“In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System … the State’s governmental finances and private economy will be thrown into chaos,” stated North Carolina Representative Glen Bradley in a bill he drafted in 2011.   Sign-up for my 100% FREE Alerts

Sensing that the Europe’s crisis has bought the Fed and U.S. Treasury some time, for now, State legislators have already begun to prepare for the eventual rejection of the U.S. dollar as a viable means for exchanging goods and services.

According to the U.S. Constitution, Article 10, Clause 1 (Contract Clause), States can issue their own money as long as they are in the form of gold and silver coins.

Article 10, Clause 1 (Contract Clause)

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

How much time the U.S. dollar has left as a trusted currency is unknown, but the countdown has begun.

Like the sudden collapse of sub-prime mortgage market—which spread throughout all mortgages—and Greek sovereign debt in 2010—which spread to the rest of Europe—one day Americans will wake up to a crisis in the dollar.

The man who warned of a credit bubble in the U.S. mortgage market in 2006, Doug Nolan of Prudent Bear, told Financial Sense Newshour he likens Greece to the sub-prime mortgage market and the currency dominoes the besieged nation will eventually topple across the globe.

“I refer to this [U.S. Treasuries] as the global government finance bubble and I draw parallels between Greece and sub-prime U.S. mortgage back in the Spring of 2007,” said Nolan.  “In the Spring of 2007, confidence started to falter for sub-prime.  The risk is part of mortgage debt and of course you had the aggressive policy response.  You actually had a very speculative market and you didn’t have a serious crisis until sometime later in 2008.  Now we see Europe; they had the initial Greek crisis; they responded aggressively with the bailout.  That bought them some time, but then things started to spiral out of control last year.”

Though U.S. Representative Ron Paul, TX has sponsored the “Free Competition Currency Act” in the U.S. House of Representatives, State legislators are waiting for Washington.  They have proposed varying methods of introducing gold and silver as a go-to currency in their States so that their citizens can continue to buy groceries, services and durable goods, such as cars and major appliances after the fall of the dollar.

However, logistical issues abound for the States.  Carrying around bullion coins aren’t practical and deviate grossly from ingrained habits of Americans in the use of money in a modern banking system of paper and plastic cards.  But Utah has a solution: Utah Gold & Silver Depository, where clients can continue to use plastic cards.  But instead of transferring fiat currency to a merchant with plastic cards, gold and silver grams would transfer instead to pay for goods and services.

“A Utah citizen, for example, could contract with another to sell his car for 10 one-ounce gold coins (approximately $17,000), or an independent contractor could arrange to be compensated in gold coins,” said Rich Danker, of public policy think tank American Principles Project in Washington, D.C.

Of the 13 States gearing up for its own currency, Danker told CNN he expects four States could pass legislation this year.  Those States include South Carolina, Georgia, Idaho and Indiana.

“I think we could get a couple passed in this legislative session, and that would show this is mainstream, popular and it would be a justification for more of the risk-averse states for doing this,” he said, suggesting a domino effect with other States could result across the U.S.

According to Prudent Bear’s Nolan, the time bomb ticks away on the dollar, and when it blows, the demise of the dollar could move rather quickly as we saw in both the sub-prime mortgage market in the U.S. and in Greek sovereign debt in 2010.

“All of a sudden you could see a situation where the sovereign debt problem in Europe leads to question on the solvency of European banking system, on global derivatives, counter-parties, and maybe at the point there will be concerns with other structural debt issues be it Japan or the U.S.,” said Nolan.  “Once the global community loses confidence in the capacity of policymakers to sustain credit excesses then it’s a totally different ballgame than what we see in Europe.”   Sign-up for my 100% FREE Alerts

Zoltek’s net revenues for the quarter ended December 31, 2011, totaled $47.0 million, compared to $32.9 million in the first quarter of fiscal 2011, an increase of 43.2%.  On a sequential quarter basis, net sales for the latest quarter increased $3.9 million, or 9.1%, from the fourth quarter of fiscal 2011.

