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Thread: Iran Takes Another Step to Kill the Petro-Dollar

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    Default Iran Takes Another Step to Kill the Petro-Dollar

    from


    (snip)"Much has been spun in recent weeks to indicate that as a result of collapsing trade, Iran's economy is in shambles and that the financial embargo hoisted upon the country by the insolvent, pardon, developed world is working. We had a totally different perspective on things "A Very Different Take On The "Iran Barters Gold For Food" Story" in which we essentially said that Iran, with the complicity of major trading partners like China, India and Russia is preparing to phase out the petrodollar: a move which would be impossible if key bilateral trade partners would not agree to it. Gradually it appears this is increasingly the case following a just released Reuters report that "Iran will take payment from its trading partners in gold instead of dollars, the Iranian state news agency IRNA quoted the central bank governor as saying on Tuesday."

    Via Reuters:

    Iranian financial institutions have been hit by sanctions imposed by the United States and the European Union in an effort to force Tehran to halt its nuclear programme.

    Significant difficulties in making dollar payments to Iranian banks have forced Iran's trading partners to look for alternative ways to settle transactions, including direct barter deals.

    "In its trade transactions with other countries, Iran does not limit itself to the U.S. dollar, and the country can pay using its own currency," central bank governor Mahmoud Bahmani was quoted as saying. "If a country should so choose, it can pay in gold and we would accept that without any reservation."

    The sanctions include a phased ban on importing oil from Iran, which EU member states are to implement by July.

    China and India, two of the largest consumers of Iranian oil, have said they will continue imports, but Japan and Korea have announced cuts to quotas following pressure from the United States. As a result the value of Iran's rial has plummeted, pushing the price of goods sharply higher across the country.


    And from the source:

    Governor of the Central Bank of Iran Mahmoud Bahmani says the country can trade in currencies other than the American dollar in its foreign transactions.

    “Iran does not just work with the dollar in trade transactions and every country can pay in its own currency,” said Mahmoud Bahmani on Tuesday.

    Bahmani added that Tehran could receive gold in its transactions instead of currency transfers.

    In case a country is willing to pay for the price of its imports from Iran in gold, there is no problem in this respect, he noted.

    According to Bahmani, Iran imports commodities from China and India in exchange for the countries’ currencies. Tehran’s move is aimed at bypassing the upcoming freeze on CBI’s assets and the oil embargo, which the European Union's foreign ministers agreed to impose on the Islamic Republic.


    Now this would be great news for Greece which as previously reported had at times relied for more than 50% of its crude imports on Iran. There is just one problem: very soon the country will no longer have said gold in its possession, as part of the preapproved Greek bailout of Europe, the country's constitution would be changed to reflect that even its gold now is part of the bailout conditions, and European banks have a lien on it. Especially if said gold is located in the basement of the NY Fed where it most likely resides.

    As for other countries, such as China which we are confident has been quietly stockpiling gold in the last few years, and will make a surprise announcement any day now, as it did back in 2009... that's a different matter entirely. (snip)


    For those with short memories, China's 2009 surprise announcement was ...

    (snip)The confirmation of its [ China's - sic ] surreptitious stockpiling is likely to fuel market talk about Beijing’s ability to buy secretly and its ambitions for spending its nearly $2 trillion (around Rs100 trillion) pile of savings. And not just in gold: copper and other metals markets are booming thanks to China’s barely visible hand.

    Speculation has gathered speed over the last year, since the tumbling dollar has threatened to weaken China’s buying power—and give it yet more reason to diversify into gold, oil and metals.(snip)

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    Default Re: Iran Takes Another Step to Kill the Petro-Dollar

    And for those who aren't up on US financial history, here's the history of petrodollars in a nutshell ... from


    (snip)"The Same Game with a New Name: "Dollars for Oil" Replaces "Dollars for Gold"

    In the early 1970s, the final vestiges of the international gold-backed dollar standard , known as the Bretton Woods arrangement, had collapsed. Many foreign nations, who had previously agreed to a gold-backed dollar as the global reserve currency, were now having serious mixed feelings toward the arrangement. Nations like Britain, France, and Germany determined that a cash-strapped and debt-crazed United States was in no financial shape to be leading the global economy. They were just a few of the many nations who began demanding gold in exchange for their dollars.

