Despite denials, the rumors won't go away that China and the Middle East's oil-rich countries are secretively seeking an alternative to the sick U.S. dollar as chief currency.

As Bloomberg notes, "gold has more than tripled in the past eight years as the dollar tumbled 67 percent versus the euro." Meanwhile, oil has climbed 60 percent since December.

And the rumor of secretive talks among the Chinese and Gulf states about "a new pricing system for oil that excludes the U.S. dollar but includes gold," pushed the gold price to historic highs in Australia. The WSJ calls the rumors "an implausible media report," but notes that the rumor has still propelled gold prices skyward.

The funniest thing to come out of the G-20 meeting in Pittsburgh is the vow to phase out subsidies for the production and consumption of fossil fuels.

As the WSJ notes in "G-20 Falls Short on Fossil-Fuel Agreement," the summit's communique doesn't even set a deadline for the phase-out, except to say the government supports should vanish "over the medium term," a period that could mean sometime in the next 10,000 years.

But that's not what makes the G-20's vowed "phase-out" so ridiculous. For one thing, oil companies are trumpeting a plethora of new discoveries, and oil companies will fight like hell to keep their subsidies to help pay the cost of extracting that difficult-to-reach oil.

Despite the cheerleading story the other day in the New York Times that announced these new discoveries and declared that there really is no "peak oil" crisis, industry figures themselves reveal that in some ways oil companies are going nowhere fast.

As the Oil & Gas Journal noted yesterday:

Oilmen are always crying about how they need oil prices to stay high so they can finance exploration and production. No sympathy from me — and I grew up in an influential oil town. The O&G Journal also notes: "High oil prices during most of 2008 helped industry to generate record cash flow of $590 billion, up 36% from 2007. ... The industry's cash flow exceeded capital spending by $100 billion."

That record cash flow, propped up by tax breaks and other subsidies, may not have generated record production, but it did generate record profits and big paydays for oil company execs.

Up to 70,000 oil patch workers would lose their jobs, and the whole industry would collapse. Supposedly backing up those hyperbolic claims by the Texas Alliance of Energy Producers (TAEP) is a study it commissioned and sent straight to Congress.

The problem? Sweetheart tax breaks the industry's independent producers (not the few giant oil companies) have historically gotten are in danger, and there just ain't no way out no how, the oilmen argue.

"The repeal of the tax provisions would be a quick death, while cap-and-trade would be a slower death," TAEP says.

Looks like the oil and gas industry's been pumping a dry hole on Capitol Hill, considering all the money it's spent on rigging — oil rigging, that is. The oil and gas sector poured a record amount of campaign cash into D.C. pols — $35 million — during the 2008 election cycle. Of course, only 33 percent went to Democrats. Oops.

Stocks Drop in Global Pullback; U.S. Economy Is Still Sputtering (WashPost)

Reaction from one investment strategist: ""Whether it's the facts catching up with the expectations or the expectations catching up with the facts, I'm not sure which." You can those words to the bank. WSJ speculation, Telegraph (U.K.) on fears that rally's over; Seeking Alpha's The Mole on the bear.

Foreclosures Rise With Unemployment Rate (WashPost)

"The country's growing unemployment is overtaking subprime mortgages as the main driver of foreclosures, threatening to send even higher the number of borrowers who will lose their homes and making the foreclosure crisis far more complicated to unwind." In the first quarter, prime foreclosures outnumbered subprime ones.

Squeaking by on $300,000 (WashPost)

Droll profile of one Laura Steins in ritzy NYC suburb Harrison: "[S]he's months overdue for a visit to her colorist, a telltale sign of economic distress for a woman such as Steins."

Fox News on pace for best year ever (AP)

Sailing on its swift boat with its three Gilligans — little buddies Bill O'Reilly, Glenn Beck, and Sean Hannity — Fox has seen its viewership rise 11 percent from last year. CNN and MSNBC are down.

