Iran Moves Further To End Petrodollar, Announces Will Accept Payment In Gold Instead Of Dollars

Tyler Durden's picture




 

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 souce:

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.

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Tue, 02/28/2012 - 14:24 | 2204659 Badabing
Badabing's picture

old news, lets just get on with it

Tue, 02/28/2012 - 14:30 | 2204696 JW n FL
JW n FL's picture

 

 

Most people dont know that this already happened a month ago.. or was it last year? when India! America's Friend! who we out source too! who we ship our wealth and manufacturing base too! agreed to suck Iranian oil for gold!

 

one better most people dont pay attention unless you put the information in a Heavy Rotation format.

 

and Tyler!  God Bless Him!! is competing with Corporate Owned Media Outlets that spew multi market tested and apporved Meme's all day every day!

 

So! get the fuck on page and help the War effort.. or shut the fuck up.

 

Tue, 02/28/2012 - 14:30 | 2204715 Chief KnocAHoma
Chief KnocAHoma's picture

Bold move... but very fucking stupid!

They might as well hold up a sign that says please bomb us back into the stone age.

Tue, 02/28/2012 - 14:32 | 2204724 Pladizow
Pladizow's picture

And...3....2....1....INVASION!

Tue, 02/28/2012 - 14:35 | 2204737 Ancona
Ancona's picture

Didn't Ghadafi do that too?? This will not end well....

Tue, 02/28/2012 - 14:40 | 2204773 EscapeKey
EscapeKey's picture

Yep.

As did Saddam Hussein and Iraq before the sequel (War ][ - the revenge).

Tue, 02/28/2012 - 14:55 | 2204864 espirit
espirit's picture

What the hey, I'd accept gold instead of USD - but noooo, can't have that can we?

Petrodollahs are taking us to the brink.

Tue, 02/28/2012 - 15:24 | 2205050 Troll Magnet
Troll Magnet's picture

time for our "BFF" israel to get to work! 

Tue, 02/28/2012 - 15:45 | 2205165 DoChenRollingBearing
DoChenRollingBearing's picture

Ahhh, but the BIG QUESTION IS WHO would pay for mere oil with gold...  What stupid country would fork over their gold (at $1780 or so) for oil when gold is really worth so much more...

Only really stupid countries would pay in gold...

Tue, 02/28/2012 - 16:04 | 2205262 viahj
viahj's picture

who says that the contracts would be based on the spot paper price?

Tue, 02/28/2012 - 16:41 | 2205428 engineertheeconomy
engineertheeconomy's picture

B-I-N-G-O

Tue, 02/28/2012 - 17:32 | 2205695 Sean7k
Sean7k's picture

Which begs the bigger question: what will it do to the paper price if it begins to operate as money?

Tue, 02/28/2012 - 19:14 | 2206105 Hacked Economy
Hacked Economy's picture

Super B-I-N-G-O, Sean.  You just nailed it.  Although the paper price is in disconnect with the physical, the paper will at some point react accordingly, and eventually affect the physical in turn.

The upward trend continues.

Tue, 02/28/2012 - 21:06 | 2206357 engineertheeconomy
engineertheeconomy's picture

Paper to go to zero, because it's, well, paper...

Physical to go to Zimbabwe levels, because, well, their going to have to print like hell now to be able to buy the Gold that they will need to buy gas with now... 

Tue, 02/28/2012 - 16:19 | 2205323 trav7777
trav7777's picture

huh?  Oil makes food and shit run.

Gold is shiny.

Tue, 02/28/2012 - 16:26 | 2205361 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Gold is money.

Tue, 02/28/2012 - 16:29 | 2205376 EmileLargo
EmileLargo's picture

"Fiat money, in extremis, is accepted by nobody, Gold is always accepted"  - Alan Greenspan

Tue, 02/28/2012 - 16:43 | 2205439 economics1996
economics1996's picture

Gresham's law is an economic principle that states:

"When a government compulsorily overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."[1] It is commonly stated as:

"Bad money drives out good", but is more accurately stated:

"Bad money drives out good if their exchange rate is set by law."

