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A Weekly Newsletter for Sunday, January 29th, A.D. 2012
 
 
MARKETS
  Between Friday, January 20th, and Friday, January 27th, the bid prices for:

Gold rose 4.2 % from $1,667.00 to $1,737.30
Silver rose 5.6 % from $32.20 to $33.99
Platinum rose 5.7 % from $1,531 to $1,619
Palladium rose 1.8 % from $677 to $689
DJIA fell 0.5 % from 12,720.48 to 12,660.46
NASDAQ rose 1.1 % from 2,786.70 to 2,816.55
NYSE rose 0.6 % from 7,829.34 to 7,876.61
US Dollar Index fell 1.6 % from 80.33 to 79.06
Crude Oil rose 0.9 % from $97.93 to $98.83

 
 
 

Iran to Sell Crude Oil for GOLD

Edited by Alfred Adask

As I’ve reported earlier, the fiat dollar has been the World Reserve Currency since the end of WWII and the only currency capable of purchasing crude oil on the international markets from A.D. 1971 through A.D. 2000.  The fiat dollar’s primacy in international oil trade created a foreign demand for “petro-dollars”.  That demand created an artificial, extrinsic value for fiat dollars that are intrinsically worthless.

Saddam Hussein threatened the dollar’s primacy as the world’s only “petro-dollar” in A.D. 2000 by selling Iraqi crude for euros.  We invaded Iraq in A.D. 2003, wrecked the country and hanged Hussein, but it was too late to stop the world’s slow slide away from reliance on “petro-dollars”.  As a result, the dollar’s value as measured on the US Dollar Index has fallen about 36% since A.D. 2000.

•  Earlier this month, in “Iran, Russia Replace Dollar With Rial, Ruble in Trade,” Bloomberg reported:

“Iran and Russia replaced the U.S. dollar with their national currencies in bilateral trade . . . .  The proposal to switch to the ruble and the rial was raised by Russian President Dmitry Medvedev at a meeting with his Iranian counterpart, Mahmoud Ahmadinejad . . . . Iran has replaced the dollar in its oil trade with India, China and Japan.”
That announcement constituted a body blow to the dollar.  Insofar as China, Japan, India and Russia (the 2nd, 3rd, 9th and 11th largest economies in the world) are beginning to trade in their own currencies and without the intervening “aid” of US dollars, the dollar is clearly being stripped of its status as World Reserve Currency and “petro-dollar”. Without that status, the extrinsic support for the dollar’s value must fade and the dollar will be increasingly subject to inflation and devaluation.

Note that the proposal to abandon the dollar was raised by Russia.  There are more ways to attack an adversary in this world than with mere guns or bombs.  Merely choosing to use one currency or another can constitute a virtual act of war.


•  Last week, DEBKAfile published an article that, if true, may be the single most important story of the past year.  The headline reads, “India to pay gold instead of dollars for Iranian oil. Oil and gold markets stunned”.

Ah heard dat!  Stunned, indeed!

Oil and gold markets must be stunned.  The U.S. government must be stunned.  Those who believe in or depend on the value of the dollar must be stunned.  The world’s central bankers and New World Order (both of which are built on fiat currencies) must be stunned.

It’s one thing for the nations of the world pay fiat rubles, fiat rupees or fiat yuan (rather than fiat dollars) for crude oil.  Such payments hurt the fiat dollar’s illusory value, but leave the power of fiat currencies and central banks largely untouched.

But paying for crude oil with gold rather than fiat dollars, attacks all fiat currencies and not only threatens to terminate the dollar’s role as World Reserve Currency, but threatens to prevent any new fiat currency from taking its place. From the perspective of the U.S. and New World Order, paying gold for crude oil must be deemed an act of war.

According to the DEBKAfile report,

 “India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, debkafile’s intelligence and Iranian sources report exclusively.  Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran’s total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.”
1 million barrels at $100/barrel = $100 million per day. At current prices, we’re talking almost 60 thousand ounces of gold per day = roughly 2 tons of gold per day.  The U.S. and London commodities markets may soon see an increased daily demand for 2 tons of physical gold.

The sale of Iranian oil for gold is a mortal blow to any plans by the globalists to replace the fiat dollar with some other “new and improved” fiat currency.  If India and China are allowed to start paying their debts with gold, the next “world reserve currency” could only be gold.  No more fiat currencies.  No more “spinning money (fiat currency) out of thin air”.  No more big governments.  No more central bankers.

If an agreement to pay Iran 2 tons a day in gold for oil is allowed to stand, the dollar’s demise will be accelerated and the New World Order will be virtually destroyed.

I doubt that the globalists will allow the gold-for-oil deal to go through.  They won’t attack China or India, but the deal would be easily terminated if Iran were invaded, destroyed and stopped from selling its crude oil to anyone for anything.

I’ll bet that the U.S., Israel, Saudi Arabia, and some elements of NATO will invade Iran within 60 days.  A pretext (probably closing the Strait of Hormuz) will be found.

•  In the meantime, if China and India spend 2 tons of gold per day for crude oil, the price of gold should rise.  Mathematically, that rise may not be very large, but the psychological impact may be significant.

