Good Morning,

Gold prices fell overnight, touching lows near $918.50 per ounce, as rising stock markets successfully diverted would-be safe-haven buyers. Bullion recovered strongly ahead of the NY opening however, and prices turned much higher, reaching up to the $935 area as the last trading day of the week prepared for a launch. The metal may finish down about 2% on the week, and it could be marking its third weekly drop, which would turn out to be the longest declining period since October's lows. Strong gains and a near-record high average price defined most of the period from mid-January to mid-February.

New York spot dealings opened with a robust $10 gain, quoted at $937.30 per ounce. Fund buying started the day off nicely and dashed hopes for those waiting to write about yet another putative 9 o'clock 'dump.' Silver rose 30 cents to $13.25 and the noble metals finally eked out small gains as well. Platinum and palladium each gained $2 to start at $1053 and $198 per ounce respectively. The US trade gap shrank faster in January than the kids in 'that' movie - to a level not seen in seven years. Of course, no one is reporting the positive news in certain camps. Once upon a time, the yawning gap made for dire predictions of US doom among members of such radical factions. Times are a changin'

Meanwhile, the world keeps changing as fast as the financial media can keep up with it. News that would have seemed unfit for print in all but the comics section of a kiosk now makes for routine headlines. Switzerland, Austria, and Luxembourg relax secrecy standards. Switzerland pushes the franc lower. Switzerland's gold holdings surpassed by the GLD (okay, by some 50,000 ounces). Cramer drawn, quartered, skewered, and grilled on the Daily Show. Do your darndest to find that memorable clip. Okay, we did it for you:

Contrition such as that heard in there, is rarer than an up day in the Dow these days.

American households lost an average of about $1 trillion in net worth each month during the past year. US household wealth had fallen 20% since two years ago. Not surprisingly, the occupants of the households in question have taken to becoming aggressive savers. That the country will have to make do with less of an extravagant lifestyle goes without saying. The question is, will it witness a permanent shift in living standards as baby boomers finally realize that this whole 'thing' is not about them? Or will it possibly turn out to be as transitory a period as the ones that came earlier, and eventually resume the spending party with a vengeance?

The US dollar was higher on the index, reaching back to 87.50 while crude oil advanced one more dollar, touching $48 per barrel, despite an increasing number of sources indicating that OPEC will likely stand pat on production levels following this weekend's meeting. Another meeting - that of the G-20 - has news writers Twittering from various spots in Brighton (UK) about all that will be on the plate this weekend.

The meeting participants will be sitting down amid growing tensions about how to tackle the issues of the day in the global economy. Granted, this will be a dress-rehearsal for next month's G-20 summit in London, but when you come to the meeting after just having shot most of your ammo on internal stimuli (US, China), weakening your currency (Switzerland), or trying to remain uncommitted (Euroland), the seating arrangement teams could have their hands full.

China's overt expression of 'concern' about US dollar-denominated assets was quickly translated by the gold radicals as a prelude to the country somehow running out to buy truckloads of gold. As if. Gold markets are way too small to take care of anything but a tiny portion of the reserves, and are volatile to boot. Buying yen or euro-denominated debt does not appear to yield any higher liquidity or better safety either. Thus, the Wall Street Journal opines that China can do little more than worry about the issue. That, and convince President Obama to get the US marching once again. By whatever means.

Bloomberg's Bill Pesek offers a slightly...different solution to China's dilemma. Buy more US debt. Double as much. Do not dismiss the seemingly tongue-in-cheek ideas as some kind of heresy. They might just end up coming to fruition.

A record plunge in Chinese exports may be great news for the U.S. Treasury.

It's simple mathematics. The U.S. economy is more than four times the size of China's. Growth in China is wildly lopsided toward exports, many of those goods packed on ships bound for America. So, if China wants to stay afloat, it should spend less money building roads, bridges and dams and more on U.S. debt. That would give the U.S. and its consumers the access to easy credit to reignite spending, much of it on Chinese-made goods.