Zoltek reported net income of $9.7 million ($0.28 per share) in this year’s first quarter, compared to a net loss of $1.6 million ($0.05 per share) in the first quarter of fiscal 2011.  The Company’s operating income was $8.2 million in the first quarter of fiscal 2012, compared to an operating loss of $1.2 million in the previous year’s first quarter.  Zoltek reported operating income of $1.0 million in the fourth quarter of fiscal 2011.

“We are pleased to report strong gains on both the top and bottom lines in the first quarter and continuation of the momentum we experienced in the fourth quarter of fiscal 2011,” said Zsolt Rumy, Zoltek’s Chairman and Chief Executive Officer.  “Our performance resulted from several internal and external factors. Our net revenues were up almost a third, despite the drag on our reported sales from the decline in the value of the Euro during the quarter, reflecting our expanded customer base in the wind energy business and increased sales of composite intermediate products. Our margins were positively impacted by a more profitable product mix, higher utilization of our production capacity, better operational performance, lower raw material costs and the decline in the values of the Hungarian Forint and Mexican Peso. We believe our first quarter results evidence that our carbon fiber business is on a path to increase significantly this year.”

But it may get much better, of course.  Silver investors are already aware of the explosive moves in the metal.  The chart (gold:silver ratio), below, serves as a visual reminder of how wild the runs can get when compared with the more tame precious metal cousin, gold.

Previous violent compressions of the gold:silver ratio manifested, starting on Oct. 3, 2003, when the ratio briefly touched 80 on a Friday (keep that in mind).  Silver closed at $4.80 on the day.  Six months later, on Apr. 6, 2004, the ratio bottomed at 51, for a drop of 36 percent in the ratio.  The silver price closed at $7.21, a gain of 50.2 percent for that period.

The more recent and ever more dramatic decline in the gold:silver ratio began on Jun. 4, 2010, when the ratio briefly touched 70, on a Friday.  The silver price closed at $17.41 per ounce.  Nearly 11 month later, on Apr. 29, 2011, the ratio pierced 31, for a drop of 56 percent.  Silver ended the day at $48.48, for a 178 percent gain for the 11-month hyperbolic move.

Then, of course, the raid on silver began within 30 minutes of the open of trading on Globex.  The silver price plunged nearly $6 in literally minutes, according to Kitco’s database for May 1 (May Day).

It appears that another compression rally is underway.  This time, on Dec. 30, the gold:silver ratio touched 57, again on a Friday.  Since then, the silver price has soared, taking the ratio back down to 51.  Silver closed at $27.86.  A ratio of 50, if broken, could start the avalanche to a much tighter ratio.  Everyone is watching closely.

So a compression in the gold:silver ratio to, say, the extent of the Oct. 3, 2003 – Apr. 6, 2004 rally of 36 percent, the new ratio calculates to 36.5 for this present move.  If the compression reaches the Jun. 4, 2010 – Apr. 29, 2012, rally, the ratio calculates to 25.

During the Oct. 3, 2003 – Apr. 6, 2004, silver rally, gold closed at $372.50 on Oct. 3 and $418.50, respectively, for a gain of 12.3 percent for that time period.  Silver rallied 50.2 percent during that period, or a 4.08 times more powerful move in favor of silver.

The monstrous rally in silver from Jun. 4, 2010 to Apr. 29, 2011, was a 178 percent move, against gold’s move of 28.3 percent—from $1,220 to $1565.70.  Silver’s move again trounced gold’s to the tune of 6.3 times!

Assuming gold and silver are indeed in a power move up and that Jon Nadler and Nouriel Roubini are dead wrong, the combinations of potential gold prices and ratios are too numerous to present here.

But let’s assume the 2010-11 rally in the precious metals repeats.  A 28.3 percent return on gold from the Dec. 29, 2011, close of $1,565.70 calculates to $2,009.  Taking a gold:silver ratio of 25 and dividing that number into $2,009, that calculates to a silver price of $80.36.

If to match the duration of 11 months from the 2010-11 silver rally to the present one, by year end, silver would reach $80.