    Despite pressure from foreign nations to protect the dollar's value by reining in excessive government spending, Washington displayed little fiscal constraint and continued to live far beyond its means. It had become obvious to all that America lacked the basic fiscal discipline which could prevent a destruction of its own currency.

    Like previous governments before it, America had figured out how to "game" the global reserve currency system for its own benefit, leaving foreign nations in an economically vulnerable position. After America, and its citizens, had tasted the sweet fruit of excessive living at the expense of other nations, the party was over.

    It is unfair, however, to say that the Washington elites were blind to the deep economic issues confronting it in the late 1960's and early 1970's. Washington knew that the "dollars for gold" had become completely unsustainable. But instead of seeking solutions to the global economic imbalances that had been created by America's excessive deficits, Washington's primary concern was how to gain an even greater stranglehold on the global economy.

    After America, and its citizens, had tasted the sweet fruit of excessive living at the expense of other nations, there was no turning back.

    In order to ensure their economic hegemony, and thereby preserve an increasing demand for the dollar, the Washington elites needed a plan. In order for this plan to succeed, it would require that the artificial dollar demand that had been lost in the wake of the Bretton Woods collapse be replaced through some other mechanism.

    According to John Perkins, author of Confessions of an Economic Hit Man: The Shocking Story of How America Really Took Over the World, that plan came in the form of the petrodollar system.(snip)

    (snip)"In a series of meetings, the United States — represented by then U.S. Secretary of State Henry Kissinger — and the Saudi royal family made a powerful agreement. (Several authors have worked to compile data on the origins of the petrodollar system, some exhaustively, including: Richard Duncan, William R. Clark, David E. Spiro, Charles Goyette and F. William Engdahl).

    According to the agreement, the United States would offer military protection for Saudi Arabia’s oil fields. The U.S. also agreed to provide the Saudis with weapons, and perhaps most importantly, guaranteed protection from Israel.

    The Saudi royal family knew a good deal when they saw one. They were more than happy to accept American weapons and a U.S. guarantee to restrain attacks from neighboring Israel.

    Naturally, the Saudis wondered how much was all of this U.S. military muscle was going to cost…

    What exactly did the United States want in exchange for their weapons and military protection?

    The Americans laid out their terms. They were simple, and two-fold.

    1.The Saudis must agree to price all of their oil sales in U.S. dollars only. (In other words, the Saudis were to refuse all other currencies, except the U.S. dollar, as payment for their oil exports.)
    2.The Saudis would be open to investing their surplus oil proceeds in U.S. debt securities.
    You can almost hear one of the Saudi officials in a meeting saying: "Really? That's all? You don't want any of our money or our oil? You just want to tell us how to price our oil and then you will give us weapons, military support, and guaranteed protection from our enemy, Israel? You've got a deal!"

    However, the U.S. had done its economic homework. If they could get the Saudis to buy into this deal, it would be enough to launch them into the economic stratosphere in the coming decades.

    Fast forward to 1974 and the petrodollar system was fully operational in Saudi Arabia.

    And just as the United States had cleverly calculated, it did not take long before other oil-producing nations wanted in.

    By 1975, all of the oil-producing nations of OPEC had agreed to price their oil in dollars and to hold their surplus oil proceeds in U.S. government debt securities in exchange for the generous offers by the U.S.

    Just dangle weapons, military aid, and guaranteed protection from Israel in front of third world, oil-rich, Middle East nations… and let the bidding begin.

    Nixon and Kissinger had successfully bridged the gap between the failed Bretton Woods arrangement and the new Petrodollar system. The global artificial demand for U.S. dollars would not only remain intact, it would soar due to the increasing demand for oil around the world.

