A ruling in the case of failed futures brokerage Sentinel Management Group could make it more difficult for customers to recoup money lost in the much larger collapse of MF Global, according to Sentinel's bankruptcy trustee.

A federal appeals court on Thursday upheld a ruling that puts Bank of New York Mellon ahead of former customers of Sentinel in the line of those seeking the return of money lost in the 2007 failure of the suburban Chicago-based futures broker.

The appeals court affirmed an earlier district court ruling that the bank had a "secured position" on a $312 million loan it gave to Sentinel, which turned out to have been secured by customer money.

Futures brokers are required to keep customers' funds in dedicated accounts to protect them from being used for anything other than client business.

However, Thursday's ruling suggests that brokerages can use customer funds to pay off other creditors, Sentinel trustee Fred Grede told Reuters.

"I don't think that's what the Commodity Futures Trading Commission had in mind" with its requirement that brokers keep customer money separate from their own, he said.

"It does not bode well for the protection of customer funds."

This Reuters story was posted on their website late Thursday evening...and is definitely worth reading. I thank Paul Laviers for bringing it to our attention...and the link is here.

Mark August 29th on your calendar. It’s the day all of us could end up on the hook for a big future bailout.

The Securities and Exchange Commission is expected to vote that day on a proposal that would limit taxpayers’ exposure to the $2.6 trillion world of money market mutual funds. The plan would reduce the odds of having to rescue teetering funds when the next financial crisis comes — and it will.

Money market funds are a huge cog in the nation’s financial machinery. Many people think that these funds are as safe as federally insured bank deposits. In most cases, they aren’t. But then, in the dark days of 2008, a run on one fund, Reserve Primary, reverberated in the industry.

Investors fled, and the Treasury stepped in. It earmarked $50 billion to protect money market funds and to prevent them from “breaking the buck,” or having their shares fall below the sacrosanct $1 net asset value. Of course, if the government rides to the rescue once, the thinking goes, it will surely do so again.

This Gretchen Morgenson offering showed up in The New York Times on Saturday...and it's worth reading as well. I thank Donald Sinclair for sending it...and the link is here.

Drought conditions plague much of the United States after a summer of scorching temperatures and a lack of rain. The dryness is affecting America's farmland, threatening crops like soybean and corn.

President Barack Obama announced emergency measures Monday to ease the impact of the worst drought in half a century, but stopped short of waiving the government’s requirement that a large portion of the now-shriveled corn crop be diverted to make ethanol.

Obama announced that the Department of Agriculture will buy up to $170 million of pork, lamb, chicken and catfish to help support farmers suffering from the drought. The food purchases will go toward "food nutrition assistance" programs, like food banks.

This story was posted on the nbcnews.com Internet site around noon Eastern time yesterday...and I thank Casey Research's own Dennis Miller for sharing it with us. The link is here.

The Federal Reserve and the world's other central banks have good reason to want control of lending—the primary purpose of central banks is to impact lending via monetary policy, thus easing or tightening the supply of credit to the real economy.

That said, allowing central banks to control this so closely does remove the "invisible hand" that governs markets so well.

If regulators want to replace LIBOR, then they'll have to effectively wrest it from the control of central banks. They will have to let lending rates rise and fall on their own to accurately reflect tensions in financial markets.

That's not a power central banks are likely to give up so easily, particularly not when they are doing all they can to flood the system with cheap money and keep floundering economies alive.

"The real problem is a government that thinks it can solve it," Burghardt remarked.

This story showed up on the businessinsider.com website last Friday...and I thank Donald Sinclair for his second offering in today's column. The link is here.

Sir David Walker, the new chairman of Barclays, is to undertake a wholesale review of the way the bank operates and has admitted that he agrees "in principle" with customers paying to use current accounts and the end of the free banking model.

In his first interview as chairman, Sir David told The Sunday Telegraph that he wanted to see significant change at Barclays and revealed that he was not committed to any of former chief executive Bob Diamond's business plan "except getting it right".

Setting a 24-month deadline by which time he hopes the bank will be back on a firmer footing, Barclays' incoming chairman said his first priorities in the role would be the three Cs – a new chief executive, reformed compensation and a changed culture. He also wants to strengthen the board so it is better able to challenge the new chief executive.

