The Economist: According to the Tanzania Albino Society, at least 35 albinos were murdered in Tanzania last year to supply witch doctors with limbs, organs and hair for their potions.

Investigators say the body parts of a single murdered albino sell for over $1,000, with the skin and flesh dried out and set into amulets and the bones ground down into a powder. Artisanal miners in the gold and diamond fields directly south of Lake Victoria are the main buyers. Some sprinkle albino powder on the walls of their narrow pits, hoping for glitter. Uneducated and desperate to strike riches, they are taken in by witch doctors’ stories of the wealth-giving properties of the potions.

From National Geographic: “In all of history, only 161,000 tons of gold have been mined, barely enough to fill two Olympic-size swimming pools.”

Like many of his Inca ancestors, Juan Apaza is possessed by gold. Descending into an icy tunnel 17,000 feet up in the Peruvian Andes, the 44-year-old miner stuffs a wad of coca leaves into his mouth to brace himself for the inevitable hunger and fatigue. For 30 days each month Apaza toils, without pay, deep inside this mine dug down under a glacier above the world’s highest town, La Rinconada. For 30 days he faces the dangers that have killed many of his fellow miners—explosives, toxic gases, tunnel collapses—to extract the gold that the world demands. Apaza does all this, without pay, so that he can make it to today, the 31st day, when he and his fellow miners are given a single shift, four hours or maybe a little more, to haul out and keep as much rock as their weary shoulders can bear. Under the ancient lottery system that still prevails in the high Andes, known as the cachorreo, this is what passes for a paycheck: a sack of rocks that may contain a small fortune in gold or, far more often, very little at all….

Even at showcase mines, such as Newmont Mining Corporation’s Batu Hijau operation in eastern Indonesia, where $600 million has been spent to mitigate the environmental impact, there is no avoiding the brutal calculus of gold mining. Extracting a single ounce of gold there—the amount in a typical wedding ring—requires the removal of more than 250 tons of rock and ore.

London Banker:

For a while now I have been on the fence on the inflation/deflation issue – whether the massive monetisation of bad debts by central banks and governments will lead to rapidly escalating inflation as currencies are debased or, alternatively, lead to deflation as bad debts and illiquidity undermine all commercial and financial activity in the economy. I’m now coming down on the side of deflation for a very simple reason: there is no longer any incentive to save or invest, and so debt and investment cannot increase much beyond current bloated levels….

I think it took me so long to feel confident about predicting deflation because the floating currency system under dollar hegemony and Bretton Woods II distorts the workings of both inflation and deflation. Despite the US being the epicentre of all the failed debts, failed securitisations, failed credit derivatives, failed rating agencies, failed banking businesses, failed corporate governance, failed accounting standards, failed capital adequacy models, and failed regulatory forbearance, the US dollar has recently strengthened as deflation globalised. The US exported inflation in the boom years, and now exports deflation in the bust years.

Michael Kranish, Boston Globe: “The Frank-versus-Shelby argument is a microcosm of the complex politics and competing interests at stake as Congress prepares to vote on the auto loans. It emphasizes what has become a geographic – not just partisan – divide: lawmakers from states with foreign-owned auto plants tend to oppose the measure, while those from the Upper Midwest and strong union states tend to back it.”

You could almost hear it in the Senate hearing room today as the heads of the nation’s big automakers pleaded their case again for a government bailout: the air hissing out of the leaking auto bubble.

The Big Three are in big trouble for many reasons, but one of the most important ones is that automakers have been producing too many cars for too long. The U.S. economy can support at most 16 million new cars sold every year. But total sales averaged sales of closer to 17 million units from 1999 to 2006. The Big Three account for more than half those sales.

How did this happen? Rather than make fewer cars, the Big Three offered bigger and bigger discounts and cheap money for consumers to borrow. Remember those days of “zero percent financing?” or “employee pricing?” In 2007, the average incentive was worth over $6,000, about 25 percent of the average vehicle price.

Why not just make fewer cars?  Under deals they signed with their unions more than 20 years ago, the car companies are required to pay laid off autoworkers up to 95 percent of their wages and benefits. The so-called “jobs bank” and related programs made it very expensive for the automakers to trim production.

As a result, American automakers produced more cars and trucks than Americans want, creating an “auto bubble” of excess supply that’s exploding like a Firestone tire:

It’s not just GM, Ford and Chrysler that can’t sell cars. No one can sell cars right now. This is hurting all carmakers, but the Big Three are especially vulnerable because they are burning through cash to meet all their fixed cost obligations, like pensions, health care and, yes, the jobs bank.

Yesterday, the UAW agreed to suspend the jobs bank program, calling it a distraction. But there’s still a whole lot of extra cars in the system. One economist estimated that the entire auto industry would have to shut down production for nearly a year, just to get rid of an estimated at 10 million extra units.

That’s not exactly what the Big Three have in mind.