When people think of the conventional battery of options the BLS applies to fudge the monthly payrolls number, the labor force participation is the first thing that comes mind: after all the thesis is that old workers are increasingly dropping out of the labor force and retiring. Nothing could be further from the truth as can be seen in this chart of workers aged 55-69, i.e. the prime retirement age.

But perhaps a far more important secular issue is the complete lack of pickup in the prime worker demographic, those aged 25-54, which in November dropped by 400k to 94 MM. This is a level first breached in April 1997, in other words in the past 15 years not a single incremental job has been gained in this most productive and lucrative of age groups!

The two graphs that accompany this article are absolutely worth the trip...and I thank Phil Barlett for our first story of the day. It's a Zero Hedge piece...and the link is here.

A decision by the Federal Reserve to expand its bond buying next week is likely to prompt policy makers to rewrite their 18-month-old blueprint for an exit from record monetary stimulus.

Under the exit strategy, the Fed would start selling bonds in mid-2015 in a bid to return its holdings to pre-crisis proportions in two to three years. An accelerated buildup of assets would also mean a faster pace of sales when the time comes to exit -- increasing the risk that a jump in interest rates would crush the economic recovery.

“There is certainly an issue about unwinding the balance sheet” in a way that “is effective and continues to support the recovery without creating inflation,” St. Louis Fed Bank President James Bullard said in an interview in October. The central bank might have to “revisit” the 2011 strategy, he added.

The Fed is already buying $40 billion a month in mortgage-backed securities to boost the economy, and policy makers meeting Dec. 11-12 will consider whether to purchase more assets. John Williams, president of the San Francisco Fed, has proposed adding $45 billion of Treasury securities a month.

The Bloomberg story from early yesterday morning Eastern time was sent to me by Manitoba reader Ulrike Marx...and the link is here.

The federal government borrowed 46 cents of every dollar it has spent so far in fiscal year 2013, which began Oct. 1, according to the latest data the Congressional Budget Office released Friday.

The government notched a $172 billion deficit in November, and is already nearly $300 billion in the hole through the first two months of fiscal year 2013, underscoring just how deep the government’s budget problems are as lawmakers try to negotiate a year-end deal to avoid a budgetary “fiscal cliff.”

Higher spending on mandatory items such as Social Security, Medicare and interest on the debt led the way in boosting spending compared with the previous year, which also highlights the trouble spots Congress and President Obama are struggling to grapple with.

This story showed up in The Washington Times yesterday...and my thanks go out to Scott Pluschau for sending it our way. The link is here.

The U.S. Commodity Futures Trading Commission (CFTC) today announced that Goldman, Sachs & Co., a registered futures commission merchant (FCM) based in New York, N.Y., has been ordered to pay a $1.5 million civil monetary penalty to settle CFTC charges that it failed to diligently supervise its employees for several months in late 2007. The CFTC Order also requires Goldman to cease and desist from violating a CFTC regulation requiring diligent supervision.

According to the CFTC’s Order, for several months, Goldman failed to ensure that certain aspects of its risk management, compliance, and supervision programs comported with its obligations to supervise diligently its business as a Commission registrant. During November and December 2007, Goldman further failed to supervise diligently the trading activities of an associated person and former Goldman trader, Matthew Marshall Taylor, whose trading activities on seven days in mid-November and mid-December 2007 in the e-mini S&P 500 futures contract traded on the Chicago Mercantile Exchange’s (CME) Globex platform resulted in a substantial loss to Goldman.

This short read was posted on the businessinsider.com Internet site early Friday afternoon Eastern time...and it's Scott Pluschau's second offering in a row. The link is here.

In March 1991, Michael R. Milken, once the richest and most powerful financier of his generation, entered prison, signaling the end of an era of junk bond-financed hostile takeovers and high-visibility prosecutions that law enforcement officials hoped would deter insider trading for generations.

But now, less than one generation later, federal prosecutors and enforcement lawyers at the Securities and Exchange Commission have exposed a vast network of insider trading that in its sophistication, breadth and profits dwarfs that of the earlier era. And with the emergence of Steven A. Cohen, the founder of the hedge fund SAC Capital Advisors, as a subject of interest, the government has identified a financier whose power and wealth surpasses even that of Mr. Milken in his heyday.

Why has insider trading proved so persistent, even in the face of prosecutions and popular Hollywood films like “Wall Street”?

