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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 deficitsOfficials warn that Bush plans endanger global economy By CBS.MarketWatch.comLast 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 projectedUnder 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, 2003The 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
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