It's a good bet that "Sir David" will do everything in his power to make sure that there are no changes worth mentioning ever implemented at Barclays. This story appeared on the telegraph.co.uk Internet site late on Saturday night...and I thank Roy Stephens for sending it. The link is here.

Luc Coene told Belgian newspapers De Tijd and L’Echo that buying the bonds of these countries would only serve to weaken the ECB and do nothing to resolve underlying issues of competitiveness.

“It makes no sense for the ECB to start financing those countries,” said Mr Coene, “It would only lead to the ECB taking on the whole public debt of Spain and Italy onto its balance sheet," he said.

"That would in turn weaken the ECB and do nothing to resolve the underlying problems...as it will take away the pressure on politicians to act."

This story was posted on The Telegraph's website at 11:00 a.m. BST on Saturday morning...and it's Roy Stephens second offering in today's column. The link is here.

The deputy head of Chancellor Angela Merkel's conservative parliamentary bloc, Michael Fuchs, told business daily Handelsblatt that Berlin was ready to use its veto if it is unhappy with findings from the Greece creditors "troika".

"You can quote me: even if the glass is half-full, that is not enough for a new aid package," he said in an interview to appear in the paper's Monday issue. "Germany cannot and will not agree to that."

Germany, Europe's biggest economy, is waiting with eurozone partners for the report on Greece from a so-called troika of inspectors from the European Union, International Monetary Fund and European Central Bank.

Their verdict, which is expected by mid-September, will determine if Athens receives the next installment of €31.5bn in rescue funds.

This story was posted on the telegraph.co.uk Internet site on Sunday afternoon BST...and I thank Roy Stephens for bringing it to our attention. The link is here.

The economy contracted 6.5pc in the first quarter, worse than the initially given 6.2pc, according to revised figures issued in June.

The Bank of Greece expects the economy to shrink 4.5pc for 2012 as a whole, following a 6.9pc drop last year, according to AFP.

The country is relying on two financial rescue packages backed by the EU, the International Monetary Fund and the European Central Bank worth around €240bn for its economic survival.

Last year, private creditors agreed to write-off more than €100bn in debt, roughly half the amount they were owed, as part of a second bailout programme.

This is another story courtesy of Roy Stephens. It's from The Telegraph late yesterday morning...and the link is here.

Prime Minister Benjamin Netanyahu said on Sunday that most threats to Israel's security were "dwarfed" by the prospect of Iran obtaining nuclear weaponry.

His comment fuelled the debate in Israel about whether to go to war against Iran over its nuclear programme. This worried oil investors who see it as defying appeals by US President Barack Obama to allow more time for international diplomacy.

"We are seeing prices rise despite weak growth outlook numbers on Friday," said Ben Le Brun, an analyst at OptionsXpress, told Reuters. "The Israeli comments ... (are) a major concern."

A decline in North Sea crude output is also supporting Brent. Output from 11 production streams is set to fall by 17pc in September due to maintenance and natural decline.

Please take careful note of the last two words of the previous sentence..."natural decline." North Sea oil production is on the wrong side of Hubbard's Peak...and has been for quite a number of years. The production outlook for the next five years is shocking...both for the U.K. and Norway. This story was posted on the The Telegraph's website during the London lunch hour yesterday...and I thank Roy Stephens once again for finding it for us. The link is here.

China is sufficiently alarmed by the flint hardness of its "soft-landing" to talk up trillions of fresh stimulus. The European Central Bank is preparing to print “whatever it takes” to save Spain and Italy. Markets are pricing in an 80pc chance of yet more printing by the US Federal Reserve in September or soon after.

There is no doubt that the three superpowers acting in concert can launch a mini-cycle of growth early next year - assuming they deliver on their rhetoric - but the twin headwinds of debt-leveraging and excess manufacturing plant across the globe cannot easily be conjured away.

The world remains in barely contained slump. Industrial output is still below earlier peaks in Germany (-2), US (-3), Canada (-8) France (-9), Sweden (-10), Britain (-11), Belgium (-12), Japan (-15), Hungary (-15) Italy (-17), Spain (-22), Greece (-27), according to St Louis Fed data. By that gauge this is proving more intractable than the Great Depression.

