We shine the spotlight on one of the ‘biggest’ stories to hit the European newswires since the EU debt-deficit crisis began two-years ago, a story that the financial media has ‘failed’ to cover …

… on November 1st, in Nazare Portugal, 70 miles north of Lisbon, an ocean side town know for the giant waves generated by a freakish 1000 foot deep canyon that runs right along the cliffs that mark the shore line … American surfer Garrett McNamara ‘caught’ a 90-foot wave, and ‘rode’ it to ‘completion’, setting a new world’s record for the largest wave ever ‘surfed’.

Long time readers know my passion for surfing, at least in my younger days (though I do note that McNamara, born in Massachusetts’s, is no teenager, at age 44). The video is nothing less than spectacular, see HERE

For a slow-motion replay with some great still shots, see HERE:

So, what, exactly, does this story have to do with Europe ??? Simple. Europe is trying to ‘ride’ a tsunami of debt.

With continued turmoil in global markets and gold remaining firm in the mid $1700s, today Michael Pento, of Pento Portfolio Strategies explains for King World News readers globally why a full-blown bond market crisis is coming in 2012 and how investors should prepare, “The European debt debacle continues to unravel and yet many investors fail to recognize the profound ramifications of taking the largest economy on the planet offline.  EU 27, which has a GDP north of $16 trillion, is the largest export destination of some of the world’s fastest growing economies.”

There’s a long list of political-oriented lies floating around out there, about oil sands. They’re in the nature of “throw it against the wall and see if it sticks” kind of things. For the sake of completeness, here are a few of the biggest whoppers…

1. Oil sand development requires huge strip mines that scar the land. No, not any more. That’s 1970s technology. Today, it doesn’t work that way. With deeper oil sand targets, the process calls for directional drilling to emplace wells within a few inches of where the geophysics and core drilling identifies the targets. Oil service provider Halliburton does this, by the way. Then it’s a process of injecting steam down “injection wells,” to warm the gooey bitumen, and get it to flow into other “recovery” wells. Today, a relatively small surface footprint of wells can drain bitumen from much larger acreage. It’s quite efficient. Oh, and the 1970s-era strip mines are being recovered — better than we recover strip mines in the U.S., in my view — which is the law in Canada.

1. Canadian oil is “too” carbon-intensive. Having visited several oil sands operations, my view is that Canadian oil is no more or less “carbon intensive” than heavy oil from anywhere else. Actually, the most-modern oil sand operations are models of sound engineering. That is, energy is recycled and reused in the best sense, and to the practical limits of thermodynamics. ConocoPhillips at Surmont, Alberta, comes to mind. When it comes to the idea of “too much carbon,” the chief culprit is not the source of the oil, in Alberta, but it’s the tailpipes of 500 million automobiles worldwide.
2. Canadian oil uses “too much” water. Actually, no. Not at all. That’s completely wrong. The sites I’ve visited have impressive capabilities to recycle water. To begin with, the original water source is NOT surface water. Most processed water at oil sand operations comes from brackish, deep zones. You’d never drink this stuff. You can’t use it for agriculture. The oil sands operations pump out deep, brackish water, clean it up, use it in oil recovery operations and then recycle it. Any water that gets discharged (and that’s a very small quantity) is generally cleaner than the streams into which it flows.
3. Canadian oil is the “consistency of peanut butter,” which is bad for the pipe. I’m serious — that’s one of the arguments. And it’s so stupid as to be ridiculous. Let’s just say that natural bitumen in Alberta, fresh from the sandstones, in the middle of winter, is the “consistency of peanut butter” — and so is every other form of oil out of the ground. It’s the nature of viscous hydrocarbons. But when you heat up bitumen and “cut” it with what’s called a “diluent” for pipeline transport, Canadian oil flows just fine. As for dissolving the pipe? Any sort of steel will corrode over time — it’s called “rust.” But oil pipe won’t fall apart if you use the right kinds steel and design the pipeline correctly.
4. If the pipeline leaks, it’ll contaminate the Ogallala Aquifer. Just as if the Alaska Pipeline leaks, it’ll contaminate the otherwise pristine waters that flow across the spectacularly beautiful state of Alaska. Well, there’s a way around that — if you double-case the pipeline in critical spots, as the builders plan to do, any spill will be contained. By comparison, the Alaska Pipeline operates in super-extreme conditions — what with Arctic temperatures and its location in vast regions of seismicity — and it has never had a serious leak. Meanwhile, if a train derails in Nebraska, that, too, could contaminate the aquifers. And if any of the other several thousand miles of major fuel pipelines in Nebraska break, it could also be a mess.

