Europe is smoldering like a fine cigar. It will take a while to burn to the end, but make no mistake, the whole Eurozone is burning.

This is a story about a man who jumped from a 100 floor skyscraper.

In order to solve the mess that is the European financial system, a country will inevitably have to leave the Euro zone.

The euro has fallen sharply lower by 3% this week, which has corresponded to a similar rise in the dollar. The rise from the dollar brought havoc to the commodities and stock market alike.

The price of gold inched closer to $1,600 an ounce today. What might happen if the yellow metal falls below $1,600?

We seem to have a short memory for the most painful events of our past - and to completely misunderstand the causes and consequences. 

It's hardly surprising that the banks blasted higher yesterday - the intervention by central banks was directly aimed at helping out big banks.

It just seems strange that central bankers would be hell-bent for leather to continually devalue their currencies.

Are you familiar with Warren Buffett's recent diatribes against gold, specifically this quote which compares gold to other assets...?

Americans have been convinced that all you need to do in order to retire is to shove money into your 401(k) every month, but there are several reason why you should be skeptical.

You wouldn't know it from watching the news or reading the paper - but there's only one data point that deserves your attention.

The real question remains: "What happens to the dollar when they inevitably raise the debt ceiling?" Well, we already know the answer...

During strong trends, leadership stocks, sectors and indices are often defined by large rises on above average volume and miniscule declines on low volume - while the opposite is usually true during bear trends.

The market concluded its fourth positive week in a row with another strong performance from financials.

Today, I'd like to provide some useful perspective as I take another look at what I had to say about silver exactly one year ago.

When two of the biggest companies in the market miss earnings - and in Apple's case it was the first time in almost a decade it missed - and the market goes higher?

I got smacked around a little bit too. I bought silver a few weeks ago when it was at $43 an ounce. After yesterday it’s selling for under $36.

Economists have been extremely inconsistent with their economic projections over the past few months, as their views and outlooks seem to be swayed by their emotional response to the economy and stock market.

I look at the entire global market for everything, and in doing so it becomes perfectly clear that no other market looks as promising or potentially profitable as the commodity market.

Europe's zombie debt crisis continues to reappear - almost on a monthly basis. Like a bad horror movie with sequels, prequels, re-makes and homages, this story just won't die.

The end is near for one of the world's greatest tyrants. 40+ years ago, the world allowed a ruthless dictator to come into power. This dictator used their power to fund endless war, terror and State sponsored killings, theft, imprisonment - even torture.

But lately, that power is on the wane. Loyal supporters continue to deny that anything is wrong - or even that anything is changed.

I might be talking about Muammar Gadhafi, but I could just as easily be talking about the Federal Reserve Note, or dollar, in common parlance.

Today I'd like to take full advantage of the power you give me. You might not realize it, but you are one of many. Tens of thousands of people read the words I write every day.

And while it's easy to forget while I sit here alone behind a keyboard, my 3 month old son cooing in the next room while my wife makes coffee - I have your attention for a few minutes each day - and that attention means something.

There's nothing about having the attention of thousands of people that I take lightly, which is why you should know that I do not accuse Ben Bernanke lightly.

The market fell by nearly 1% yesterday. Volume stayed high, but was nowhere even close to the levels of last week. And in sharp contrast to Monday's session, energy and bank stocks were murdered.

The big banks felt the worst the bears could offer yesterday as BAC (-4%), JPM (-2%) and C (-4%) led the charge lower in the financial sector.

More notable than the drop in big banks or big oil stocks was the inability of the bulls to maintain SPX 1197.

President Obama's upcoming jobs proposal just might be the final piece of the puzzle to guarantee a huge upswing in gold prices and silver prices.

Why? Well here's what we know so far:

1. He plans on spending money to create more jobs.
2. He plans on tackling the deficit.

What do we know about his first goal...

Right now, Mr. Market is giving you a variety of warning signs. You don't get market volatility like we've seen over the past couple weeks unless there's something very, very wrong with stocks.

You also don't get Italy, Spain, and the United States' debt all downgraded unless there's something wrong in the sovereign debt world.

