It has been four long winters since the federal government, in the hulking, shaven-skulled,Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you'd think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we've been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?

Wrong.

It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it.

Today's first story is a big read out ofRolling Stonemagazine from last Friday that I've been saving for today's column. I haven't had time to read it yet, but it's on my plate for this weekend. I don't know how much of Matt's "pithy prose" you'll find in here, but be warned in advance that there will probably be the odd bad word from time to time. I thank reader "Eric" for being the first through the door with this essay...and the link ishere.

Some four years after the 2008 financial crisis, public trust in banks is as low as ever. Sophisticated investors describe big banks as “black boxes” that may still be concealing enormous risks—the sort that could again take down the economy. A close investigation of a supposedly conservative bank’s financial records uncovers the reason for these fears—and points the way toward urgent reforms.

This huge essay was posted in the January/February edition ofThe Atlantic...and the first thing I noticed about it was that it was co-authored by Frank Partnoy. Frank wrote the bookF.I.A.S.C.O. - Blood in the Water on Wall Streetback in 1997...and I devoured it. Based on that book, I would suggest that this is more thanworth the readas well. I borrowed it from theKing Reportearlier this week...and the link ishere.

Detroit's fiscal future could soon be out of its hands if a team of state officials determines that the nation's former auto and manufacturing giant is so firmly entrenched in afinancial emergencythat it cannot climb out on its own.

Mayor Dave Bing, who has been dead-set against state oversight, said earlier this week that results of a month-long review of the city's red ink-stained books could be presented as early as Friday to Gov.Rick Snyder.

But that will probably be delayed after Snyder on Thursday asked the state-appointed review team to take a closer look at Detroit's cash flow problems and potential options for addressing health care, pension and other long-term obligations.

If the governor determines there is a financial emergency, the mayor would have 10 days to request a hearing underMichiganlaw. Snyder could then revoke his decision or appoint a manager who would be responsible for overseeing all of Detroit's spending.

ThisAP item showed up on theyahoo.comInternet site early yesterday...and I thank Scott Pluschau for sending it. The link ishere.

The investment recommendations made by many financial commentators are now dominated by cross-asset class relative valuation rather than the fundamentals of the investment itself. A typical refrain runs something like this: Buy X because it is cheaper than other things out there.

This is an understandable approach as unusual central bank activism has artificially elevated certain asset prices. Yet the dominance of this increasingly popular advice comes with potential risks that need to be well understood and well managed.

Several asset classes now have highly manipulated prices due to experimental central bank activities, both actual and signalled. The more this happens, the more investors come under pressure to migrate to higher risk investments in search of returns. Ben Bernanke, Federal Reserve chairman, said as much at his latest press conference, noting that the aim of policy is to "push" investors to take more risk. True to his wish, many pundits seem eager to discard fundamentals in favour of searching for (and levering) anything that "yields" more.

This article showed up in theFinancial Timesof London yesterday...and it's posted in the clear in this GATA release...and it'sdefinitely worth reading. The link ishere.

In their new reflection on the world economy and international financial system, the economists and fund managers Lee Quaintance and Paul Brodsky of QB Asset Management in New York have had enough of central bank favoritism and subsidies to big banks and rich folk with access to discounted capital, the financial gaming that has indefinitely postponed real economic growth, the scheming for faster mechanisms of infinite money creation (like the trillion-dollar platinum coin) and market leverage, and the loss of sensible valuations. Time, Quaintance and Brodsky say, to get on with the big reset, the worldwide devaluation of currencies and their pegging to sovereign gold reserves.

The link to this 14-page report is embedded in a GATA release...along with a few other things that Chris Powell has to say. The report isworth your time, if you have it...and the link to the GATA dispatch ishere.

The decisions America makes today regarding drone policy could come back to haunt it sooner than later.

Micah Zenko of the Council of Foreign Relations makes this argument in a new report: A major risk is that of proliferation. Over the next decade, the U.S. near-monopoly on drone strikes will erode as more countries develop and hone this capability. In this uncharted territory, U.S. policy provides a powerful precedent for other states and non-state actors that will increasingly deploy drones with potentially dangerous ramifications.

Jim Michaels of USA Today reports that 75 countries, including Iran and China, have developed or acquired drone technology in the wake of America's prolific program.

Thisbusinessinsider.comstory from Wednesday is avery interesting read...and Roy Stephens sent it to me on Wednesday. The link ishere.

This cute cartoon story was posted over at thealexcartoon.co.ukInternet site just before the New Year...and it's entitled "It's a Wonderful Crisis: Chapter 15...Christmas in Hell". I thank Ohio reader Peter Schuller for sharing it with us...and I'm sure you'll get a laugh out of it. The link ishere.