In a new book called “Currency Wars,” Wall Street insider Jim Rickards examines how countries try to get out of financial trouble by devaluing their currencies.  Rickards says, “Today, as yesterday, countries are attempting to devalue their way out of trouble. Following the strategy of beggar-thy- neighbor, the U.S., Europe, China and Japan all want to weaken their currencies. The flaw in the tactic should be clear. “Not everyone could cheapen at once,” Rickards writes. “The circle still could not be squared.” (Click here to read a book review by Bloomberg.) Rickards predicts the U.S. dollar’s future is not bright, and if there were a “catastrophic collapse of investor confidence,” the dollar’s buying power could suffer suddenly and dramatically in a global sell off.

Gold would be the big beneficiary if the dollar declined, and Rickards’ top price for gold per ounce is–wait for it–$44,552! That price is the absolute highest possibility.  Rickards and others predict that in the next few years, America will go back on some sort of gold standard.  Meaning, the dollar will be backed by gold, but Rickards has stated on many occasions that there probably will not be a100% gold backed U.S. dollar.  Instead, Rickards contends it will be more in the neighborhood of 40%.  If that is the case, then gold would be $17,821 per ounce using Rickards numbers.  It appears gold prices are going much higher.

….read more HERE

ore pieces are coming together. Day by day, the puzzle takes shape. Not a pretty picture.

An epic battle is taking place. Between the forces of…

…inflation and deflation

…growth and depression

…credit expansion and credit destruction

…centralization and de-centralization

…politics and markets

…managed paper money and gold

…managed capitalism and the real thing

…control and wealth

…bull and bear

…greed and fear

…zombies and real working people.

Yes, dear reader, it’s quite a fight. Better than Frazier vs. Ali. And who’s gonna win?

Europe faces its “toughest hour since WWII,” says Angela Merkel. What does she propose? More centralization. Centralization got Europe into this mess — harmonizing interest rates so that the Greeks and Italians could borrow more. And now, more centralization, she believes, will get it out.

Europe is taking no chances. This debt problem is a slugger. What to do about it?

Who knows more about debt problems than anyone else? The people who cause them, of course. So, under great pressure from the centralized European authorities, Greece got rid of its Papandreou, after the man had the gall to suggest letting democracy work. He wanted the people to vote on further austerity measures. It replaced him with Papademos…a guy who won’t make the mistake of deferring to the masses. After all, he was vice-president of the European Central Bank for years. And he taught at the Kennedy School of Government at Harvard.

Meanwhile, Italy too has been forced to get rid of its popular, but difficult to control, elected leader — Silvio Berlusconi. It has put in a company man. Yes, a company man. What company? Goldman Sachs, of course. The new fellow, Mario Monti is an ex-Goldman guy. And so is the new fellow at the European Central Bank, Mario Draghi. Monti was also an EU commissioner. Draghi ran the Bank of Italy as the nation built up one of the world’s biggest piles of debt. Then, when Italy’s cost of borrowing shot over 7%, in came Monti and Draghi.

It is almost as if they planned it that way. Who’s the biggest seller of debt on the planet? We don’t know…but Goldman Sachs has to be up in the rankings somewhere. You’ll recall it was Goldman that helped Greece structure its debt so that it could abide by the letter of its treaty engagements with Europe but totally thumb its nose at the spirit of it.

And now the debt has blown up…and the Goldman boys are on the job, managing the mess they were so instrumental in creating.

What’s their solution? Oh come on…dear reader, you should know how this works by now. They propose more centralization, more management, more paper money, more debt, more inflation, more of everything you see on the right hand of our column above.

In other words, they believe that they know better than the people…or the market. They believe that their sanitized, homogenized, pasteurized Capitalism-in-a-Can works better than the real thing. Besides, they have a reason to believe it. This claptrap is the source of their power, status and money. Who knows, maybe their wives married them because it.

Rather than renounce the program on which their reputations, careers and fortunes depend, they try to shore it up. They open up the can and see what they can use. They promise to reform the system, not reject it.