But of course, after silver passes the $50 threshold, $100 is assumed to be the next target.  That’s the Stephen Leeb scenario, and it makes a lot of sense.  Traders love round number targets.  But then there’s the cartel who’s watching, too.  $100 might be their target, as well.

Richard Russell once stated that as far as the price of gold is concerned, traders will look at $2,000, $2,500, then $5,000, and then $10,000.  So, at $2,500 gold on this move and a ratio of 25 gives us that $100.  Sure makes David Morgan’s target of $60 tame, but traders would still make out like bandits.   Sign-up for my 100% FREE Alerts

GMXR today announces an operational update on our Bakken development program, provides production guidance for the first quarter and year-end 2012 and provides an update on the Company’s capital expenditures for 2012.

Over the last 14 months many important accomplishments have been made regarding the Company’s strategic direction to transform from a concentrated natural gas producer into a more diversified energy Company focused on an accelerated program to increase oil as a significant component of our near term exploration and production activities while improving liquidity in challenging market conditions.

• Agreements to purchase 35,524 acres in the Bakken (150/1,280 acre Units) and 40,191 acres in the Niobrara providing the Company the opportunity to switch from primarily a natural gas producer to predominately an oil producer
• Issued equity for approximately $105 million of cash and $200 million in High Yield Bonds to make acquisitions and fund drilling
• Suspended natural gas drilling in July 2011 to re-direct capital to significantly higher rate of return acreage
• Reduced H&P Flex Rig contract obligations by $47 million
• Successfully completed a natural gas VPP for $49.7 million
• Captured $18.5 million of natural gas hedge value
• Terminated credit agreement and related financial maintenance covenants; no longer dependent on commercial lending
• Successfully generated $100 million in new liquidity in connection with Bond Exchange
• Implemented plan to reduce cash G&A by an estimated 21% for 2012
• Established operational footprint in one of the largest and most competitive oil plays in USA
• Prefunded planned 2012 drilling program with recent liquidity events

Given the continued decline in natural gas pricing resulting from an oversupply created by the success of horizontal drilling in the United States, our decision to transition to an oil producer and to suspend drilling of our core East Texas natural gas assets continues to be a prudent business decision. The liquidity-enhancing steps undertaken by the Company during the fourth quarter of 2011 consisting of the issuance of secured senior notes due 2017, the execution of the VPP and the monetization of natural gas hedges were both creative and challenging to accomplish but resulted in approximately $168 million of additional capital available for drilling.  We plan to proactively maintain liquidity and are working on new oil hedging strategies. Read more

Nothing new there, but Gross believes the threat of stagflation could be with us for a lot longer than investors expect.

The Bond King stated he believes that the “Fed provides assurances that short and intermediate yields will not change,” which therefore invites investors fearful of a total loss into an arrangement with the U.S. Treasury whereby the return of investors’ capital is “assured” but at the cost of declining purchasing power of their capital.

And for how long will this arrangement between investor and the Fed be extended?  “We are witnessing the death of abundance and the borning of austerity, for what may be a long, long time,” Gross wrote, as he expects 30-50 years of leveraged capital to continue to unwind for many years to come.

So the Fed’s plan is to trap fearful investors into a real loss for as long as they can tolerate it.  Then, at some point, the pain of rising living expenses and no end to sluggishness economic conditions reaches a point of investors taking action.  Austrian economist Ludwig von Mises (1881 – 1973) explains the reaction of investors to the “liquidity trap” the Fed has faced since Lehman and for an additional “long, long time.”

“Inflation can be pursued only so long as the public still does not believe it will continue,” wrote von Mises. “Once the people generally realize that the inflation will be continued on and on and that the value of the monetary unit will decline more and more, then the fate of the money is sealed. Only the belief, that the inflation will come to a stop, maintains the value of the notes.”

The endgame is a declining dollar and higher living costs, according to von mises.

Gross believes that the Fed has no options that include economic growth rates exceeding interest rates, which explains targeting ‘nominal’ GDP.

