The spats between the United States and China appear to be getting more numerous and more serious. The Chinese objected in strong terms to Washington’s latest arms deal with Taiwan and threatened to take sanctions against those firms involved. President Obama recently accused the Chinese of currency manipulation. At Davos, Larry Summers, the director of the White House’s National Economic Council, made an oblique attack on China by referring to mercantilist policies

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American political and economic leaders have sounded the alarm for years about the red ink rising in reports on the federal government’s fiscal health.

But now the problem of mounting national debt is worse than it ever has been before with — potentially dire consequences for taxpayers, according to a report by the nonpartisan Peterson-Pew Commission on Budget Reform.

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After he signed a law last week authorizing the U.S. Treasury to borrow an additional $1.9 trillion, President Barack Obama delivered a characteristically sanctimonious speech. It was about his deep commitment to frugality.

“After a decade of profligacy, the American people are tired of politicians who talk the talk but don’t walk the walk when it comes to fiscal responsibility,” he said. “It’s easy to get up in front of the cameras and rant against exploding deficits. What’s hard is actually getting deficits under control. But that’s what we must do. Like families across the country, we have to take responsibility for every dollar we spend.”

To put Obama’s Olympian hypocrisy in perspective, one need only examine the federal budget tables posted on the White House website by Obama’s own Office of Management and Budget.

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After net-selling an average of 444 tonnes of gold in the five years to 2008, central banks only offloaded a net 44 tonnes last year. In fact, after 62 tonnes of net selling in the first quarter of 2009, central banks posted three quarters of net buying. This shift may signal a “fundamental change in sentiment”, says the London-based World Gold Council (WGC).

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BISMARCK, N.D. – It has no automatic tellers or drive-up windows, doesn’t issue credit cards, and tends only a few thousand checking and savings accounts. Its only location is a glass, steamboat-shaped headquarters near the Missouri River, where the business moved from its original 1919 home in a former auto assembly plant.

The Bank of North Dakota — the nation’s only state-owned bank — might seem to be a relic. It was the brainchild of a failed flax farmer and one-time Socialist Party organizer during World War I.

But now officials in other states are wondering if it is helping North Dakota sail through the national recession.

Gubernatorial candidates in Florida and Oregon and a Washington state legislator are advocating the creation of state-owned banks in those states. A report prepared for a Vermont House committee last month said the idea had “considerable merit.” Liberal filmmaker Michael Moore promotes the bank on his Web site.

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In an interview on MSNBC this morning, newly retiring Sen. Evan Bayh declared the American political system “dysfunctional,” riddled with “brain-dead partisanship” and permanent campaigning. Flatly denying any possibility that he’d seek the presidency or any other higher office, Bayh argued that the American people needed to deliver a “shock” to Congress by voting incumbents out en masse and replacing them with people interested in reforming the process and governing for the good of the people, rather than deep-pocketed special-interest groups.

Bayh’s announcement stunned the American political world, as up until just last week he looked to be well on his way to an easy reelection for a third term in the Senate, and his senior staff was aggressively pursuing that goal.

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Feb. 17 (Bloomberg) — Billionaire George Soros’s Soros Fund Management LLC more than doubled its holding in the biggest gold exchange-traded fund in the fourth quarter after bullion advanced 8.9 percent to a record.

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Feb. 16 (Bloomberg) — Gold rose the most in three months on speculation that concern over Greece’s sovereign debt will spur demand for the metal as an alternative to holding currency.

European finance ministers pressured Greece to rein in budget deficits and refused to say how they would rescue the nation if it can’t contain its debt. Gold rose to a record $1,227.50 an ounce last year as central banks in the U.S., the U.K. and European Union kept lending rates low to revive growth.

“There’s a lack of faith in fiat currencies that’s driving the market,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. “There’s too many sovereign-debt problems and too many countries printing money. Gold is the only hard asset I’d want to own right now.”

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THE OREGON WILDERNESS—Frustrated by the widely held assumption that he unequivocally endorses the wars in Afghanistan and Iraq, a bald eagle said Monday that his thoughts on the conflicts were far more nuanced than many Americans might expect.

Speaking to reporters from his nest in the upper branches of a 175-foot ponderosa pine tree, the eagle explained that each member of his species was different and none should be taken for granted as a lockstep supporter of American military policy.

“I think World War II was justified, and I got behind the first Gulf War [in 1990],” said the bird, who has served as the national symbol of the United States since 1782. “But the recent war in Iraq, with its shifting rationale and poor planning, was clearly a huge mistake. Personally, I believe that these crucial, life-and-death matters deserve more honest and less politicized discussion than they get.”

“I’m not a hawk or a dove,” he added. “I’m an eagle.”

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Last year, two Detroit tavern owners were sitting at the bar, sampling their beverages and bemoaning the local economy — no one in the city had cash, and when they did, they spent it in the suburbs. Then the pair hit on a solution: Print their own money.

It is, after all, perfectly legal for anyone to issue currency, as long as it doesn’t look too much like a U.S. dollar. Thus was born the Detroit cheer, a local scrip accepted by a handful of city businesses, including a pizzeria, an electrician and a doggy day care center.

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