MORE HEADLINES FOLLOW

"As Congress Goes on Break, Health Lobbying Heats Up" (WSJ)

Health-care lobbyists are thicker on Capitol Hill than hookers on a Marseilles dock. The biggest spenders by far of any sector this year, health-care industries have unleashed 3,100 lobbyists, spending more than $263 million so far this year kissing ass and making threats. Just one f'rinstance: NYC teaching hospitals, trying to protect their higher Medicare payment rates, are stalking Chuck Schumer. Rural hospitals and clinics are stalking Senate Finance Chair Max Baucus of Montana, trying to protect what little money they already get — they get Medicare loot at a lower rate than the urban hospitals. Where's Big Pharma? I need more medication.

"P&G's Profit Falls 18% as Sales Decline" (NYT)

With the rest of the country still plunging deeper into the recession, those uncooperative consumers are the "missing link" because their "wallets are still being held quite tightly." So tightly that, according to Procter & Gamble, shoppers aren't putting the lotion in the basket, and their clothes are beginning to smell bad, too: "Consumers have slowed purchases of products such as Tide detergent and Olay face cream to save money as unemployment increased." Fact: Household income in the past 12 months has experienced the biggest drop in the past 50 years. Gee, you think this is in way related to "stubbornly high unemployment"?

"Two Traders Will Urge Changes in Gas Market" (WSJ)

Ex-Enron speculator John Arnold, now Centaurus hedge-fund major energy speculator, will ask the CFTC to rein in energy speculators. What a guy! Altruism? Of course not. Good way to head off more stringent regulation amid growing criticism of oil-market speculation? Yes. CFTC finally gets it, aiming at "excessive speculation," instead of just "speculation." Not that the CFTC's Gary Gensler is such a hot-shot regulator.

"The Republican Consumer Financial Protection Plan" (James Kwak, Baseline Scenario)

Apparently, it's just a hotline. Probably outsourced to Moldava.

"Bull Is in Full Stampede Mode" (Seeking Alpha, Sean Hannon)

Yeah, the market's doing great, but put on your black armbands: "Unfortunately, I believe that our economy has been forever altered as consumer behaviors will change (i.e., more savings, less consumption) and entire sectors have been curtailed (i.e., lack of leverage means fewer jobs in prime brokerage)."

"BofA, Wells Fargo get low marks on mortgage modifications" (McClatchy, Kevin G. Hall)

At least Ken Lewis still has his job.

"GE FINED $50M FOR GOOSING PROFIT" (NY Post, Paul Tharp)

Way before the current recession, Jeff Immelt's crew "bent the accounting rules beyond the breaking point," SEC says.

"Microsoft Needs More to Stall Google's Engine" (James B. Stewart, WSJ)

"Fraud groups ding Bing for illicit pharmacy promos" (Register)

"Yahoo Filing Reveals More Details of Microsoft Deal" Nancy Gohring, CIO)

"Lean Inventories Imperil Car Sales" (WSJ)

"Ban on Flash Orders Is Considered by SEC" (WSJ)

"Who Should Hide Behind the Regulatory Shield?" (Ilya Podolyako, Baseline Scenario)

"Medicare to reduce home health payments nationwide" (McClatchy)

On the day that Iraq's shaky government forces assumed control of the war that the U.S. government started six years ago, the first day of a heralded auction of Iraq's massive gas and "sweet oil" fields started leaking trouble. The first round of bidding for the giant Rumaila oil field in southern Iraq stalled when the companies balked at the government's offer of a fixed $2 a barrel — not a share of the profits.

Eight of the world's top 10 non-state oil companies jumped in to bid. But not one of them bid for a major gas field in still-violent Diyala province, west of Baghdad.

And adjacent to the country's northern fields, Mosul was in chaos. Judges and lawyers went on strike Monday, protesting abuses by police. Security forces are being attacked and killed every day. A dead policeman is worth $100 and a cell phone, Al Jazeera reports in video and print coverage much more sophisticated than that in any American press outlet. Security forces protect themselves by driving "at very high speed" and are armed with rocket launchers and machine guns.

"Iraqis danced in the streets and set off fireworks Monday in impromptu celebrations of a pivotal moment in their nation's troubled history," the Washington Post overstated in a story that didn't back that up. Yes, those who dared to venture outside were dancing.

The situation's so shaky that even many Iraqis are protesting the U.S.'s mostly symbolic pullout. Indoors and, in some areas, outdoors, citizens and government officials protested the pullout, pointing out that Iraq's own troops aren't capable of maintaining the semblance of order that now exists.