British Prime Minister David Cameron is under mounting pressure these days -- at least when it comes to Europe. Given the choice, the euroskeptic wing of his Conservative Party would prefer to bolt the European Union. Later this month, Cameron is expected to hold a major speech about Britain's position in Europe, one that could provide insight into where his conservative-liberal coalition government will steer London in the future and the price it will charge for Britain to remain a part of the EU.

The increasingly shrill tone of the domestic debate over the EU is being viewed by politicians in Berlin with concern. "With a view to the current debate over Great Britain's role in the EU, I would say: Germany desires a Great Britain that will remain a constructive and active partner in the EU," German Foreign Minister Guido Westerwelle told SPIEGEL ONLINE on Friday.

This is another story courtesy for Roy Stephens...and it was posted on thespiegel.deInternet site yesterday. The link ishere.

The European Central Bank has dashed hopes of further stimulus to pull the eurozone out of recession and fight record unemployment, deeming the economy strong enough to heal itself.

Mario Draghi, the ECB’s president, said the financial landscape has been transformed, citing a sharp drop in bond yields across the EMU periphery, a stock market rally and recovery of bank deposits in Greece and Spain. Capital flight has begun to reverse.

He even spoke of "exuberance" creeping into pockets of the credit system, with leveraged buy-outs and private equity deals becoming frothy - the first warning by the ECB of an incipient bubble as the fresh cycle gathers momentum.

The euro surged more than two cents to $1.32 against the dollar after he revealed that the ECB’s governing council had agreed "unanimously" to hold interest rates at 0.75pc, implying that "doves" who called for rate cuts last month have been silenced by a clutch of rising confidence indicators.

More whistling past the graveyard in this Ambrose Evans-Pritchard commentary posted onThe Telegraph's website early on Thursday evening...and I thank Roy Stephens for sending it. The link ishere.

Cyprus applied for a financial rescue last June after its banks suffered huge losses on the EU-approved write-down on Greece's debt.

It has so far failed to persuade its European partners to sign off on the package, given concerns the level of the island's indebtedness means it would be unable to repay the aid without further concessions from international lenders.

But "a haircut is not an option for us," Olli Rehn, the European Economic and Monetary Affairs Commissioner, told the German business daily Handelsblatt in an interview.

Ratings agency Moody's slashed Cyprus's credit rating by three notches late on Thursday on an expected rise in its liabilities, adding that it saw a 50pc probability the Mediterranean island would "default outright or press for a distressed exchange" on its debt.

ThisReutersstory was posted on thetelegraph.co.ukInternet site early yesterday morning GMT...and it's another offering from Roy Stephens. The link ishere.

When war between Israel and Iran seemed imminent, Israeli graphic designer Ronny Edry shared a poster on Facebook of himself and his daughter with a bold message: "Iranians ... we [heart] you." Other Israelis quickly created their own posters with the same message -- and Iranians responded in kind. The simple act of communication inspired surprising Facebook communities like "Israel loves Iran," "Iran loves Israel" and even "Palestine loves Israel."

Ronny Edry of Israel accidentally created an online movement for peace in the Middle East when he posted a Facebook image that declared "Iranians, we will never bomb your country."

This heart-warming 15-minute TED video was posted on the their Internet site way back in September...and I thank Roy Stephens for sharing it with us. The link ishere.

Japan's cabinet approved on Friday 10.3 trillion yen (£73bn) economic stimulus package in the biggest spending boost since the financial crisis as Prime Minister Shinzo Abe pursues an ambitious agenda to spur growth and end nagging deflation.

The government will spend the funds on public works, incentives for corporate investment and financial aid for small firms to help the economy emerge from a mild recession triggered by falling exports last year.

It expects the stimulus to raise real economic growth by 2 percentage points and create 600,000 jobs.

The stimulus package is part of a 13.1 trillion yen extra budget for the current fiscal year to March due to be approved by the cabinet next week.

Mr Abe is gambling that a shift to a more expansionary fiscal policy and more monetary easing from the central bank can end years of stop-start growth.

This news item was posted on thetelegraph.co.ukInternet site early yesterday morning GMT...and it is, of course, another offering from Roy Stephens. The link ishere.

China’s inflation accelerated more than forecast to a seven-month high as the nation’s coldest winter in 28 years pushed up vegetable prices, a pickup that may limit room for easing to support an economic recovery.

