Dominique Strauss-Kahn

A Very Different Take On The "Iran Barters Gold For Food" Story

Much has been made of today's Reuters story how "Iran turns to barter for food as sanctions cripple imports" in which we learn that "Iran is turning to barter - offering gold bullion in overseas vaults or tankerloads of oil - in return for food", and whose purpose no doubt is to demonstrate just how crippled the Iranian economy is as a result of the ongoing US embargo. Incidentally this story is 100% the opposite of the Debka-spun groundless disinformation from a few weeks ago that India was preparing to pay for Iran's oil in gold (they got the asset right, but the flow of funds direction hopelessly wrong). While there is certainly truth to the fact that the US is actively seeking to destabilize the local government, we wonder why? After all as the opportunity cost for the existing regime to do something drastic gets ever lower as the popular resentment rises, leaving the local administration with few options but to engage either the US or Israel. Unless of course, this is the ultimate goal. Yet going back to the Reuters story, it would be quite dramatic, if only it was not the case that Iran has been laying the groundwork for a barter economy for many months now, something which various other analysts perceive as the basis for the destruction of the petrodollar system. Perhaps regular readers will recall that back in July, we wrote an article titled "China And Iran To Bypass Dollar, Plan Oil Barter System." Specifically, we wrote that "according to the FT, China has decided to commence a barter system in which Iranian oil is exchanged directly for Chinese exports. The net result: not only a slap for the US Dollar, but implicitly for all fiat intermediaries, as Iran and China are about to prove that when it comes to exchanging hard resources for critical Chinese goods and services, the world's so called reserve currency is completely irrelevant." Seen in this light the fact that Iran is actually proceeding with a barter system, something that had been in the works for quite a while, actually puts the Reuters story in a totally different light: instead of one predicting the imminent demise of the Iranian economy, the conclusion is inverted, and underscores the culmination of what may have been an extended barter preparation period, has finally gone from beta to (pardon the pun) gold, and Iran is now successfully engaging in global trade without the use of the historical reserve currency.

WSJ On DSK, DisUnion, And The Dismal Dithering In Europe

In an interesting history, today's WSJ points to a closed-door meeting in Washington on April 14th of this year as the moment that the attempts to 'save' Europe began to unravel. The player at the center of the debacle - one Dominique Strauss-Kahn - was pressing for more 'help' from Europe or else the IMF would not deliver more magic-money to the Greeks. The ultimatum drove a wedge between many competing camps over who should be on the hook for more or less of the money required to save this tiny sovereign. Critically, as we have pointed out again and again, it is not (in this case) size that matters, but the precedent that a nation leaving the socialist construct of the Euro 'breaks' the union and the WSJ weaves a torrid tale of this increasing tension and DSK's catalytic impact and timely 'dismissal' from the process. Furthermore, the clear 'dithering' they describe among these so-called leaders offers insights into what we can expect going forward as a new fiscal compact (same as the old one) begins to emerge with mid-March hard Greek deadlines looming fast.

Gold Near Record USD And EUR High – Eurozone Debt And U.S. Default Risks Global Financial Contagion

Gold is marginally higher against most currencies today and is trading at USD 1,614.40, EUR 1,130.50, GBP 990.08 and CHF 1,294.50 per ounce. Gold is flat against the dollar but remains just less than 1% from the record nominal high reached yesterday ($1,628.05/oz).  The euro is under pressure again today and gold is 0.7% higher against the euro and is just less than 1.5% away from the record euro high of EUR 1,144.80/oz reached last Monday. Investors were made nervous by comments from chemicals major BASF, which said it saw global economic growth slowing as it posted weaker-than-expected earnings, sending its stock down 4.9%. Siemens AG, Europe's largest engineering conglomerate, warned that global economic risks were increasing and posted below forecast results. Its shares fell 1.3%. The Dow to Gold Ratio has again turned down suggesting gold may continue to outperform U.S. stocks and the DJIA, in particular, in the coming weeks. The long term target of below 2:1 remains viable.

Guest Post: Doing The Global Currency Shuffle

In mainstream financial circles, the concept of a global currency is often spoken of only with an air of caution. It is approached always in hypothetical terms. It is whispered of as some far off dream; a socio-economic moon landing in the far reaches of fiscal space. Perhaps in 2015, or 2020, or maybe 2050, but certainly never just over the horizon, or right around the corner posing as an innocuous trade asset created over 40 years ago and used only on rare occasions. Unfortunately, the development of a centralized global security representing the creation of a supranational economic body is much closer than many would care to admit…

As DSK's Star Is Rising, Is Lagarde's About To Set? French Court To Decide Whether To Open Against Brand New IMF Head

The IMF soap opera just entered the twilight zone. Following the release of facts about DSK's accuser just two days after the swearing in of his replacement, Christine Lagarde, that could discredit her story and absolve the former IMF head of all wrongdoing, the current one may be about to experience amajor legal humiliation of her own. According to Reuters, a French court will decide on Friday whether to launch a legal inquiry into the role of IMF chief Christine Lagarde in a 2008 arbitration payout, a move that could cloud her debut at the international lender. To be sure this is the second time in the past two months that Lagarde's legal troubles have followed her: back in May we noted that the very same legal troubles could potentially delay her ascent to the head of the IMF. However, the French tribunal did not move fast enough, and thus Lagarde was elected without that major legal blemish being removed from her record. Thus it would be supremely ironic if tomorrow the Court Justice of the Republic were to pronounce that there just may be a case against Lagarde for abuse of authority. Coupled with DSK's probable imminent absolution of wrongdoing, in keeping with the Onionesque nature of reality, it would not surprise us if a year from now the IMF will have done a big switcheroo, and undone the whole thing, whereby DSK is back as head of the IMF.

DSK Two-Front Legal War Now Official: Tristane Banon Just Filed Attempted Rape Charges

Unfazed by threats that DSK's legal team would sue her for defamation if she proceeded to accuse the former IMF head of sexual assault, France 24 has just reported that Tristane Banon has formally filed an official legal complaint against DSK.

French writer files attempted rape complaint against Strauss-Kahn

French journalist and writer Tristane Banon has filed a legal complaint alleging that former IMF chief Dominique Strauss-Kahn attempted to rape her while she was interviewing him in a Paris apartment in 2003, her lawyer said.