OK, so that's not about to happen. China is already spooked about its $696 billion of Treasuries. Their value is subject to the whims of Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke.You still have to wonder if domestic stimulus is the best way for China to go. It's only a matter of time before China adds to the 4 trillion-yuan ($585 billion) spending plan unveiled in November. As global demand slides, China 's stimulus needs will grow exponentially. There are few signs it will be enough to ensure China's projected growth of 8 percent in light of the 26 percent plunge in exports in February.

China, it's often said, can spend its way out of this crisis. Throwing lots of money at the problem will soften the blow, yet it won't be enough with the world slump intensifying. The key to China getting back to the all-important 8 percent growth level is a global recovery. Basically, that means the U.S. That's why buying more U.S. debt makes sense. I'm not saying this because I'm American. This isn't about economic nationalism. It's just that the sheer size of the U.S. economy makes it a $14 trillion gorilla when officials in Beijing, Tokyo or Singapore grapple with safeguarding growth.

Malaysia, for example, plans to spend 60 billion ringgit ($16 billion) to support its export-dependent economy. Expect fiscal-stimulus packages of similar magnitude to sweep across Asia in the months ahead. Southeast Asia is experiencing this global crisis in slow motion. Even though most economies are still growing, the worst is yet to come. Savings-rich Asia could almost fund a U.S. budget deficit that is sure to reach previously unthinkable levels over the next two years. And, really, it could be in the region's best interest to do so. Hillary Clinton's visit to China last month dramatized the point. She didn't exactly arrive with her hat in her hand, yet it was surreal to see the U.S. secretary of State hawking bonds.

“Our economies are so intertwined,” Clinton told Dragon Television in Beijing. “It would not be in China's interest” if the U.S. were unable to finance deficit spending to stimulate its stalled economy. Clinton was referring to the Group of Two, an entity that has eclipsed the Group of Seven nations. The G-7 has been useless in this crisis. The G-2 is the key to restoring global demand. Japan's economy may be the second-biggest at $4.4 trillion, but it has its own problems. Germany's economy is roughly the same size as China's and it, too, might benefit more from a U.S. snapback than domestic stimulus.

President Barack Obama and Geithner need to get real about the magnitude of U.S. stimulus needs. Getting the U.S. off life- support may require another $2 trillion. Making that case to a disillusioned public and Republican leaders arguing for less public spending won't be easy. They should begin laying the groundwork immediately.

The next step, of course, is paying for it. That's where Asia comes in. Rebalancing the global economy will require Americans to become a bit more Asian -- consuming less and saving more -- and for Asians to become a bit more American. It's not an easy transition, and in the meantime, expect U.S. officials to unleash a massive buy-bonds campaign. Admittedly, this whole argument is politically incorrect. Asia lending the U.S. even more money would be highly unpopular. The U.S., Asians often point out, was slow to help this region during its 1997 crisis. And why bail out a country that is so successfully exporting its own crisis?

The answer is that Asia is heading into a highly turbulent environment. Governments can spend all they want on stimulus efforts, and they may help at the margin. For better or worse, though, restoring global growth is more of a U.S.-centric exercise than many in Asia and Europe might like to admit. That inconvenient fact makes it pointless for China to suddenly dump its Treasuries. It's just not an option for the world's third-largest economy .

U.S. officials used to fret about the Japanese doing that. Concerns increased after Prime Minister Ryutaro Hashimoto said in June 1997 that “several times in the past, we have been tempted to sell large lots of U.S. Treasuries.” It never happened. The reason: It can't, and especially now.

China would cannibalize its outlook by curtailing its U.S. debt purchases. It may have more to gain from doing the opposite.

Food for thought. The greater good being at stake, and all. Otherwise, we could be seeing a lot more messages such as:

Hello. Me have reduced on work. The grant for unemployed in Russia do not pay. And I should pay the credit for apartment and feed two children. Us already are going to move. Please help who than can.

The above is, indeed, a stunner. What appears to be a first - Internet panhandling- has come into the Kitco e-mail inbox. The writer provides his PayPal and E-gold account numbers. Think about it. Then think about it again.

Happy Book-Squaring.