This 2-page article showed up in the print version of The New York Times today...and it's worth reading. I thank Phil Barlett for his second story in today's column...and the link is here.

South Florida wildlife officials are holding a competition they hope will help eradicate invasive Burmese pythons in the Everglades.

The Florida Fish and Wildlife Conservation Commission's Python Challenge will kickoff on Jan. 12 in Fort Lauderdale, the FWC announced Wednesday.

Florida python permit holders and the general public will get a chance to compete in the month-long competition to see who can harvest the longest and the most Burmese pythons.

Grand prizes of $1,500 for harvesting the most Burmese pythons will be awarded to winners of both the general competition and the python permit holders competition, with additional $1,000 prizes for the longest Burmese python harvested in both competitions.

This story was posted on the nbcnews.com Internet site a couple of days ago...and there are also a couple of short embedded videos as well...and I thank Casey Research's own Dennis Miller for sharing it with us. The link is here.

Vindication comes in the form of the latest Stability Report from the Bank of England's Financial Policy Committee, published last Thursday. For a long time, this column has focused on the multi-billion pound undeclared losses on the balance sheets of the UK's largest banks as the major reason why our economy remains moribund and unable to stage a recovery. The FPC has just shown that it not only agrees with that view but wants to take some action.

Ever since the sub-prime crisis exploded, Western banks have been harbouring huge hidden liabilities, burying them using off-balance sheet vehicles, complicit auditors and a host of obfuscation tactics. Financial markets know this, which is why banks have been trading at extremely low "price-to-book" valuations – with many priced at less than the value of their tangible assets.

If the UK economy is to fire on all cylinders again, our banks badly need to raise fresh capital, so providing finance to the creditworthy businesses that will pull us out of the recession danger-zone. Our politicians stick with the "growth versus austerity" soap opera, trading ideological jibes as they argue over future taxation and spending plans that are anyway largely fiction.

This story from The Telegraph is almost a week old, but worth skimming nonetheless. I thank reader U.D. for bringing it to our attention...and the link is here.

The European Central Bank pondered an interest rate cut on Thursday and predicted the euro zone economy would shrink again in 2013, leaving the door open to a possible reduction in borrowing costs early next year.

ECB President Mario Draghi said the policymaking Governing Council held a wide discussion on interest rates before opting to leave them on hold. The euro fell against the dollar and the yen in response.

The Council also touched on the idea of cutting its deposit rate into negative territory. By effectively charging banks for their deposits rather than paying them interest, the ECB could push banks to put their money to work elsewhere.

This Reuters article was posted on their website early Thursday afternoon...and I plucked it from yesterday's edition of the King Report. The link is here.

For the last four years, Barack Obama has not only asserted, but aggressively exercised, the power to target for execution anyone he wants, including US citizens, anywhere in the world. He has vigorously resisted not only legal limits on this assassination power, but even efforts to bring some minimal transparency to the execution orders he issues.

This claimed power has resulted in four straight years of air bombings in multiple Muslim countries in which no war has been declared – using drones, cruise missiles and cluster bombs – ending the lives of more than 2,500 people, almost always far away from any actual battlefield. They are typically targeted while riding in cars, at work, at home, and even while rescuing or attending funerals for others whom Obama has targeted. A substantial portion of those whom he has killed – at the very least – have been civilians, including dozens of children.

Worse still, his administration has worked to ensure that this power is subject to the fewest constraints possible. This was accomplished first by advocating the vague, sweeping Bush/Cheney interpretation of the 2001 Authorization to Use Military Force (AUMF) - whereby the President can target not only the groups which perpetrated the 9/11 attack (as the AUMF provides) but also those he claims are "associated" which such groups, and can target not only members of such groups (as the AUMF states) but also individuals he claims provide "substantial support" to those groups. Obama then entrenched these broad theories by signing into law the 2012 National Defense Authorization Act, which permanently codified those Bush/Cheney interpretation of these war powers.

The U.S. is pretty much a rogue nation now...and nobody can stop them. This essay showed up in The Guardian on November 26th...and is worth the read if you have the time. I thank Casey Research's own Doug Hornig for bringing it to our attention...and the link is here.

It may not have been a deadly Predator equipped with a Hellfire missile eager to incinerate a Pashtun wedding party, but in our Brave New UAV World - also known as Obama's Drone Wars - even a lowly ScanEagle, manufactured by a Boeing subsidiary, may be assured to steal the limelight.

