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ARCHIVED DISCUSSION FROM 2/22/2003
All times are U.S. Mountain Time

(Yesterday's Discussion.)

mikal (02/22/03; 23:43:30MT - usagold.com msg#: 98214)
"Twin deficits" get closer look
http://www.cbsmarketwatch.com
Europeans slam U.S. budget deficits
Officials warn that Bush plans endanger global economy
By CBS.MarketWatch.com
Last Update: 2:55 PM ET Feb. 22, 2003 -Excerpts:
"PARIS (CBS.MW) -- Already angry over the Bush administration's war fever, officials of key European allies and trading partners lashed out Saturday at the United States and Great Britain over what they as see as irresponsible deficit spending and unworkable economic stimulus plans.
While some members of the euro zone -- notably Germany and France -- are themselves pushing the envelope on European Commission debt rules, they have a different view on how best to get out of their respective holes and warned that the ballooning U.S. debt could put the global economy at further risk.
"It's a cause of concern for Europe and the world that the situation of the twin deficits seems to be re-emerging," European Central Bank President Wim Duisenburg told Reuters at a meeting of the G7 in the French capital.
Duisenberg also told a press conference that the bank "would not hesitate to act" in cutting European interest rates, if Continental economies weakened further. Rates were taken down last year but they are still above those in the U.S., Britain and basket-case Japan (where rates are currently near zero) and the ECB has been questioned over its relative lack of aggressiveness in this area.....
$307 billion U.S. deficit projected
Under the current White House plan, the U.S budget shortfall will be a record $307 billion in fiscal 2004, even higher than the hitherto unheard-of $304 billion deficit this fiscal year. It is projected to rise to 3 percent of gross domestic product if nearly $700 billion in tax cuts take effect over the next decade. Those figures do not include the cost of any invasion of Iraq; war planners in the executive branch have been reluctant to publicly put a price tag on that potential conflict.
Several European nations have topped, or are expected to top the 3 percent of GDP mark as well. EU members are worried that, coupled with the massive IOUs across the Atlantic, their own fiscal woes could further pressure a battered U.S. dollar, harming exports and driving up U.S. interest rates.....
The tax cut plan has generated plenty of high-level opposition at home as well, with Federal Reserve Chairman Alan Greenspan recently characterizing part of it as "unnecessary.".....End snippits

21mabry (02/22/03; 22:01:49MT - usagold.com msg#: 98213)
Faber,Rogers
I watched the video of the conversation between Marc Faber and Jim Rodgers.I thought Faber came off well he seems a decent person,he made a remark stating not all people had as much wealth as Rodgers so they had fewer options were to put their money.I have always liked listening to Jim rodgers but he was constantly asking where am i gonna put my money how am I gonna survive the future.Now I dont know for sure but Jim rodgers could put his money in his matteress and have enough for ten life times,just found it amusing Jim acting all worried about his future.

21mabry (02/22/03; 21:49:00MT - usagold.com msg#: 98212)
War Iraq
If there is a war in Iraq it will probably be fought in urban enviroments.I see no way the iraq army will fight in the deserts of southern Iraq.The last time they did this the American forces swung aroun their flank and destroyed them.That desert is to vast he would have to spread his forces to thin leaving the American forces free to concentrate at points of their choosing and thus break through.In my humble opinion if war breaks out he will entrench in his urban areas and fight it out.If the Americans go house to house its gonna be a mess.Napoleon said the best way to fight in cities is to set your artillery up at intersections and other key spots and reduce the enemy position that way.hope it does not come to war many many lives will be lost.

Cavan Man (02/22/03; 19:52:29MT - usagold.com msg#: 98211)
TIH
Thats "sobriquet" and I am sober!

Cavan Man (02/22/03; 19:51:20MT - usagold.com msg#: 98210)
The Invisible Hand
They have all read A/FOA. The GATA/A-FOA battle of Titans is played out here in the cyber personages and sobirquets of sector and Aristotle. Kind of reminds me of the battle of science and faith. The two can be and in fact are compatible; no need to draw lines in the sand (especially now). The science is the GATA data. The faith is in the well marked Gold Trail still as warm as ever. Ha. The devil is in the details. Physical is still the best buy.

The Invisible Hand (02/22/03; 18:29:14MT - usagold.com msg#: 98208)
One more step towards the golden petro euro
http://www.observer.co.uk/business/story/0,6903,900867,00.html

When will we buy oil in euros?

When it comes to the global oil trade, the dollar reigns supreme. But it has a challenger, writes Faisal Islam

Sunday February 23, 2003
The Observer

Whether the price of oil is surging to new highs, as it is today, or slumping, as is predicted after a war in Iraq, there is one enduring constant: the dollar sign.

