The world is moving step by step towards a de facto Gold Standard, without any meetings of G20 leaders to announce the idea or bless the project.

Some TTPers will already have seen the GFMS Gold Survey for 2012 which reported that central banks around the world bought more bullion last year in terms of tonnage than at any time in almost half a century.

They added a net 536 tons in 2012 as they diversified fresh reserves away from the four fiat suspects: dollar, euro, sterling, and yen.

Gone is the illusion that the euro would take its place as the twin pillar of a new G2 condominium alongside the dollar. That hope has faded. Central bank holdings of euro bonds have fallen back to 26%, where they were almost a decade ago.

Neither the euro nor the dollar can inspire full confidence, although for different reasons. The euro is a dysfunctional construct, covering two incompatible economies (northern vs. southern Europe), prone to lurching from crisis to crisis, without a unified treasury to back it up. The dollar stands on a pyramid of debt. We all know that this debt will be inflated away over time - for better or worse. The only real disagreement is over the speed.

Shanghai.  "Air in many China cities remains highly polluted." No, this is not a headline in the Onion (satirical newspaper), but the front-page lead headline in the Shanghai Daily on Nov. 8.

Shanghai is a city of 23 million people, which at first glance appears to be the most modern city on the planet. The architecture is spectacular and varied, with some of the new edifices exceeding 100 stories. It looks prosperous - nicely dressed people; wide, tree-lined streets; well-maintained flower beds; and the world's newest auto stock on its many crowded expressways. To a lesser extent, the same thing can be said about Beijing and other Chinese cities.

China, arguably, has today more people with a middle-class or higher standard of living than any European country and even Japan, only trailing the United States. However, more than 80 percent of its people have yet to enjoy most of the fruits of this prosperity. It is a bit ironic that a country that calls itself communist has, perhaps, the greatest income disparity on the planet.

China is both rich and poor at the same time.

Princeling Jiang Mianheng, son of former leader Jiang Zemin, is spearheading a project for China's National Academy of Sciences with a start-up budget of $350m.

He has already recruited 140 PhD scientists, working full-time on thorium power at the Shanghai Institute of Nuclear and Applied Physics. He will have 750 staff by 2015.

The aim is to break free of the archaic pressurized-water reactors fueled by uranium -- originally designed for US submarines in the 1950s -- opting instead for new generation of thorium reactors that produce far less toxic waste and cannot blow their top like Fukushima.

"China is the country to watch," said Baroness Bryony Worthington, head of the All-Parliamentary Group on Thorium Energy, who visited the Shanghai operations recently with a team from Britain's National Nuclear Laboratory.  "They are really going for it, and have talented researchers. This could lead to a massive break-through."

The thorium story is by now well-known. It could do for nuclear power what shale fracking has done for natural gas -- but on a bigger scale.

How much pressure would it take before you would sell out your intellectual integrity? Those who are given responsibilities for developing and promoting sound public policy are subject to never-ending pressure by those in the political class to serve them rather than the public.

An extraordinarily well researched and provocative paper has just been released, tracing how the Organization for Economic Cooperation and Development (OECD), a major international organization, descended from promoting trade- and job-creation policies among the nations of the world to one that is supporting job-destroying tax cartels for the benefit of the high-tax countries.

What we are seeing is the growth of international, non-elected bureaucracies that hack away at our liberties and economic freedoms, destroying jobs and opportunity, all in the name of redistributionist and "tax-fairness" schemes.

But international organizations aren't the only ones that are destroying jobs and economic opportunity in the name of tax fairness. The U.S. Treasury and Internal Revenue Service are considering regulations that could cost Americans millions of jobs.

This week, the Catholic World News leaked word of an “Instruction” to be issued by the Vatican next month banning the admission of homosexuals to Catholic seminaries. This will come as no surprise to you, as you learned in To The Point last April this was coming in The De-Homosexualization of the Catholic Church .

