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KENNECOTT MAY GIVE UP WETLANDS
(Source: The Salt Lake Tribune, 3/5/08)

Kennecott Utah Copper would transfer ownership of 616 acres of wetlands, near Lakepoint in Salt Lake County, to The Nature Conservancy as part of an environmental restoration plan. The public is invited to comment on the draft plan through April 2.

The land transfer is part of a settlement agreement between Kennecott and the U.S. Fish and Wildlife Service as compensation for contamination of the North Zone Wetlands near Interstate 80 in Tooele County, according to a statement from the federal government. The Wildlife Service contends the North Zone Wetlands were contaminated by groundwater flowing from Kennecott's smelter.

Although Kennecott has admitted no guilt, the company has stopped contaminated water from flowing to the North Zone Wetlands and has dredged contaminated soil, said Chris Cline, spokeswoman for the Wildlife Service. As part of the draft agreement, Kennecott would construct a pipeline and canal system to improve water flow to the Lakepoint Wetlands and provide funding for the costs of ownership and management.

The draft restoration plan can be viewed and downloaded at http://www.fws.gov/mountain-prairie/nrda/lakepointwetlands/index.html. Comments also can be sent to U.S. Fish and Wildlife Service, 2369 West Orton Circle, Suite 50, West Valley City, 84119. - Christopher Smart.

GROUP: 'EXTREME ENVIRONMENTALISTS'
ARE HARMING THE POOR AND MINORITIES
(Source: Patty Henetz, Salt Lake Tribune, 3/8/08)

The Congress of Racial Equality is rolling out a new environmental justice campaign that focuses on "extreme environmentalists" such as wilderness advocates, charging them with harming poor people and minority groups.

Niger Innis, CORE's national spokesman, attended a news conference this week at the Utah Capitol to announce the consumers' campaign, which he is taking across the nation.

Innis, son of civil rights leader Roy Innis, said environmental organizations intimidate governments and have a trickle-down effect on minorities.

"You can't have economic development in my community when my community is worrying about paying their gas bill," Innis said.

Innis has a growing reputation as a conservative who questions environmentalists' "pseudoscience" and condemns what he calls the global green movement's oppression of poor people in the Third World.

Earlier in the week, Innis spoke to members of the Colorado Legislature during a news conference held to oppose efforts to restrict energy development there. Colorado news organizations reported the media event was organized with the help of Colorado-based Americans for American Energy.

AAE associate Jim Sims accompanied Innis at the news conference in Utah, held on the last day of the legislative session. There, Innis was surrounded by state lawmakers who congratulated the CORE effort.
"I remember his father, Roy Innis, who marched with Martin Luther King [Jr.]," said Rep. Mike Noel, R-Kanab.

AAE in January circulated a missive linking wilderness supporters with terrorists.

CORE will sue the Bush administration if the polar bear is designated an endangered species, Innis said later.

Innis said CORE receives donations from a wide variety of sources, including energy companies. "Quite frankly, we should be getting more, given our position," he said.

PACIFICORP WILL DEFEND COAL-FIRED PLANT'S AIR POLLUTION PERMIT
(Source: Judy Fahys, Salt Lake Tribune, 3/10/08)

Backers of a proposed coal-fired power plant in central Utah won the right last week to defend their air-pollution permit.

Pacificorp and the Utah Associated Municipal Power Systems, calling themselves the "Development Committee," persuaded the Utah Air Quality Board to let them join the fight against the Utah chapter of the Sierra Club over the permit. The Development Committee wants to go forward with Unit 3, a new 950 megawatt coal-fired unit at the Intermountain Power Plant near Delta, and protect the millions of dollars already invested. But the committee is in court over the resistance of some of its former partners - a group of California municipalities including the Los Angeles Department of Water and Power. The group has a majority interest in the Delta power plant.

The Sierra Club, saying regulators never should have granted the permit in 2004, is appealing the state's decision to allow the new coal-fired plant. But the case has been on hold for months because of the dispute between the Development Committee and the Californians.

"Our purpose in intervening is obviously to defend our rights," said Michael Keller, arguing before the Air Quality Board on behalf of the Development Committee last week.

Attorney Joro Walker, representing the Sierra Club, urged the panel to reject the request. She noted that the former partners had refused to sign the state's change-of-ownership form needed to transfer the air permit to the Development Committee.

She also pointed out that the court could well decide the Development Committee doesn't own the permit, which means it might have no right to a place in the appeal.