Gold and silver don't go on decade-long bull market tears unless there's something very wrong with the dollar.

Well, well. Congress did it. And more than a full day ahead of Treasury Secretary Geithner's absolute deadline on Tuesday, August 2. I will admit, I'm surprised. Not that they reached a deal -- after all, I playfully wagered my entire business that a deal would get done with High Yield Wealth editor Steve Mausy. But I figured it would be a midnight deal.

Of course, nothing is signed, sealed and delivered just yet. I expect that may not happen until this evening. But the rhetoric from Congressional leaders and the president suggest the signatures are a formality.

The market was destroyed yesterday. Volume wasn't meaningfully high, but it was better than the past few sessions. The market ripped lower yesterday morning following concerns that Italy was near a default. And the indices continued to trickle lower into the close.

Most indices finished 2% lower in yesterday's bloodbath. But even that percentage seemed low since most of the stocks I followed declined over 4%.

I can't argue against the strength of yesterday's decline. The selling pressure was strong and it was a continuation of Friday's sell-off. But I can't believe the selling was due to Italy.

Over the weekend, new capital requirement rules for large banks were finalized. Known as Basel III, these rules will add as much as another 2.5% to some banks Tier 1 capital. That brings the total to as much as 9.5% for banks that are deemed to be too big to fail.

These new rules are designed to keep banks from over-leveraging and causing a repeat of the financial crisis. But it should also be clear that even a 9.5% Tier 1 capital requirement is not a big requirement. Banks will have no trouble raising their Tier 1 capital to the new levels by the 2019 deadline.

In reality, this is a token move and won't affect the banks much. It definitely doesn't do much to prevent another crisis. But it may be good news for banks stocks. One reason for the recent weakness in bank stocks is uncertainty of new financial regulations. With this Basel III agreement, some of that uncertainty is removed.

The market continued its decline yesterday, although the momentum waned. Despite hitting new lows the indices bounced nicely into the close and protected their March low. Volume was also high

I’m always looking for unique ways to invest in gold, and legendary investor Dennis Gartman recently discussed a way to build a gold position in other currencies…

What do I mean by other currencies? Well, as Mr. Gartman says, “If you buy gold, by definition you have gone short of the U.S. dollar.”

Now, I’m as bearish on the dollar as anyone over the long term, but just like no bull market goes up in a straight line, no bear market drops straight through the floor.

And right now, the dollar is absolutely in the gutter – even relative to other at-least-as-crappy currencies like the Euro or the Yen.

Here’s a one year chart of the dollar index – which plots the exchange rate of the dollar against a basket of other (fiat) currencies.

Practically no one is talking about it, but one of the most commonly used commodities nearly doubled in price between the middle of May 2010 to the middle of May this year.

Of course, Ben Bernanke will tell you that such price swings don’t necessarily hit the consumer – which would then trigger a boost in consumer price inflation.

But my wife pointed out that prices for this commodity are starting to now rise for the consumer.

Still groggy from a lack of sleep and not enough coffee, I hadn’t noticed an obvious sign that prices for this commodity are now hitting home.

Literally…

Back in November, I made some predictions about the then upcoming second round of Quantitative Easing, aka QE2.

In short, I predicted that QE2 would disappoint the market. As a consequence, I thought that most asset classes would trend lower as the dollar strengthened.

I hoped that such an action would occur, because I believed, and still believe, that the commodity market still has plenty of upside, but that such a disappointment would create a stellar buying opportunity to load up on my favorite commodities.

I was wrong, of course. Bernanke’s announcement of $600 billion only encouraged the markets higher.

Everything’s more expensive now – which is exactly the type of market movement that’s highly unlikely if not completely impossible under normal circumstances. Normally, if widget X goes up in price, commodity Y and wage Z will fall. Normally, prices don’t all rise at once…

Paper money system default appears at first glance to be an unhappy accident of progressive governments biting off more debt than they can chew.

And while there’s certainly plenty of blame to go around for progressives, conservatives, RINOs, DINOs and moderates alike – if you take notice of who benefits from the devaluation of paper currencies, you arrive at a different conclusion.