There are still 130,000 U.S. troops in the country, but they've backed off from their visible presence on the country's city streets. By tomorrow, the streets of Baghdad, Mosul, and other cities will be empty of the Americans' hulking vehicles and troops, Iraqi and U.S. officials said. But yesterday, those streets were already mostly deserted by Iraqis too fearful to step outside.

Dick Cheney, known for going where the oil is, no matter the danger to others, was not believed to have been present for the auction.

Western hopes that Iran's stormy presidential election shows glimmers of democracy are well and good, but if the oil giant emerges from the grip of the mullahs, it's more likely to cast its lot with the East than the West.

Practically overlooked over the tumultuous events in Iran was this weekend's meeting of the Shanghai Cooperation Organization in Yekaterinburg. (See Moscow-run Russia Today's video above.) This was kind of an anti-G20 summit. Iran has observer status at this Russia/China-dominated version of the UN. China's the real power behind the SCO.

Meanwhile, while the SCO grows in political and economic clout, here in the West it's more of the same, as the Financial Times says this morning in "Greed, fear, interest rates and bond yields."

In 2005, I noted, "While the Bush regime sinks into Iraq quicksand, China and Russia remake the world order."

As oil prices dropped under $67 a barrel today on the foreign markets, some analysts insist they're not surprised. After all, says one, "the major economies are still weak and we are still losing demand."

So there's plenty of oil, right? And you can still enjoy relatively low prices at the pump, right? Maybe not. Goldman Sachs analysts say the price of crude, which has wildly gyrated in the past couple of years, could hit $85 by the end of the year. And now Russia is predicting that oil could rise again to $150, as it did last year.

Well, it is true, as the Wall Street Journal points out, that this year's rise in crude has been steeper than even last year's. It was only on February 12, after all, that oil closed just under $34. That's a 50 percent rise from then to now. In a comparable period last year, the rise was "only" 33 percent.

Ah, but the real story may be taking place in the mysterious Far East, where analysts are trying to figure out just how big China's demand for oil is.

While China's censors are cracking down on the internet — trying to force PC companies (including our own Hewlett-Packard) to install filters to block "harmful content" from unwelcome web sites — oil analysts are sorta turning the tables by using the web to suss out China's oil demand. If that demand is growing more rapidly than now thought, we could be wind up over a barrel again. As the WSJ notes:

Complicating the picture by injecting a new dose of foreign policy implications: Iran's national oil company has invaded China, setting up its first office there and hoping to start selling oil to the Chinese market.

If Iran does establish a beachhead in China, the Chinese would be even more unlikely to support harsher sanctions on a country that is supplying oil to its growing middle class.

And that would make it all the more unlikely that the U.S. will try to do to Iran what it did to Iraq — unless Dick Cheney raises a private army to storm Tehran.

Time for your Two Minutes Hate (or, in this case, your Eight Years Hate).

If Cheney's sweating probes of the Bush-Cheney Era, this is a good time to dredge up the Kazakhstan bribery intrigue.

Amid all the bonus talk and other financial news, some people are still wondering why Dick Cheney chose this month to throw acid in Barack Obama's face on CNN.

As always, follow the money.

Yes, Time's Bobby Ghosh has a valid reason for ruminating:

Yes, yes, yes, torture, torture, torture. But maybe we can also look at the Foreign Corrupt Practices Act (FCPA), under which several probes of alleged U.S. corporate bribery overseas are proceeding with little publicity. Some of the cases began during the Bush regime; others predate it. It's for sure that the Bush-Cheney people weren't exactly eager to pursue many, if any, of them.

FCPA Blog has a nice little roundup — "Unfinished Business" — of some of the probes (including one in which the government is calling out Avon's business practices in China).

But the one I'm thinking of is the long-delayed U.S. v. Giffen, a bribery case swirling around oil-rich Kazakhstan that I wrote about several years ago because of its possible connection to Cheney and/or other U.S. government officials.

There's a murky Cheney angle regarding Kazakhstan (so murky that we don't know if he has a direct connection to Giffen's alleged wrongdoing).