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

Tyler Durden's picture




 

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.

Here is how Reuters presents its findings:

Difficulty paying for urgent import needs has contributed to sharp rises in the prices of basic foodstuffs, causing hardship for Iranians with just weeks to go before an election seen as a referendum on President Mahmoud Ahmadinejad's economic policies.

 

New sanctions imposed by the United States and European Union to punish Iran for its nuclear program do not bar firms from selling Iran food but they make it difficult to carry out the international financial transactions needed to pay for it.

 

Reuters surveys of commodities traders around the globe show that since the start of the year, Iran has had trouble securing imports of basic staples like rice, cooking oil, animal feed and tea. Grain ships have been held at its ports, refusing to unload until payment can be received for cargo.

 

With Iran's rial currency tumbling, the prices of rice, bread and meat in Iranian bazaars have doubled or more in dollar terms in recent months.

 

Iranian grain importers have in the past side-stepped sanctions by booking business through the United Arab Emirates, traders said, but this option was cut off by the UAE government in response to sanctions.

 

Iran has been trading oil in currencies like Japanese yen, South Korean won and Indian rupees, but such deals make it difficult to repatriate profits.

 

Deals revealed Thursday appear to be among the first in which Iran has had to result to offering cashless barter to avoid sanctions, a sign of new urgency as it seeks to buy food and get around the financial restrictions.

The article's punchline:

Another trader said: "As the shipments of grain are so large, barter or gold payments are the quickest option."

 

Details of how the barter deals work are still unclear as the payments problem is so new, and traders did not disclose the exact size of such deals.

Perhaps a different spin on the news is that gold is "suddenly" just as equially accepted as a pseudo-reserve currency virtually everywhere in the world, as the dollar: a blasphemous concept to many legacy economists for sure. But the truth is that gold and barter appear to be working. Especially when one considers what the FT had to say on this topic back in July 2011:

Tehran and Beijing are in talks about using a barter system to exchange Iranian oil for Chinese goods and services, as US financial sanctions have blocked China from paying at least $20bn for oil imports.

 

The US sanctions against Iran, which make it extremely difficult to conduct dollar-denominated business, mean that China could owe the oil-rich nation as much as $30bn, according to people familiar with the problem.

 

They said the unpaid oil bills had built up over the past two years and the governments, which are in early-stage talks, were looking at how to “offset” the debt.

 

Some Iranian officials are growing increasingly angry about the inability of the country’s largest oil customers to pay cash, a problem that has contributed to a shortage of hard currency and has hindered the central bank from defending the Iranian rial, which has been sharply devalued over the past month.

 

China and India together buy about one-third of Iran’s oil, the country’s economic lifeblood. China’s oil imports from Iran have risen 49 per cent this year, according to Reuters.

And what prevents China, whose secretive gold stockpiling is the stuff of legends to migrate from a barter system to one of gold, whereby the two countries exchange goods not in the form of barter but using the yellow metal currency equivalent. Furthermore, how would the world react if the entire Asian continent was found to be transacting in gold, coupled with the discovery that China's gold holdings have soared, very much the same way it disclosed its shocking gold expansion back in April 2009 when overnight its gold holdings went from 600 tonnes to 1054 tonnes:

Shanghai/Beijing: China disclosed on Friday that it had secretly raised its gold reserves by three-quarters since 2003, increasing its holdings to 1,054 tonnes and confirming years of speculation it had been buying.

 

Hu Xiaolian, head of the State Administration of Foreign Exchange (SAFE), told Xinhua news agency in an interview that the country’s reserves had risen by 454 tonnes from 600 tonnes since 2003, when China last adjusted its state gold reserves figure.

 

The confirmation of its 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.

Not only that, but consider our post from September 2011: "Wikileaks Discloses The Reason(s) Behind China's Shadow Gold Buying Spree"

Wondering why gold at $1850 is cheap, or why gold at double that price will also be cheap, or frankly at any price? Because, as the following leaked cable explains, gold is, to China at least, nothing but the opportunity cost of destroying the dollar's reserve status. Putting that into dollar terms is, therefore, impractical at best, and illogical at worst. We have a suspicion that the following cable from the US embassy in China is about to go not viral but very much global, and prompt all those mutual fund managers who are on the golden sidelines to dip a toe in the 24 karat pool. The only thing that matters from China's perspective is that "suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar's role as the international reserve currency. China's increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB." Now, what would happen if mutual and pension funds finally comprehend they are massively underinvested in the one asset which China is without a trace of doubt massively accumulating behind the scenes is nothing short of a worldwide scramble, not so much for paper, but every last ounce of physical gold...