Therefore, the two options the Fed have are between allowing the financial system to painfully collapse to the point whereby capital comes out of hiding once again, while on the other hand the Fed could prop up the deleveraging process at the expense of a return on capital.

What makes matters worse is that Gross believes the Fed (and other central banks) is inadvertently promoting a liquidity trap, further hasting the process out of Treasuries by investors and more Fed monetization of those absent buyers of its debt, creating a virtuous process of no growth, higher Fed balance sheets, higher debt-to-GDP and so forth.

“When all yields approach the zero-bound, however, as in Japan for the past 10 years, and now in the U.S. and selected ‘clean dirty shirt’ sovereigns, then the dynamics may change,” he stated.  “Money can become less liquid and frozen by ‘price’ in addition to the classic liquidity trap explained by ‘risk.’”

Gross goes on to state that institutional money won’t let go of its balance sheet while an economy deleverges.  Therefore, the slack in demand will come from government spending, a Keynesian prescription that is expected to lead to higher and higher deficits and lower and lower currency rates against other currencies as well as the ‘things’ consumed on a day-to-day basis.

“Where else can one go, however? We can’t put $100 trillion of credit in a system-wide mattress, can we?” Gross asked rhetorically.  “Of course not, but we can move in that direction by delevering and refusing to extend maturities and duration … It may as well, induce inflationary distortions that give a rise to commodities and gold as store of value alternatives when there is little value left in paper.”

The way out has always been to secure gold.  Sign-up for my 100% FREE Alerts

Now the gold and silver expert extraordinaire expects the silver price to double as soon as it breaks out of its ‘descending wedge’ price pattern.  He offers the chart, below, obtained on the KingWorldNews.com Web site. Sign-up for my 100% FREE Alerts

“This following weekly silver chart is really looking very powerful and as I have been saying, once silver hurdles above $35, I expect to see $68-$70 in 2-to-3 months,” Turk told King World News during the weekend.

Compare Turk’s latest call for a double in “2-to-3 months” with silver‘s monstrous run of 177 percent from September 2010 through April 2011.  That eight-month move, or a 13.6 monthly compounded rate of return, is half the rate of return expected from Turk’s latest forecast of a 26 percent compound rate of return for throughout the three months.  A truly remarkable call.

However, before silver bugs can sit back and watch the fireworks, silver must overcome its descending wedge upper band, first, which, from the graph, looks like the $35 level.

“Note how the downtrend line, the $35 resistance level and the current silver price are getting ready to meet,” Turk added.  “Silver’s first attempt to hurdle $35 could happen within the next 2-to-3 weeks….”

Today, as silver trades near $33, it could break through $35 by as early as February, according to Turk.

Presumably, dollar weakness must play a part in Turk’s latest call.  The chart of the USDX, below, shows the dollar beginning to breakdown from its eight-month rally beginning in early spring, as the euro crisis escalated to a point of near hysteria.

Many bullion analysts have pointed out, however, that throughout the crisis in Europe, one would think the dollar would have manage a more meaningful rally.  An 11 percent move off its near-term bottom of 73 on the USDX, the dollar topped out at approximately 81, which, considering the intense focus brought onto the euro, day after day for eight months, the dollar’s touted ‘safe haven’ status should be considered only that: touted.

What could Turk be sure about that would warrant a frenzied buying silver fest?

A move in silver that rapid could possibly mean that a surprise deal in Europe to stabilize the euro is in the offing, or, maybe, Iran gets drawn into a kickoff to WWIII.  Or, how about the Fed panics and announces what it has been doing all along anyway, monetization of debt through more QE.

In any event, Turk expects a flight out of the dollar.  That would leave Beijing plenty of room to ease again as China fights its own real estate crash and declining exports (see BER article, GET OUT of STOCKS).

What ever triggers a Turk scenario will no doubt disturb the peace in the currency markets, between warring nations, or both.