You’d think that progressive candidates would spend money in an effort to end poverty. That would get them elected for life by the formerly impoverished.

Similarly, you’d expect the end-goal for hawkish conservative legislators would be world peace. Nothing would be a bigger victory for the world’s greatest military.

But despite decades of entitlement programs at home and billions of dollars spent annually on intermittently bombing and paying our enemies into submission abroad – we still have more poor people in this country than we know what to do with, and our list of enemies only grows longer every year, not shorter.

So if these programs have failed, then who or what is the real beneficiary of inflationary policy-cum-deficit spending?

Any first year economics student will be able to slowly and cogently explain the theory of maximum employment, or even give you a run-down on modern monetary theory.

Certainly, most hobbyist economists will be able to fumble their way through an explanation of Keynesian stimulus theory.

But where their book learning and theories and financial models break apart is during a crisis.

Why?

Because: you can’t model a currency crisis. You can’t say when one will occur. You can’t say how bad it will be once it starts.

A currency crisis occurs outside the realm of even the best mathematically correct theories. Such a crisis results from a massive, widespread loss of faith in a given currency. It doesn’t happen in textbooks or in charts, models or in Paul Krugman’s daily hack-job column.

It happens in the minds of men.

It’s easy to be cynical about the state of the dollar – after all, it seems as if every bit of news is either terrible for the dollar, or clearly a whitewash attempt from some Pollyanna official or talking head.

When all the real news is bad and all the rest of it is BS, it’s tough to keep a positive outlook.

It’s easy to get angry, frustrated and irritable about the state of this country and its currency – especially as friends, family and acquaintances just don’t “get” what’s going on.

Most people still have no conception of what money really is: a medium of exchange and a store of value. They can’t see that the Federal Reserve Note is an especially poor money unit.

But that’s okay. Even if people in this country have to be pulled, kicking and screaming into gold and silver ownership – they will do so.

Be content with your precious metals ownership and investments. Continue averaging into gold and silver – especially on dips.

The market bears were at it again yesterday. All indices, both domestic and abroad, collapsed. The decline was on low volume, but it was painful. No sector outside of healthcare was able to escape the

Suffice to say that though the last two weeks appeared to have been some of the most interesting and tumultuous, with silver and oil prices getting rocked, and sovereign debt issues raising their head again in Europe, as well as the continuing sagas of War and debt here in the United States – I can confidently say that all of the major themes I talk about in this letter are still in place.

It’s been more of the same.

It’s important to re-evaluate your investment thesis on an ongoing basis. When the facts change, you should be prepared to change your investment strategy.

I buy gold and silver, oil and coal, natural gas and potash – not because I have any special affinity for commodities, but rather, because it makes sense to invest in these things.

Why does it make sense to invest in commodities?

The market gradually climbed higher yesterday but with no real show of enthusiasm. Volume was also low and most indices were up less than one percent. Despite the rather bland session the market did

The market declined yesterday, but only technology showed clear weakness. The fall from the other indices was a byproduct of the decline in tech stocks. Despite the big drop in technology, and the

The market ripped higher yesterday. Volume was average during the ascent which was led again by commodities and technology. The gain from the technology sector was especially good to see yesterday.

The market declined last week, which is it's first decline of over 1% in some time. Volume picked up, but not in a significant manor. The turn in the market happened to coincide with a turn in the

We’re not yet in the mania stage for gold. We could be as close as a year, or as far as 5 years, but we’re just not there yet. Take a look at the chart below, which shows gold compared to two of the last, biggest asset bubbles.

What kind of performance can we realistically expect for gold companies to see when we do enter the mania phase?

It’s tough to find historical data on gold companies during the 1970s. Most of them are gone. The rest have been gobbled up or sliced apart into completely different companies.

We do have a frame of reference for the internet bubble. You might remember that time as a period when everyone had a hot stock tip. Everyone was up hundreds of percent, or more, on companies like Cisco and Intel.

The market actually closed lower again yesterday. Although neither volume nor the percent of decline was substantial, SPX has struggled mightily against 1377 resistance. Additionally, which I also