Uranium

Iran's oil exports have dropped in March as buyers prepare for sanctions, and shipments are likely to shrink further if Obama determines by Friday that markets can adjust to less Iranian oil and tightens sanctions even further. Sanctions could eventually leave half of Iran's oil output cut off from international markets, according to analysts and officials. Iran is also being excluded from global commerce and the global economy by being locked out of the international payment system – SWIFT. SWIFT, the Brussels based clearing house, announced last week it will cut services to Iranian banks on foot of European sanctions, in order to comply with the EU Council. The service denial includes Iran’s central bank, which processes Iran’s oil revenues. Some 30 Iranian banks will be blocked from doing international business. History suggests that the trade, economic and currency war with Iran may soon degenerate into an actual war. Increasingly, the regime in Iran has little to lose in engaging in a more aggressive foreign policy – including attempting to close the strategically important Straits of Hormuz.

Dumbfounded. That’s the only way to describe the reaction that future historians will have when they look back and study the utter perversion that is our global financial system. We live in a time when a tiny handful of people have their fingers on a button that can conjure trillions of dollars, euro, yen, and renminbi out of thin air. In the United States, it comes down to one man. Just one. With a single decision, he controls the lever that dominates the entire economy. When you control the money, you control everything– financial markets, consumer prices, risk perceptions, investment habits, savings rates, hiring decisions, pay raises, sovereign debt, housing starts, etc.  One man.

The U.S. Is Letting China Steal Its Nuclear Innovations … Just Like Xerox Let Apple and Microsoft Steal Its Valuable Breakthroughs

Two days ago Obama held a press conference in which he openly prevaricated and disinformed the world about the true nature of his meeting with Israel PM Netanyahu. Today we find what was truly discussed, courtesy of Israel's Maariv newspaper, Spiegel and Reuters, which all tell us that it was a simple case of quid pro quo, namely that Barack Obama would supply Israel with bunker-busters and refueling planes if Bibi promised to delay an Iran attack until after the presidential election. The implication is simple - avoid an oil price shock this summer and delay it until next winter when Obama will be safely in his throne for another 4 years, at which point US citizens can fuel their cars with combustible urine following nights of binging on Everclear in hopes of ending their sorrows with alcohol poisoning, or better yet, all be in possession of the heavily subsidized flaming half ton block of metal known as the Obama Pinto, er, Volt.

Perhaps not so shockingly, AP is reporting tonight that satellite images of Iranian military facilities show trucks and other earth moving vehicles. Diplomats, accredited to the IAEA, suggest this indicates attempted cleanup of radioactive traces possibly left by tests of a nuclear-weapon trigger. As sanctions grow more burdensome and Israel's pre-emptive rhetoric rises, the discovery of this sanitization effort only raises the stakes as the images are said to be very recent and updated constantly and suggest evidence of tests of a small experimental neutron device. This wouldn't be the first time a site has been 'sanitized' prior to IAEA inspector visits but as The Boston Globe reports IAEA expert teams have tried twice - and failed - in recent weeks to get Iranian permission to visit this area and now (following the apparent clean-up) they have finally been granted access. As the US, Britain, France, Germany, Russia, and China postpone their meeting, in an effort to find more moderate language to criticize Iran, it seems to us that actions may just start having more impact than words very soon.

What is one sure thing sure to set triggerhappy warmonger fingers in the US and Israel on Defcon 1 more than the word Iran? The words Iran and North Korea. How about three nouns that will send crude soaring by at least $10 the second a CL trading algo sees them fly across Bloomberg? Try "Iran" "North Korea" and "Nukes." And if the following report just released by the Wiener Zeitung is even remotely correct, then Israel, the military industrial complex, and crude are all about to go ballistic, not necessarily in that order.

