The U.S. is expected to go over the “fiscal cliff” at midnight Monday, but President Barack Obama and Senate GOP leader Mitch McConnell said an agreement to prevent a middle class tax hike was in sight.

Obama said more work needed to be done to avoid other pending issues, but McConnell told the Senate: “Let’s get what was agreed on and get moving,”

As Obama addressed the nation, the stock market spiked, with the Dow jumping nearly 100 points, but quickly cut some of those gains. They surged after McConnell’s subsequent comments from the Senate floor, (Read More: Stocks End Up 1% on ‘Cliff’ Progress)

The House was not expected to vote on any measure Monday night, so the U.S. will technically be going over the “fiscal cliff” at midnight, sources told CNBC. The House GOP caucus was scheduled to meet late Monday afternoon, but focusing on relief from Hurricane Sandy.

The emerging deal with the Senate would raise tax rates on family income over $450,000 a year, increase the estate tax rate and extend unemployment benefits for one year.

Read More at CNBC .

India’s community of high net worth individuals is growing fast and, for them, the most favoured form of investment is gold.

The HNI population in India rose by around 20.86% in 2010, and their wealth is estimated to have grown by more than 11%, to $530 billion. India is one of the fastest growing HNI segments in the world, currently contributing approximately 1.2% to the global HNI wealth.

“The number and wealth of the ultra HNIs has leapfrogged in the last decade. With an estimate that in the next five years, there would be about 219,000 such households, up from the current 62,000 households, their net worth is also expected to grow five times,” says Rupesh Nagoria, product head at broking firm, Alchemist House.

And, importantly, while their assets are growing the members of this class are also getting younger.

The average age of Indian high networth individuals (HNIs) has fallen to the mid-40s from the early 50s in just five years. Though precious metals still holds the roost, Indian HNIs are experimenting with a gamut of investments, from fixed income instruments, commodities to art and private equity firms.

Read More at mineweb.com . By Shivom Seth.

Be sure and read the quotes, above – especially the first Sinclair quote. Trust what he has to say. I do. Yes, I believe that gold is headed to $4000 or higher during the 2015-2017 period, and the dollar is in danger of a massive devaluation. Sinclair, as usual, tells it like it is and pulls no punches. Be long gold and short dollars. Follow that advice and you win. Ignore it and you lose. It’s just that simple.

Recently, I read reports from Stansberry and Larry Edelson suggesting that gold was in danger of a major correction, down into the $1300s or low $1400s. Both of these gentlemen assure us that they are still bullish toward gold and silver, but not short-term. At least they are long-term bullish and acknowledge that the bull market is far from over. Personally, I strongly disagree with their analysis, which is strictly based on technical analysis. I have less faith in TA than they do, in a market place dominated by manipulation.

When you consider the kind of information that they are presenting, it has to make you uneasy. What if they are right? After all, anything is possible. Bearish views, like those presented by Stansberry and Edelson, are not in tune with writers like John Embry, Bill Murphy, Andy Hoffman, Bill Holter, Jim Sinclair, Jim Willie and myself, to name but a few. What do all of us share in common? Most of us have been heavily involved in the precious metals industry for decades. We may not be right, but we are not fools and we are very experienced. You know my view – I am still very bullish and believe that January through April will be very kind to gold and silver. We shall see.

So how should you react to the following question: Is it prudent to hold off buying gold and silver now, at these low “correction” prices? As we head into 2013, I would like to share a few of my thoughts on what lies ahead for gold and silver.

First and foremost, I remind you that GOLD IS NOT AN INVESTMENT; GOLD IS MONEY. A simple statement, but it has deep meaning. When you think of gold only in terms of profit and loss, you become speculators. Count your gold IN OUNCES not IN DOLLARS. Your wealth, in the long run, and even in the rather near-term, will be measured in how many ounces you own. The price will take care of itself.

Read More at milesfranklin.com . By David Schectman.

Hope springs eternal about Europe’s ability to finally resolve its sovereign debt crisis. For despite a double dip economic recession and despite the clearest of signs of austerity fatigue, the markets appear to be buying European policymakers’ reassurances that the worst of the crisis is now behind us. The markets do so seeming to have forgotten previous hollow European policymaker reassurances since the start of the crisis in early 2010. They also do so in seeming disregard of the underlying economic and political forces now at play in Europe. Those forces offer little hope that the European periphery will soon extricate itself from its seeming downward economic and political spiral, which could make 2013 yet another challenging year for the Euro.