Oil trading, whether from Norway to the Netherlands, Britain to Bermuda, or Bahrain to Bangladesh, operates through the US greenback.
The oil-dollar nexus is one of the foundations of the world economy that inevitably filters through to geopolitics. Recycling so-called petrodollars, the proceeds of these high oil prices, has helped the United States run its colossal trade deficits. But the past year has seen the quiet emergence of the 'petroeuro'.
Effectively, the normal standards of economics have not applied to the US, because of the international role of the dollar. Some $3 trillion (�1,880 billion) are in circulation around the world helping the US to run virtually permanent trade deficits. Two-thirds of world trade is dollar-denominated. Two-thirds of central banks' official foreign exchange reserves are also dollar-denominated.
Dollarisation of the oil markets is one of the key drivers for this, alongside, in recent years, the performance of the US economy. The majority of countries that require oil imports require dollars to pay for their fuel. Oil exporters similarly hold, as their currency reserve, billions in the currency in which they are paid. Investing these petrodollars straight back into the US economy is possible at zero currency risk.
So the US can carry on printing money - effectively IOUs - to fund tax cuts, increased military spending, and consumer spending on imports without fear of inflation or that these loans will be called in. As keeper of the global currency there is always the last-ditch resort to devaluation, which forces other countries' exporters to pay for US economic distress. It's probably the nearest thing to a 'free lunch' in global economics.
And for a long time, everything has worked smoothly. The oil industry was born in Texas, and so developed in dollars. The complex web of supply chains, distribution, and futures markets, all run off the central rock that is the US dollar.
But now there is the euro. At the time of its launch, various overblown claims were made to its role as 'co-hegemon', sharing the spoils of reserve currency status. The rapid fall in the euro after its launch put paid to such suggestions. But the single currency has since rescued itself, reigniting talk of euro-ised oil. In fact, it's happening already.
Iraqi oil, two-thirds of which is being snapped up by US companies, can only be paid for in euros.
'It was a political move on the part of the Iraqi government to show that the euro could be a substitute for the dollar in denominating the oil price,' says Fadhil Chalabi of the Centre for Global Energy Studies.
That move was made in the same week that the euro reached its historic low of $0.82 in October 2000. The subsequent 30 per cent rise in the euro has greatly helped the United Nations' oil-for-food programme in Iraq.
Soon afterwards, Jordan launched its own bilateral trade scheme with Iraq, carried out entirely in euros.
Last year, in a little noticed Opec speech to a Spanish Finance Ministry conference, Javad Yarjani, a senior Iranian oil diplomat, said: 'It is quite possible that as bilateral trade increases between the Middle East and the European Union, it could be feasible to price oil in euros. This would foster further ties between these trading blocs by increasing commercial exchange, and by helping attract much-needed European investment in the Middle East.'
Yarjani said the 'critical question is the overall value and stability of the euro, and whether other countries within the union adopt the single currency'.
The first point is beginning to be answered. The second refers to Britain and Norway. If either joins the single currency, the key Brent benchmark could be redenominated in euros, offering an impetus to movers within Opec.
The rising value of the euro makes redenomination in the immediate financial interest of European oil majors such as TotalFinaElf and Shell. Over the past year both companies have seen profits gobbled up by the dollar slump, as their profits are calculated in euros. Opec member countries too would have a strong interest in moving to euros. The eurozone is the biggest importer of oil in the world and 45 per cent of Middle East imports are from Europe. Even US oil majors would benefit from selling their oil in a currency that is increasing in value, say US energy consultants.
The Iranian and Russian parliaments have recently discussed adopting the euro for oil sales.
Last year Russia entered into negotiations with Germany over the establishment of an exchange to sell oil futures denominated in euros. Russia, which on some measures is the world's Number 1 oil producer at the moment, is awash with petrodollars, but trades mainly with Europe. Russia's foreign exchange holdings recently reached an all-time high of $50bn.
At the moment, European consumers are benefiting from the link between oil and the dollar. The euro's surge has, in effect, paid for much of the increase in the price of oil. This, however, is just the flipside of the very high prices in France and Germany in Autumn 2000, which were a combination of a very weak euro and high oil price. US consumers have no such additional worries, as there is no currency risk.
So there is a huge list of potential winners from a move to price oil in euros, but movement remains slow.
'At various points in time since the early 1970s, oil producers have discussed this, especially in periods when the dollar has been weak. Opinions have tended to be wide-ranging, depending on the strategic and trade alliances certain members have with particular trade blocs,' said Yarjani.
That was an elliptical reference to the overwhelming influence of Saudi Arabia, whose government is the staunchest ally of the US within Opec.
'The Saudis are holding the line on oil prices in Opec and should they, for example, go along with the rest of the Opec people in demanding that oil be priced in euros, that would deal a very heavy blow to the American economy,' Youssef Ibrahim, of the influential US Council on Foreign Relations, told CNN.
Last year the former US Ambassador to Saudi Arabia told a committee of the US Congress: 'One of the major things the Saudis have historically done, in part out of friendship with the United States, is to insist that oil continues to be priced in dollars. Therefore, the US Treasury can print money and buy oil, which is an advantage no other country has. With the emergence of other currencies and with strains in the relationship, I wonder whether there will not again be, as there have been in the past, people in Saudi Arabia who raise the question of why they should be so kind to the United States.'
Historically, empires have been exporters of capital, rather than importers like the US. The dollar has been vital to this revolution. At the euro's launch Martin Feldstein, a Harvard economist, pointed to the possibility that the single currency could weaken the status of the dollar to the extent that it 'could complicate international military relationships'. Feldstein is an outside contender to replace Alan Greenspan at the Federal Reserve.
Oil pricing is just the background to a wider issue. The Bank of China and the Russian Central Bank are both rumoured to be waiting for the best moment to increase the holdings of euros. Only 5 per cent of Chinese reserves are held in euros, but more than 20 per cent of its trade is with Europe. Middle Eastern states hold $700bn of US assets, but comparatively little in Europe.
So is the euro the missing link between the 'axis of evil' and the 'axis of weasel'? It is greatly appreciated in the former and was invented in the latter. Research by State Street shows that the euro has gained 'safe haven' status since last August as the dollar has lost it. It's likely this shift is a temporary phenomenon. Petroeuros may just change that.
==
Gata is still refusing to take this into account and mention it.

