* Citi chief goes to Capitol Hill, blames short sellers, hilarity ensues

* Faber on whether gold is really a “Ponzi scheme,” Casey on the future from the euro

* Unpacking the Census’ impact on February job numbers

* Enron memories, yours for a mere $11,900,000

Iraq will pump up oil production from 2.4 million barrels a day now to 12 million barrels by 2017. That’s the promise of Prime Minister Nouri al-Maliki, who’d like to hold onto his job following elections on Sunday.

It is not 2004 anymore. And it is no longer in Washington’s interest to play up purple fingers in Iraqi elections. So let’s bring you up to speed on what’s been happening there since the “surge” was deemed a success:

* A bevy of suicide bombings this week went underreported within the U.S. press. Three explosions just today killed 12 individuals. Chances are it is the work from the Sunni minority, who’ve stayed quiet the last couple years simply because U.S. troops paid them off to lie low — a key reason “the surge” has kept the fighting to a dull roar

* The Sunnis are restless simply because the Shiite majority maneuvered recently to keep hundreds of Sunni candidates for parliament and local offices off the ballot. Of course, we were told the whole concept of “the surge” was to give Iraq’s factions breathing room to settle their differences. So much for that.

We still have 100,000 American troops in Babylon trying to make certain that non-American oil businesses like BP and China National Petroleum Corp. have reasonably secure access towards the giant Rumaila oil field. (ExxonMobil got a small consolation prize within the bidding.) We marvel at the spectacle.

The delusion that “short selling” is what nearly took down Citigroup in 2008 was being peddled on Capitol Hill yesterday. Citi chief Vikram Pandit blames that foul, unpatriotic trading strategy…. but paid no mind towards the reams of foolish loans made by his employees.

Even in Congress, the concept didn’t fly. Elizabeth Warren, chairwoman from the Congressional Oversight Panel bird-dogging the TARP program, wondered why Citi was the only bank that required a second bailout following the first. “I just wish to realize why Citi is special,” she quipped.

“His bank has got the highest credit loss rate of any from the big four,” Christopher Whalen from Institutional Risk Analytics added. “The shorts were just responding — the emperor had no clothes.”

Our own stock market vigilante would do the same. For much more on Dan Amoss’ Strategic Short Report and a 62% discount, read here.

An additional delusion gaining traction this morning: Gold is “the ultimate Ponzi scheme.” Honestly, the folks at CNBC are starting to become unhinged.

Gold is “an inanimate object that sits in a dark, damp cellar somewhere,” host Simon Hobbs posited to Gloom Boom & Doom Report’s Marc Faber, “that may or may not be in short supply, may or may not glitter within the correct light, but really has no productive power. Isn’t gold the ultimate Ponzi scheme?”

Faber was entirely too polite in smacking this down: “No, I don’t think it’s a Ponzi scheme, and it’s not a liability of someone else… its quantity cannot be increased at the same rate as you can print money… I’m not saying that the dollar will go straight away down, simply because other currencies, apparently, like the euro, are even worse at the present time. But eventually, if you print money, the purchasing power of money will lose.”

Faber and our friend Doug Casey agree on the outlook for that delusion in currency collectivism known as the euro. Greece will get an indirect bailout from the European Central Bank, says Faber. And it won’t work. And the rest from the PIIGS countries will follow. Lather, rinse, repeat.

“I think it was inevitable,” says Casey, “that the euro would burst apart at the seams, sooner or later. This isn’t the first straw within the wind, by any means, but it’s a major, unmistakable sign that the EU currency union is going to break up and the euro itself is on its way out. And the EU itself will meet its inevitable doom not too long following that.

“When you stop to think about it, the EU was really a stupid concept to begin with. It started out as a coal and steel free-trade zone, which made a lot of sense. But as time went on, as individuals in general often seem to do, and Europeans in particular seem to love to do, they bureaucratized the thing and made it into a pseudo-government.

“They wrote a constitution hundreds of times longer than the one that served the U.S. so well until it was abandoned. They took on micromanaging everything, down to producing huge, phone book-sized regulations on the composition of French cheeses, and so on. There’s a burgeoning bureaucracy in Belgium trying to consolidate the 27 member states into one giant country, and it’s absolutely not going to work.”

Both Doug and Marc Faber will join your editors and a host of Agora Financial regulars in Vancouver this July at the Agora Financial Investment Symposium in Vancouver. David Walker, Bill Bonner and Petrobras veteran Marcio Mello will be there, too. Our symposium chief Bruce Robertson has outdone himself this year. Register here. Early bird discounts still apply.

And of course, this morning, it is time for that ritual exercise in delusion that comes on the first Friday from the month, otherwise known as the Labor Department’s monthly employment report. Let’s go towards the tape…

· Payrolls fell about 36,000 — less than mainstream analysts expected

· The worthless U3 unemployment rate held steady at 9.7%

· The U6 figure that includes discouraged workers and part-timers who want full-time jobs grew from 16.5% to 16.8%.

Amazing how 15,000 temporary Census jobs can take the edge off an otherwise-lousy report, huh? And those temporary government jobs are just starting to ramp up.

Still, from the stock market’s standpoint, these are Goldilocks jobs numbers — stronger than expected, but not so strong that anyone expects the Fed to go and do something crazy, like, you know, raise the fed funds rate.

The major U.S. indexes opened up .5% within the first few minutes of trading. And the airwaves were filled with fund managers heralding the good news.

Gold is holding up nicely at $1,133. Oil has perked up a buck, to over $81.

So much for the delusion that extending the homebuyer tax credit would keep pumping up the housing market. Pending home sales fell 7.6% in January, according towards the National Association of Realtors — which is already trying to lower expectations for the February number by pointing out that individuals tend not to look at homes when they’re buried under three feet of snow.

From the “times are tough all around” department comes word that the widow of Enron chief Ken Lay is having trouble shopping her Houston penthouse among private buyers (showings by invitation only) for $12.8 million.

So it is been publicly listed for $11.9 million.

“Italian Renaissance-inspired,” the listing says. Reminds us of that gag about the Holy Roman Empire: It is not Italian, it is not Renaissance and it is definitely not inspired.

The 12,827-square-foot spread features six elevators, five half-baths, four balconies, three fireplaces and two toilets within the master suite. No partridge in a pear tree, alas.

A spokeswoman for Linda Lay says only she’s looking for a smaller home. It is also possible she’s trying to come up with some scratch to generate a couple of pennies on the dollar for Enron’s creditors. But if she’s made any sort of deal with the Justice Department, we won’t find out about it — the court records are sealed.

“The reason given was that due towards the modern conveniences of better communications, the election results could be confirmed faster than in olden times. They did not wish to make our Congress and president wait until almost the end from the first quarter from the year to begin their service.”

Have a good weekend,