"The proper course is to wait for the court to decide the issues," she told the Air Quality Board.

The Sierra Club went to the state Supreme Court two years ago for the right to dispute the permit. The group says it was wrong for the Utah Division of Air Quality to grant a permit for the Unit 3 project because the plant would impair visibility of the national parks downwind, including Capitol Reef, and because the plant was not required to use the latest clean-coal technology.

With the board's unanimous ruling last week, the appeal can now move forward. The board will hear evidence from both sides, with the state's lawyers teamed up with the Development Committee to defend the permit.

State regulations give the Air Quality Division the job of reviewing applications for any kind of polluting facility to make sure up-to-date technology is used and to assess its projected pollution output. The pollution of all key facilities is capped to meet standards set by the federal government that are aimed at protecting the health of people and the environment.

The permit granted for Unit 3, for instance, essentially limits the volume of pollution the plant would be allowed to release.

California passed a law in 2006 that has such a tough greenhouse gas emission limit that, in effect, it prevents any new energy from coming from a coal-fired plant like the proposed Unit 3.

The California partners, which get roughly three-fourths of all the power generated from IPP Units 1 and 2, have withdrawn their support for Unit 3 since enactment of that law.

Last summer, their attorney withdrew from the Sierra Club appeal case.

GREENS: MINE CLAIMS CROWD TOWNS
(Source: Thomas Burr, Salt Lake Tribune, 03/12/08)

WASHINGTON - Mining activity is encroaching on cities and towns in Utah because of an outdated 19th-century law, potentially posing serious problems for residential areas, an environmental group said.

The number of mining claims within five miles of cities and towns in the state shot up almost 150 percent in the last five years, the Environmental Working Group says, from 2,786 to 6,793.

Overall, there are now 34,516 mining claims in the state as of January 2008 compared with just 8,723 in 2003, the group says in a new study conducted in part with the Pew Campaign for Responsible Mining. That's a dramatic increase likely pushed by a boost in prices for gold, silver, copper, uranium and other metals, the group says.

"The data show that claims and communities are on a collision course in the West," said Jane Danowitz, director of the Pew Campaign. "This potential crash is due in large part to the nation's frontier-era mining law, which places few restrictions on where and how mining can take place on western public lands."

The Environmental Working Group and the Pew Campaign are lobbying to overhaul the 1872 Mining Law, which hasn't been touched since it was put into place and now is being used to stake thousands of claims to parcels on public lands to dig up precious metals.

The Senate Energy and Natural Resources Committee will hold a second hearing today and is expected to vote on a reform bill next month changing the law to provide more say-so to states and communities affected by metals mining.

"The law that governs the mining of gold, uranium and other hard-rock metals made sense when it was signed into law by President Ulysses S. Grant in 1872 to encourage development of the West," Danowitz said on a conference call with reporters. But, "Since 1872, the West has changed more dramatically perhaps than any other region of the country."

The report released says the largest percentage increase within five miles of an incorporated area of Utah was near New Harmony in southwestern Utah. That community saw a 2,400 percent increase in claims from Jan. 1, 2003 to this year. La Sal, a small town near Arches National Park, saw claims jump more than 1,000 percent. And claims near Wendover, Utah, shot up by more than 400 percent, the group says.

The National Mining Association responded to the report, arguing that the numbers are misleading because only 5 percent of mining claims ever become operating mines.

Additionally, NMA spokesman Luke Popovich says communities and individuals have "ample" opportunity to oppose the mines under the National Environmental Protection Act and laws governing Bureau of Land Management areas at the time operating plans are filed on the claims. On the back end, he added, communities and individuals can oppose the release of bonds put up by the mining operators if they do not meet their responsibility to reclaim those lands.

What's more, Popovich added, the strongest support for hard-rock mining comes from the mining communities, who rely on the operations for a large part of their economic base.

The House passed legislation last November that would change the 1872 law to allow a state, political subdivision or Indian tribe to petition the Interior Department to remove specific federal lands from claimable territory to protect valuable and important areas.

The legislation also would impose a 4 percent royalty fee on existing permits and establishes a civil penalty for failure to comply with royalty payments. It also would protect several areas from mining claims: wilderness study areas, areas of "critical environmental concern," areas designated to be included in the National Wild and Scenic Rivers System and any area inside a roadless area as determined by the Forest Service.

