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With Everyone Expressing Their Fake Support For The Euro, Iran Is Now Openly Dumping €45 Billion
Over the past two weeks we have seen a charade of support for the euro coming from not onlly the insolvent developed sovereigns, but from the BRICs as well (especially China's SAFE), which have hundreds of billions on euro-denominated holdings that would be severely impacted in case the euro continues on its painful slog to parity. Ironically, one country which sees no reason to sugarcoat reality is Iran - the country's Central Bank has just announced plans to sell 45 billion in euros, without providing further commentary. The proceeds? Buy dollars and, wait for it, gold ingots.
Iran's central bank will sell 45 billion euros from its reserves to buy dollars and gold ingots, a report on the website of state-owned Press TV said on Wednesday.
There was no announcement of the sale on the bank's website and officials at the bank declined comment.
Following the report, the euro eased slightly versus the dollar from around $1.2227 to $1.2213.
Traders said the news was having limited impact on the euro, and some in the market were sceptical about whether Tehran would be able to buy significant amounts of dollars, given that U.S. depository institutions are banned from processing transfers involving the country.
"Considering that the value of the euro is plummeting and that of the dollar is increasing, we will be examining the issue of changing the composition of Iran's hard currency basket," Mahmoud Bahmani was quoted as saying in the May 18 edition of Hezbollah daily.
Iran does not usually disclose the value of its reserves, though state television reported last December they exceeded $80 billion.
The real question is whether China will now following the Iranian example, and realize that taking a 20%+ haircut on its $600 billion in EUR-denominated holdings will be worth formally announcing a diversification away from the european currency and into gold. Even the merest hint of such an announcement would lead to the euro's break in the 1.20 support area and provide the impetus for gold to move well into a higher price level. Of course, the bargaining behind the scenes to prevent this from happening must be very fierce.
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Never mind that, what is Gisele Bundchen demanding payment in these days?
But yeah, I think I've posed this question before - at what point will China sit out a Euro or US-T auction and take down a large chunk of gold (the IMFs?) instead? Obviously many ZH readers passed that point a long time ago.
Watching everyone jump from chair to chair in the game of musical chairs, eventually no chairs will be left. Great entertainment though, it's like watching Benny Hill... I can hear that music right now with everyone running around.
All the rats are looking to jump off the ship, unfortunately the ship is way out to sea. The greatest firework show ever created by Man and everyone has a front seat view.
All the rats are looking to jump off the ship
Yes, but in this case gold is the flotation device.
I love these guys that think gold is going to protect them. Credit system implodes = Production implodes
Too many stupid Peter Schiff books floating around like turds.
"There is no out, there is only in"
Wait till you see India implode, the world's largest private stash of gold, they will be hacking away at each probably worse than here. Someone is going to have to be liquidated.
"if you can't do the time, don't do the crime"
Unfortunately, even the gold rats THINK they can avoid the penalty.
I doubt that India explosion will convince some people of anything about gold as they like their propaganda.
Why wait for India? The whole Spanish empire collapsed. Currency based on gold. And gold injection from New world started to dwindle around the 1700s. The Spanish Empire and stuff like Siglo de oro was ended before that.
I agree with you there, it's a done deal. Of course, if all the rats knew this the show wouldn't be as entertaining. All the rats still think there is a way out = fun to watch.
mako what are you holding for fun and games
lets see i'll take some gold into the frey, food , yadda and you take what
all talk and no potatoes;
who the heck do you think your fooling just yourself
completely giving own's power away to the government ($) versus completely taking it back into one's hand (store of energy, you pick).
Mostly irrelevant at this stage.
Where is your answer as to where you put YOUR money. Huh?
Mako, posters on here continue to ask you the question "what's your plan"?
So far you haven't responded.
Do you have any ideas, or make sure you arrange for a cemetery plot is the best you can come up with?
P.S. While I agree with some of your points, 6000 year history of human behavior is suggesting that your position on gold is IDIOTIC.
The only thing that can stop gold is a mass population die off, in the order of billions. That's why i invest heavily in my health and self sustainability with plauge being the most likely culprit.
I think that this must be their day job. After all, why would they bother otherwise? I think that USTs are a bad bet now, but I don't go from site to site trashing them.
Do they think that the mere assertions and cussing of an unknown on the internet is going to change a gold-bug's mind? If you're so certain that gold is doomed, then short it. In fact, talk gold up so you can short it some more.