slingshot (02/22/03; 17:42:37MT - usagold.com msg#: 98207)
Siege Engine
Gold's Ascension
Morning came and preparations for the march soon were underway. The Field of Years became a staging area for the army of the Goldbugs grown larger than ever. By afternoon one would see very little grass which had now turned brown with the coming of winter.
Stephen the Great and Bonfir had climbed the staircase to the top of the wall and looked out over the field. They could see carts and wagons being loaded. Man,women and child lend their hands to the cause.

They have come a long way, Stephen the Great, and by the looks of it they will go alot further, said Bonfir.
In unity there is strenght,but that is not all they have, said Stephen. They believe in what they do. That will carry them through many hardships and inspire others to do the same.

It was then Gandalf join the two men. It is incredible that so many with little left, have so much to gain, said Gandalf. Once we stood at the edge of that field and our enemy stood where we stand now, peering down at us. This army brought down the tower as you see in the moat and broke down the gate to capture this castle. I have seen one risk her life to save another. Lighting the fire ensuring victory.

The stakes are higher, Gandalf. We now face four armies'said Bonfir.
Many have joined us and many have left our ranks. We will prevail'said Gandalf turning to look at the army below.

In the council chamber Sir Howe had summoned the Captain of the Guard. When he arrived Sir Howe gave him this order.
Inform the Lord of the Castle he will be going with us. As you wish and the Captain of the guard left the chamber.

He heard the turning of the keys in the lock. Wake up Lord of the Castle, Your army awaits you, said the guard. Pack what you have. You will be going on a journey.
The Lord picked up his few items and went with the guard. He was on his way to the courtyard on the second level and looked out a window and upon the field. He stopped and stared for some time. If only one could read his thoughts. This way my Lord, the guard said with a smile on his face.

The three observers on the mountain watch the armies battle each other for a few days. One battle in particular involved the army of green. They had come onto the plain with lightning speed. They went up against a segment of the Confederation which had separated in the fight from the main body. And they came as thunder with the speed of Gandalf's Shadowfax. Into them they rode and when they passed, no one was standing. As fast as they appeared they returned to their ranks of safety.

A thousand Shadowfaxes,thought Slingshot.

Tonto (02/22/03; 17:32:55MT - usagold.com msg#: 98206)
Noble 1
Question #1 Metal Detectors # 2 Dont know #3If you have willing buyer and seller #4 I dont think you can. Tonto

Cavan Man (02/22/03; 17:11:46MT - usagold.com msg#: 98205)
@CB (too)
.....and thank you CB (too) for your balanced perspective on life across the pond. Your C and B (P)will soon provide comfort to their fans and friends (no doubt).

Cavan Man (02/22/03; 17:09:07MT - usagold.com msg#: 98204)
Speaking of "Founding Fathers"
Happy Birthday George Washington #271. Thank you for your (continued) service to our country.

CoBra(too) (02/22/03; 16:47:05MT - usagold.com msg#: 98203)
Views of the US fom the Outside -
@ elevator guy - I think your kind reply has been spot on. I guess the european view of the US was always mixed with some awe of your (former?) real prosperity and with some envy of your clear constitutional bill of individual rights. A gift your founding fathers have been so wise to pass on to their inheritors. The US Constitution, of course has been the rock solid base for building your free and enterprising nation and poart of that legacy was a monetary system based on a currency redeemable in gold.

As such the first real blow was the debasement of the US Dollar, starting with the introduction of "The Creature of Jekyll Island", the FED in 1913. And followed by FDR's Gold confiscation internally and Nixon reneging the Bretton Woods agreement, actually putting the US into receivership - and the world on floating, or worse fiat currency system.

A system, which history has proven more than once that it is intrinsically unstable and the start of a downward spiral in all walks of human endeavors; Including ethical and moral values. In other words the basic fabric of society has been dragged towards an ever accelerating race to the bottom.

" ... The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. They not only confiscate, but confiscate arbitrarily; and while the process impoverishes many, it actually enriches some."

This quote is from Lenin and may remind us all that - even while communism in the old Soviet style seems defeated - socialism, even under the cloak of liberalism is destroying liberty and ethical values. An un-ethical monetary system is corroborating freedom, moral and lastly society and puts ever more government in place to regulate our lives... until total serfdom of a new world order of a new brand of feudalism of the "establishment" has engulfed us totally.