If silver does double in price within three months following a clean break from the $35 level, Goldmoney’s James Turk should go straight to the head of the class as far as silver investors are concerned. Sign-up for my 100% FREE Alerts

Ecoland International has been making vast strides to network its products and has even expressed interest in venturing into new market segments. The following are just a few recent contracts that Ecoland and subsidiaries have constructed over the past couple months.

On December 8, ECIT announced the receipt of a contract from Toyota Boshoku (OTN: TDBOF), a major tier one automotive parts supplier. The new project consists of a newly designed retrofit to the production systems producing parts for the 2012 Toyota Rav4.

On December 15, ECIT announced that PWO, a German based company, selected its solutions to design and construct a new processing line for “Air Suspension Tubes”. Equipment will be delivered to PWO Canada – Kitchener plant by the end of first quarter of 2012. “Reality that our company can contribute our expertise and experience in exemplary industrial market, is a news-worthy accomplishment. From an economic and from a technical standards perspective our solutions appeared as a preeminent choice for our new customer. Technologically, we are diversifying into the vehicle ‘safety and comfort’ market that has numerous opportunities for expansion,” stated Drasko Karanovic, President and CEO of D&R Technology (ECIT’s subsidiary).

Finally 0n January 26, ECIT announced another contract award from Johnson Controls Inc. Equipment that is covered with this contract will be producing seat components for the all-new compact luxury sports sedan, Cadillac ATS.

“Today, the BDI is on the verge of making headlines once again, being that is plummeting like a wingless 747 into the swampy mire of what I believe will soon be historical lows,” regular zerohedge.com contributor Brandon Smith of Alt-Market.com wrote.

Since the inception of the BDI in 1985, economist and traders alike use the index to assess global shipping rates of dry bulk goods, a leading indicator of demand for raw materials from manufactures of finished products.

Therefore, a rise in the index suggests production managers foresee a strong economy and customer demand for its goods, while shippers raise rates to optimize revenue during the good times.  The reverse, of course, takes place as shippers cut rates to keep its carriers operating at close to full capacity as possible.

According to Smith’s research on the correlation between the BSI and equity markets, he suggests big trouble for stocks lie in the months ahead.  See chart, below.

According to the Smith, the danger zone for stocks follow a decline in the BDI  below 800.  The 1987 stock market crash, Asia currency crisis, the popping of the Nasdaq bubble, and the Lehman collapse, took place as the index was dropping toward the 800 level (quickly, in the case of Lehman), began recovering after reaching 800, or remained close to that level, as in the case of the Asian currency crisis of 2008.

A continuation of the chart, below, shows the BDI again plunging suddenly as the new year rang in.  The BDI has once again dropped into the danger zone.  A stock crash warning has triggered.

Adding to the gloom and doom comes the notorious and legendary market timer Joseph Granville, who told Bloomberg last week that the Dow is headed for a fall of 4,000 points by year end.

Granville, 88, said, “Volume precedes prices … You are seeing much lower volume. That tells you that prices are going to go much lower, much lower than most people think possible and very few people have projected.”

Presently trading at a dividend yield of 2.5 percent, a drop of 4,000 points off the Dow equates to a 31 percent haircut from today’s 12,600 level and a higher dividend yield of 3.7 percent.

Granville expects the carnage in stock to reach a climax some time during the summer months.

And if that isn’t bad enough, another pair of trusted eyes sees a lot of trouble for stocks as well.

In mid-December, another octogenarian of the stock market, Richard Russell, of Dow Theory Letter, told his subscribers to bailout of stocks and hold onto gold.  Today, stocks are very vulnerable and appear to be repeating a chart pattern of the post-1929 stock market crash period of 1929-33, according to Russell.

Russell wrote:

The great bear market rally is now about over, following a very long period of deceptive distribution.  I am warning all my subscribers again that we are back in the grip of a vicious and ruthless bear.  The bear has been held back for almost two years, due to the so-called quantitative easing of an anxious and ignorant Fed.  There’s no bear angrier than a frustrated bear.  As a result, I believe we’re going to see a brutal stock market that will shock the Fed and the bulls and the public — and all who insist on remaining in this bear market.