Tue, 02/28/2012 - 17:22 | 2205654 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Gresham also wrote "The Firm" & lots of other best-sellers.

Tue, 02/28/2012 - 16:51 | 2205498 trav7777
trav7777's picture

so are a lot of other things

Tue, 02/28/2012 - 17:10 | 2205595 tmosley
tmosley's picture

Not two hours ago you were telling us that gold isn't money.

You have no idea what you are talking about.

Tue, 02/28/2012 - 17:47 | 2205762 The Big Ching-aso
The Big Ching-aso's picture

 

 

One of him is schizo.   Leave them the fuck alone.

Tue, 02/28/2012 - 20:03 | 2206215 Börjesson
Börjesson's picture

The price in gold of a barrel of oil has been pretty much unchanged since the 70s. (And not by chance, some say.)

Wed, 02/29/2012 - 03:24 | 2207062 Bringin It
Bringin It's picture

"Confessions of an Economis Hit Man"

After explaining how he worked as part of WB/CIA teams to inflate developing country infrastructure needs, ie. electrical grid, to send the inflated contracts back to the connected entities back in the Homeland, the author moves on to describe his activities when Nixon closed the gold window.  Back then, like now, FRN's were falling out of favor fast.  What was a broke US, with a bloated military to do?  Why Gun Boat Diplomacy, using aircraft carrier battle groups of course.  The US visited the Saudis and said - accept only dollars for oil and we will guarentee your reign.  What would happen if the Saudis said no??

Anyhow, the Saudis said yes and gave us the PetroDollar.  It looks like part of the deal was to maintain a barrel/ounces peg. 

With the PetroDollar, every country in the world had to find ways to get and save dollars so that they could have some hope of buying what they need, say in an emergency.  This roaring demand for dollars got staggering America back on it's feet by accomidating the launch of the financial bubble.

It looks like the Ponzi depends on the PetroDollar.  Good luck Iran.  Maybe the West's governments will convulse first?

Tue, 02/28/2012 - 23:27 | 2206747 TheFourthStooge-ing
TheFourthStooge-ing's picture

DoChenRollingBearing asked:

What stupid country would fork over their gold (at $1780 or so) for oil when gold is really worth so much more

You've hit upon the key point without even realizing it, my friend. First, though, picture this. What if Iran decides that it's had enough of sanctions and, removing the stated reason for the bullying that it's had to endure, voluntarily suspends its uranium enrichment in the interest of advancing diplomacy and regional peace?

By Iran taking the high road like this, the United States, Israel, and their toadies, I mean allies, would have to engage Iran diplomatically or else lose what little credibility they have left. More stonewalling on the part of Israel and the US would end up driving a wedge between them and their toady allies, as Iran could then make the case that the real issue all along was that the United States wanted to replace Iran's government with a subservient puppet (again). Sanctions would then begin breaking down as more countries began to realize that the US and Israel had been playing them for chumps all along.

Now we get back to the key point that you brought up. Suppose Iran then decides to throw a wrench into the gears of the petrodollar machine by offering to sell their oil at a price of 40 barrels per troy ounce of gold, but only for physical gold delivered to them. If gold was $2000 per troy ounce, the Iranian oil would be selling at the equivalent of $50 per barrel. Do you see what then happens to the price of gold in dollars? It doubles very quickly as dollar holdings are dumped in a scramble for physical gold. Other oil exporters would then be forced to raise the dollar price of their oil in response to the drop in the dollar's value. This would cause the dollar price of gold to go higher, becoming a positive feedback loop.

It's hard to say where it would end, but the dollar could end up mortally wounded.

But what the hell do I know?

 

Wed, 02/29/2012 - 00:56 | 2206953 Calmyourself
Calmyourself's picture

You know plenty, probably too much by half and your mind is agile..  I would stay away from DC parks, small planes and of course hot tubs..  Joking aside that is a provocative proposal, the numbers may be off but the wrench it would throw is immense at whatever price point.  That countries in Iran's position never do things like this sometimes predispose me toward listening longer than I normally would to conspiracy theorists; illuminati, girl scouts, CFR and the like..