UTAHNS PRAISES CLOSURE OF MERCURY-SPEWING NEVADA PLANT
(Source: Judy Fahys, Salt Lake Tribune, 3/13/08)

Nevada environmental officials have shut down a gold-ore plant until it can scrub more mercury pollution from its smokestacks.

The gold "roasters" have been suspected of contaminating lakes, streams and wildlife with a dangerous form of the metal, so Nevada's move won support from downwinders in Utah and Idaho.

"This is a bold action they've taken," said Cheryl Heying, director of the Utah Department of Air Quality. "It shows they have teeth, and they can bare them."

Nevada had a voluntary program for years but implemented tougher, mandatory regulations last year. Now reports of mercury emissions are required and checked.

Two other companies have successfully cut their pollution under the new program, but roasters operated by Yukon-Nevada Gold Corp. at Jerritt Canyon, north of Elko, had been under investigation for more than a year. The Nevada Department of Environmental Protection directed the Jerrit Canyon plants to shut down by March 17 until they can get the mercury out of emissions.

"These events demonstrate not only that the incentives we've built into the program are producing early emissions reductions, but also that the regulations contain strong enforcement provisions," said agency administrator Leo Drozdoff.

No clear link has been proven yet between Nevada's gold roasters and pollution in neighboring states. But it was only two weeks ago that the Utah Legislature approved $100,000 to buy a monitor to help track the microscopic mercury particles that many believe are drifting from Nevada.

In 2004, scientists discovered the highest levels of toxic methylmercury ever measured in a natural water body in the Great Salt Lake.

Methylmercury is the toxic form of mercury after it has been biologically transformed. It poses a public health risk, especially to children and unborn babies.

A neurotoxin, it builds up in the food chain and attacks the neurological system, causing retardation in the unborn and learning disabilities and behavioral problems in children. Humans are exposed most commonly by eating contaminated flesh, usually fish.

Utah has consumption warnings for several fish statewide and four duck species on the Great Salt Lake.

Idaho has similar warnings.

Canadian-based Yukon-Nevada Gold said the shutdown was planned and insisted its mercury controls simply aren't working right yet.

But Justin Hayes of the Idaho Conservation League said the company has been hiding the true volume of its mercury pollution. He called Nevada's shutdown order "a really big deal." He said: "This is the first step to solving this problem."

Lynn de Freitas, director of the Friends of the Great Salt Lake, applauded Nevada's action, too.

"What a responsible thing to do," she said.

WE'RE ALL DOWNWIND: CONVENTIONAL COAL POWER MEANS SMOKE
(Source: Tribune Editorial, 3/13/08)

Folks in Utah's Dixie are riled about the prospect of being downwind of a proposed coal-fired power plant in nearby Mesquite, Nev. They are worried about air quality and haze. It's good that they're worried, and that the Washington County Commission and the mayors of St. George and Springdale have joined the opposition.

This leads us to wonder, however, when other Utahns and their government officials will get the message that coal-fired power, at least with conventional technology, is no longer acceptable, even when large numbers of Utahns are not immediately downwind.

Where's the public outrage about the proposed expansion of the Intermountain Power Project with a new 950-megawatt unit near Delta? Or the 270-megawatt Sevier Power Plant proposed at Sigurd? Or the 110-megawatt Bonanza plant near Vernal?

They will produce the same pollution - mercury, particulates, sulfur dioxide and carbon dioxide (the major greenhouse gas) - as the 750-megawatt Toquop plant proposed near Mesquite. But while local officials in Washington County have joined the opposition, you don't hear the same song in other Utah cities and towns. Heck, many Utah municipal utilities are partners in the deal to get the huge new unit at IPP built.

Even if the folks in Utah don't take a dim view of these plants - they provide high-paying jobs, taxes and electric power, after all - our neighbors in Colorado, Kansas and points east should. That's the thing about air. Everybody's downwind of somebody else.

The conventional argument for conventional coal power is that it's cheap. But people are beginning to factor in the environmental cost of that power, measured in things like lung disease and the haze that obscures views in Utah's national parks. They are coming to the conclusion that conventional coal power is not so cheap after all. Add the role of carbon dioxide emissions in global warming, and the possible effects on Utah's climate, including drought, and the bargain looks even worse.

Apparently, the quiescent Utah Legislature and governor have not yet awakened to the damage pouring from coal-fired stacks. Until they do, and impose tougher air-quality standards, electric utilities won't know which way to jump.