So here's the star of the show on Iranian TV after it was captured over the Persian Gulf. Geopolitical junkies fed up with the same old US generals regurgitating clichés on Fox or CNN will certainly feast on that ultra-retro "We will trample the US under our feet" banner, not to mention the quirky Islamic Revolutionary Guard Corps (IRGC) production values in the PR front.

Rear Admiral Ali Fadavi, commander of the IRGC's navy, said the ScanEagle was "hunted" and then "forced" to "land electronically" after invading Iran's airspace. Well, it may have been slightly more complicated. The always delightful Moon of Alabama still provides the best explanation: the IRGC probably electronically disabled the drone's satellite link and then took over its line-of-sight radio control.

This short story showed up on the Asia Times website on Thursday...and I thank Roy Stephens for sending it. The link is here.

It had been a couple of years since I ended my service as a U.S. Marines combat correspondent, and I wanted to get back to the war.

Traveling as a civilian, I paid my own way and had hardly any support, but I also had more freedom to travel than when I was in uniform.

I took the following photos during the time between my arrival in Kabul and my official embed date (until which, no military unit will give you refuge, regardless of your citizenship). For these few days I played tourist; found a nice little guest house, contracted a driver and an interpreter, and headed on daily road trips around the area.

What I saw was a country hardened by decades of war and poverty — but also filled with sympathetic people whom you'll rarely see in Western media. People who, in the midst of chaotic street life, insisted I take my shoes off and get comfortable, drink tea and eat candy prior to doing business. Kids living in squalor who still dreamed of becoming doctors and engineers — and were thrilled to pose for pictures and beat me in impromptu soccer matches.

This photo essay was posted on the businessinsider.com Internet site on Wednesday...and it's definitely worth running through the pictures. Because of all the photos, it takes a while for this story to load, so be patient. I thank Roy Stephens for his final offering in today's column...and the link is here.

The growth of China's massive population has slowed in recent years, but migration to urban areas has increased, with almost half of China's 1.3 billion people living in or near cities. A booming economy, government housing initiatives, infrastructure programs, and private real estate speculation have all driven construction to record levels. New apartment, office, and government buildings regularly rise up over older neighborhoods, and thousands have relocated to modern housing complexes. The blend of old and new Chinese architecture is ever-present in cities and villages, as older buildings are torn down and newer ones built at ever faster rates. The 51 images show glimpses of Chinese architecture, both traditional and modern, as it appears today.

This is a very impressive set of photos by a photographer who had the right camera...and knew what he was doing. This set of pictures showed up in The Atlantic in late November...and I thank Michael Cheverton for sharing them with us. This also takes a while to load...and the link is here.

The past four weeks saw the swiftest escalation in recent years of tensions over the territorial disputes between China and its neighbours in the Asia-Pacific.

The tensions spiraled in late November when the province of Hainan, in the southern coastal region of China, issued an imperial-sounding edict that its so-called lawmaking body had authorised its police patrol boats to board and search foreign ships of any nationality that illegally enter what it considers Chinese territories in the South China Sea. The plan was announced to take effect on short notice: on January 1.

The edict caused considerable alarm among China’s smaller neighbours, including the Philippines, Vietnam, Malaysia, Brunei, and Taiwan, all of whom have overlapping claims on islands in portions of the South China Sea, which China has claimed as exclusively belonging to it on the strength of ancient maps. It also caused consternation among other world powers such as the United States and India, which do not have territorial claims in the South China Sea, which is the shortest route between the Pacific and Indian Oceans and through which more than half of the globe’s oil tanker traffic passes.

The concern of the United States and India, both of which have powerful navies to challenge China’s aggressive assertion of its hegemonic ambitions, involves freedom of navigation and trade routes in the entire China Sea.

This news items showed up in the Philippine Daily Inquirer...and was subsequently posted on the asianewsnet.net Internet site yesterday...and it's a must read for all students of the "New Great Game". I thank Ulrike Marx for digging it up on our behalf...and the link is here.

The first blog is with Egon von Greyerz...and it's headlined "Here is the Gold Market in One Fantastic Chart". The second [and last] blog is with Citi analyst Tom Fitzpatrick. It's entitled "9 Charts to Help Understand the Direction of Global Markets". The audio interview is with Ben Davies.

The supercycle that saw the prices for many commodity prices soar over the past decade hasn’t finished yet, according to Goldman Sachs.

