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]

JEDDAH, Saudi Arabia, Jan 18

(Reuters) - 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.

"The price of oil is $33, but the U.S. dollar has declined by 40 percent against the euro so you're effectively getting $20," Mahathir told an economic conference in Saudi Arabia's Red Sea city of Jeddah. "So you're being short-changed."

Saudi Arabia, the world's biggest oil exporter, has justified higher world oil prices by saying they are necessary to compensate for the slide in the U.S. currency.

Mahathir, who retired last October, spent much of his time in office upsetting Western governments and defying their economic orthodoxies. But he became a respected spokesman in Islamic and developing states and received an ovation in Jeddah.

He suggested countries tally their total annual imports and exports and settle the difference at the end of the year in "gold dinars". Sounding a discordant note, Mahathir also warned Saudi Arabia against rushing to join the World Trade Organisation (WTO), saying it was not necessarily a positive move.

Saudi Trade Minister Hashem Yamani said on Saturday his country had narrowed differences with the United States that were holding up accession to the organisation and said he wanted to join "tomorrow".

"Everybody should be careful before joining the WTO because it is not all positive. It can be very negative if you don't handle it properly," Mahathir said. "They try to impose their agenda without regard for some other countries."

Copyright 2004, Reuters News Service

[ordinaryguy]

That is a 25% increase. Imagine more. On everything we import. Quickly. At a time of their choosing.

[ordinaryguy]

and that is while we still have some jobs that have not been outsourced yet.

And also before the baby boomers start retiring.

[blabs]

"Some of the new non-optical photofinishing systems in development don't use silver-halide. Phogenix Imaging, for instance. "

Actually, Phogenix is no longer. The two players, HP and Kodak, decided to dismantle it because the returns were not up to par (basically it costs too much and produced too little). They were trying to get the same results from an inkjet for small retail.

As far as SLR cameras go, even a $29 optical camera can still get about 22megapixels - compare that to a digital 22megapixel camera cost (if you can find one). A 10 Megapixel optical camera costs about $500.

Digital photography is great, and I own a nice Canon digital camera, but I bought a great digital camera so I can print my pictures that I want to keep...which of course will be on silver paper :) Anything else would just fade over time

[oceanview]

so. $2.99 xmas tree lights go to $3.50. A $12 shirt at walmart goes to $15. I try not to buy any of their crap now, so what. alot of people are buying this chinese made crap "because its so cheap". that's all I hear: "why did you buy this?", "because its only $8". maybe if their junk cost a little more, it would cut down on impulse buying of US consumers who would save the money or pay their credit card debt down instead.

[ordinaryguy]

Phogenix is no longer

Yes, the joint-venture folded, but the technology still exists. As soon as Kodak thinks they can make money on it, it'll happen.

A 10 Megapixel optical camera costs about $500.

A couple of years from now it won't.

[ordinaryguy]

$2.99 xmas tree lights go to $3.50

That is only a 17% increase.

A $12 shirt at walmart goes to $15.

That is only a 25% increase.

Think higher. A swift, significant price increase on everything made abroad will really shock people in this country. Apparently you too.

I agree that returning people to fiscal sanity will be a good side effect, but the whole episode will be painful for this country.

[arete]

Silver may very well become the king of metals.

I'm counting on it.

Richard W.

[arete]

Not that this could happen in a "free" country...

We are free as long as we do what the fascists tell us to do.

Richard W.

[Major_Risktaker]

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

Sound like the former Malaysian Sinister Minister Mahathir Mohamad bought gold at $426.00

Anyway Saddam started trading crude oil in Euro's and look what happened to him. America invented oil. so all of the oil in the world belongs US.

Kinda of like the movie Dune. Who ever control the spice (oil), controls the universe (world).

[The Westerner]

Two questions were raised on this thread that you might know the answer to. 1) Is it illegal for the little coin shop on the corner to sell you gold without telling the government your name and address? 2) Is it feasible in this day and age to store one's numismatics at home where government police can use high tech machines to find it? And my question 3) Is there enough gold left in Ft. Knox to support returning to a gold standard or is the United States basically bankrupt?

[junta]

I think in 1980 gold did its 800$ spike when OPEC hinted about gold as payment.

[shanec]

1) Is it illegal for the little coin shop on the corner to sell you gold without telling the government your name and address?

Currently, no, as long as the purchase is not so large it'd trigger them filing an IRS currency transaction, which I think is $10,000. Some coin dealers want a name/address for their own internal records or mailing list, just shop around for another, if they do.

2) Is it feasible in this day and age to store one's numismatics at home where government police can use high tech machines to find it?

I think so, better if there in a house safe or good hidey hole, or 'midnight gardening' out back, rather than not taking physical possession of it or having in a safe deposit box, IMO.

3) Is there enough gold left in Ft. Knox to support returning to a gold standard or is the United States basically bankrupt?

I don't know.

-Shane

[RedWhiteBlue]

As the dollar weakens, prices only go up for those paying in dollars. Consumers in the United States will see prices on Chinese manufactured goods increase, but the European consumer won't.

The Chinese Yuan is pegged to the dollar, so it strengthens or weakens right along with the US Dollar. So we see no change in prices of Chinese goods, and the Europeans see prices go down and have more buying power when using the stronger Eurodollar to buy Chinese goods.

That may change; China have been under pressure from other countries to let their currency free-float, but so far they have resisted. So it seems that the Chinese, under the current situation, make out like bandits. They have the American market well under wraps, and now can penetrate the European market further with products that will cost fewer Eurodollars.

[B4Ranch]

"If the US government recalled bullion gold, the value of one's coin holdings would crash to the "redemption" price. If a holder were to deal with the underground, they would face numerous risks, and would also have to sell at a severe discount to world market value. Then face the consequences should the government have a computer record of their former holdings. Not that this could happen in a "free" country..."

Sir, you get out of bed on the same side as I do. Congratulations for keeping your eyes open.

[ordinaryguy]

Agreed. When the Chinese make any change to their currency system, either allowing it to free-float or pegging it to a basket of currencies, they will be doing it at a time of their choosing, and to their advantage.

[arete]

Is there enough gold left in Ft. Knox to support returning to a gold standard or is the United States basically bankrupt?

Because of the gold lease program, I seriously doubt if there is anything in the US Treasury vaults but a bunch of dusty IOU's. It is one of the dirty little secrets our government doesn't like to talk about. If there is a single dollar sitting around anywhere, the politicians will spend it. Just think social security "trust" fund. Nothing there either.

Richard W.

[The Westerner]

I had heard that over the years...that the gold in Fort Knox had been sold off. But don't know if that's actually true. That explains why gold bug Alan Greenspan stopped advocating the gold standard.

[headsonpikes]

Don't worry - be happy!

There's no shortage of paper and ink.

[AmericanVictory]

dOn the other hand we could, if we wanted to, enable innovation in the oil business, starting with cheaper cleaner fuel that got better mileage and then moving on to cheaper, more productive, cleaner refining and into cheaper, cleaner production of that which now leave in the ground, and do so swiftly, letting the Saudis, the Iranians and the Russians know that we're doing it and solve most of these problems with the same solution. Stay tuned.