Maybe more Utahns should help their elected officials make up their minds. Because in reality, we're all downwind.

MINING GROWTH IRKS LAKE LOVERS
(Source: Tom Wharton, Salt Lake Tribune, 3/25/08)

WILLARD - Hundreds, if not thousands, of migrating pintail ducks and snow geese filled the gray sky on a remote stretch of the Great Salt Lake where Jeff and Lynn Pace and Rich Noble skimmed across the shallow waters northwest of Willard Bay in airboats

"I've seen the sky black with birds," said Lynn Pace, a hunter and lake lover from West Valley City. "It's a wonder of the world so taken for granted."
Airboaters and a coalition of environmental organizations are concerned about a proposed 33,000-acre expansion of dikes and evaporation ponds by Great Salt Lake Minerals (GSLM). They fear the diked ponds would negatively affect millions of birds that use the lake to migrate, feed and nest

Jeff Pace compared the relatively small loss of wetlands in the more controversial Legacy Highway project farther south as the Great Salt Lake equivalent to human fingers. The area of Bear River Bay included in the proposed expansion, he said, is the lake's heart

One thing is certain: Mineral operations on the lake are massive

According to the Mineral Leasing Plan for the Great Salt Lake, current mining operations by all companies on the lake use 171,644 acres for mineral extraction. GSLM's expansion would add 33,000 more

If allowed to expand beyond its current 43,000 acres, GSLM's operation would cover 119 square miles, a land mass larger than Salt Lake City

Approval for the expansion involves the state, which manages the lands under the lake beds, as well as the U.S. Army Corps of Engineers, which must issue permits because the proposal has the potential to harm or destroy wetlands

A coalition of hunting, airboating and environmental organizations who feel the Utah Department of Natural Resources did not consider their concerns when issuing permits for the expansion is challenging the decision-making process in 3rd District and the Utah Supreme courts

A federal environmental impact statement that must be conducted because of potential destruction of wetlands is in its preliminary stages. If all goes as planned, a draft will be out for public comment this fall with a final decision coming in early 2009

Peggy Landon, a spokeswoman for Great Salt Lake Minerals, said last August that the dikes would not hurt the lake and that the permit process will ensure no damage is done

"It is a lengthy process and a process that will give all interested parties a chance to be heard," she said at the time

The debate pits economics and a growing need for domestically produced potash fertilizer against fears that increased mining operations would harm the Great Salt Lake's hemispheric importance to birds.

Effects of expansion

According to a scoping document on the project by the Army Corps of Engineers, Great Salt Lake Minerals "draws naturally occurring brine from the lake into shallow ponds and allows solar evaporation to produce sulfate of potash as well as salt and magnesium chloride minerals. Sulfate potash is a specialty fertilizer that improves the yield and quality of high-value crops such as fruits, vegetables, tea, tree nuts and turf grasses."
The state receives money from the leases. According to Dave Grierson of the Utah Division of Forestry, Fire and State Lands, which issued the leases, the state receives $1 per acre per year plus royalties of 66 cents per ton for salt and 5 percent of royalties for other chemicals

Joro Walker, a Salt Lake environmental attorney who represents such groups as the Audubon Society, Sierra Club, Friends of the Great Salt Lake, League of Women Voters, airboaters and hunters, lists 10 effects the expansion could have on the lake

They include turning lake ecosystems into industrial zones, cutting off recreational access to 33,000 acres of the lake, destroying the beauty of the landscape, artificially reducing water levels and availability critical to the ecosystem, and impeding water flow

Environmental groups also worry about impacts to thousands of acres of wildlife and fish habitat. Of particular concern are nesting American pelican colonies at Gunnison Island that are now remote but will be less isolated and more accessible to prey species and human incursion by the new development

There also is concern about Great Salt Lake water quality, especially if concentrations of poisons such as mercury and selenium increase

No one doubts the lake's importance to wildlife

According to the environmental groups, 257 avian species use the Great Salt Lake, with 112 species using different wetlands while 117 species nest on the lake's islands or near its shores

At least 33 species of shorebirds representing 2 million to 5 million individual birds and 5 million waterfowl migrate through the lake. In fact, about 30 percent of waterfowl migrating along the Pacific Flyway depend on the Great Salt Lake's wetlands

None of this surprised the airboaters enjoying a spring day of sightseeing on Bear River Bay. They worry that too much development could doom a place they view as irreplaceable

"We're at the end of the noose and someone's about ready to pull the stool away," said Noble of Syracuse.

