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Worldwide, an incredible tower of debt has been under construction since President Nixon's 1971 default on the gold obligations of the US government. His decree severed the redeemability of the dollar for gold and thus eliminated the extinguisher of debt. Debt has been growing exponentially everywhere since then.

For the first time since 2010, we are seeing key relationships within the metals market in a bullish position which indicates precious metals may be setting up for a big first half move, particularly when both gold and silver bullion and the HUI are closer to oversold levels than overbought and would have to rally considerably before risk rises for a major overbought correction.

We would note to this that it is not possible to know when the US might 'turn into Greece'. Greek interest rates suggested that there would be no trouble whatsoever for many years – until they didn't anymore. Granted, the US is unlikely to be beset by similar problems in the near future.

I am saddened to report that Michael Pettis' site China Financial Markets has been blocked. The link redirects to a site with a one line message "This Account Has Been Suspended". When I have more details, I will post them.

You think this presidential race is nasty? The Founding Fathers had it beat. In the race between John Adams and Thomas Jefferson for president in 1800, Jefferson called Adams "a blind, bald, crippled, toothless man who is a hideous hermaphroditic character with neither the force and fitness of a man, nor the gentleness and sensibility of a woman."

Consumer confidence spiked last December. Gas prices were lower for the third straight month, a mild winter has meant that many consumers paid less to heat their houses, the auto sector posted another strong month, consumers spent more on recreation and demand for student loans increased.

Over the past five years, barley, of the eighteen commodities we follow, was the top performer. Rising by 180+% it bested Gold, +170%, and Silver, +150%. But why quibble? Nearly all commodity prices have done than paper equities. And perhaps they should, as real assets require real work to produce and are essential to the real world.

Even the early stages of new bull markets experience corrections. After surging off the March 2009 lows, the weekly chart of the S&P 500 experienced what is known as a “perfected sell setup” in DeMark speak. Following the sell setup signal in early June 2009, the S&P 500 corrected 9.1% in the next six weeks.

You may recall that only a few months ago, the investment community was worried about Europe and many were questioning the survival of the single currency. During that period, investors were dumping all sorts of risky assets and capital was flowing towards the world’s reserve currency and the most liquid government bond market.

The ballyhooed “Mortgage Settlement” is a big ol’ pile of crap—plain and simple. President Obama called the $25 billion deal the biggest settlement since the one with Big Tobacco—but that settlement, at $350 billion, was over ten times the size of this one. Actually, 14 times bigger, to be precise. And when you look at actual out-of-pocket costs (which I will below), you realize the Big Tobacco settlement was sixty times bigger.

The U.S. Department of Labor’s Employment Data is Bogus, as we and John Williams of shadowstats.com have been pointing out for years. Real U.S. Unemployment is 22.5%.

Februaries have been particularly troublesome since 1999. It has been a down month in 8 of those 13 years, with an average decline of 4.3% in the down years. But even that doesn’t tell the whole story.

Dominic Frisby has been bearish on the property market for years. His view on house prices hasn't changed, but now he is seriously considering buying a home. Why?

As an investor looking strictly at the charts, you want to see one thing: a breakout from a base. We are currently in one of the best markets to find these chart patterns in a long time. There have been catalysts for improvement on the fundamental side, many of which I’ve been talking about for three months in Market Observations and on the Financial Sense Newshour.

If you think that a gold or silver stock mania can't happen again, I am willing to bet you are wrong. There are several advantages mining shares can provide investors, but few are in favor at the moment. Just as crisis consciousness is not the only driver for bullion investing, neither is risk aversion going to keep people away from the mining shares forever. Barring the end of the world, I think they will eventually get their day in the sun.

It has to be one of the strangest weather phenomena of the decade. A Bournemouth, England resident was rained on by marble-sized balls of blue jelly. When he gingerly collected the slime, the Bournemouth University reported that they appeared to be fish eggs. Unfortunately, it was slimy blue mystery eggs, not caviar.

The self-interest of the alcoholic is to keep drinking. Is this truly in his best interests? The answer illuminates the pathology of power in America.

Bernanke’s testimony to the House last week and to the Senate yesterday held no surprises. Ben has promised to maintain monetary policy at DEFCON 4 levels for as far into the future as we can see.

Before we begin, a quick note that this week’s article is largely a continuation of musings from last week, entitled Ingredients for Inflation. In that article – which was widely circulated around the internet – we wrote about the coming wave of inflation that will result when the velocity of money accelerates in the US and all the new money printed by the Federal Reserve begins to circulate.

We are seeing a sea change in market sentiment, almost as if the Christmas break administered a large dose of stay calm medicine. Bad news is now good news and good news is even better. The European debt crisis is wholly discounted by equity markets as the ECB, with a new Italian president, has opened the cheap loans spigot with carefree abandonment of tough collateral requirements.