Kind regards Sir e.g. cb2

PS: Many thanks to Chris Powell for his clear and precise recent treatise. Very refreshing to see a relatively new scholar of Gold's historical role and value grasp the intricacies of the subject in such a comprehensive manner. I feel priviledged to have met you and occasionally chat with you on the net. Kudos to the GATA guys.

Cavan Man (02/22/03; 16:39:47MT - usagold.com msg#: 98202)
You mean, like Timothy McVeigh?
By DAVID JOHNSTON and JAMES RISEN The New York Times

WASHINGTON, Feb. 22 � The possibility of war with Iraq could unleash acts of anti-American violence in the United States or overseas by individual extremists who do not belong to Al Qaeda or other Middle Eastern terrorist groups but sympathize with their grievances, intelligence and law enforcement officials say.

A classified F.B.I. intelligence bulletin, issued on Wednesday to state and local law enforcement agencies throughout the country, warned the authorities to be on the alert for lone terrorists who are not directed by organizations like Al Qaeda.

"Lone extremists represent an ongoing terrorist threat in the United States," the bulletin said. "Lone extremists may operate independently or on the fringes of established extremist groups, either alone or with one or two accomplices."

USAGOLD / Centennial Precious Metals, Inc. (02/22/03; 16:37:16MT - usagold.com msg#: 98201)
Common sense investing for common and uncommon times...
http://www.usagold.com/cpm/abcs.html

The ABCs of Gold Investing

"If you are looking for thorough guidelines for making good decisions about private gold ownership, The ABCs of Gold Investing has all the answers." --Money World Magazine
Please Remember: It is your purchase from USAGOLD - Centennial Precious Metals that nourishes these pages.

Noble1 (02/22/03; 15:06:31MT - usagold.com msg#: 98200)
On Topic/Off Subject

Has anyone in this forum ever received a written response from the appropriate government agency or have reference to a case setting a precedent on any of the following questions regarding the use of Gold Eagles as money? If so, would you please share them? I think we know the answers but it would be interesting and perhaps helpful to future causes to have such a record.

1) I understand we must declare currency amounts greater than $10,000.00 taken out of the country. Must I declare say $9,000.00 in face value of Gold eagles?

2) If I enter an IRS office to pay taxes and wish to pay with Gold Eagles, will I be credited with the bullion value or the face value?

3) Can I sell an item and require different dollar amount payments in FRNs vs. Gold eagles? For example: payment for a piece of real property = $375,000 of FRNs or 1,000-$50.00 Gold Eagles(=$50,000)? Or, demand payment only in Gold Eagles?

4) If I purchased an investment item in FRNs and later sold it for a lesser amount in face value Gold Eagles, can I declare a loss?

5) Any other similiar question.

Remember: An ounce of gold will always have the value of an ounce of gold!

misetich (02/22/03; 14:40:06MT - usagold.com msg#: 98199)
One Recession Away from Deflation - S. Roach
http://www.morganstanley.com/GEFdata/digests/latest-digest.html
Snip:

Yet, in my view, it would be entirely premature to issue the "all clear" signal on the deflation front -- especially in light of conditions in the world's three largest economies. Japan is still in deflation and Germany, Europe's dominant economy, is hardly out of danger. Meanwhile, America's GDP-based inflation rate averaged just 1.0% in the second half of 2002, closer to the precipice of deflation than at any point in nearly half a century. Consequently, notwithstanding the recent resurgence in commodity prices, it wouldn't take much for disinflation to morph into outright deflation. My concern is that another recession -- hardly a low-probability outcome with oil prices now in the danger zone -- could well be the trigger for just such an outcome.

The case for deflation rests on three key premises: First is the post-bubble legacy of excess supply -- especially the overhang of redundant IT capacity that was put in place in the United States and Asia in the latter half of the 1990s.
..........

Globalization is a second force behind the deflation story. Courtesy of accelerating growth in world trade, the globalization of supply chains changes the balance between aggregate supply and demand. That is not only the case in tradable goods -- the so-called China factor comes to mind -
.........
But the latest twist can be found in the business cycle, the third piece to the deflation puzzle. Recessions are, by definition, deflationary events. Since the world economy entered its last recession in 2001 at a very low inflation rate -- a 1.3% increase in the advanced world GDP deflator in 2000, according to the IMF -- a close brush with outright deflation can hardly be judged a shock. In the parlance of macro, this recession opened up a positive "output gap" as a deficiency in aggregate demand and, in the context of excessive aggregate supply, virtually destroyed any semblance of pricing leverage for most global businesses. Normally, cyclical recoveries promptly close the gap between supply and demand, thereby restoring pricing leverage. That has not been the case in the decidedly subpar recovery that has occurred in the aftermath of the 2001 global recession. By our estimates, a 2.6% increase in world GDP in 2002 -- versus a longer-term trend of 3.6% -- actually led to a further widening of the global output gap and a concomitant increase in deflationary pressures. Against this backdrop, it would now take a fairly vigorous recovery in the global economy -- several years of world GDP increasing in excess of 4% -- to tilt the business cycle away from deflation.

