-Caveat Lector- <A HREF="http://www.ctrl.org/"> </A> -Cui Bono?- from; vhttp://www.aci.net/kalliste/ Click Here: <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin Grabbe</A> ----- The Lion Will Lay Down with the Lamb, and a Little Child Shall Lead Them Clinton Will Pay Off the National Debt! And if this doesn't work, we'll get money from the Chinese. WASHINGTON - On a day when consumer confidence was reported at a record high, President Bill Clinton seized on the prolonged U.S. economic expansion Tuesday to propose paying off the government's public-held debt by 2013, two years sooner than had been expected. Those developments underscored the extraordinary vitality and durability of U.S. economic growth - aided by an expanding global economy - and the ways it not only has improved Americans' lives and perspectives but is being counted on to ease their future burdens. The Conference Board's consumer confidence index reached a record 144.7 in January, up from 141.7 in December, a larger-than-expected rise. A majority of consumers in the 5,000 households surveyed by the private research group said they were more optimistic both about current and future business conditions. Fifty-four percent described jobs as ''plentiful.'' Mr. Clinton, in an announcement from the White House, called on Republican leaders in Congress to ''put politics aside and join me'' in a budget proposal that would pay off $3.6 trillion in debt by 2013. This, he said, would leave the United States debt-free for the first time since 1835. ''What we're doing by taking this position,'' Mr. Clinton said, ''is maximizing the choices the next president and the next Congress will have.'' Money now being spent to pay interest on the debt will be available for more productive uses, he said. ''Our children and their children will not inherit the crippling burden of interests payments that we faced seven years ago,'' the president said. Republican leaders, whose large tax-cut proposal last year was vetoed by Mr. Clinton as ''irresponsible,'' have been warming to the idea of eliminating the national debt. The House speaker, Representative Dennis Hastert of Illinois, had called for paying off the publicly held debt by 2015. Looming budget surpluses have also allowed the presidential candidates of both parties to push for new spending or tax reduction, and in some cases to take a more socially liberal tilt, without being accused of irresponsibility. Joseph Lockhart, the White House spokesman, said that ''obviously the strong economy'' had made possible the debt proposal. The federal budget surplus last year was $124 billion, the largest in history Reduction of the national debt helps consumers by removing the government from competition for loans. That helps bring down interest rates and makes it easier for employers to invest in plants and payroll, spurring economic growth. Growth, in turn, increases the government's tax receipts - and options. Mr. Clinton's plan, Mr. Lockhart said, would use the interest saved through lower debt to keep the Social Security retirement program solvent beyond 2050 and to protect the Medicare program for the elderly through 2025. Left unchanged, both those programs could run short of money as the average age of the population rises in the next few decades. Meanwhile, the consumer confidence index, an important indicator that helps predict spending patterns, soared in January to the highest level since it was first calculated in the 1960s. The Conference Board surveys 5,000 households and uses the 1985 finding as the starting point of 100. ''People looking for confirmation that the consumer confidence bubble will soon burst have a further wait in store,'' said Lynn Franco, research director for the Conference Board, a business-financed research group, which reported the measurement. ''An expanding global economy and a robust job market suggest that consumer optimism and consumer spending could rise even further in coming months.'' The economic expansion began in March 1991. Next month, it is set to surpass the 106-month expansion of the 1960s. Mr. Clinton credited both the sound economy and the fiscal policies of his administration for lowering the debt by $1.7 trillion since he took office in 1993 at a time of higher interest rates and lower growth. Total federal debt is $5.76 trillion, including the $2 billion held by large government trust funds, primarily the Social Security Trust Fund. But projections of the budget surplus have continued to mount as the persistently strong economy has brought far more money into the Treasury than anticipated. Democrats and Republicans disagree over just how big the surplus will be, largely because of uncertainty over how long the economic expansion might continue. It has already defied conventional economic theory. Reflecting that disagreement, and the heavy political pressure it has generated, the nonpartisan Congressional Budget Office is planning to made public three projections Wednesday for surpluses in the coming decade, without indicating which one it believes is most accurate. Congress relies on the semiannual report on economic and budget projections in setting its priorities for tax cuts, spending increases and debt reduction. Democrats are expected to embrace the smallest of three projections. Republicans have not yet agreed on an approach. The report might, however, raise concerns of a return to inflationary spending, and thus increase prospects of interest-rate increases from the Federal Reserve Board. The Fed's policy-making committee meets next week. The bond market and stock prices were little moved by the consumer-confidence numbers. For now, consumers have good reason to remain optimistic about the course of growth, said Mark Zandi, an economist at Regional Financial Associates in West Chester, Pennsylvania. ''There is just nothing going wrong'' with the economy, he said. ''Unemployment is as low as it's ever been, wage growth is robust and accelerating, and most important of all is the booming stock market,'' Mr. Zandi said. ''Until the stock market cools, confidence will not weaken and consumers will not stop spending.'' International Herald Tribune, January 26, 2000 Gold Market Bank of England's Gold Auction Most Profitable Yet Sell, baby, sell. The Bank of England's fourth auction of gold reserves yesterday was its most profitable to date, realising $289.50 per ounce. But the Dutch central bank stole some of the UK central bank's thunder by revealing shortly afterwards that it had sold nearly as much metal through the market last week. To date the Bank of England has sold 100 tonnes in four auctions since its controversial May 1999 announcement of a plan to sell a total of 415 tonnes. The Dutch have sold 64 tonnes since the uncontroversial December 1999 announcement that their central bank planned to sell 300 tonnes. Yesterday there was a reasonable amount of bidding. Anglo Gold, the South African mining group that bought almost 40 per cent of the gold sold at the November auction, said yesterday it bought less than 10 per cent. The result provoked a mildly positive response from metals analysts, although the market price eased afterwards, with an afternoon fix of $288. The Bank of England sold 25 tonnes (800,000 ounces) of metal from UK reserves, at $289.50 per ounce, for a total of just under $233m. The sale, which was 3.3 times oversubscribed, attracted bids totalling 3,451,200 ounces. The cover of 4.3 times was better than the disappointing November figure of 2.1 times, but below the eight times reached in the November auction. Yesterday's sale was part of a plan to sell 125 tonnes in the 1999-2000 financial year. The plan, which involves selling a total of 415 tonnes over the next few years, leaving the UK with just 300 tonnes, provoked a storm of criticism from gold mining companies and countries when it was announced last May. But yesterday's auction price was actually higher than the market price before the May announcement. During the summer the gold price tumbled, but a statement on September 26 by European central banks that they planned to limit both sales and loans prompted a sharp recovery in the price, which spiked above $330 in early October. During the last three months the price has fluctuated within a band of $280 to $300 per ounce. The Dutch central bank has taken advantage of the recent improvement in the market to sell some of its own excess reserves. In early December it announced plans to sell about a third of the country's reserves, 100 tonnes this year and another 200 tonnes in the following four years. Last week it sold 23 tonnes, bringing the total to 64 tonnes. The Dutch central bank's explanation for its strategy is that gold reserves are less necessary now that currencies are more stable, and its job is to improve the profitability of its reserves. The Financial Times, January 26, 2000 ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, All My Relations. 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