The increasing demand for physical (rather than paper-) gold will tend to stop or at least slow the manipulation of gold prices on the U.S. and London commodities markets. India’s and China’s increasing need for physical gold will cause them to demand delivery of physical gold from the U.S and London commodities markets which have heretofore excelled at selling non-existent, “paper” gold at artificially reduced prices.  As India and China buy and take possession of more physical gold, gold’s price will rise.

Other nations will follow India’s and China’s lead and also demand to receive physical gold at the artificially low prices maintained on the U.S. and London commodities markets.  The commodities markets will be forced to either sell their physical gold at give-away prices or raise prices to true free market levels—and they will not give their physical gold away.

As the price of gold rises, the perceived value of the dollar will fall even faster, leading to more and more inflation.

•  Again, if my meager understanding of money and global politics is roughly correct, the decision to sell crude for gold will be perceived as an act of war against the fiat dollar, fiat currencies in general, central bankers, the U.S., probably the EU, and the New World Order.

With or without pretext, the globalists will therefore invade Iran as a matter of survival.

But even if Iran is prevented from selling its oil for gold, you can bet that other oil producing countries are approaching India and China in hopes of negotiating their own gold-for-oil deals.  If India and China will pay gold to India, why not pay gold to other oil-producing nations?  I guarantee that oil-exporting nations around the world are gearing up to ask to be paid with gold for their oil rather than being paid in fiat dollars, or fiat anything.

More, as nations compete to sell oil for gold, the price of crude oil as denominated in gold should fall—while the price of crude oil denominated in paper dollars should rise.

•  “By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank’s assets and the oil embargo which the European Union’s foreign ministers agreed to impose Monday, Jan. 23. . . . .  The EU decision of Monday banned the signing of new oil contracts with Iran at once, while phasing out existing transactions by July 1, 2012, when the European embargo, like the measure enforced by the United States, becomes total. The European foreign ministers also approved a freeze on the assets of the Central Bank of Iran which handles all the country’s oil transactions.”
The EU and U.S. have agreed to impose an oil embargo on Iran.  An embargo is an “act of war”.

Iran has responded with its own “act of war”—selling Iranian crude for gold.  Although most people won’t understand, from the globalist perspective, selling Iranian crude for gold is a far more aggressive and provocative act than closing the Strait of Hormuz.

A war—albeit without bullets and bombs—has already begun.  We can expect that war to soon escalate to the use of the bullets, bombs and invading soldiers.

•  The DEBKAfile report continues:

“Delhi is to execute its transactions . . . through two state-owned banks: the Calcutta-based UCO Bank, whose board of directors is made up of Indian government and Reserve Bank of India representatives; and Halk Bankasi (Peoples Bank), Turkey’s seventh largest bank which is owned by the government.”
Now, the government of Turkey is peripherally involved in the sale of oil for gold.

We’ve seen recent allegations that one or more Iranian nuclear physicists have been assassinated in order to prevent Iran from developing nuclear weapons.  I won’t be surprised if some of the bankers and/or government officials in India and Turkey who are implementing the sale of oil for gold are also found dead in the near future.

•  A coalition of India, China, Turkey, Russia and Japan have joined together to buy oil from Iran with their own domestic currencies or even gold—but not with the fiat dollar.  In doing so, this coalition has threatened the fiat dollar, fiat currencies in general, central banks, the United States and the New World Order.

This is big. This is dangerous.

In some regards, this coalition may be more important that the German Nazis joining the Italian Fascists prior to WWII.

It won’t be possible for the U.S. and/or New World Order to openly attack all of the members of the new anti-fiat-dollar coalition.  But there is one central player in that coalition: Iran.  All of the other members of the collation are seeking to purchase crude oil from Iran.

Thus, if Iran could be stopped from selling its crude oil to everyone, it would also be stopped from selling its crude oil to India (and soon China) for gold.  The dollar would be protected.  Fiat currencies would be protected.  Central banks, big governments and the New World Order would be protected—if Iran could be stopped from selling any crude oil.

It may yet be possible to stop the sale of Iranian crude for gold by diplomatic means, but I’d bet the odds favoring an invasion of Iran are now 4:1.

•  The sale of Iranian crude for gold might not be a fatal blow to the fiat dollar—but it could be.

Gold is reemerging as the only legitimate “global reserve money”.  This reemergence is directed by a coalition of nations that are apparently outside of and unsympathetic to the New World Order.  The existence of this coalition signals that neither the U.S. nor the New World Order is really running this planet.  The New World Order’s foundation (fiat currency) is fragmenting.  A significant part of the world has made a first bold step to escape they tyranny of fiat currencies.

It’s possible and even likely that this first attempt to sell Iranian crude for gold will not succeed—just as Saddam Hussein’s first attempt to sell Iraqi crude for fiat euro’s ultimately ended in catastrophe.  But within three or four years after Hussein’s first attempt failed, other nations began selling their crude oil for currencies other than dollars.  Similarly, Iran’s attempt to sell its crude for gold may not succeed in the immediate future, but it will almost certainly have laid a foundation for other nations to soon start selling their crude for gold.

When Iraq sold their crude oil for fiat euros instead of fiat dollars, the U.S. gov-co punished Iraq with nearly nine years of invasion.  Now, Iran is preparing to sell its crude oil for gold rather than fiat dollars.  Relatively speaking, selling oil for fiat currencies other than the fiat dollar is a misdemeanor; but selling oil for gold is a felony—even a form of economic blasphemy

God only knows what our gov-co plans to do to Iran.





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