Wed, 02/29/2012 - 04:09 | 2207092 StychoKiller
StychoKiller's picture

Hmm, all right, dish the dirt on the Girl Scouts...

Wed, 02/29/2012 - 03:54 | 2207084 Cathartes Aura
Cathartes Aura's picture

that's food for thought, most definitely. . . but I have to say I'm with Calmyourself - if they haven't thought to do this already, or soon! - then perhaps the game is more complex than we even care to realise. . .

who knows, eh.  but great thinking there.

Wed, 02/29/2012 - 11:14 | 2207780 DaveyJones
DaveyJones's picture

something is deeply wrong with your country when citizens are playing out strategies for the sworn enemy

it's a nice twist on the damned if they do (get the nuke) damned if they don't (we have oil so we're terrorists) conundrum 

Wed, 02/29/2012 - 18:51 | 2210165 TheFourthStooge-ing
TheFourthStooge-ing's picture

Somehow it must all be a part of the eternal nature of US citizenism.

 

Tue, 02/28/2012 - 15:03 | 2204903 e-recep
e-recep's picture

any evidence to support these claims? i mean evidence to prove that saddam and qaddafi had petrogold plans?

Tue, 02/28/2012 - 15:12 | 2204958 JW n FL
JW n FL's picture

 

 

USA's Petro Dollar Threatened by Gaddafi's Gold-for-Oil Plan

http://www.youtube.com/watch?v=wha9lTKN7Zg

Tue, 02/28/2012 - 15:16 | 2204990 Fukushima Sam
Fukushima Sam's picture

In a world where fiat currency still has value buying oil with gold is just plain stupid.

Tue, 02/28/2012 - 15:24 | 2205051 seek
seek's picture

True, but selling oil for gold instead of fiat that will eventually be worthless makes a hell of a lot of sense.

This is why the sellers accepting gold get smacked down so hard -- it's the first crack in the fiat dam that leads to a full on fiat currency collapse.

Wed, 02/29/2012 - 01:40 | 2207001 Pinto Currency
Pinto Currency's picture

-

 

Recep - you are a most helpful provocateur.

Tue, 02/28/2012 - 15:26 | 2205060 Troll Magnet
Troll Magnet's picture

i know!  it's really unbelievable that people all over the world are taking a piece of paper with ink on it for their valuable hard assets and commodities.  truly unbelievable times we live in.

Tue, 02/28/2012 - 15:27 | 2205065 goldfish1
goldfish1's picture

No, you're stupid

NO YOU're stupid

No you'RE stupid

Tue, 02/28/2012 - 17:20 | 2205637 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

The radiation has made him incoherent.

Tue, 02/28/2012 - 15:25 | 2205040 JW n FL
JW n FL's picture

 

 

 

e-recep

any evidence to support these claims? i mean evidence to prove that saddam and qaddafi had petrogold plans?

 

 

USA's Petro Dollar Threatened by Gaddafi's Gold-for-Oil Plan

http://www.youtube.com/watch?v=wha9lTKN7Zg

http://www.zerohedge.com/news/libyan-oil-fully-liberated-headline-gaddafi-dead

and just so you know..

You can Google this shit yourself and find it as easy as I did..

do you know how to Google?

key words.. "Gaddafi Oil for Gold Plan" enter them into Google and then push the search button! which then will lead you to this!

About 5,320,000 results (0.24 seconds)

https://www.google.com/#hl=en&gs_nf=1&tok=bTN5bcLxEPSwf7mbkDYcOg&cp=25&gs_id=2&xhr=t&q=Gaddafi+Oil+for+Gold+Plan

Now you try Iraq and post what you learn.. that is called sharing.

Sourcing and sitting information os easy and fun.. it helps people grasp the truth.. it is better than my saying.. "I Feel Like Gaddafi was killed because of his plan to trade Oil for Gold or his (1) African Currency Plan backed by Gold"

I know that most Baptist Ministers Frown on the Flock being EdJewMakated.. let alone being able to research ideas and learn from what they saw with their own eyes.. but here at ZeroHedge we are ALL! for people being able to solve or pursue complicated critical thinking !

