San Bernardino on Tuesday became the third California city in less than a month to seek bankruptcy protection, with officials saying the financial situation had become so dire that it could not cover payroll through the summer.

The unexpected vote came at the suggestion of the interim city manager, who said the city faces a $46-million deficit and depleted coffers.

We have an immediate cash flow issue," Andrea Miller told the mayor and seven-member City Council.

Mayor Patrick Morris called the decision, passed on a 4-2 vote, a "stain" on the city. But he said the only other option was "draconian cuts" to all city services, including the police and fire departments.

This story was posted in the Los Angeles Times late on Tuesday evening...and I thank Scott Pluschau for sending it. The link is here.

Federal Reserve Bank of St. Louis President James Bullard said the U.S. fiscal position is as weak as some euro-area countries’ and lawmakers must take “dramatic” measures to tackle it and restore confidence.

“The U.S. fiscal situation is similar to that of some countries in Europe and requires dramatic and sustained attention,” Bullard said in a speech in London. “The political compromise in the U.S. has been to delay action until after the November election, but markets tend to pull the uncertainty forward.”

Bullard said that while the U.S. economy is growing, the pace is “sluggish” and the “most pressing” issue is the debt crisis in Europe. He said payrolls data last week hadn’t changed his outlook for a “modestly improving” performance in the second half of the year.

“Increased government spending today followed by higher future taxes is not likely to produce more rapid growth,” he said. “The most likely way forward continues to be a long period of debt pay down and sluggish growth, both in Europe and the U.S., and that the most pressing policy issue is to accept this path and prevent any additional problems from developing.”

This Bloomberg story showed up over at the moneynews.com website on Tuesday morning...and I thank West Virginia reader Elliot Simon for digging it up for us. The link is here.

More than $200 million in customer money is allegedly missing from the accounts of one of the largest, non-clearing, US futures commission merchants, PFG Best, according to regulators. Customers have been told their money is frozen. Does this sound oddly familiar?

This is Lauren Lyster's Capital Account program over at the Russia Today Internet site. It's the Tuesday edition...and is worth the listen if you have twenty-seven minutes just now. I thank reader 'David in California' for finding this for us...and the link is here.

With the rate at which horrifying examples of widespread moral bankruptcy and fraudulent misdeeds are coming to light in the financial industry today, one can scarcely afford a moment's rest for fear of missing the dastardly disgrace du jour.

Already this week, even as investors continue to wrap their heads around the monumental LIBOR rate-rigging debacle, the dramatic implosion of futures brokerage PFGBest amid a reported shortfall in customer-segregated accounts has shattered hopeful notions that the MF Global disaster would remain an isolated event.

Here is Motley Fool's precious metals analyst Christopher Barker with his commentary on the debacle involving PFGBest parent company, Peregrine Financial Group. The link is here.

Struggling to meet euro zone financial targets, Prime Minister Mariano Rajoy of Spain introduced his latest package of tough austerity measures Wednesday, including a rise in the sales tax, reversing his previous stance.

The package, Mr. Rajoy’s fourth set of budget measures in seven months, is intended to reduce the budget deficit by €65 billion, or $80 billion, over two and a half years. It follows a decision by European Union finance ministers Tuesday to relax Spain’s deficit target for this year to 6.3 percent of gross domestic product, rather than the 5.3 percent target that was set only four months ago. But the finance ministers also said they expected Madrid to continue showing progress on its deficit cutting.

The new austerity plan came as Finland’s prime minister, Jyrki Katainen, issued a warning Wednesday that the euro’s predicament was as perilous as at any time in the past two years. “This situation is dangerous, very dangerous,” he said in an interview with Finland’s biggest daily, Helsingin Sanomat.

This 2-page story showed up in The New York Times yesterday...and I thank Phil Barlett for sending it along. The link is here.

Bank bailouts don't work, GoldMoney founder James Turk writes in his latest commentary, celebrating Iceland's revival after refusing to make itself the slave of big banks.

This short essay is posted over at the goldmoney.com website...and I pulled it from a GATA release yesterday. The link is here.

The first is with Rick Rule...and it's headlined "We are Near an Epic Collapse in Confidence". The second blog is with Stephen Leeb...and it's entitled "All Hell is Going to Break Loose on the Upside in Gold".

GoldMoney published its "Ultimate Guide to Buying Gold" yesterday...examining ways of acquiring coins and bars, exchange-traded and closed-end funds, certificates, futures, mining company shares, and metal in GoldMoney-style bailment systems. The guide is posted in PDF format at the GoldMoney Internet site here.

A 1,000-year-old hoard of gold coins has been unearthed at a famous Crusader battleground where Christian and Muslim forces once fought for control of the Holy Land, Israeli archaeologists said on Wednesday.

The treasure was dug up from the ruins of a castle in Arsuf, a strategic stronghold during the religious conflict waged in the 12th and 13th centuries.

The 108 coins - one of the biggest collections of ancient coins discovered in Israel - were found hidden in a ceramic jug beneath a tile floor at the cliff-top coastal ruins, 15 km (9 miles) from Tel Aviv.

This very interesting Reuters story was picked up on the news.yahoo.com website...and I thank Scott Pluschau for being the first reader through the door with it. The link is here...and the photos are worth the trip all by themselves.

Erste Group's commodity analyst, Ronald Stoferle, has produced what may be the most comprehensive and incisive report about gold's use and prospects as money throughout history and into the age of negative interest rates and "financial repression" by bankrupt governments. The report, published today and titled "Gold Report 2012 -- In Gold We Trust," concludes that gold's rise is likely to continue as the metal is gradually reintegrated into the world financial system.

The two links associated with this report are imbedded in this GATA release. The main report runs 120 pages...so you'll need to pack a lunch for this one. It's well worth reading of course..and the link is here.

German journalist Lars Schall interviewed Erste Group market analyst Ronald Stoeferle about his new comprehensive report on gold's prospects and value and its relation to other markets. The interview, headlined "The Seed for an Even Bigger Crisis Have Been Sown"...and is posted at Schall's Internet site here.

The new media and the 24-hour news cycle have a great deal to answer for, not least encouraging a political class which would otherwise be happily engaged expensing duck houses into the belief that it should demonstrate perpetual action on our behalf – hence the endless stream of badly drafted legislation from the corridors of Whitehall.

It does, however, reveal things that would otherwise be ignored. The issue of manipulation in the gold market which I wrote about last week is a case in point. The ball of half-truths and downright lies which have surrounded the issue for a long time is beginning to unspool in an issue internet activists kept alive long before it was acknowledged by the mainstream media.

People ask why the issue is important at a time of naked market manipulation of the Libor rate. The answer is simple: the Libor manipulation scandal can be seen as the thin end of the wedge in terms of government market manipulation.

Although Libor manipulation affects the interest rates we pay on all number of credit products, gold market manipulation is more serious still.

This story showed up on the telegraph.co.uk Internet site late yesterday afternoon...and I found it posted in a GATA release. It's a must read as well...and the link is here.