Yet precisely the opposite now seems to be in the cards.
*******
Misetich

More useless "dollar bills" can be expected to be printed or "pop up"- as oil prices are set to skyrockedt as US continues its imperialistic attempt

Got gold?

Dollar Bill (02/22/03; 14:27:32MT - usagold.com msg#: 98198)
Henry Hazlitt 1959
Henry Hazlitt's Introduction (1959):
"It begins to be believed that the value of the monetary unit is going to continue to fall � that it will be less next year than this year, less next month than this month. Once such a belief has taken hold, the decline in the value of the monetary unit is anticipated. The value of the monetary unit begins to fall faster than the supply is or can be increased. The monetary managers are from then on in a necessarily losing battle. The more they increase the supply of money, the more public opinion anticipates still further increases�" (page 19)
"Inflation, in its final stages, always ends in prostration, in what modern economists call a �stabilization crisis.� The explanation of this stabilization crisis is not mysterious. During the inflation�prices do not respond in simple proportionality to the increase in the money supply. Some prices race beyond this, anticipating a further inflation. Even if inflation is halted at some point and no deflation sets in � that is, even if the increased supply of money is merely locked where it is and not reduced � the stabilization crisis sets in because these anticipatory prices collapse. The stabilization crisis, like the drunkard's hangover, is part of the price that must be paid for every inflationary orgy."

hiplt (02/22/03; 14:21:37MT - usagold.com msg#: 98197)
Chris Powell, Bill Murphy, GATA and Dollar Bill
A quick aside:
In the 70's, as Systems Theory was being cross-bred with the emerging field of Family Therapy, researchers and therapists identified a process they called "Mystification".

This was the process whereby the "Identified Patient" (IP)in a dysfunctional family would be emotionally bound to NOT speak the truth in the face of a family myth held as crucial to the survival of the family hierarchy (eg.'Children in this family are loved!' when in fact they are abused').

In a classic "Double-bind" you're "Damned" if you speak the truth (excommunication/labeled 'crazy'/ put on psychtropic drugs) or "Damned" if you don't ('If they're right, I can't believe my own perceptions, therefore I must be nuts').

In the face of the ridicule and abuse heaped upon Chris, Bill, GATA and the other 'truth sayers' in this debate, it is small wonder to me that their tone has not become even more strident.

Of course the final irony is its much easier to shot the strident messenger.

sector (02/22/03; 14:08:44MT - usagold.com msg#: 98196)
The Iraq War Set-Up
Watch the bullion banks
Spec longs were dumped by a surprise margin increase. After an exactly 8 week linear rise of $60 per ounce. When does any market move linearly? When it's a set-up ...that's when!

The Street talk is the stock markets will shoot up as the war starts.

The Street also "Tells" us that gold will fall.

What are the bnullion banks doing? Hard to tell exactly...but JPM says go long on gold.

Having trashed the weak hands in gold and lured the stock hopers to the edge of the table, it seems logical that the powers want to buy gold into a dip and sell their stock into a "war" rally.

Really...who wants GM or GE here? The wise players on Wall Street? Nope.

They want gold because they KNOW a deval is coming. So thery have created... as they almost always do, a situation where weak handed players are wrong-footed.

Get some more gold. Dump some more non-gold stocks.

The cool thing is that the gold stock shorters are going to get absolutely smashed as the tanks roll.

It's different this time.

ElGordo (02/22/03; 13:25:49MT - usagold.com msg#: 98195)
No recovery this year in Europe predicted
Paris, Feb. 22 (Bloomberg) -- European Central Bank President Wim Duisenberg said the economy of the dozen states sharing the euro probably won't recover this year, signaling policy makers may reduce interest rates as soon as next month.

``If anything, uncertainties about future developments seem to have increased further,'' Duisenberg told reporters during a meeting of Group of Seven finance ministers and central bankers. ``The perspective of an economic recovery this year is no longer supported by the most up-to-date information.''

ElGordo (02/22/03; 13:17:24MT - usagold.com msg#: 98194)
Recession looming because of energy prices?
http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=2270248
History is full of examples that when Americans have to pony up a lot more money for gasoline, they've quickly cut back on spending and the economy has suffered.

The economy dipped into recession following the oil crisis caused by the Yom Kippur war in 1974. The same thing happened in 1979 after Iraq invaded Iran. Economic growth also slowed when Iraq invaded Kuwait in 1990 and it set the stage for the Gulf war.

NO DUCT-TAPE SOLUTION

Even if the OPEC oil cartel goes through with its pledge to pump more oil to dampen a war-related jump in prices, the world's tanker capacity has eroded to the point where there aren't enough ships that can transport the stuff to the United States fast enough to avoid a price surge.

For example, the Organization of Petroleum Exporting Countries and other producers increased oil production by 1.2 million barrels a day in January. But the oil has still not reached U.S. refineries.

Then there's the issue of hope over reality. The cartel would be hard pressed to raise capacity if Iraq stopped producing because Saudi Arabia and perhaps, the United Arab Emirates, are the only producers with extra output to make more oil available to the world market.

