Must-Read: China Alarmed by US Money Printing – (Telegraph) “Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets,” he added. “The comments suggest that China has become the driving force in the gold market and can be counted on to buy whenever there is a price dip, putting a floor under any correction.”

Us Govt Pays for GSE Legal Bills – (NYT) Taxpayers are footing the bill for former Fannie and Freddie execs, yay! Makes me feel like my tax dollars are being well spent.

A Black Hole Called the Federal Reserve – Extreme and hyperbolic, yeah. But maybe that’s what we need to change this corrupt hellhole of a financial system:

Karl Denninger on Banks and our “Recovery” – (Market-Ticker.org) “No fractional reserve system can survive with charge-off rates much beyond 1% over any material amount of time.  Rates beyond 2% threaten near-imminent collapse.  This is inherent in how fractional reserves work – with a 6% Tier Capital ratio 2% charge-off rates eat dramatically into your Tier Capital – and this assumes that your “assets” are marked accurately.  You can try to make this up with “earnings” (and the banks are) by charging outrageous interest rates, but as you can see from the above chart all this has done is feed back into higher delinquency and loss rates, becoming self-defeating.”

Even if you disagree with Mr. Denninger, you gotta admit the guy knows his sh*t. He prefaces the above statement with this, “What’s worse, however, is the news contained in this chart:”

income-assets-debt

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