I think we’ll see selling of gold to cover losses (particular losses by the short sellers), but ultimately gold will be the last man standing.  But most important — GET OUT OF STOCKS.

With the BDI reaching near all-time lows and Granville and Russell warning their subscribers of a post-1929 crash replay, the remaining question is: when will traders hear that the Hindenburg Omen just triggered a warning signal?  Sign-up for my 100% FREE Alerts

FriendFinder Networks Inc (NASDAQ:FFN) has traded as high as $1.14 during today’s trading session and last traded at $1.04 for a gain of 16.85% from Friday’s close. FFN shares have traded as high as $10.01 over the last 52 weeks, which is nearly 90% of that high at last traded stock price. Get my next ALERT 100% FREE

FriendFinder Networks Inc. (www.FFN.com) is an internet-based social networking and technology company operating several of the most heavily visited websites in the world, including AdultFriendFinder.com, Amigos.com, AsiaFriendFinder.com, Cams.com, FriendFinder.com, BigChurch.com and SeniorFriendFinder.com, and social commerce company operating JigoCity websites in more than five countries, providing members high quality, daily deals that are relevant to their individual lifestyles. FriendFinder Networks Inc. also produces and distributes original pictorial and video content and engages in brand licensing.

Renren Inc (NYSE:RENN) has traded as high as $6.12 during today’s trading session and last traded at $5.87 for a gain of 11.81% from Friday’s close. RENN shares have traded as high as $24 over the last 52 weeks, which is 75.5% of that high at last traded stock price.

RenRen Inc. operates the leading real name social networking internet platform in China. It enables users to connect and communicate with each other, share information and user generated content, play online games, listen to music, shop for deals and enjoy a wide range of other features and services. RenRen’s platform includes the main social networking website Renren.com, the online games center game.Renren.com, the social commerce website nuomi.com, and the newly launched professional and business social networking service website jingwei.com. It had approximately 117 million activated users as of March 31, 2011.

Quepasa Corporation (AMEX:QPSA) has traded as high as $5.25 during today’s trading session and last traded at $4.87 for near even percentage change from Friday’s close. QPSA shares have traded as high as $15.45 over the last 52 weeks, which is nearly 68.5% of that high at last traded stock price.

Quepasa Corporation is the public market leader for social discovery and owner of Latin-American platform Quepasa and North-American platform myYearbook. The company makes meeting new people fun through social games and apps, monetized through both advertising and virtual currency. In addition to Quepasa and myYearbook, the Company operates Quepasa Games, a cross-platform social game development studio. Get my next ALERT 100% FREE

Quepasa has strong reach throughout the world, with a concentration across North and South America. Quepasa is headquartered in New Hope, Pennsylvania. For more information about the Company, go to www.quepasacorp.com, or join for free at www.Quepasa.com, myYearbook.com, or via the myYearbook app on iPhone, iPad, and Android.

Facebook, Inc. IPO is coming soon… expecting to file on Wednesday.

On January 23, 2012, Atrinsic, Inc. completed the sale of certain short codes, domain names, trademarks and databases used in the Company’s subscription businesses to Mkono Media Corp., a British Columbia corporation (“Mkono”), pursuant to an asset purchase agreement by and between the Company and Mkono dated as of December 28, 2011. The transaction resulted in net cash proceeds to the Company of $615,000 USD.

Atrinsic, Inc. is a marketer of direct-to-consumer subscription products, including Kazaa, and an Internet search-marketing agency. Kazaa is a subscription-based digital music service that gives users unlimited access to millions of CD-quality tracks. Unlike other music services that charge you every time a song is downloaded, Kazaa allows users to listen to and explore as much music as they want for one monthly fee, without having to pay for every track or album.

Royalties are paid to the rights’ holders for licenses to the music utilized by this digital service. Atrinsic and Brilliant Digital Entertainment, Inc. jointly offer the Kazaa digital music service pursuant to a Marketing Services Agreement and a Master Services Agreement between the two companies.