Commodities won’t appreciate much going forward, but bursts of global demand will spark short-term shortages, according to a new report from the bank. And that will create mini rallies in various commodities, it says.

“It is tempting to call an end” to the commodity supercycle, thanks to increased supplies and slowing growth in China, the report says, according to Marketwatch.

Of course they qualify it by saying that gold won't be included in this "commodity supercyle". You really have to wonder what these idiots at GS are smoking! I thank West Virginia reader Elliot Simon for bringing this story to my attention...and now to yours. The link is here.

Gazing into their crystal balls this week, Wall Street firms interpreted differing futures for gold next year. Morgan Stanley awarded gold the “best commodity for 2013” while Goldman Sachs called the end of the metal’s hot streak. After seeing 11 consecutive years of positive performance from gold, one needs to be wary of research analysts’ price forecasts, as they have consistently underestimated the shifting dynamics driving the precious metal higher.

Take a look at analysts’ annual predictions of gold prices, which is “a telling picture,” CEO Nick Holland of Gold Fields told the crowd at a mining conference last summer. From 2006 through 2011, Bloomberg’s contributing analysts have forecasted that future gold prices would be lower. “The analysts who keep telling us the gold price is going down have been wrong seven years out of seven. That’s a remarkable track record!” says Holland.

This must read piece by Frank Holmes about gold was posted over at the usfunds.com Internet site yesterday. I thank Elliot Simon for his second offering in a row...and the link is here.

Silver’s more popular and volatile than ever, ready to finish the year with gains more than double those of gold, as the industrial staple wins more favor as an investment asset.

“The evidence is clear that investment, not industrial demand, is what is driving silver prices higher,” said Mark Thomas, chief investment strategist and author of SilverPriceAdvisor.com.

Last month, Thomson Reuters GFMS said investment demand will likely be the prime driver of the silver price this year.

The precious-metals consultancy forecast that implied net investment would jump 82 million ounces to 234 million in 2012 from 2011, even as demand for silver in industrial applications is expected to fall nearly 28 million ounces.

This marketwatch.com piece was filed from San Francisco and posted on their website early yesterday morning Eastern time. I thank Ulrike Marx for sending it...and the link is here. Nice photo, too!!!

Pfizer Inc.'s medical research lab in St. Louis County is missing $700,000 worth of gold dust, and police are trying to determine if it was lost or stolen.

The St. Louis Post-Dispatch reports that Chesterfield police began an investigation this week after a Pfizer employee conducting inventory couldn't find the gold dust purchased last year for use in research.

Police Capt. Steven Lewis says no one is "sure if they just didn't account for it and it was used naturally, or if it was stolen or misplaced."

This very short AP story was posted on the foxnews.com Internet site yesterday...and is worth reading. I thank Washington state reader S.A. for finding it for us...and the link is here.

The world's biggest gold refiner, South Africa's Rand Refinery, is considering setting up a refining plant in China within two to three years, joining hands with a local partner on its first such plant abroad, a senior executive said on Friday.

Rand is targeting Asia, home to the world's top two gold consumers, China and India, as a key region for future development. It expects to complete a sampling and assaying facility in Singapore by the end of the year.

"During the past year, we have identified one or two possible opportunities to partner for a potential initial refinery footprint in China," Peter Bouwer, chief strategy officer at Rand, told Reuters on the sidelines of a conference.

This Reuters story filed from Shanghai on Friday was posted on the mineweb.com Internet site yesterday...and I thank Ulrike Marx for her final offering in today's column. The link is here.

Filmmaker Brady Haran and chemist Martyn Poliakoff go inside the vaults of the Bank of England, where $315 billion worth of gold bars currently sit.

Each shelf consists of one ton of gold, which equates to $56 million of gold.

This very interesting clip should be a real education for some. All of the "Comex-approved depositories" I speak of in the first part of my daily commentary, look just like the one show here at the Bank of England. And, as he explains, the gold sold between banks just changes owners and locations within the vault. Sometimes they don't even change the bar location. They just put a Sticky Note on it saying who the new owner is.

The gold in the CME's Daily Delivery Report I talk about every day, are the inter-bullion bank sales that he refers to...and he gives an excellent representation of that process. However, a lot of the other stuff he talks about is overly simplistic and aimed at the "Joe Six-Pack" viewer.

This 6:49 minute video presentation was posted on the businessinsider.com Internet site late yesterday afternoon...and is an absolute must watch. I thank Scott Pluschau for sharing it with us...and the link is here.