Approved by Pope Benedict XVI three weeks ago, the Instruction argues that: “homosexual men should not be admitted to seminaries even if they are celibate, because their condition suggests a serious personality disorder which detracts from their ability to serve” the Church.

A "rational optimist" like me thinks the world will go on getting better for most people at a record rate, not because I have a temperamental or ideological bent to good cheer but because of the data. Poverty, hunger, population growth rates, inequality, and mortality from violence, disease and weather -- all continue to plummet on a global scale.

But a global optimist can still be a regional pessimist. When asked what I am pessimistic about, I usually reply: bureaucracy and superstition. Using those two tools, we Europeans seem intent on making our future as bad as we can.

Like mandarins at the court of the Ming emperors or viziers at the court of Abbasid caliphs, our masters seem determined to turn relative into absolute decline. It is entirely possible that ten years from now the world as a whole will be 50 per cent richer, but Europeans will be 50 per cent poorer.

As the Ming empire found out, the more government you buy, the less economic activity you get. A Fujian travelling salesman in 1400 was enmeshed in such a tangled bureaucracy that he could neither travel nor sell without bribes and permits, and he had to submit a monthly inventory of his stocks to the emperor.

Sound familiar?

If only we had followed his recommendations, the United States and the rest of the world would not be in the present mess. On Oct. 26, the world lost one of its wisest, most competent and principled economists, William Niskanen.

Bill did his undergraduate work at Harvard and earned a doctorate from the University of Chicago, where he studied under Milton Friedman. He then taught at a couple of leading universities, was a high-level official at the Office of Management and Budget and the Defense Department, served as chief economist of the Ford Motor Co., was a member and, ultimately, head of President Reagan's Council of Economic Advisers and finally, served for more than two decades as the chairman of the Cato Institute.

For four decades, Bill Niskanen worked for a tax-and-spending-limitation amendment to the Constitution. In January 1995, in only 125 words, he presented his proposed constitutional amendment to the House Budget Committee, "consistent with the crisp and majestic language of most of the Constitution."

Here is his amendment. After reading it, ask yourself how much better off the nation would be today if the body politic had passed what he proposed:

“Jack, what's wrong with W? It seems he has a serious deficit of energy and strength. Maybe it's just me, but he doesn't seem right, and hasn't for some months. I’m worried.”

This inquiry by TTPer Paul Rosenberg is typical of many I’ve been receiving. It’s obvious to Paul and lots of others that the Bush Presidency is running out of steam. The deficit in question is not, however, physical - as anyone who tries to keep up with W on a mountain bike at the Crawford Ranch can attest - it’s mental.

Which means neurochemical.

Peace, stability, and freedom of navigation in the Pacific Ocean are inseparable from peace, stability, and freedom of navigation in the Indian Ocean. Developments affecting each are more closely connected than ever. Japan, as one of the oldest sea-faring democracies in Asia, should play a greater role in preserving the common good in both regions.

Yet, increasingly, the South China Sea seems set to become a "Beijing Lake," which analysts say will be to China what the Sea of Okhotsk was to Soviet Russia: a sea deep enough for the People's Liberation Army's navy to base their nuclear-powered attack submarines, capable of launching missiles with nuclear warheads. Soon, the PLA Navy's newly built aircraft carrier will be a common sight - more than sufficient to scare China's neighbors.

That is why Japan must not yield to the Chinese government's daily exercises in coercion around the Senkaku Islands in the East China Sea.  The ongoing disputes in the East China Sea and the South China Sea mean that Japan's top foreign-policy priority must be to expand the country's strategic horizons.

Japan is a mature maritime democracy, and its choice of close partners should reflect that fact. I envisage a strategy whereby Australia, India, Japan, and the US form a diamond to safeguard the maritime commons stretching from the Indian Ocean region to the western Pacific. I am prepared to invest, to the greatest possible extent, Japan's capabilities in this security diamond.