Look, I can trash gold too, if the pay is right. Why can't I get a job like that? At least I can write five words without making ten spelling, grammar, or usage mistakes. I wonder what it pays.
But seriously, there's something deeper at work here. What motivates these guys? Is it possible that ZH is sufficiently influential (or at least widely read) that the anti-gold crowd (the big-time shorts documented by GATA) find it worthwhile to show the flag.
I think that the interesting posters on ZH offer insights that make me go 'Duh! Why didn't I think of that?', but what do these guys offer?
Just as there are two sides to every issue, there's a plausible anti-gold argument to be made. So, make it already, or at least tell us why you bother to read ZH when you don't learn anything from it.
Because there is no need for an answer.
The factuality of a report on a situation does not rest on the capability of preventing the bad consequences of the situation.
Personally, I dont even understand why people ask for a plan when discussing facts.
Now, here's a strategy that has proven its efficiency through all human history. Be at the top of the society. No matter what, you will get access to the best of what society can deliver. Gold, not gold, it does not matter.
"Now, here's a strategy that has proven its efficiency through all human history. Be at the top of the society. No matter what, you will get access to the best of what society can deliver. Gold, not gold, it does not matter."
Exactly correct.
Wealth. You're either born into it, marry into it, or you earn it.
Those who get it from the first two methods do as much as possible to ensure that no one else can get it by the third.
Every revolution will prove you wrong.
Peter Schiff is mentioned very rarely on this site. Fail
It doesn't matter if India implodes since there will be plenty of buyers outside of India. Fail
Yep.
Much better to curl up in fetal position and weep while you pray for the politicians and bankers to get everything all worked out.
Holy shit Mako. Believe me, I've got a nihilist streak a mile wide but you take it to a whole new freaking level.
I'm sure you've seen the Zimbabwe "bread for gold" video by now (http://www.youtube.com/watch?v=7ubJp6rmUYM ). What more do you need but a concrete example in real time that you may be incorrect. No matter how bad things get, humans will always be eating, working, trading, and requiring a store of value and a medium of exchange.
Dont tell that the whole low level trade made in Zimbabwe rely on gold.
People will be always be eating in the limits of availability to food, working in the limits of resources to fuel an activity, trading in the limits of the goods to exchange.
Gold is just a part of the whole picture.
Perhaps Mako believes in a future police state where we`re all implanted with RFID chips.
Of course a world like that would have no place for Gold.
Hypothetically speaking…. if that is his assertion then his proclamations are not without merit. :)
"I love these guys that think gold is going to protect them."
How much?
"Credit system implodes = Production implodes"
How much?
You are incorrect in equating production with credit, they are not the same.
Linked, yes. Equivalent, no.
"Too many stupid Peter Schiff books floating around like turds. "
And how much have you made off of your posts here on Zero Hedge?
Sounds like your just jealous and spiteful of Schiffs success to me.
"Wait till you see India implode, the world's largest private stash of gold, they will be hacking away at each probably worse than here."
So when exactly can we expect this to happen?
From http://www.americanchronicle.com/articles/yb/145510811
""About 18,000 tones of gold is privately held in India. Jewellery accounts for 70% of the total gold," says Ajay Mitra, managing director (Middle East and India), World Gold Council. At the current price of gold, this comes to around Rs30 trillion or around 50% of the Indian gross domestic product, or a per capita gold holding of around Rs30,000."
Converting from rupees to dollars gives ~$640.
I bet that this money is in no way distributed equally to all of Indias citizens, and if and when India 'implodes' those who do have a disproportionate amount of gold will disproportionately be among the survivors.
Of course having weapons, a food supply, and being linked into a good community are at least as important as owning gold (or other liquid wealth), but I'm also willing to wager that those Indians who happen to already own significantly more gold than national average may also already be ahead in these catagories as well.
"Someone is going to have to be liquidated."
By all means please volunteer to go first.
Ahhhh, Benny Hill
“All this talk of euro is a bit silly,” Jim O’Neill, chief economist at Goldman Sachs.....In past two weeks, "the euro's behaviour seems to be a pure test of whether the European Monetary Union will survive," O'Neill said.
But politicians aren’t going to let the single currency fail, he added, concluding that the “euro is due for a bounce.” The UK’s financial situation isn’t as desperate as many people think, O'Neill also said....Jippie !!!! :=))
Well now that the oil price is going down, it looks like Iran will need that money just for crowd control :)
What does 45 billion buys you these days? Besides 270 ballic missiles with a nuclear charges?