But every reform — unless it merely dismantles one of their previous reforms — is a manipulation…a price fix…and a scam. For example, they are proposing tax incentives to employers who hire youths and women. Good idea? Why not just drop some of the regulations and taxes that make it so expensive to hire youths and women in the first place? Nope. Then, they’d be giving up control. They’d be letting market forces decide who gets what. Here’s another proposed reform, as reported in The Financial Times: “Wider social safety net to help those made redundant (laid off) and encourage labor mobility.” Typical rubbish. Spread a wider safety net and you discourage people from doing the hard work of finding new careers. But here’s one that will be popular with the managers: a “crackdown on tax evasion.” Are you kidding? Tax evasion is the only thing that keeps these economies going. People prevent their government from squandering their money. They spend it themselves. But the new Goldman guys won’t like it. They’ll want to get their hands on as much of that ‘black money’ as possible.

Meanwhile, what’s going on in the USA? Alas, the US economy is the hands of the same sort of people… The people who caused the mess…who did not see it coming…and who have not had a clue what to do about it. They’re still running US economic policy. These illustrious incompetents — such as Larry Summers of Obama’s National Economic Council and Tim Geithner, his Treasury Secretary — have proven that they wouldn’t know a Great Correction if it bit them on the behind..

So, they just keep adding more debt, more spending, more management, more ‘reform’ measures, and more centralization.

Ultimately, the elite managers of Europe and America all went to the same schools (Harvard, Yale, MIT…)…all read the same newspapers and magazines (The Financial Times and The Economist)…all worship the same gods (money and power)…all speak the same language (mid-Atlantic English)…and all want to control the world.

So far, they seem to be making great progress towards their objectives. They stuff the world with debt. It blows up. Then, they push out democratically-elected leaders…gain new power and authority…and take charge of the rescue.

Of course, everything isn’t smooth sailing for the manipulators. There are storms to reckon with. The Telegraph reports that there is revolution in the air. From Ambrose Evans Pritchard:

Italy’s youth are turning. Watch the footage of students chanting “democracy” and brandishing their “95 Theses” of Wittenberg revolt as poet Van Rompuy tried to speak in Fiesole.

“No to Austerity,” starts the Luther List: “Troika out of Greece”, “IMF and ECB out of Italy, Ireland, and Portugal”, it goes on.

“The EU has become ever less accountable to the people of Europe. The undemocratic structures have infiltrated the very structures of the Union,” they said.

Behold “the EU’s furious reaction to the Greek government’s effort to seek popular consent over the financial stranglehold imposed on the country. No longer are expressions of popular consent simply ignored, it is now impermissible to consult citizens.”

“The game is getting dangerous,” said Il Sole. Some suspect that the Berlusconi camp would not do too badly in snap elections, if allowed, campaigning against the “hated euro and EU bosses”. Is that why Brussels is now so afraid of Italy’s voters?

If Mr. Monti relies on the Left, how can he comply with EU orders to break the power of the trade unions and impose “Anglo-Saxon” wage-bargaining? A large bloc in parliament will die in a ditch to defend Article 18 of the labour code.

Labour minister Maurizio Sacconi warned last week that careless handling of this issue threatens to unleash another round of terrorism in Italy. It is only nine years since Marco Biagi was assassinated by the Red Brigades for threatening the sacred cows of the Sindicati.

In 2009 the European Commission praised Italy’s “spectacular job creation” and its “greater resilience to external shocks”. In 2008 in said Italy was making “good progress” on the Lisbon reform agenda. In 2007 it said Italy’s debt sustainability risk was “broadly in line” with France and Germany.

Italy’s four sets of pension reforms were held out as a shining example. Finance minister Giulio Tremonti was feted in Brussels, lauded for his iron discipline and primary budget surplus.

And now these same EU bodies tell us that Italy’s failure to grasp the nettle of reform and tackle its debts is so egregious that Europe must step in to overthrow an elected government.

Regards,

Bill Bonner
for The Daily Reckoning

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.

Special Report: Shattered Bank Vaults, Empty ATMs, and No Milk in the Store- Do you know just how drastically your life could be set to change if the U.S. gov’t can’t borrow another dollar? Services you take for granted today could disappear overnight. Don’t risk your future – watch this urgent briefing right now. There’s no time to lose… Don’t wait, watch now.