The real reason why wardrums are beating on Iran

[cheguevara]

we are fucked

Will Iran Kill the Petrodollar?

To explain this situation properly, we have to start in 1973. That's when President Nixon asked King Faisal of Saudi Arabia to accept only US dollars as payment for oil and to invest any excess profits in US Treasury bonds, notes, and bills. In exchange, Nixon pledged to protect Saudi Arabian oil fields from the Soviet Union and other interested nations, such as Iran and Iraq. It was the start of something great for the US, even if the outcome was as artificial as the US real-estate bubble and yet constitutes the foundation for the valuation of the US dollar.


But in late 2000, France and a few other EU members convinced Saddam Hussein to defy the petrodollar process and sell Iraq's oil for food in euros, not dollars. In the time between then and the March 2003 American invasion of Iraq, several other nations hinted at their interest in non-US dollar oil trading, including Russia, Iran, Indonesia, and even Venezuela. In April 2002, Iranian OPEC representative Javad Yarjani was invited to Spain by the EU to deliver a detailed analysis of how OPEC might at some point sell its oil to the EU for euros, not dollars.

This movement, founded in Iraq, was starting to threaten the dominance of the US dollar as the global reserve currency and petro currency. In March 2003, the US invaded Iraq, ending the oil-for-food program and its euro payment program.

Then there's China. Iran's energy resources are a matter of national security for China, as Iran already supplies no less than 15% of China's oil and natural gas. That makes Iran more important to China than Saudi Arabia is to the United States. Don't expect China to heed the US and EU sanctions much – China will find a way around the sanctions in order to protect two-way trade between the nations, which currently stands at $30 billion and is expected to hit $50 billion in 2015. In fact, China will probably gain from the US and EU sanctions on Iran, as it will be able to buy oil and gas from Iran at depressed prices.

So Iran will continue to have friends, and those friends will continue to buy its oil. More importantly, you can bet they won't be paying for that oil with US dollars. Rumors are swirling that India and Iran are at the negotiating table right now, hammering out a deal to trade oil for gold, supported by a few rupees and some yen. Iran is already dumping the dollar in its trade with Russia in favor of rials and rubles. India is already using the yuan with China; China and Russia have been trading in rubles and yuan for more than a year; Japan and China are moving towards transactions in yen and yuan.

And all those energy trades between Iran and China? That will be settled in gold, yuan, and rial. With the Europeans out of the mix, in short order none of Iran's 2.4 million barrels of oil a day will be traded in petrodollars.

http://www.investorsinsight.com/blog...trodollar.aspx

[cheguevara]

There is another consideration to keep in mind, one that is very important when it comes to making some investment decisions based on this situation: Russia, India, and China – three members of the rising economic powerhouse group known as the BRICs (which also includes Brazil) – are allied with Iran and are major gold producers. If petrodollars go out of vogue and trading in other currencies gets too complicated, they will tap their gold storehouses to keep the crude flowing. Gold always has and always will be the fallback currency and, as mentioned before, when currency relationships start to change and valuations become hard to predict, trading in gold is a tried and true failsafe.

2012 might end up being most famous as the year in which the world defected from the US dollar as the global currency of choice. Imagine the rest of the world doing the math and, little by little, beginning to do business in their own currencies and investing ever less of their surpluses in US Treasuries. It constitutes nothing less than a slow but sure decimation of the dollar.


And motherfuckers call Ron Paul crazy for trying to go back to the gold standard. we dropped the gold standard and pegged our money to oil.



looks like Ron Paul will be right again.

[TDMVPDPOY]

well if america doesnt like what china is doing, you can always hendge/pegged the fkn yuan...

[ChumpDumper]

Better written then most conspiracy theories. I'll grant that.

[RandomGuy]

However, this calculation of Iran’s possible actions could just as well be one of many reasons why China might eventually soften its objections to sanctions. If Iran is emboldened by the support it believes it has from China and others to resist Western pressure over its nuclear programme, then that, too, could lead to conflict. Israel, for instance, might take matters into its own hands, with a pre-emptive strike against Iranian nuclear facilities.

It is fair to assume that Chinese leaders are sincere when they say they do not want a nuclear-armed Iran. Wen Jiabao, China’s prime minister, was unusually explicit about this on January 20th. China, he said, “adamantly opposes Iran developing and possessing nuclear weapons.” China may resent the hypocrisy of Western leaders, who tolerate nuclear programmes in India and Israel, but it seems to accept that Iran’s acquisition of the bomb would be bad for regional stability.