The nation's dependence on foreign oil is frightening. The United States imports more than 11 million barrels a day, or 55 percent of its total consumption.

In its latest weekly update, the U.S. Energy Information Administration, the statistical arm of the U.S. Department of Energy, says gasoline prices increased for the ninth consecutive week, and the hike of 8 cents a gallon matched the biggest rise since the EIA started tracking the data in 1990. Heating oil prices are at a three-year peak.

Energy prices are going through the roof at a time when consumers are tapped out.

Consumer confidence, as measured by the University of Michigan, fell in February to the lowest reading since September 1993.

The smart money says it's just a matter of time before the slump in consumer confidence translates into an equally deep drop in spending.

Worth keeping in mind is this: Consumers, who have single-handedly kept the economy from slipping back into a so-called double-dip recession for the last two years, are now exhausted. They're loaded up to their eyeballs in debt.

So an oil-price shock would give the battered U.S. economy -- and the drivers of those gas-guzzling SUVs and pickup trucks -- a very rough ride indeed.

Daniel Druff (02/22/03; 12:06:43MT - usagold.com msg#: 98193)
Waaaaaay off topic
How long has it been since we assumed that "Arms Control" was a left/liberal goal. Sadam is sure to proclaim his 2nd Amendment rights.

Thank you

Old Yeller (02/22/03; 12:05:42MT - usagold.com msg#: 98192)
Creative Accounting and Destructive Risk(Henry CK repost)
http://www.atimes.com/global-econ/DD03Dj01.html

This is chaos.To aid and abet this chaos,Fekete's monetary
policeman must be silenced,along with a lot of other
economic warning signs of central planning run amok.

"It seems the world at large is convinced that organized
plunder is a natural state of things and we choose this of
our own free will.I don't think anything could be further
from the truth.I would counter that people don't understand
money and,if they did,they would choose sound money."

ET,USAGOLD

sector (02/22/03; 10:38:11MT - usagold.com msg#: 98191)
Shiokawa to propose yuan revaluation
http://www.yomiuri.co.jp/newse/20030222wo11.htm
Yomiuri Shimbun

Finance Minister Masajuro Shiokawa is expected to urge finance ministers and central bank governors of the Group of Seven industrialized countries to press China to revaluate the yuan, government sources said Friday.

At a two-day G-7 meeting, scheduled to open in Paris on Friday, Shiokawa will argue that China's "export of deflation" is one of the factors behind global deflation, and he will insist that China's cheap exports are negatively influencing the world economy, the sources said.
+++++++++++++++++

Minister Shiokawa has an interesting point in so far as when the dollar falls so too must the Chinese Yuan since they are linked. This will just make matters worse in US trade imbalances since China and the US are joined at the hip.

What is needed is not to browbeat the Chinese who have scrimped and done without in order to prosper, but to devalue the dollar and the yen together against the Yuan. Perhaps the Euro too since the Euro area is none-too-competitive against the Far East these days.

Call me a pessimist, but I don't see the Chinese revaluing their currency to make themselves less competitive, so that leaves a currency devaluation on the near horizon for the West.

The reality of securing Iraqi oil as useful spoils must pass numerous legal tests before it can be used to lower the price fo crude. That assumes the US sweeps to a resounding victory on the sands of the desert cities of iraq.

Those that have gold will escape the ravages of this looming devaluation.

sector (02/22/03; 08:58:08MT - usagold.com msg#: 98189)
@Dollar Bill It Seems Your are unhappy that gold is "Chaotically" up
...and the dollar is down.
I cannot improve on Chris Powell's clear and concise rebuttal of your misperceptions.

But I will say that GATA has made Herculean efforts to bring the truth to Washington's attention. If it's the truth regarding manipulation that has you so upset then you have the problem.

Your repeated references to "Chaos" being wished by GATA is absurd on its face.

When rigged markets, corrupt officials and secrecy rules the American economy, THAT itself is the purest definition of chaos. Enron was chaos. El Paso Gas and the California energy disaster was chaos. Mahonia, the offshore rigged distribution division of JP Morgan was chaos. Hiding the truth regarding central bank gold status is chaos.

An economy held together only by the influx of the government's clever printing of fiat paper is chaos. All this chaos has been created not by GATA but in spite of GATA's insistence, with many other honest money advocates across the world, that fair and free markets be allowed to operate. The ultimate form of tyranny and chaos is the slow destruction of a population's wealth through government planned inflation.

Since when is honest money viewed as "Chaos"? By your definitions the Constitution itself advocates "Chaos" by stipulating gold and silver as the only form of money. In reality, chaos has ensued because the Constitution's careful plan of government wasn't followed.

Your four sons will do just fine in a free market system. They will work hard as you do, and they will be paid. Without honest money, they will encounter more chaos if today's corruption lasts...which it won't.

As for the issue of 16,000 tonnes of central bank gold having been sold�it's settled. The gold is gone.

Burning one's furniture [gold] to stay economically warm cannot survive as a government policy. Stated another way, no nation ever borrowed and consumed its way to prosperity.

I'm sorry if GATA's advocacy of honest money and honest government policies upsets you.