I hope this helps you going forward!

 

 

Tue, 02/28/2012 - 15:43 | 2205149 VulpisVulpis
VulpisVulpis's picture

I'll make it easier for all the specials out here:

 

http://lmgtfy.com/?q=Gaddafi+Oil+for+Gold+Plan

Tue, 02/28/2012 - 16:02 | 2205253 AnAnonymous
AnAnonymous's picture

You've got US citizened.

The piece information is easy to find and/or well known.

A US citizen urges someone to provide some data, link or evidence to prove the statement...

You've been US citizened.

Mere statement of power.

Are facts only opinions that US citizens want to be facts.

Tue, 02/28/2012 - 17:35 | 2205708 zapdude
zapdude's picture

Aaargh!  Go away you blobbing up, nose-picking, running dog, crapping-on-the-side-of-the-road TROLL!!! 

Everyone IGNORE this retarded fool. 

Except AKAK -- you can drop the atomic elbow off the top turnbuckle on him anytime!

Tue, 02/28/2012 - 17:36 | 2205710 Poor Grogman
Poor Grogman's picture

Some facts from you would be nice once in a while.
Have you got a link for your particular type of illiteracy?

Tue, 02/28/2012 - 17:59 | 2205814 JW n FL
JW n FL's picture

 

 

AnAnonymous

You've got US citizened.

The piece information is easy to find and/or well known.

A US citizen urges someone to provide some data, link or evidence to prove the statement...

You've been US citizened.

Mere statement of power.

Are facts only opinions that US citizens want to be facts.

 

I am Very Sorry.. I did not know you did not have Google to use..

No Worries! any time you need some help with links.. I will happily provide them.

Most or some people here don’t understand that Google is Censored in other Countries so that the links other people can Not! find.

So anyone else who would like to help out a Fellow Fight Club Brother who is stuck outside of the Google circle!

If language is an issue we will see who can help you out there as well.

We are ALL! here to help people!

We do like to beat up on each other a little bit though..

do you know the movie Fight Club?

Fight Club philosophy and theoretics

http://www.youtube.com/watch?v=SQ8imPmQ0js

so we fight with each other for fun.. not to be mean or because we dont like each other.. the fighting makes our points or logic more sound.. that way when we have to discuss our thoughts with people outside of the family.. we are ready for war.. to win and maybe even help reach someone who is blind to the truth!

So! Please forgive me.. I did not know language was an issue.. nor did I understand that Google was not helpful too you.

hang in there!

You are not alone!

 

Please come back and let us know how we can help!

Tue, 02/28/2012 - 18:42 | 2205980 Element
Element's picture

In the spirit of, ur doin a heck of a job brownie ... the zh cup of camaraderie runeth-over!

Tue, 02/28/2012 - 22:54 | 2206644 JW n FL
JW n FL's picture

 

 

I am trying to be more like the rest of you(s) that I like.. which means less fighting and more sharing!

I have known you how long?

sure I dont call or come over and hit on your wife... but thats why you still luv me! LOL!

one day we all might end up at the White House together.. more likely a FEMA Camp.. but I am trying to stay positive! take a picture (screen shot) LOL!

Much Love To You and Yours!

God Bless and God Love You! and the rest of the Brotherhood here!

Wed, 02/29/2012 - 02:09 | 2207020 e-recep
e-recep's picture

ah, you do believe in the imaginary bullshit people call god? that gives a hint about your iq level. use your google page for "zeitgeist the movie". i don't have high hopes but try and see if your brain can digest what's in there.

Tue, 02/28/2012 - 16:29 | 2205377 e-recep
e-recep's picture

yes, i do know how to google, asshole.

Tue, 02/28/2012 - 16:30 | 2205378 e-recep
e-recep's picture

yes, i do know how to google, asshole.

Tue, 02/28/2012 - 17:00 | 2205554 Dickweed Wang
Dickweed Wang's picture

Go back to work  . . . .

Do NOT follow this link or you will be banned from the site!