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BUFFETT TO BUSH, BERNANKE: WAKE UP, THE RECESSION IS HERE
(Source: Combined News Services, 3/3/08)

OMAHA, Neb. - Contrary to assertions by President Bush and Fed chief Ben Bernanke, billionaire investment wizard Warren Buffett said that the U.S. economy is essentially in a recession even if it hasn't met the technical definition of one yet.

Buffett, whose Berkshire Hathaway Inc. holding company owns home furnisher RC Willey and Rocky Mountain Power in Utah, said in an interview on CNBC the reports he gets from his retail businesses show a significant slowdown in purchases.

Along with the fact that millions of people have lost equity in their homes, ''I would say, by any commonsense definition, we are in a recession,'' Buffett said, but added that it's not clear how deep the recession will go.

The technical definition of a recession is two consecutive quarters of negative growth in the nation's gross domestic product. The Commerce Department reported that the GDP increased at a 0.6 percent pace in the quarter that ended Dec. 31. In the July-September quarter, the economy grew at a brisk 4.9 percent. GDP measures the value of all goods and services produced in the U.S.

Buffett's TV appearance came on the heels of the release last week of Berkshire's 2007 financial report. He also said Berkshire Hathaway had been approached by investors seeking to sell municipal bond holdings that were sinking in value.

Buffett said he bid unsuccessfully for $3.5 billion of municipal bonds. Some bondholders are being pressured by lenders to sell, he said. Top-rated tax-exempt bonds due in 30 years declined for the 14th consecutive day to a three-year low, according to Municipal Market Advisors.

Berkshire held $28 billion in fixed-maturity securities as of Dec. 31. Buffett last year entered the business of insuring municipal bonds, competing with established guarantors struggling to maintain their top credit ratings.

As defaults on mortgage-related securities climbed, Berkshire offered last month to assume $800 billion of municipal bond obligations from MBIA Inc., Ambac Financial Group Inc. and FGIC Corp. in exchange for more than $9 billion in premiums. The companies rejected the offer, Buffett said.

UTAH ECONOMY WILL LIKELY SLOW
IN COMING MONTHS
(Source: Paul Beebe, Salt Lake Tribune, 3/4/08)

Utah's economy is likely to continue to slow in coming months, a monthly Creighton University survey of supply managers and business leaders shows. The university's Business Conditions Index dipped in February to 53.9 from 54.2 in January. An index greater than 50 indicates the economy is expanding.

"Expansions in mining and natural resources will be more than offset by continuing downturns in manufacturing firms tied to domestic sales," Creighton economist Ernie Goss said.

ORDERS FOR MANUFACTURED GOODS
FALL 2.5% IN JANUARY
(Source: Salt Lake Tribune, 3/6/08)

U.S. factories saw demand for their products drop sharply, while the country's service sector contracted, fresh evidence of an economy hobbled by housing and credit crises.

The Commerce Department reported that new orders for manufactured goods fell 2.5 percent in January, a deterioration from December's 2 percent increase. It was the biggest decline in five months. Activity in the nation's service sector shrank in February for the second-straight month.

The Federal Reserve, in a new snapshot of nationwide business conditions, reported that the economy has weakened since the start of the year, especially pinching retailers and manufacturers.

Manufacturers, service providers and others are feeling the sting of the economic slowdown. Persisting problems in the housing and credit markets are causing people to be cautious.

TRADE DEFICIT GROWS LARGER; IMPORTS REACH ALL-TIME HIGH
(Source: Salt Lake Tribune, 3/11/08)

The United States' trade deficit grew larger in January as imports - including crude-oil prices - zoomed to all-time highs.

The latest snapshot of trade activity, reported by the Commerce Department, showed that the country's trade gap increased to $58.2 billion. That was up from a trade shortfall of $57.9 billion in December and was the highest since November.

Imports of goods and services climbed to a record high of $206.4 billion in January. The United States' voracious appetite for imported crude oil, where prices skyrocketed to the loftiest on record, figured into the increasing demand for overall imports.

The trade gap widened even as exports of U.S.-made goods and services totaled a record high of $148.2 billion in January.

FED RESCUE PLAN CHEERS UP WALL STREET
(Source: Combined News Services, 3/11/08)

Wall Street staged its biggest rally in five years as investors cheered the latest move by the Federal Reserve to shore up the nation's shaky financial system.