The consumer price index rose 2.5 percent in December from a year earlier, the National Bureau of Statistics said today in Beijing. That compares with the 2.3 percent median estimate in a Bloomberg News survey of 42 economists and a 2 percent gain in November. The decline in the producer-price index eased to 1.9 percent.

Chinese stocks headed for the biggest drop in eight weeks on concern that the quickening in inflation makes further policy loosening less likely, after data yesterday on exports and credit growth underscored the strength of the economic rebound. Chen Yulu, a central bank academic adviser, said Jan. 8 that price gains may become a concern in the second half.

ThisBloombergstory was posted on their website yesterday...and I found it in theKing Report. The link ishere.

After repeatedly flying surveillance aircraft into disputed airspace with Japan, and Tokyo scrambling F-15s in response, China's now sending fighters of its own on "routine flights" into the East China Sea.

China Daily: A Foreign Ministry spokesman said Friday that Chinese military planes were on"routine flights" in relevant airspace over the East China Sea. Spokesman Hong Lei made the remarks at a press briefing in response to media reports that Japan sent fighter jets to head off a number of Chinese military planes spotted in Japan's "air defense identification zone" over the East China Sea on Thursday.

"China firmly opposes Japan's moves to gratuitously escalate the situation and create tensions," Hong said.

Thisbusinessinsider.comstory was posted on their Internet site early yesterday morning Eastern time...and it's also courtesy of Roy Stephens. The link ishere.

Drones have taken centre stage in an escalating arms race between China and Japan as they struggle to assert their dominance over disputed islands in the East China Sea.

China is rapidly expanding its nascent drone programme, while Japan has begun preparations to purchase an advanced model from the US. Both sides claim the drones will be used for surveillance, but experts warn the possibility of future drone skirmishes in the region's airspace is "very high".

Tensions over the islands – called the Diaoyu by China and the Senkaku by Japan – have ratcheted up in past weeks. Chinese surveillance planes flew near the islands four times in the second half of December, according to Chinese state media, but were chased away each time by Japanese F-15 fighter jets. Neither side has shown any signs of backing down

This story was posted inThe Guardianon Wednesday...and it's Roy's final offering in today's column. The link ishere.

The first is withBen Davies...and it's headlined "Gold is Now Set Up For a Vertical Price Explosion". The second one is withDr. Stephen Leeb. It bears the title "Chinese to Increase Gold & Silver Storage a Staggering 180%". And lastly is this interview with Citi analystTom Fitzpatrick...and it bears the headline "Expect Higher Gold & Unemployment as Stocks Set to Plunge".

Ansgar Belke, former Research Director for International Macroeconomics at the German Institute for Economic Research in Berlin, talks in depth about a paper that he authored for the EU Parliament on using gold as collateral for highly distressed sovereign bonds.

Belke is Professor of Macroeconomics and director of the Institute of Business and Economic Studies (IBES) at the University of Duisburg-Essen in Germany. He was the research director for
International Macroeconomics at the German Institute for Economic Research (DIW), Berlin until October 2012, and since 2012 he is (ad personam) Jean Monnet Professor.

He is,inter alia, a member of the "Monetary Experts Panel" of the European Parliament and the Committees for Economic Policy and International Economics within the German Economic Association.

This 2-page interview was conducted by Lars Schall...and was posted on theAsia Timeswebsite yesterday. The link ishere.

A report commissioned by the World Gold Council for the Official Monetary and Financial Institutions Forum in London, written by the chairman of the forum's advisory board, Meghnad Desai, more or less acknowledges what we've never seen the gold council acknowledge, the most important aspect of gold's place in the international financial system -- that is, that there is a war against gold.

"Most crucial with respect to the role of gold," Desai writes in his introduction, "the previously dominant Western economies have attempted to dismantle the yellow metal's monetary role, and -- for a variety of reasons -- this has comprehensively failed."

The rest of Chris Powell's preamble...and the link to the 44-page report...can be found in this GATA dispatch from yesterday. The link ishere.

JPMorgan Chase & Co. sold $35 million of one-year notes linked to the price of gold, the bank’s largest offering tied to the precious metal in at least three years.

The securities, issued Jan. 2, yield three times the gains of the price of gold in London up to 15.6 percent, with no protection against losses and all capital at risk, according to a prospectus filed with the U.S. Securities and Exchange Commission. The metal’s price increased 8.3 percent last year in London.

The bank sold $82.4 million of notes tied to gold in eight offerings last year, according to data compiled byBloomberg. New York-based JPMorgan issued $27.8 million of one-year securities on Oct. 26, the next-largest deal since 2010, whenBloombergbegan collecting comprehensive data on U.S. structured notes.