You misspelled 'phallic'.
will 'merkin do '
The cool kids were always the ones in the back of the room who didn't give a damn! They got to leave early- or dump their EUROS first. 8
Get ready for talk of US Naval maneuvers in the Caspian and a prep for invasion. This is a slap in the face to the Fed and ECB.
Do you think Obama is planning to launch an amphibious surrender?
HA!
Thanks for that chuckle.
Economic Bullying.... never!!
/sarc.
"some in the market were skeptical Tehran will be able to buy significant amounts of dollars" LOL
Not only is there not exactly any shortage of dollars, Millions of bundled dollars were found in Iraq by US soldiers. Being at war with Iraq I could only presume normal access channels had been frozen. What a laugh
5 billion in green cash went missing in Iraq.
Russian and China have vast dollar holdings and are stalwart trade partners with Iran. They can do a currency swap, or the Chinese can pay for oil in dollars. There's enough Ben Franklins floating around in Russia to carpet Siberia. Plus, the US is firehosing everyone with treasuries. I'm sure Iran won't break a sweat to find dollars.
More like $23B FRNs, if you mean the palettes that were jacked.
I did. Thanks for the correction; I was going on a recalled story from several years ago. It said that the local warlords were trading bundles of 100-dollar-bills still in the government vacuum-packing, like Tony Sorprano, or those drug lords in The Wire.
US dollars is indeed a scarce resource these days...
If they can't buy dollars, they may just go for 100% gold. That is about 1250 short tons of gold at today's price. I wonder what the price will be if they actually follow through.
Possibly no effect at all. They can buy straight from Russia (a major miner) without having to enter the traded markets. This way they can buy without pushing up the price.
Also, I think that, outside the English-speaking world, metric tons (1000 kg) are used for precious metals.
That is....IF Russia is selling
russia buying adding to stash of gold
they do not have mako for an advisor ,,
Actually, in the english speaking world they use metric.
Just the US is stuck with its outdated imperial system.
Sell it. BUY GOLD.
Or invest that money in actual programs/institutions etc in other countries.
Or buy other hard commodities/natural resources.
Anything but paper.
NEWSFLASH!
Mish bullish on gold, says only currency worth holding!
Maybe it's just a threat to the EU.
Not a threat, but a well-deserved vote of 'no confidence'.
It's just a small fire.
The goal of the Iranians is to limit how much finished goods they have to buy. They are spending cash or trading resources to China and others to upgrade their manufacturing capabilities. In a few years they will be an exported of gasoline and other refined products.
Possibilities:
1. Iran will never support the USD, so it's only buying gold, using the USD story as a cover for a 55Bn USD purchase.
2. Iran understands a strong USD is pissing off Obama and Bernanke, and will do everything to support USD and Gold, even if they dont buy any they just have to say they are.
I vote for 1, I dont see anyone smart enough in the Iranian regime to try 2.
Tyler, "Iran"ically? I bow to your comedic resistance.
iran plays mean hand of poker , those who fade iran .. do it at their own risk ..
and a zero hedge poster probably is not at the same table or every could be ,
China would rather buy more euros.
Preparing for redenomination to Islamic Gold Dinar?
45B euro would buy enough gold to make approx 360M gold dinar coins (at 4.25 grams, 91.7% pure 22k, etc).
Get me some of them Great Satan Reserve Notes!
T-shirt quote.
I doubt Iran will give away any sensitive information regarding it's holdings besides concentrating it's wealth into enough gold that can be trucked away on a single trailer sounds foolish to me.
It's analogous to jews and Israel. Israel is a good example of what not to do when you consider yourself a race/people subject to persecution, if you know what I mean.
GOLD RALLY IN CONTEXT WITH PRIOR SECULAR BULL MARKETS
David Rosenberg offers us this thought provoking chart comparing the Gold rally with, well everything else.
The implication being, Gold has much further to run.
And check out this chart:
Gold at $3000? Only if Bubbles Repeat... This chart tracks the the performance of gold since April of 2001 against the three largest bubbles of the last 40 years. Past bubbles have shown strong but steady growth for the first 7-8 years before moving into a hyper-growth phase for the last 18-24 months. Each series begins at the lowest point of the previous cycle, is adjusted for inflation and is smoothed with a 3-month moving average.Brian Kelly (Kanundrum Capital) on CNBC mentioned Iran buying gold, for either economic and/or political reasons, and that other central banks may do the same, the play being to buy gold (or GLD/ETFs as that is the CNBC equity play).
Video is not available yet