    And from the perspective of empire, this new "dollars for oil" system was much more preferred over the former "dollars for gold" system as its economic requirements were much less stringent. Without the constraints imposed by a rigid gold standard, the U.S. monetary base could be grown at exponential rates.

    It should come as no surprise that the United States maintains a major military presence in much of the Persian Gulf region, including the following countries: Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates, Egypt, Israel, Jordan, and Yemen.

    The truth is easy to find when you follow the money…(snip)

    (snip)The petrodollar system has proven tremendously beneficial to the U.S. economy. In addition to creating a marketplace for affordable imported goods from countries who need U.S. dollars [ to buy imported oil - sic ], there are more specific benefits.

    In essence, America receives a double loan out of every global oil transaction.

    First, oil consumers are required to purchase oil in U.S. dollars.

    Second, the excess profits of the oil-producing nations are then placed into U.S. government debt securities held in Western banks.

    The petrodollar system provides at least three immediate benefits to the United States.

    •It increases global demand for U.S. dollars
    •It increases global demand for U.S. debt securities
    •It gives the United States the ability to buy oil with a currency it can print at will"(snip)

    (snip)"With this in mind, it is easy to see why maintaining a global demand for dollars is vital to our national "illusion of prosperity" and our "national security." (The lengths at which America has already gone to protect the petrodollar system will be explained in our third article of this series.)

    When, not if, the petrodollar system collapses, America will lose its "permission slip" to print excessive amounts of U.S. dollars.

    When this occurs, the amount of dollars in existence will far exceed the actual demand. This is the classical definition of hyperinflation. (snip)
    Last edited by Melonie; 02-28-2012 at 04:29 PM.

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    Default Re: Iran Takes Another Step to Kill the Petro-Dollar

    Its funny. I saw an article about the recent Swift code deletion of Iranian banks. I did some digging and found the articles about Iran selling oil for gold or other currencies.

    This is huge! A Swift code has never been deleted before. In theory it is a good step to prevent war IF the only reason for war is the oil currency issue. But it also shows just how weak America is.
    Nature knows no indecencies; man invents them. ~ Mark Twain


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    Default Re: Iran Takes Another Step to Kill the Petro-Dollar

    ^^^ this is definitely economic warfare at this stage ... and Iran has just 'retaliated' ... from


    (snip)"Iran is set to begin selling oil in currencies other than the dollar tomorrow. Combine this info with the fact that there are now 4 NATO aircraft carriers sitting on Iran's doorstep, and this week's Illuminati holy day of March 21st (Vernal Equinox), and the Greek CDS payments which are scheduled to be made after today's Greek debt auction, and the situation could not look much more bleak.

    We all know what immediately happened to the last 2 oil producers who announced plans to sell their oil in a currency other than the US dollar (Iraq & Libya).

    Last week, the Tehran Times noted that the Iranian oil bourse will start trading oil in currencies other than the dollar from March 20. This long-planned move is part of President Mahmoud Ahmadinejad’s vision of economic war with the west.
    “The dispute over Iran’s nuclear programme is nothing more than a convenient excuse for the US to use threats to protect the 'reserve currency’ status of the dollar,” the newspaper, which calls itself the voice of the Islamic Revolution, said.

    “Recall that Saddam [Hussein] announced Iraq would no longer accept dollars for oil purchases in November 2000 and the US-Anglo invasion occurred in March 2003,” the Times continued. “Similarly, Iran opened its oil bourse in 2008, so it is a credit to Iranian negotiating ability that the 'crisis’ has not come to a head long before now.”

    Iran has the third-largest oil reserves in the world and pricing oil in currencies other than dollars is a provocative move aimed at Washington. If Iran switches to the non-dollar terms for its oil payments, there could be a new oil price that would be denominated in euro, yen or even the yuan or rupee."(snip)

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