Staring at spreading dangers, the Fed announced a rescue package that would pour as much as $200 billion into banks and investment houses and allow them to put up risky home-loan packages as collateral. The hope is to encourage them to lend more freely.

Wall Street rebounded - and hoped the Fed had even more cards to play.

The Fed's maneuver, coordinated with central banks overseas, was its latest effort to stem the global credit crisis and severe housing woes that threaten to bury the United States in its first recession since 2001. Fed Chairman Ben Bernanke and his colleagues have been stretching for new and imaginative ways to confront the situation.

They are hoping to bring relief where it is sorely needed: in the market for mortgage securities. Home-loan financing has become much harder to get as nervous lenders have hunkered down.

On Wall Street, the Fed's action propelled stocks upward. The Dow Jones industrials jumped 416.66 points - the biggest one-day point gain since July 29, 2002.

Traders will be looking for still more action. Recent stock rallies have been followed by renewed sell-offs by investors who believe the economy is still headed for recession, if it isn't there already.

Assuming Tuesday's action helps to stabilize turbulent financial markets, that could reduce the chances that the Fed will order a deep, three-quarters of a percentage point cut in its key interest rate next week to further encourage lending and other economic activity. An increasing number of economists believe the Fed is more likely to cut rates by a half-point.

The Federal Reserve announced it would allow squeezed financial institutions - including big investment houses and banks - to borrow up to $200 billion in super-safe Treasury securities by using some of their more risky investments as collateral.

The move makes it less likely that bad debt related to the meltdown in the housing industry will sink a major bank or Wall Street firm, analysts said. Moreover, the Fed is moving in concert with central banks in Canada and Europe, which pledged to inject up to $45 billion into their financial systems.

The coordination with Europe helped strengthen the dollar, which rose slightly against the euro and the yen. The greenback had fallen to record lows against the euro in recent months as the Fed cut rates to bolster the struggling U.S. economy while European bankers held their rates steady.

The Fed said it would provide financial institutions with 28-day loans of Treasury securities, rather than overnight loans. The institutions would pledge other securities - including federal agency residential-mortgage-backed securities, such as those of mortgage giants Fannie Mae and Freddie Mac - as collateral for the loans. Fed officials said it's the first time they'll be accepting mortgage-backed securities through this type of lending program.

By allowing financial institutions to put up mortgage-backed securities - for which there's little market appetite - in return for safe securities that are in high demand, the Fed hopes to take pressure off financial companies and make them more inclined to lend to individuals and to businesses.

The Fed's move comes as banks and other financial institutions face cash crunches.

GOLD FUTURES BREAK $1,000 MARK
(Source: Bloomberg News, 3/13/08)

Gold rose above $1,000 an ounce for the first time as mounting credit-market losses spurred demand for bullion as a haven from the sagging dollar and equities.

Silver and platinum also advanced as the dollar dropped below 100 yen for the first time since 1995 and to a record against the euro. Standard & Poor's increased its forecast for bank write-downs related to subprime mortgages to $285 billion. Gold is up 37 percent since the Federal Reserve began cutting interest rates in September, sending the dollar tumbling.

''There is more monetary reflation in the pipes, more interest rate cuts and more flushing of money at the system,'' said Martin MurenAbeeld, chief economist at Toronto-based DundeeWealth Inc., which manages $60 billion in mutual funds and brokerage accounts. ''The easiest thing to say about gold at the moment is to stay long.''

Gold futures for April delivery climbed $13.30, or 1.4 percent, to close at $993.80 an ounce on the Comex division of the New York Mercantile Exchange. The price earlier reached $1,001.50, the highest ever for a most-active contract.

Silver futures for May delivery rose 42.5 cents, or 2.1 percent, to $20.42 an ounce. The metal reached $21.325 on March 6, the highest since October 1980.

''The situation in the U.S. could easily spread further, which means other central banks will try to take steps to support their economy,'' Murenbeeld said.

Gold's all-time inflation adjusted record is $2,284 on Jan. 21, 1980, according to a calculator on the Web site of the Federal Reserve Bank of Minneapolis. In 1980, when U.S. inflation was running in the double digits and oil was climbing after a decade of Middle East instability, gold reached $873.

''The dollar weakness is systemic and interest rates are headed lower,'' said Robert Gottlieb, managing director and global head of precious metals at Bear Stearns Cos. in New York.

