Sell Oil for Gold, Mahathir tells Saudi Arabia

Forbes.com - Reuters, 01.18.04, 7:47 AM ET ^ | 01.18.04, 7:47 AM ET | Reuters

[shanec]

I would not discount this possibility too readily just because it's coming here from one former Prime Minister of Malaysia. Talk amongst OPEC members considering Euro's over shrinking dollars has been going on for quite awhile, including from Chavez in Venezuela. Others have suggested it was another reason we are in Iraq today.

Bottom Line: Whether or not OPEC eventually does switch to Euro's or gold, over dollars, for their oil, just the increasing talk about it will likely weaken the dollar and further support gold and oil price increases.

As consumers here, the dynamics could be fascinating, to say the least. The price of an ounce of gold today ($406), would buy about 270 gallons of gasoline at $1.50/gallon. In the future, if/when gas has doubled in price, that same ounce of gold would probably still get you a whole lot closer to that original 270 gallons, once again, rather than only half that, or 135 gallons @ $3.00/gallon that that same $406 would only then buy.

-Shane

[waterstraat]

With the massive deficits bush has in our balance of trade and in our federal budget deficit, the dollar is headed much lower. Gold is what you want to have , not dollars, until we can bring back surpluses into our federal budget and our balance of trade. Simple economics.

[montag813]

Former Malaysian Prime Minister Mahathir Mohamad said on Sunday that Saudi Arabia should sell oil for gold, not dollars, to avoid being "short-changed" by a decline in the U.S. currency.

Good advice, despite the wacko source. Gold may see a nice boost Monday.

[templar]

until we can bring back surpluses into our federal budget and our balance of trade.

Thi is highly unlikely to happen without severe changes to our way of life. Changes so severe that it could result in something akin to civil war to some degree.

[Truth666]

http://www.freerepublic.com/focus/f-news/1060313/posts?page=8#8

[Young Rhino]

With the EU suing its members (France and Germany) for failing to meet economic requirements, long-term prospects for the euro don't look that good. The U.S. is coming out of a recession while the economic powerhouses of Europe are sinking into depression. As for Chavez, the prime minister of Malaysia, and other tinpot whack jobs, let them declare economic war on the U.S. Chavez's days are numbered. Although his beliefs are like Castro, he won't be able to maintain his hold on power. I'd give him less then two years before (a) he flees to Cuba for exile or (b) he is assassinated by his own people.

[bulldogs]

What is the best way to buy gold?

[razorback-bert]

ping

[waterstraat]

What is the best way to buy gold?

United States $50 gold coins(mintage created by Ronald Reagan).

Actually, any bullion gold coins are ok but I like those minted by the US. Even older US gold coins with low numistic value are nice to have. You should have started buying gold when bush got elected, but it is not too late unless you think bush can balance our federal budget and bring back our jobs and factories back from china and india in the very near future.

[shanec]

"Gold may see a nice boost Monday."

Especially now that we've had this recent correction and many of the shorts have gotten themselves covered and the weak longs have been flushed out. Was also interesting to see how well silver recovered, too. Lot of buyers there, not just in futures, but taking the physical. While the world focuses on gold and the Central Banks continue to try and tarnish it as a viable alternative to their paper, silver has the potential to double much quicker than gold, IMO. -Shane

[bulldogs]

United States $50 gold coins(mintage created by Ronald Reagan

Thanks. I was going to buy eagles. I don't think gold has topped out yet.

[Norse]

I think it's time to realize that deficits and balance of trade have absolutely no affect on the value of the dollar. This have never been proven or even remotely proven.

Mahathir is right on the money, although if I were him I would be advocating a return to the gold standard where the dollar does not change in value, instead of just putting a bandaid on the problem.

[baltodog]

TRADE WHEAT FOR OIL, BALTODOG TELLS FREEREPUBLIC

[GregoryFul]

Saudi princes - voila Iraq!

[GregoryFul]

Gold mining stocks with significant proven reserves, and a policy of not hedging.

[ikka]

United States $50 gold coins(mintage created by Ronald Reagan).

What is your opinion on such ventures as www.e-gold.com ?

[Coroner]

Trade promises not to bomb their desalination plants for oil!!!

[bulldogs]

"Gold mining stocks with significant proven reserves"

Yeah, I know. I am chicken. Give me the granny way.

[Coroner]

or is it desalinazation or desalinisation?? Who cares, bomb their desal plants and take their oil!!

[Cu Roi]

I like the US ones too, esp. the pre-St. Gaudens 10s and 20s. I heard somewhere that Krugerrands tend to have low margins compared to other modern bullion coins?

Ironically, I think some of the Asian countries that we are running big trade deficits are going to get burned the most from the declining Dollar. Japan and Red China have been making huge investment in US Treasury securities to keep the Dollar overvalued and thus their exports to US relatively cheap. These countries are essentially defending the Dollar for us while we don't lift a hand.

Japan is in slightly better shape; they tend to buy more equities thus higher returns to offset any exchange rate losses. Plus they have a floating exchange rate. China has much less flexibility since they have to maintain the $-Yuan peg.