Mr Wen was speaking in Qatar during a tour that took in the United Arab Emirates and Saudi Arabia—but not Iran. This carried a reminder to Iran that, big though its oil exports to China are, they come to only about half of Saudi Arabia’s. Not only would China want to be sure it had other sources of supply if Iranian oil dries up. It would also be wary of antagonising Saudi Arabia, a strong supporter of the American and European embargoes. And in fact Chinese purchases of Iranian oil have fallen sharply in January, supposedly because of a commercial dispute.

http://www.economist.com/node/21543567

[cheguevara]

Better written then most conspiracy theories. I'll grant that.

thanks!

now go on keep believing we want to attack Iran because they are aquiring the BOMB. Because they will use it against as soon as they get their hands on one.


now which conspiracy theory is more nutty?

[RandomGuy]

Better written then most conspiracy theories. I'll grant that.

There are many other historic examples of the US stepping in to halt a movement away from the petrodollar system, often in covert ways. In February 2011, Dominique Strauss-Kahn, managing director of the International Monetary Fund (IMF), called for a new world currency to challenge the dominance of the US dollar. Three months later a maid at the Sofitel New York Hotel alleged that Strauss-Kahn sexually assaulted her. Strauss-Kahn was forced out of his role at the IMF within weeks; he has since been cleared of any wrongdoing.

Entertaining. Simplistic, and only really mildly informative.

Nothing like being able to say shit without evidence.

Oh the places you can go without that little thing.

Too bad most of those places don't tend to reflect reality.

Smart investors realize oil, like gold, is destined to rise dramatically and that investing in the right energy companies now will be like getting into the yellow metal 10 years ago.

While I cannot dismiss the OP simply based on the fact that it was written by a crank, I can decide to take his statements with a great deal of skepticism.

(chuckles)

"Gold is going to rise dramatically."

Gold is quite due for its plummet back to historical norms. Overdue, IMO.

I can only hope a lot of gold bugs keep buying into the gold bubble, so that when it crashes, at is surely must, they will have no one to blame for their stupidity but themselves.

[cheguevara]

gold might plummet back eventually. But first the dollar will plummet further down and faster.

What gets chuckles from me is to think that the dollar bubble will outlive the gold bubble.

but let's go ahead and keep believing Irani boogiemen will push the big red button as soon as it is installed in their console.

[ChumpDumper]

thanks!

now go on keep believing we want to attack Iran because they are aquiring the BOMB. Because they will use it against as soon as they get their hands on one.


now which conspiracy theory is more nutty?

We don't want to attack Iran.

[cheguevara]

you and your living partner might not. But the guys who control the country do.

[boutons_deux]

other countries will make cocktail of currencies for international exchange as alternative the US$ before they will go to a gold-only standard.

[Winehole23]

the guys who control the country do

who's that?

[ChumpDumper]

you and your living partner might not.

What do you mean by that?

But the guys who control the country do.

Yes, please be specific here.

[The Reckoning]

jews, duh.

[Winehole23]

of course

[hater]

[hater]

[cheguevara]

the Shah makes Ahmadinejad look like Snooki

[Winehole23]

There is an Israel lobby; it does have influence. There is also a military-industrial- congressional complex. It has considerable influence too.

Are these the only two relevant influences in government and decisions to go to war?

[boutons_deux]

the US/UK oilcos want to get back into Iran's oil, just like they were the impetus for invading Iran.

[cheguevara]

There is an Israel lobby; it does have influence. There is also a military-industrial- congressional complex. It has considerable influence too.

Are these the only two relevant influences in government and decisions to go to war?

Those are 2 good examples. I'd add the Oil Industry into the mix for sure.

[Winehole23]

what else is in the mix? who else controls our government?

[cheguevara]

what else is in the mix? who else controls our government?

very valid and penetrating questions. Let's go ahead and do the research and reconvene with the results.

[Winehole23]

You're the one referred to "guys who control the country." Your reluctance to say what you meant is understandable.

[cheguevara]

You're the one referred to "guys who control the country." Your reluctance to say what you meant is understandable.

what are you a paparazzi? I answered your connundrums, read my posts and move on.

El Che has a full schedule, maybe boutons can help you out in your search for EVERY single influence in the US government...

[SA210]

[Winehole23]

what are you a paparazzi? I answered your connundrums, read my posts and move on.

El Che has a full schedule, maybe boutons can help you out in your search for EVERY single influence in the US government...

You answered nothing. Not in your own words, anyway. By implied assent to the characterizations of others, perhaps...

Your continued refusal to clarify your own comments in your own words or even to add any relevant examples of what you meant by "guys who run our government," is underscored by your phony asked and answered routine.

Are you rationing keystrokes, El Che? What's with the busy man routine? Are you ripping pages from WC's notebook?

[SA210]

[Wild Cobra]

Are you rationing keystrokes, El Che? What's with the busy man routine? Are you ripping pages from WC's notebook?

Huh?

[Winehole23]

pretending to be too busy and important to unpack his own comments