''As long as there's a great deal of financial uncertainty, gold can go higher," he said.

FED TAKES NEW STEPS TO EASE FINANCIAL DOWNTURN
(Source: Jeannine Aversa, Associated Press, 3/17/08)

WASHINGTON The Federal Reserve announced a series of new steps to help provide relief to a spreading credit crisis that threatens to plunge the economy into recession.

The central bank approved a cut to its lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created another lending facility for big investment banks to secure short-term loans.

The steps are "designed to bolster market liquidity and promote orderly market functioning," the Fed said in a statement.

"Liquid' well-functioning markets are essential for the promotion of economic growth."

The new lending facility will be available "to financial institutions today.

It will be in place for at least six months and "may be extended as conditions warrant," the Fed said. The interest rate will be 3.25 percent and a range of collateral will be accepted to back the loans.

The Fed also approved the financing arrangement in which JP-Morgan Chase & Co. will acquire rival Bear Stearns Cos.

The deal valued at $2362 million, a stunning collapse for one of the world's largest and most venerable investment banks. The Fed will provide special financing to JP-Morgan Chase for the deal, JP-Morgan Chase said. The central bank has agreed to fund up to $30 billion of Bear Stearns' less liquid assets.

Treasury Secretary Henry Paulson said he was pleased by the developments.

"Last Friday, I said that market participants are addressing challenges and I am pleased with recent developments. I appreciate the additional actions taken by the Federal Reserve to enhance the stability, liquidity and orderliness of our markets," he said.

The Fed's action comes just two days before the central bank's scheduled meeting on Tuesday, where another big cut to a key interest rate that affects millions of people and businesses is expected to be ordered.

FED'S RATE CUT ENERGIZES WALL STREET,
BUT SHADOWS LINGER
(Source: Combined News Services, 3/18/08)

Stocks roared back Tuesday in the biggest daily gains on Wall Street since July 2002 after the Federal Reserve cut its benchmark interest rate by three-quarters of a percentage point, but shadows still hover over the economy.

The Dow Jones Industrial Average shot up 420.41 points, or 3.5 percent, to 12,392.66. The S&P 500 rose 54.14 points to 1,330.74 and the Nasdaq was up 91.25 points to 2,268.26, both up more than 4 percent on the day.

Sustaining Tuesday's rally may prove challenging, however, especially given the Fed's explicit warning that expectations of inflation are rising.

The new warning on inflation, coming very high up in the Fed's statement, was a troubling reminder of how complicated the job has become for the guardian of the U.S. economy.

The Fed is wrestling with a housing-market disaster, and perhaps recession in the broader U.S. economy. Then, too, there are malfunctioning credit markets and investment banks that remain vulnerable to investor runs that could bankrupt them. Now inflation is back on the list of concerns, complicated by sky-high oil prices and a falling dollar.

''Inflation has been elevated, and some indicators of inflation expectations have risen,'' the Fed's Open Market Committee wrote in the third paragraph of its statement announcing two separate rate cuts.

Fed Chairman Ben Bernanke is an inflation hawk who has frequently warned that expectations about inflation are as important as inflation itself. That's because if businesses expect inflation - rising prices across the economy - they raise their own prices, helping to spur the problem.

The Fed's public focus on inflation expectations may be designed to bolster the U.S. dollar by alerting the world that the central bank is paying attention. The dollar's value has slid against major currencies as investors feared that the Fed was willing to tolerate rising inflation - which weakens the dollar's purchasing power - in order to boost the slumping U.S. economy.

President Bush, eager to reassure a rattled country, said that his administration is ready to intervene again to stabilize the economy.

''If there needs to be further action, we'll take it, in a way that does not damage the long-term financial health of our economy,'' Bush said.

It was the second signal in two days from Bush about the possibility of more government action to help hurting consumers and a shaken financial market. Much of his agenda these days is meant to show he is engaged in fixing the economy but still confident in it.

Bush was not specific about other steps he might take.

The latest Fed move brought the federal funds rate - the interest that banks charge one another - down to 2.25 percent, the lowest since late 2004.

That's important far beyond bank boardrooms. The reduction triggered announcements from commercial banks that they were cutting their prime lending rate to 5.25 percent from 6 percent. This rate is the benchmark for millions of business and consumer loans.

The Fed action was designed to lower borrowing costs and boost spending by consumers and businesses and thus increase economic activity. Economic growth slowed to a near standstill in the final three months of last year as the nation was hit by a series of blows including the credit crunch, a prolonged housing slump, rising unemployment and surging energy prices.