2012 was not a good year for the European economy. According to the European Central Bank (ECB), the overall European economy again succumbed to economic recession. And it did so before having recovered to its pre-Lehman 2008 crisis peak, which raises the disturbing prospect of a lost European economic decade. Meanwhile the Greek economy literally collapsed, as reflected by a cumulative 20 percent drop in output since 2009, while the economies in Italy, Portugal, and Spain experienced economic contractions of between 1 ½ percent and 3 percent. This dismal economic performance sent unemployment soaring to over 25 percent in Greece and Spain and to over 15 percent in Ireland and Portugal. Worse yet, youth unemployment in Greece and Spain reached over 50 percent.

If 2012 was a bad year for the European economy, it was equally challenging for European political stability. During the year, Greece drifted towards a state of un-governability and large cracks have emerged in its weak three party coalition government, with the extreme left-wing Syriza Party now baying at the gate. At the same time, anti-austerity protests became the order of the day in Portugal and Spain, where strong secessionist pressures also surfaced in Catalonia and the Basque country. Capping these political developments was the recent fall of Mario Monti’s government in Italy. That fall could very well mark the end of Italy’s year of relative political stability, which Monti’s technocratic government brought to the country.

Over the past year, two key policy developments have prevented the Eurozone’s deteriorating economic and political fundamentals from driving Europe over the abyss. The first was the bold action taken by Mario Draghi, head of the ECB in response to a market panic that enveloped Italy and Spain in the middle of the year. In response to that panic, Mr. Draghi announced that the ECB would buy unlimited quantities of short-dated Italian and Spanish bonds subject to those countries signing up for economic adjustment programs with the European Stability Mechanism (ESM). The second supportive policy development was a change of heart by German Chancellor Angela Merkel towards Greece. After having insisted earlier that Greece would not receive a third bail-out package, mindful of the German elections scheduled for September 2013, Mrs. Merkel changed her tune and began insisting that Europe was determined to do what it takes to keep Greece in the Euro.

Looking to 2013, there is every prospect that the European economic recession will deepen, and that the economic recovery projected for the second half of 2013 by hopeful European officials will not materialize. After all, the European periphery countries are committed to applying a similarly severe degree of budget austerity in 2013, within a Euro straitjacket that they applied with such dismal results in 2012. And they will now be doing so in the context of an ongoing domestic credit crunch and a very much weaker external economic environment than last year.

Read More at Real Clear Markets . By Desmond Lachmann.

Eighteen years ago, Morgan Stanley’s Investment Strategist, Byron Wien, quipped, “Unless Europe engages in an extensive program of restructuring, in 20 years it will be a vast open-air museum.”

But Europe did not restructure herself. Instead, she clung tenaciously to her beloved Welfare State. As a result, the museum’s doors are now open…and what a delightful museum it is!

Every exhibit hall features fascinating artifacts of capitalism and/or real-time interactive displays of the “Welfare State in Motion” — i.e. in stasis. The “Paris Exhibition” gets our top vote: Plop yourself down at a café table, sip a $15 cappuccino and watch unionized employees pretend to work.

Be sure to put it on your bucket list.

As museums go, this one may be the most dynamic and expansive one on the planet. If current trends continue, a brand new “American Wing” will be opening soon. In fact, to judge from the graphic below, this museum may soon have docents strolling the streets of almost every major economy in the Developed World.

Read More at dailyreckoning.com . By Eric Fry.

The Welfare States of the Developed World are “long growth.” Without it, their finances are doomed.

First, a little background…

Generally, investors will pay more for a dollar’s worth of earnings from a stock than from a bond. Stocks are riskier than bonds, in the sense that share prices tend to go up and down more, depending on company results. But investors believe this ‘risk premium’ is worth it, because there is more ‘upside’ in stocks; they will grow with the economy. Over the long run, therefore, the rate of return on stock market investing should more or less reflect the stream of dividends received, plus the rate of growth in the economy. If the economy doesn’t grow, however, the risk premium becomes a costly artifact of an earlier age.

Pension and insurance funds, too, count on growth. They collect money. They invest it and make projections based on what they consider a likely rate of return. The difference between what they collect in premiums…and what they need to invest to cover their costs and payouts…is profit. As of 2012, the typical pension fund — such as those operated by state and local governments — was banking on a rate of investment return as much as four times higher than the GDP growth rate. If growth does not pick up, these funds will go broke.

Private households, pension and insurance funds all are on one side of the trade, betting that growth rates will recover to those of the ’80s or ’90s. If so, disaster might be averted. Higher growth rates will permit governments to keep the rate of debt growth in line with revenue increases. But if growth doesn’t recover, public finances all over the planet are doomed.

Over the last 4 years the number of people on disability has risen more than 7 times faster than the number of people with jobs. The number of people on food stamps has increased by 17 million during Obama’s term in office. From the beginning of Obama’s first term to the end of it, approximately 4.6 million jobs disappeared. But the number of additions to food-stamp and disability roles jumped 21.2 million.

Read More at dailyreckoning.com . By Bill Bonner.