Natural gas prices are depressed and expected to remain so for the short to medium term, so investing in natural gas options or a natural gas exchange-traded fund is not likely to bring home the big bucks anytime soon. Domestic natural gas equities are an even riskier idea - most producers are scaling back production and selling assets as they hunker down in preparation for a tough few years. In this case, the way to profit is by understanding how natural gas' changing role is impacting North America's energy machine as a whole. Cheap natural gas is prompting utilities to switch from coal to gas where possible. The confluence of cheap natural gas and a risky global economy has droves of investors turning their backs on green energy, the sector that was such a market darling only a few years ago. Farther down the road, North Americans are debating - and in places implementing - a range of strategies to take advantage of the continent's newfound abundance of natural gas, from natural-gas-powered transport trucks to exportation of liquefied natural gas (LNG). Isaac Newton showed us that for every action there is an equal and opposite reaction. That is why every downside force in the energy sector creates upside opportunities elsewhere. The challenge is finding them. It takes an understanding of the entire global energy machine to figure out what areas are benefitting from the changing landscape.

The war parties in Israel and Iran are in full ascendancy.

Previously we presented some alternative thoughts to the mainstream misperception of the Iranian "isolation" by some of its biggest oil trading partners. Unlike others, we simply believe that the gulf nation, together with the new axis of anti-USD (as confirmed once again earlier today) is simply preparing itself for a barter based economy, or alternatively, one with commoditized intermediates. However, this ignores the likelihood of geopolitical instability caused by intervening US and Israeli interest in the region. Below are some thoughts from Doug Casey of Casey Research on the likelihood of another full blown shooting war erupting in the Persian Gulf, as well as his thoughts on how one may prepare for such a contingency.

Even American military and intelligence chiefs admit this ...

In each of the years 2008, 2009, and 2010, significant worries emerged that Western nations might attack Iran. Here again in 2012, similar concerns are once again at the surface. Why revisit this topic again? Simply because if actions against Iran trigger a shutdown of the Strait of Hormuz, through which 40% of the world's daily sea-borne oil passes, oil prices will spike, the world's teetering economy will slump, and the arrival of the next financial emergency will be hastened. Even if the strait remains open but Iran is blocked from being an oil exporter for a period of time, it bears mentioning that Iran is the third largest exporter of oil in the world after Saudi Arabia and Russia. Once again, I am deeply confused as to the timing of the perception of an Iranian threat, right now at this critical moment of economic weakness. The very last thing the world economies need is a vastly increased price for oil, which is precisely what a war with Iran will deliver. Let me back up. The US has already committed acts of war against Iran, though no formal declaration of war has yet been made. At least if Iran had violated US airspace with stealth drones and then signed into law the equivalent of the recent US bill that will freeze any and all financial institutions that deal with Iran out of US financial markets, we could be quite confident that these would be perceived as acts of war against the US by Iran. And rightly so.

Yesterday we reported how as a result of a financial embargo enacted on by the US on New Year's Day, Iran's economy had promptly entered freefall mode and is now experiencing hyperinflation as the currency implodes. Today EA WorldNews gives us the response, which confirms that indeed the economy is in terminal shape following an interest rate hike to 20%. From the Source: "State news agency IRNA has no news on the Iranian currency this morning, but it does feature an interview with an official, noting the rise in interest rates to 20%. The effort is to reduce the flow of cash in the economy, but the official says it will increase capital investment by banks in an "impressive market"." As noted before, every incremental creep worse in the status quo merely makes the probability of escalation higher due to a lower opportunity cost of "irrationality" although we hope we are wrong. And in other unreported so far news, EA also informs us that in a street bomb explosion in Tehran earlier, one Mostafa Ahmadi Roshan, deputy head of procurement at the Natanz uranium enrichment facility, was killed. Are predator drones now patrolling over the Iran capital? Who knows, but Iran is already spinning the news.

Markets are moving positively across the board today following comments from Fitch, dampening speculation that France may be downgraded from its Triple A status. Fitch’s Parker commented that he does not expect to see France downgraded at all throughout 2012. However he added that there are continuing pressures for France from national banks and EFSF liabilities, Parker also reinforced German confidence stating that Germany’s Triple A rating is safe. Markets were also experiencing upwards pressure from strong French manufacturing data performing above expectations and successful Austrian auctions today, tightening the spread between France and Austria on 10-year bunds.

All you need to know.