This item showed up on theBloombergwebsite late yesterday morning Mountain Time...and I thank West Virginia reader Elliot Simon for digging it up for us. The link ishere.

Mike Kosares of Centennial Precious Metals in Denver today cites the novelist Ernest Hemingway's comments about inflation, war, and icebergs to evoke the likely outcome of worldwide central bank policy amounting to the reincarnation of the infamous French finance minister of the early 1700s, John Law.

I plucked the headline...and the above paragraph of introduction...from a GATA release yesterday. It's posted on theusagold.comInternet site...and the link ishere.

The Gold Anti-Trust Action Committee (GATA) and other advocates--who argue the quantity of gold held by the world’s central banks, international bullion banks, and future exchanges is overstated--are backing a petition demanding an assayed public audit of the U.S. gold reserve, published Wednesday on the White House petitions website.

The petition reads: “As of 12/31/2012, the US Treasury claims to hold 261 million ounces of gold at Denver, Fort Knox, West Point and at the Federal Reserve Bank of New York. This bullion was last subjected to a full physical audit in 1953.”

I have two stories on this. The one above was posted on themineweb.comInternet site yesterday...and the link to that one ishere. It was also picked up byZero Hedge...and that link ishere. I thank Marshall Angeles and reader 'David in California' for sending them along...and I hope you have the time to add your name to the list.

While jewellers across India are planning to launch an agitation against the Indian government's proposal to increase import duty on gold to around 6% from the current 4%, a massive jump in gold imports has been witnessed across the country.

"With the news that the government is considering such a move (to hike import duty) and could most probably make an announcement in the Budget next month, bullion houses have jacked up their imports of the precious metal considerably since the last week,'' said Prithviraj Kothari, of bullion house Ridhi Sidhi Bullions.

"As compared to the normal 5-6 metric tonnes each week, traders have imported more than 30 metric tonnes already in the last five days,'' he added.

Thismust readstory was filed from Mumbai yesterday...and was posted on themineweb.comInternet site. The link ishere.

Most of the farming community across Haryana and Punjab in North India, were buying silver as a cheaper alternative to the more expensive gold for investment purpose. "The trend began at the end of 2010 when silver prices started rallying to a 30 year high. The price of silver has great potential to go even higher this year. Plus, most shops have been showcasing exquisite silver jewellery items. The lure is too much," he added.

Corporation Bank, which had opened a gold loan centre for small and medium enterprises and a gold loan shop at Chandigarh recently, said there was more interest in silver bars at the counter.

"The white metal is attracting a lot of investor attention locally as the silver price is forecast to rise this year. Gold, on the other hand, is static and its current high price is keeping most people away," said an official.

This is another story from themineweb.comInternet site yesterday...and it was also filed from Mumbai. The link ishere.

The Wonderful Wizard of Ozby L. Frank Baum (Chicago, 1900) is a parable about Money Reform and the 1890s Midwestern political movement led by William Jennings Bryan (1860-1925); three times candidate for President of the United States. From 1891-1895 Bryan served in the House of Representatives, where he advocated the coinage of silver at a fixed ratio with gold, in order to break the bankers' monopoly and manipulation of the gold-backed currency.

Bryan and his supporters accused Eastern banks and railroads of oppressing farmers and industrial workers. Bryan believed that a switch to silver-backed currency would make money plentiful. Although correct, Money Reformers today would argue that money need not, and should not, be backed by either silver or gold, but only by the people, their skills, and their resources.

In 1896 Bryan delivered the following words at the Democratic National Convention: "Having behind us the producing masses of this nation and the world, supported by the commercial interests, the labouring interests, and the toilers everywhere, we will answer their [i.e. the bankers'] demand for a gold standard by saying to them: 'You shall not press down upon the brow of labor this crown of thorns; you shall not crucify mankind upon a cross of gold.'"

Although only 36 years old, this speech resulted in his nomination for the presidency. He contested, and lost to, William McKinley. He stood again for the Democrats in 1900 and 1908, losing both times.

Carroll Quigley wrote about the 1896 Presidential election inTragedy and Hope: A History of The World in Our Time(MacMillan, 1966, p. 74): "Though the forces of high finance and of big business were in a state of near panic, by a mighty effort involving large-scale spending they were successful in electing McKinley."

If this is your first encounter with this story, then I absolutely guarantee that you will never look at this movie the same way again...ever. Thisexcellent must read articleis posted on Nick Laird's websitechartsrus.com...and I thank him for sending it. The link ishere.