Some date the crisis to August 9 2007, the day it became clear that Europe’s banks were up to their necks in US housing debt. The ECB flooded markets with €95bn of liquidity. It seemed a lot of money then. The term “trillion” was still banned by the Telegraph style book in those innocent days. We have since learned to swing with the modern dance music from central banks.

This Ambrose Evans-Pritchard offering was posted on the telegraph.co.uk website late Sunday afternoon BST...and I thank Roy once again for digging this up for us. It's well worth reading...and the link is here.

Writing for GoldMoney's research bureau, economist Alasdair Macleod notes that no Keynesian economists saw the credit crunch coming...and now all of them are advocating still more credit creation to revive the world's economies. Macleod notes that gold and silver have performed well since the credit crunch began while traditional equity investments have declined.

I borrowed the headline and the paragraph of introduction from a GATA release yesterday. Macleod's commentary is headlined "Anniversary of the Credit Crunch"...and it's posted at GoldMoney.com website. The link is here.

Banks, companies and investors are preparing themselves for a collapse of the euro. Cross-border bank lending is falling, asset managers are shunning Europe and money is flowing into German real estate and bonds. The euro remains stable against the dollar because America has debt problems too. But unlike the euro, the dollar's structure isn't in doubt.

Otmar Issing is looks a bit tired. The former chief economist at the European Central Bank (ECB) is sitting on a barstool in a room adjoining the Frankfurt Stock Exchange. He resembles a father whose troubled teenager has fallen in with the wrong crowd. Issing is just about to explain again all the things that have gone wrong with the euro, and why the current, as yet unsuccessful efforts to save the European common currency are cause for grave concern.

He begins with an anecdote. "Dear Otmar, congratulations on an impossible job." That's what the late Nobel Prize-winning American economist Milton Friedman wrote to him when Issing became a member of the ECB Executive Board. Right from the start, Friedman didn't believe that the new currency would survive. Issing at the time saw the euro as an "experiment" that was nevertheless worth fighting for.

Fourteen years later, Issing is still fighting long after he's gone into retirement. But just next door on the stock exchange floor, and in other financial centers around the world, apparently a great many people believe that Friedman's prophecy will soon be fulfilled.

This story was posted on the German website spiegel.de yesterday...and it's another story courtesy of Roy Stephens. The link is here.

Egypt’s military signaled its acquiescence Monday to the president’s surprise decision to retire the defense minister and chief of staff and retake powers that the nation’s top generals grabbed from his office.

President Mohammed Morsi’s shake-up of the military on Sunday took the nation by surprise. It transformed his image overnight from a weak leader to a savvy politician who carefully timed his move against the military brass who stripped him of significant powers days before he took office on June 30.

A posting on a Facebook page known to be close to the country’s military said the changes amounted to the “natural” handing over of leadership to a younger generation.

This AP story was posted on the france24.com Internet site on Sunday...and is Roy Stephens final offering in today's column. The link is here.

The big news went almost unnoticed. Bloomberg was there, however, and had this report: Housewives With Frying Pans Protest Japan Tax Hike as Debt Soars... "About 200 housewives marched down a shopping street in central Tokyo, beating pans with ladles and shouting slogans criticizing a government plan to double Japan's 5 percent consumption tax."

You're probably thinking what most of the world's financial press thought. This story seems small. Unimportant. Insignificant.

But it is THE story of our time... a harbinger of the coming worldwide financial implosion.

Do you recall the news reports in 2001 as Argentina's economy slipped into the biggest default the world had ever seen - $100 billion worth?

Groups of housewives began beating on pots. They called them the "cacerolazos". They were protesting against the "corralito", in which their savings were forcibly trapped by the government. This led to a breakdown in the whole financial system... including the above-mentioned defaults.

Bill Bonner calls it the way it is...and the way it's going to be. The commentary was posted over on the dailyreckoning.com.au Internet site yesterday...and I thank Nitin Agrawal for sending it. The link is here.