R Powell (02/22/03; 08:54:14MT - usagold.com msg#: 98188)
Dollar Bill // Is GATA gloating?
As a parent I can share your apprehension of the future that awaits my children as well as your four boys. We both know that parenting is a tough job with the advice of our years often being overpowered by peer pressure, the changing of customs or acceptable behavior as defined by today's society (illustrated by both the so-called criminal and respectable members of society) and the foolishness or exuberience of youth.

I would ask you to condense the factual information that GATA has provided over the years while remembering your father-sons relationship over the years. Have we not demanded, argued for and suggested courses of action for different situations that arouse while our children were maturing? Have you ever counciled by evaluating the different options available to resolve different situations? Have you ever spoken of the repercussions of actions taken or actions not taken, both of which will either alleviate or intensify the situation in question. Have you ever spoken of the dire and tragic results which may be precipitated by whatever course of action your boys decided to take? Have you ever let one of your boys pick a wrong course, on something less than life threatening, in order to learn (the hard way) that actions invoke consequences and that we must be responsible for those consequences. We both know that you do NOT want these negative results but, as parents, we are obligated to warn of such events, especially as the kids grow older and must learn to make intelligent decisions on their own.

Now, reconsider what GATA is attempting to do. Is it not an attempt to point out the facts of the situation as best as they can, as discovered, and alert all who will listen to the consequences of the situation. How would you proceed if asked to head up the public relations department of GATA? Would you defend the current view by illustrating current happenings that prove that your previous views were valid. Would you use "bad" economic happenings to prove that your previous views were valid?

I believe your point of view is not without merit in that it does offer feedback to GATA of how their information dissemination campaign is being perceived. Would GATA be wise in the future to warn of dire consequences without giving the appearance of wishing for those consequences? It is a normal reaction to gleefully emphasise any current information which supports previous allegations. Unfortunately, as events transpire, these evolving events may be or have negative economic results. Should this surprise us? No, GATA has not been warning that happy days are coming again, they have been warning of the dire consequences of at least bad and harmful,if not unlawful, economic manipulation.
Thoughts?
And Happy Weekend !!
Rich

JCTex (2/22/03; 08:15:36MT - usagold.com msg#: 98187)
Boxman (2/22/03; 06:56:23MT - usagold.com msg#: 98182)
Agreed with every word in your post.

Unfortunately, "shooting the messenger" seems to be a national disease.

JCTex (2/22/03; 08:03:48MT - usagold.com msg#: 98186)
silvercollector (2/22/03; 07:43:59MT - usagold.com msg#: 98185)
No, they were not ushered off this site.

silvercollector (2/22/03; 07:43:59MT - usagold.com msg#: 98185)
Can someone confirm if Another was "ushered out the door" as
Dollar Bill claims in his message #98174.

silvercollector (2/22/03; 07:38:42MT - usagold.com msg#: 98184)
Dollar Bill
I feel somehow obliged to respond to you since I was the one who orginally posted the link to the article. (Let it be known that I picked it up from the neighbouring castle where it was posted at least a day earlier)

Your interpretation of the article and your subsequent reply to Chris Powell is distorted to say the least. Please re-read the article again, note your message to Chris and please understand his reply. For the most part, your objections could be directed to the author of the article more so than to Bill Murphy via Chris Powell.

Let's try to comprehend the message sent by Kelly O'Meara; it fits in very timely with the current discussion on this board regarding the "physical reserves" held by CB's as debated by many and in particular 'sector' & 'Aristotle'.

We have, from what I can comprehend given my limited accounting skills, proof positive that a handful of CB's are 'double-counting' physically held gold bullion. We know of Phillipine and Portugal of course but now irregularities surface with Norway, Denmark and Finland (thanks steady!)

It has been discussed a zillion times that the POG has had, and does have an albatross hanging over it in the form of CB threatened, percieved and anticipated selling. If this story does march on, that is to say if offically held gold is proved to be 16,000 tonnes short of the officially claimed 32/33,000 tonnes then I believe "the shaking of the financial world to it's core" will be describing the situation most lightly.

So in summary I believe it prudent for you to:

a) re-read the Insight article a couple more times and try to comprehend the essense of the message rather than pick a fight with GATA, Bill Murphy and Chris Powell.

b) retract your bizarre request that GATA (via Chris Powell) be removed from this forum.

c) offer a sincere apology to Chris Powell

Cavan Man (2/22/03; 07:18:08MT - usagold.com msg#: 98183)
ECB rate cuts in the wind?
By Farah Nayeri, Katrin Bennhold and Rainer Buergin

Paris, Feb. 22 (Bloomberg) -- European Central Bank President Wim Duisenberg said the economy of the dozen states sharing the euro probably won't recover this year, signaling policy makers may reduce interest rates as soon as March.

``If anything, uncertainties about future developments seem to have increased further,'' Duisenberg told reporters during a meeting of Group of Seven finance ministers and central bankers. ``The perspective of an economic recovery this year is no longer supported by the most up-to-date information.''

Old Yeller (2/22/03; 02:10:40MT - usagold.com msg#: 98181)
So, what's wrong with a centrally planned economy?

