Last month, I spent some time in San Juan, Puerto Rico. One day, we visited Old San Juan, the oldest settlement within the territory of the United States, with a history that begins in 1508. We also visited the old fort known officially as El Castillo San Felipe del Morro, or simply El Morro.

The fort must have sent shivers up the spines of all those who hoped to take it. The walls of El Morro are 18 feet thick and 145 feet high. Built on a headland, the Spanish Empire controlled the flow of goods in and out of the New World from here. El Morro has been tested many times. Even today, you can walk in the oldest tower in the fort, built in 1539, and see shell fragments in the ceiling that date to the 1898 bombardment of San Juan by the U.S. Navy during the Spanish-American War.

El

Gold had a nothing day yesterday, but most of the action it did have occurred on the Comex in New York, where an attempt to break through $740 was once again thwarted. Silver was where all the action was. After a 20 cent sell off on the Comex open, silver jumped up sixty cents from the bottom by lunchtime, but someone was there to put an end to this “irrational exuberance.”

Monday’s open interest numbers showed another substantial decrease in gold open interest…this time 4,551 contracts. But in silver, o.i. rose 1,191 contracts to 93,757. Was it short selling? I’ll let you know on Saturday morning.

Talking about silver, here’s a graph (courtesy of Gene Arensberg) showing Comex silver stocks from October 17th to November 17th. Since that graph was published early yesterday, Comex silver stocks have fallen again…this time by 314,095 troy ozs. to 128,720,340 troy ozs. Options expiry and first

The bulls and the bears battled hard for supremacy throughout Tuesday trading on the Canadian Markets with the bulls eventually coming out on top of the big board and the bears winning the day once again over on the junior bourse. For the tale of the tape, the TSX Exchange added 0.46%, while the TSX Gold Index dropped 0.8% and the TSX Venture Exchange, Canada’s largest junior exploration bourse, lost 4.52% with the declining issuers outpacing the advancers by a 543 to 290 margin on volume of 169 million shares traded.

It was a good day for Peregrine Diamonds after the company reported that it discovered a gem quality 2.01 carat stone from a 2.28 tonne sample collected from the CH-1 kimberlite on the Chidliak property in Canada’s north. Peregrine ended the session at C$0.395, for a C$0.06 gain.

Rolling Rock Resources bounced off the mat to close at C$0.035 for

The base metals did little more than tread water on Tuesday. Copper sank from the pre-dawn hours to mid-morning, but then rallied strongly to the noon hour, but faded again from there, finishing at $1.611/lb., up a tenth of a cent. Nickel crested at $4.70, also around the noon hour, then gave back most of the day’s gains, closing at $4.607/lb., up less than a half-cent.

Zinc pushed higher from the pre-dawn hours through the morning, only easing a bit late, to end at $0.5358/lb., up 2 cents. Aluminum too had a morning rally, but wound up little changed, adding less than a half-penny, to $0.8354/lb., while lead was little changed at $0.577/lb., up less than a quarter-cent.

Copper came in nearly unchanged after a down/up/down session in which the industrial metals barely showed any signs of life.

“Worries about the international economic outlook have continued to dominate base metals trading,” wrote

In the energy market Tuesday, oil touched a 22-month low at $53.96 but then edged higher, with crude for December delivery closing at $54.39/barrel, down 56 cents. Gasoline for December delivery dropped 3.8 cents, to $1.1386/gallon.

The average U.S. price for gallon of regular gasoline at the pump now stands at $2.068, according to AAA’s Daily Fuel Gauge Report, down more than $1 from the year-ago level of $3.095.

Crude’s precipitous fall is having an effect in the field, says Charles Perry, president of Perry Management, who says that, “With the decrease in oil prices … we are now seeing a drop in active drilling rigs, and some are being stacked … Truth is, several of the drilling prospects are no longer economical, and plans to drill them have been shelved. Same is true in the gas producing areas.”