The Federal Reserve has now cut its funds rate by three-fourths of a percentage point twice this year. The first occurred on Jan. 22 after an emergency meeting and was followed by a half-point cut at a regular meeting on Jan. 30. The three rate cuts over the course of two months represent the most aggressive Fed credit easing since mid-1982 when the Paul Volcker-led Fed was working to get the country out of a deep recession.

The Fed also announced that it was reducing its discount rate, the interest it charges to make direct loans to banks, by a similar three-quarters of a point, pushing this rate down to 2.5 percent.

That cut, which followed a quarter-point reduction in the discount rate on Sunday, was seen as a clear signal that the Fed is ready to supply significant amounts of credit in direct loans to banks and other institutions through its discount window in an effort to stabilize financial markets roiled by the collapse over the weekend of Bear Stearns, the nation's fifth largest investment bank.

''We had been on the brink of the biggest financial meltdown this country had ever seen, but I think the Fed has now turned the psychology around,'' said David Jones, chief economist at DMJ Advisors. ''The Fed is saying it is ready to supply all the emergency credit banks need to get us out of this crisis.''

UTAH'S GROWTH IN JOBS COOLING
(Source: Lesley Mitchell, Salt Lake Tribune, 3/18/08)

Two reports show that plummeting home sales have begun to affect Utah's economy in a big way.

The Utah Department of Workforce Services said that job growth in the state in the year that ended Feb. 29 slipped to 2.3 percent. That's down from a revised 2.6 percent job growth in the year that ended Jan. 31 and from a peak of 5.4 percent in the year that ended June 30, 2006.

Putting those percentages into hard numbers, Utah created about 28,100 new jobs in the Utah economy during the year that ended in February, much fewer than the 54,000 jobs during the year that ended June 2006.

Buoyed by commercial construction and other industries, Utah's job growth is still positive, of course, and well above the national average of 0.6 percent. But in recent months employment growth in the state has lost more and more steam, prompted in great part by job losses related to residential real estate. As home sales have plummeted, people working for home builders, and mortgage and title companies, as well as real estate agents, have lost jobs in recent months.

State officials say Utah's job growth isn't likely to dip below zero, which would mean the state's economy is losing jobs overall. But it can get close.

"The question now is, how far until it hits bottom?" asked economist Mark Knold, of the Utah Department of Workforce Services.

Utah's unemployment rate for February moved up slightly to 3 percent, meaning about 41,000 Utahns were out of work last month. The U.S. unemployment rate was 4.8 percent. The state's real estate downturn is especially apparent in data from Construction Monitor for February.

Builders along the Wasatch Front took out permits for the construction of only 261 homes last month, the lowest level since at least 1990 and down nearly 72 percent from 928 units in February 2007, according to the service, which tracks building activity throughout the West.

February's total also is lower than any other February since at least 1990, when the service began compiling permit data.

Nationally, building permits plunged by 7.8 percent in February to an annual rate of 978,000 units, the slowest pace in 16 years.

Knold believes the situation in Utah isn't going to turn itself around this spring, as some have hoped.

He said the market won't start to show increased demand for homes until sellers - home builders and homeowners alike - start lowering prices on properties they hope to sell. That has started to happen, but not to the extent some economists say is warranted.

The good news for the state's job outlook, however, is the relative strength of commercial construction. Construction employment in Utah overall is down 1.3 percent for the year that ended in February. The drop could have been much deeper if the state's commercial construction industry wasn't still healthy. The only other sector to report fewer overall jobs is the information sector, which includes jobs at publishing, motion picture, telecommunication and Internet service companies. But much of that industry's 2.6 percent decline can be attributed to a change in the way those jobs are accounted rather than real job losses.

Alan Rindlisbacher, director of corporate marketing for the commercial construction company The Layton Cos. in Sandy, said commercial construction isn't as robust as it was two years ago. But it's still strong, he said, which makes it possible for some employees who have lost jobs in residential construction to find jobs in commercial construction.

In addition, thousands of people will work in the coming years on various aspects of City Creek Center, a project in downtown Salt Lake City being undertaken by The Church of Jesus Christ of Latter-day Saints. "With projects like City Creek, everyone in commercial construction is going to continue to be busy for the next several years," Rindlisbacher said.

--- The Associated Press contributed to this report.