. This Reuters story was posted over at cnbc.com yesterday...and I thank West Virginia reader Elliot Simon for sending it my way. The link is here.

Europe's grotesque debt crisis rumbles on. France and Germany are at daggers drawn, the eurozone's two largest economies still a million miles away from agreeing on how they intend to patch-up what is, and always has been, an utterly incoherent economic construct.

The euro was never going to work. Yet the eurocrat elite – which includes Mr. Juncker down to the tip of his Mont Blanc pen – arrogantly ignored all the signals. Those of us who objected to monetary union on technical grounds, who warned of bitter conflict, who recalled the lessons of history, were dismissed as "xenophobes" and "cranks".

On Friday, in a rare public outburst, China's Wen Jiabao said Europe's leaders should "turn their political will into action". Beijing wants to see decisive measures to prevent Europe's debt crisis from spreading, with all the global market turbulence that would bring.

This Roy Stephens offering was posted in The Telegraph late Friday night...and is well worth the read. The link is here.

Britain will seek to claw back powers from Brussels during negotiations for a new rescue deal for the euro, David Cameron said as he attempted to undermine a Conservative rebellion over calls for an EU referendum.

The Prime Minister is to demand more British control over employment and social laws in return for supporting a new European treaty to shore up the single currency.

Although British taxpayers’ money will not be used for the new multi-trillion euro bail-out, it is expected to require a rewriting of EU treaties, which needs Britain’s backing and may prompt a referendum in this country. Mr. Cameron’s “repatriation of powers” offer came as the Conservative leadership was making a last-ditch attempt to stop at least 60 Tory MPs voting for a referendum on leaving the European Union in the Commons today.

This story was from the Sunday Telegraph...and is another Roy Stephens offering. It's definitely worth skimming...and the link is here.

French President Nicolas Sarkozy snapped at UK Prime Minister David Cameron during Brussels talks on Sunday, saying he was "sick of him telling us what to do" according to the British newspaper The Guardian.

"You say you hate the euro, you didn't want to join and now you want to interfere in our meetings," he added.

Tempers frayed over Sarkozy's insistence that only the 17 members of the eurozone attend a bank rescue summit meeting hastily arranged for Wednesday, according to the Telegraph...but Cameron convinced those at the meeting that all 27 EU members should be invited, and British newspapers reported on Monday that Cameron had cancelled his planned trips to New Zealand and Japan in order to attend.

This very interesting story was posted over at the france24.com website...and I thank Roy Stephens for sharing it with us...and the link is here.

The EU crisis meetings now underway will at best buy time for the bloc to start tackling its debt problems in earnest. The euro needs fiscal union to survive in the long term -- but how will leaders ever forge such a union if they can't even agree on the most urgent firefighting measures, German commentators ask?

This story, posted over the German website spiegel.de yesterday, is another one courtesy of Roy Stephens...and the link is here.

The euro crisis is becoming surreal in that everything that possibly could go wrong is now doing so, all at once.

The French and Germans, who command the resources of the eurozone's two largest economies, are at loggerheads. If they cannot agree on a policy, nothing gets done in Europe.

The French insist that the European Central Bank start creating money to finance the next phase of the endless euro rescue. The Germans decline, adding that their constitutional court says this couldn't be done legally, even if Berlin wanted to. And it doesn't.

You can't make this stuff up. This UPI story, filed from Berlin yesterday, is also courtesy of Roy Stephens...and the link is here.

Why shouldn't everyone get into the act? I feel so much better now that the Vatican is giving advice.

The Vatican called on Monday for an overhaul of the world’s financial systems, and again proposed establishment of a supranational authority to oversee the global economy, calling it necessary to bring more democratic and ethical principles to a marketplace run amok.

In a report issued by the Pontifical Council for Justice and Peace, the Vatican argued that “politics — which is responsible for the common good” must be given primacy over the economy and finance, and that existing institutions like the International Monetary Fund had not been responding adequately to global economic problems.

Maybe the pope can get a seat at the table of these EU meetings tomorrow. I'm sure British Prime Minister David Cameron can get him an invite. This UPI story was courtesy of Casey Research's own Louis James...and the link is here.

The Reserve Bank of India will raise interest rates again on Tuesday to control price rise despite slowing growth, but its job may get complex due to government's policies that are pulling the economy in the opposite direction and the wobbly global markets, indicates a report from the central bank.

The twelve increases in interest rates so far is slowing demand, but excessive spending by the government and a slide in the Indian rupee are neutralising tight monetary policy, says the Reserve Bank of India's report.

This story, from this morning's edition of The India Times, is Roy Stephens last offering of the day...and the link is here.

Dominic Frisby interviews Nick Laird, of www.sharelynx.com, for the GoldMoney Foundation. They talk about the gold price and gold charts in detail and Nick mentions his time frame and price targets for the gold bull market.