Perry added that, “When an oil company leases a drilling block, the usual

In the currency market, the dollar edged higher against the euro. Late Tuesday, the euro was trading at $1.2618 vs. $1.2643 on Monday.

The day’s big number was the Labor Department report showing that producer prices fell 2.8% in October, the most in at least 50 years.

The headline number was slightly misleading, however, as the plunge was triggered by a 24.9% drop in gasoline prices, a record freefall going back to 1947, when the government first began keeping track. Outside of food and energy, prices were actually up, by 0.4% in October.

But Nigel Gault, economist with IHS Global Insight, downplayed the core figure, saying that, “We saw huge commodity price increases really through the middle part of this year … It took a long time for that to start feeding though into the core inflation. So we’re probably seeing the last gasp of the inflationary implications of the previous

Gold sagged from $740 at the London open to as low as $732 in the first hour in New York, spiked back up to $743 at the noon hour, fell back below $735 at the close of the Comex, then pushed higher on the Globex to finish a very up and down day little changed at $737.70, up $1.60. Overnight, gold is slightly lower.

Platinum bottomed at $810 right at the New York open, then inched its way higher through most of the day ending near its intraday high at $830/oz., up $28. Overnight, platinum has been flat.

Silver was near flat to the New York open, fell off 20 cents in the first hour, but then went near-vertical, adding 60 cents to peak above $9.70, eased into the Comex close, but pushed higher again on the Globex, finally closing at $9.59/oz., up 36 cents. Overnight, silver is trending lower. (

Buy gold, silver and oil as fast as you can, you morons, or die a horrible death by inflation like the people of Zimbabwe!

Mike Shedlock of globaleconomicanalysis.blogspot.com writes that I - and people like me, who are expecting inflation - are a bunch of idiots, which is unfortunately true about me, and I am grateful that my Natural Mogambo Stupidity (NMS) is his only complaint about me. I only wish that others were equally restrained in their criticism, as there is apparently no end to either my personal shortcomings or their delight in pointing them out.

He writes, thankfully not mentioning me by name, “You would think that inflationistas would have caught on. But they haven’t. Nor will they. And articles about shrinking day care, collapsing retail sales, rising unemployment, record foreclosures, massive credit card defaults, bankrupt insurers, collapsing auto sales, sinking commercial real estate, plunging commodity prices, and dozens of

First Congress authorized $700 billion — quite a bit more than the entire Department of Defense budget — for some sort of “troubled asset relief plan (TARP).” (Nobody ever really explained it to my satisfaction. Somehow we were going to throw money at a very big problem and fix it.) Then the money flowed like rainwater to Wall Street and a bunch of banks. Then the banks and Wall Street houses continued to pay their insiders’ big salaries and bonuses.

Yard Work, Troubled Assets, Bankruptcy and Energy

I often mention that I live in Pittsburgh. Well, the truth is that I live in a leafy suburb of Pittsburgh. I grew up in the Steel City. But when I got married I moved to the suburbs to be near my wife.

Life in the Leafy Suburbs

There is a problem with living in a leafy suburb. When autumn rolls around, the leaves turn brown

Don’t look now, but China has just displaced Japan as the leading holder of U.S. Treasury debt.

The latest numbers show China now holding $585 billion in Treasury paper — about 20% of all Treasury paper in foreign hands, and 10% of the total both foreign and domestic.  And since Treasury doesn’t keep tabs on who holds its paper domestically, China is likely Uncle Sam’s biggest creditor, period.  (In fact, those percentages might be higher still since rumor is that China buys additional Treasuries through other countries.)

So there you have it: Beijing is financing no small portion of the $700 billion bailout.

Sort of puts things in a different perspective when you hear the new president saying essentially, “Damn the deficits, full speed ahead.”  If someone like David Walker can’t convince him a trillion-dollar deficit is a problem, the Chinese certainly will if they decide they don’t want to keep