The first blog is with John Embry...and it's headlined "Gold to Spike as Physical Market is Shockingly Tight". The second is with James Turk...and it's entitled "Tight Gold & Silver Markets to Spark Massive Breakout". And lastly is this blog with Michael Pento. It's headlined "Central Banks To Launch Unprecedented & Coordinated Action".

I recently held a hearing in my congressional subcommittee on the subject of competing currencies. This is an issue of enormous importance, but unfortunately few Americans understand how the Federal Reserve and Treasury Department impose a strict monopoly on money in America.

This monopoly is maintained using federal counterfeiting laws, which is a bit of a stretch. If any organization is guilty of counterfeiting dollars, it is the Federal Reserve. But those who dare to challenge federal legal tender laws by circulating competing currencies -- at least physical currencies -- risk going to prison.

Like all government-created monopolies, the federal monopoly on money results in substandard product in the form of our ever-depreciating dollars.

I plucked this must read story from a GATA release yesterday. It was posted over at the paul.house.gov Internet site yesterday..and the link is here.

"..All of you know these changes are necessary for a very simple reason--silver is a scarce material. Our uses of silver are growing as our population and our economy grows. The hard fact is that silver consumption is now more than double new silver production each year. So, in the face of this worldwide shortage of silver, and our rapidly growing need for coins, the only really prudent course was to reduce our dependence upon silver for making our coins.

If we had not done so, we would have risked chronic coin shortages in the very near future.

If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content.

I heard Chris Powell mention this in his Capital Account interview last week...and reader Ron Flutur was kind enough to forward the speech that LBJ made about it at the time. It's posted over at the presidency.ucsb.edu website...and the link is here. It's definitely worth the read.

Gold analyst Joe Foster is the investment team leader for Van Eck’s flagship gold fund, the Van Eck International Investors Gold Fund. He also serves on the investment teams for the Van Eck Global Hard Assets Fund and Van Eck VIP Global Hard Assets Fund, and is an advisor to the Market Vectors ETF Trust – Gold Miners ETF (GDX) and Junior Gold Miners ETF (GDXJ).

Foster has been in the mining and investment business for more than 25 years and is frequently quoted in the Wall Street Journal and Barron’s. He’s also a frequent guest on CNBC and Bloomberg TV. Hard Assets Investor Managing Editor Drew Voros spoke recently with Foster about the gold market as well as the gold mining sector.

Of course Joes doesn't even hint at the short-side corner that the '8 or less' traders hold in the Comex futures market in both gold and silver, so you have to take his reasoning with what's driving prices with a big grain of salt. But I agree with his general premise that the precious metal stocks will be the place to be when the powers that be finally let the precious metals fly.

This interview was posted over at the indexuniverse.com website yesterday...and I thank Randall Reinwasser for sending it along. The link is here.

GATA's friend the journalist Lars Schall today interviews the founder and president of the Gold Standard Institute, Philip Barton, about his belief that a gold standard for the whole world is inevitable -- a return to gold but not to the gold standard system of old.

This is another story that I lifted from a GATA release yesterday. The interview is underwritten by Matterhorn Asset Management and is posted at its Internet site, Gold Switzerland.com. It's certainly worth reading...and the link is here.

Here's an interview that Nick Barisheff of Bullion Management Group did with Fox Business News show "Money" on Friday, August 10, 2012. The video clip runs for 3:41...and it's worth watching. The link is here.

For years GATA has been glad to respond to questions about the gold market from financial journalists in the mainstream news media...but we have always urged them to question the primary actors in the market, central banks, particularly in light of the documentation we have amassed showing or suggesting their often-surreptitious intervention in the market.

As far as we know, no such journalists have yet tried to question central banks about gold and reported the answers or refusals to answer, even as the efforts to question Germany's central bank, the Bundesbank, by the Canadian market analyst Rob Kirby in 2009 and the German freelance journalist Lars Schall in 2010 extracted some sensational confirmations in the form of denials.

So to make it easy for mainstream news media financial journalists in case they ever want to pursue the gold story seriously, GATA has compiled some critical questions for central banks.

This GATA dispatch was posted on the gata.org Internet site early yesterday afternoon Eastern time...and is a must read from one end to the other. The link is here.