They discuss several ways of valuing and charting gold, comparing it to the DJI through the Dow/gold ratio as well as to real estate. Nick explains his view that we are in a Kondratiev winter and that gold is the best store of wealth until the down cycle reaches its bottom and the world goes back to investing and growing again. He recommends avoiding paper assets and fiat currencies during this cycle. They also talk about the US debt/gold ratio and the message it brings for gold.

They also talk about the possibility of governments revaluing gold to escape their debt trap and how this would require large multiples of the current gold price.

You've been looking at Nick's charts in this column for years now. This is his first interview...ever. It runs about 30 minutes...and is posted over at the goldmoney.com website. The link is here.

Geopolitical analyst James G. Rickards told King World News that the Federal Reserve increasingly is trying to manipulate markets with mere propaganda and that the United States risks the collapse of the dollar if it doesn't drastically change its fiscal, monetary, and tax policies. Rickards says he buys the dips in gold.

I posted the blog to this Rickards interview in my Saturday column. Here's the full audio interview posted over at KWN. It runs about 20 minutes...and the link is here.

Here's a GATA dispatch from Saturday...and I'm pretty much going to leave it to Chris Powell to do the introductions...as he has lots to say. But here's the first paragraph... "Debating GATA Chairman Bill Murphy on Friday at the Silver Summit in Spokane, Washington, CPM Group executive Jeffrey Christian graduated from his usual distortions to outright contrivance."

The rest of his preamble, plus all the associated reading material, is linked here.

MineWeb's Lawrence Williams today comments on the recent exchanges between GATA and CPM Group executive Jeffrey Christian and goes on to wonder why gold price manipulation should be so surprising.

Williams writes: "If one assumes that governments as a matter of course manipulate currency exchange rates, then there is logic in their manipulating the gold price too, as many throughout the world consider gold as money (currency) and a rise in the gold price thus equates to a depreciation in currencies -- notably the U.S. dollar."

Williams' commentary is headlined "Gold Anti-Trust Action Committee Spat with Jeff Christian Getting Personal". I stole the headline and preamble from a GATA release on Sunday...and the link to this mineweb.com article is here.

When the price of gold plunged 20 percent last month, many market watchers declared the gold boom over. Stalled, yes; ended, no, according to many gold analysts, who believe the precious metal may instead be near a new sustained rally.

“I can tell investors don’t sell off your gold,” says Martin Murenbeeld, the chief economist at DundeeWealth. “We’re at a crossroads here.”

“Have the countries around the world solved the debt crisis?” asks Nick Barisheff, president of Bullion Management Group, a precious metals investment company based in Toronto. “Have the bailouts ended? Have their currencies stopped tanking?“ With the world already worried about Greece’s fiscal problems, gold summer’s rally was sparked by fears that the U.S. might default on its debt.

This commentary was posted over at Reuters on Friday...and I thank reader Richard from Salem, Oregon for sharing it with us. The link is here.

Gold mining investors got two interesting pieces of news to chew on this week. One demonstrated why equities have largely underperformed the gold price over the last few years, and the other showed one way that trend could potentially end.

The bad news came from Agnico-Eagle Mines Ltd., which stunned the street on Wednesday by shutting down its Goldex mine because of rock stability problems. As Agnico shares tumbled 18%, investors couldn’t help but wonder: Why buy gold stocks when the exchange-traded funds have much less risk? The Goldex debacle seemed to embody everything wrong with the miners, who are creating little shareholder value despite record profits.

The positive news got a lot less attention. On Monday, Eldorado Gold Corp. announced an enhancement to its dividend policy that links the payout more closely to the gold price. The company demonstrated that its dividend per ounce of gold sold will rise progressively from US$100 (when gold is less than US$1,549 an ounce) to US$225 (when gold reaches US$1,850).

The price-linked dividend is a smart strategy, experts say, because it attracts yield-seeking investors while forcing reluctant miners to part with more of their cash when gold prices go up.

“The reality is that gold mining companies have been criticized, and rightfully so, for not [offering] what people look for in real businesses. And that is yield,” Eldorado chief executive Paul Wright says.

I borrowed this Financial Post story from a GATA release. It's well worth the read...and the link is here.

Another tough week for gold bugs. But they’ve survived tough weeks before in this decade-long bull market. And now they see vindication [from] unexpected quarters.

This week saw unprecedented commentary from unusual sources on gold’s behavior. Most astonishing of these: a column in Saturday’s London Financial Times by U.S. Editor Gillian Tett. She recently listened to a speech by radical gold bug Gold Anti-Trust Action (Gata) Committee leader Chris Powell.

I say “ah ha!” to this. I’ve been writing about the gold conspiracy theory on Market Watch since I started here 2002. [Greatly to the credit of the MW editors — other employers balked].

This short marketwatch.com story on Monday by columnist Peter Brimelow is a must read...and the link is here.

Writing exclusively for King World News yesterday, GoldMoney founder and GATA consultant James Turk explains why he figures that gold's true value is around $11,000 per ounce -- at least as long as gold is to be considered money.

The link to this must read KWN blog is here.