By Jon Nadler
The first day of the new month started off with a few new records that underscored the goings-on in the world economy. China's manufacturing contracted by the largest amount on record in November. The Chinese yuan logged a record half percent drop against the US dollar and traded limit down on the day. Yields on US Treasuries fell to a record low on apprehensions that the US economy may have shrunk at the fastest pace in 26 years.

We could, by now, use at least one week when something does not fall or collapse by some record metric. Alas, the reality of the global slowdown does not appear to pay particular attention to the calendar and to how many months of negative global economic news have already been filed away this year. In fact, we are entering the 17th month of various shrinkages as the credit crisis keeps reverberating around the globe. The good news is that we will be tossing those pesky calendars in only 720 hours. Good riddance.

Gold and other precious metals opened sharply lower on Monday, as the economic news from China weighed on the commodities sector with renewed urgency. Spot bullion started the session with a $24 loss, quoted at $792.40 per ounce as participants returned from the recent holiday and were seen as unable to make the best of a small rise in net long positions recorded in the week before last. Silver fell 40 cents to start the day at $9.86 per ounce. Ten minutes into the trading day, the losses in metals accelerated fairly sharply.

Platinum lost $57 opening at $811, while palladium dipped $7 to $180 an ounce. Rhodium traded under both gold and platinum, quoted at $785.00 this morning. Auto sales figures are due shortly and are largely expected to reflect another wheel coming off that sector in recent weeks. Closing out the morning price scan, crude oil fell nearly $3 to $51.58 as frustrated participants took the OPEC delay in announcing production cuts fairly hard and punished the gooey stuff once again. The dollar, well, it rose again. Not by much, but it made further progress towards 87 on the index. Finally, stock futures indicated a faltering start to the first session of December. And the beat(ing) goes on...

And now, for something completely different. Who would have imagined that the country of last resort sitting on piles of the asset of last resort would be where it finds itself today? Bloomberg's intrepid reporter team uncovers the stark reality of the current global implosion and its effects on... Switzerland. Yes, the country of chocolate and precision timekeeping is turning as soft as chocolate in a shop window on Banhofstrasse in June. The ticking sound you hear is the Swiss economy running on some very slack springs and aiming for an eventual needed rewind. Meanwhile, the world's wealthy are left wondering whether their money is still as safe as they imagined it would be back when they parked it in those mighty-looking bank buildings on the world's most elegant (and expensive) street. My, my.

" An isolated European country with an economy geared toward finance and winter sports is no longer a monetary bastion as credit evaporates around the globe. Banks teeter, the once-impregnable currency depreciates and a proudly independent people question whether a centuries-old go-it-alone strategy can survive.

Even Switzerland is wondering if it’s immune to the forces ravaging Iceland.

The drama playing out in the Nordic nation, whose economy the International Monetary Fund says may shrink about 10 percent next year, offers a cautionary tale for the no less fiercely independent Swiss. While they are in far better shape, their status as custodians of the world’s wealth is under threat by a global economic upheaval they can’t control and miscues by the banks that made them great.

“The Swiss model of isolationism is not an advantage” in the current environment, says Michael Baer, 46, the great- grandson of Julius Baer, founder of Switzerland’s largest independent wealth manager. “Switzerland is absolutely not immune to global developments, especially not as regards the financial crisis and the economy.”

Baer -- scion of a legendary family in one of the world’s oldest financial centers -- has moved his own business to one of the youngest: In 2006, he set up Baer Capital Partners in Dubai to tap Middle Eastern wealth.

For the 7.6 million Swiss, signs of stress are evident amid a cataclysm in world markets that has besieged them with reasons to doubt a splendid isolation dating back to medieval times.

Europe’s Biggest Losses

While the Swiss Market Index has outperformed the Nasdaq Composite Index this year, it has still lost 31 percent of its value. Zurich-based UBS AG, Switzerland’s flagship bank, amassed Europe’s biggest losses in the credit crunch, forcing the government and central bank to offer a $59 billion helping hand. The franc has tumbled against the dollar. And the banking secrecy that attracts offshore wealth is drawing more fire than ever.

Slowly, the pain on Zurich’s Bahnhofstrasse -- the boutique- and bank-lined promenade through Switzerland’s largest city -- is trickling through to main streets countrywide.

Switzerland’s economy will shrink 0.2 percent next year after expanding 1.9 percent in 2008, the Organization for Economic Cooperation and Development said on Nov.25. Manufacturing contracted the most since at least 1995 in November, a report showed today. While the 2.6 percent jobless rate is low by global standards, unemployment rose for the first time in five years in September and is heading higher."

There may or may not be an afternoon update, as much depends on what fun time we might encounter at the airport later today. Off to Shanghai, for the 3rd Annual China Gold Summit. Sure to be an eventful one. Stay tuned for reports straight from the mighty dragon's fiery mouth. A bit more tepid these days...

Happy December.

Jon Nadler is Senior Analyst, Kitco Bullion Dealers Montreal