"It is an economic truism that low inflation for a large,
complex economy can only be achieved by driving certain
sectors into deflationary levels.Businesses in these
unfortunate sectors are held in a state of protracted,
if not perpetual loss,to face bankruptcy and liquidation.
This detachment of profit from real production and the
dubious linkage of profit to financial speculation and
manipulation Greenspan accepts happily as Schumpterian
'creative destuction'.Pockets of deflation and bankruptcy
are intregal parts of systemwide disinflation that inevit-
ably produces losers who allegedly made wrong business bets.
It turned out that these wrong way bets were not against market forces as much as they were against Fed policy bias.

Henry C K Liu

That's what I see GATA fighting for,Dollar Bill.The free
market the monetary authorities trumpet,yet'simultaneously
employing the tactics mentioned above to covertly divert
the inflationary policies to the 'correct' sectors.This
is not only highly unethical,IMO,it borders on the
criminal.Look,one either has a free market,or one does not.
There is no middle ground here.

Give us the real truth,as we should expect from people
who hold so many destinies in their hands.The Federal
Reserve/US Treasury should have lost the right to
print the world's reserve currency long ago,in 1971,
when they defrauded gold holders and converted them to
dollar holders.The rest of the world gave them an inch,
and they took a mile.The obvious manipulation of the
gold market is but a small part of the injustice perpetrated upon the hard workin people of the world
by not just the Fed,but through their complicity,the
BOJ and the ECB.

They have a lot to answer for,GATA does not.

ElGordo (2/22/03; 00:38:13MT - usagold.com msg#: 98180)
@Gold Standard
I sometimes post info on uses for silver. I don't argue the
merits of the technology. This is not a forum for fuel cells.
Do some research with google.
Bacteria can produce hydrogen cheaply. Storage is with
"on demand" systems like: millenniumcell.com
I just came across info on silver as a catalyst in rocket
motors. Its truly amazing.

steady (2/22/03; 00:36:09MT - usagold.com msg#: 98179)
learning
dollar bill i am gata and am capable of learning. ive learned alot at this board. gata learn to earn !

Chris Powell (2/22/03; 00:03:42MT - usagold.com msg#: 98178)
Reply to Dollar Bill
A few points in reply to your post of tonight....

1) The Insight magazine article's reference to "lunatic
fringe" was not directed toward GATA particularly
but rather was the author's characterization of how
the financial establishment sees gold advocates. That
characterization, true as it is, is not what GATA
embraces about the article. GATA embraces the article
for throwing light on the duplicitous accounting
provided by the International Monetary Fund and
central banks for their gold reserves. This has been
a big part of GATA's work.

2) GATA Chairman Bill Murphy has not advocated
chaos and destruction for the world economy. He has
WARNED that economic chaos and destruction will be
consequences of the gold price rigging scandal the
more it continues. Murphy and others in GATA have
gone to Washington several times to meet with U.S. government officials to AVERT the disaster that will
result from rigging the gold price. But if chaos and destruction come to people and organizations doing bad things to gold, the mining industry, the nations
dependent on that industry, and the world's economy,
it might as well be called justice. The planet just
might survive without the Exchange Stabilization Fund,
J.P. Morgan Chase, and Barrick Gold.

3) Yes, exposure of the gold scandal will "shake
the world's financial system to its core." But
should the crooks be given a free ride because
of the hostages they have taken? Should the
truth be suppressed because some people may
not be able to handle it -- or because certain
financial interests profit from suppressing
the truth and will lose money if the truth comes
out? The current financial order survives only
because it cheats and even kills many innocent
people. The defenders of those people aren't
obliged to remake the system so that those who
profit from it can continue to profit; they are
obliged only to obtain redress for the victims.
In his novel "Bleak House," Dickens characterized
your argument this way: Outlaw cannibalism and
you starve the cannibals. Well, yes, let's starve
the cannibals so their victims may live.

4) GATA has not been hiding its light under a
bushel. If you think GATA is right, you have had
plenty of opportunity to protect your family.
And if you really think that GATA will destroy
the world if it makes the truth known, are you
not defending a world order based on a lie?

5) GATA has no political power and won't be
making political decisions for the United States
or any other country. Only those whose conduct
would be heaped with shame if it was exposed
have anything to fear from GATA.

6) "Goldilocks economy" was a reference to an
economy in perfect balance, like the soup
tested by Goldilocks in the children's story --
"not too hot, not too cold, but just right."

7) GATA is far from perfect. It is an interesting
bunch of people of various backgrounds, training,
outlook, and motive who work for free to investigate
and expose wrongdoing in the gold market. GATA is
doing work the World Gold Council should be doing
-- indeed, the WGC could expose and end the gold
scandal with maybe six weeks of effort mobilizing
the mining industry politically and shaking the
financial press by the neck until it woke up.
Until then, GATA will muddle on, and while we'll
listen earnestly to criticism, we're likely to pay
more heed to criticism that comes from people who
do more than gripe or nit-pick, people who do
something to help the cause. And with gold as
with everything else, nothing is rarer than people
who DO something to change what's wrong.

ViewYesterday's Discussion.

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