In other words, we humbly submit that instead of taking the Reuters article at face value, and one may certainly do that, what may instead be happening as Iran migrates to a non-dollar based international trade system is the testing of the waters of a non-USD regime, more impotantly, one quietly encourage by  China, who is a very complicit participant in the transition to a world in which the US Dollar suddenly finds itself irrelvant. Whether replaced by gold, or a currency backed by a basket of hard assets (the CNY?) we don't know. However, we know one thing: China needs Iran's crude, which at last check was among the world's top 5 oil producers, and had the world's third largest proven oil reserves after Saudi Arabia and Canada, and despite media reports that it is actively looking for crude import alternatives, we would allege that this is nothing but purposeful disinformation. After all why would China comply with US demands for an enhanced Iranian embargo? The whole point of China's foreign policy to date has been to counteract US pushes and provocations abroad without fail. Why should it make an exception now. Frankly, we don't buy it, especially when one considers last summer's FT piece.

 

Finally, we leave readers with this interesting take from Casey Research's Marin Katusa, who looks at recent development in a rather comparable light.

Will Iran Kill the Petrodollar? (source)

The official line from the United States and the European Union is that Tehran must be punished for continuing its efforts to develop a nuclear weapon. The punishment: sanctions on Iran's oil exports, which are meant to isolate Iran and depress the value of its currency to such a point that the country crumbles.

But that line doesn't make sense, and the sanctions will not achieve their goals. Iran is far from isolated and its friends – like India – will stand by the oil-producing nation until the US either backs down or acknowledges the real matter at hand. That matter is the American dollar and its role as the global reserve currency.

The short version of the story is that a 1970s deal cemented the US dollar as the only currency to buy and sell crude oil, and from that monopoly on the all-important oil trade the US dollar slowly but surely became the reserve currency for global trades in most commodities and goods. Massive demand for US dollars ensued, pushing the dollar's value up, up, and away. In addition, countries stored their excess US dollars savings in US Treasuries, giving the US government a vast pool of credit from which to draw.

We know where that situation led – to a US government suffocating in debt while its citizens face stubbornly high unemployment (due in part to the high value of the dollar); a failed real estate market; record personal-debt burdens; a bloated banking system; and a teetering economy. That is not the picture of a world superpower worthy of the privileges gained from having its currency back global trade. Other countries are starting to see that and are slowly but surely moving away from US dollars in their transactions, starting with oil.

If the US dollar loses its position as the global reserve currency, the consequences for America are dire. A major portion of the dollar's valuation stems from its lock on the oil industry – if that monopoly fades, so too will the value of the dollar. Such a major transition in global fiat currency relationships will bode well for some currencies and not so well for others, and the outcomes will be challenging to predict. But there is one outcome that we foresee with certainty: Gold will rise. Uncertainty around paper money always bodes well for gold, and these are uncertain days indeed.

The Petrodollar System

To explain this situation properly, we have to start in 1973. That's when President Nixon asked King Faisal of Saudi Arabia to accept only US dollars as payment for oil and to invest any excess profits in US Treasury bonds, notes, and bills. In exchange, Nixon pledged to protect Saudi Arabian oil fields from the Soviet Union and other interested nations, such as Iran and Iraq. It was the start of something great for the US, even if the outcome was as artificial as the US real-estate bubble and yet constitutes the foundation for the valuation of the US dollar.

By 1975, all of the members of OPEC agreed to sell their oil only in US dollars. Every oil-importing nation in the world started saving its surplus in US dollars so as to be able to buy oil; with such high demand for dollars the currency strengthened. On top of that, many oil-exporting nations like Saudi Arabia spent their US dollar surpluses on Treasury securities, providing a new, deep pool of lenders to support US government spending.

The "petrodollar" system was a brilliant political and economic move. It forced the world's oil money to flow through the US Federal Reserve, creating ever-growing international demand for both US dollars and US debt, while essentially letting the US pretty much own the world's oil for free, since oil's value is denominated in a currency that America controls and prints. The petrodollar system spread beyond oil: the majority of international trade is done in US dollars. That means that from Russia to China, Brazil to South Korea, every country aims to maximize the US-dollar surplus garnered from its export trade to buy oil.

The US has reaped many rewards. As oil usage increased in the 1980s, demand for the US dollar rose with it, lifting the US economy to new heights. But even without economic success at home the US dollar would have soared, because the petrodollar system created consistent international demand for US dollars, which in turn gained in value. A strong US dollar allowed Americans to buy imported goods at a massive discount – the petrodollar system essentially creating a subsidy for US consumers at the expense of the rest of the world. Here, finally, the US hit on a downside: The availability of cheap imports hit the US manufacturing industry hard, and the disappearance of manufacturing jobs remains one of the biggest challenges in resurrecting the US economy today.

There is another downside, a potential threat now lurking in the shadows. The value of the US dollar is determined in large part by the fact that oil is sold in US dollars. If that trade shifts to a different currency, countries around the world won't need all their US money. The resulting sell-off of US dollars would weaken the currency dramatically.

So here's an interesting thought experiment. Everybody says the US goes to war to protect its oil supplies, but doesn't it really go to war to ensure the continuation of the petrodollar system?

The Iraq war provides a good example. Until November 2000, no OPEC country had dared to violate the US dollar-pricing rule, and while the US dollar remained the strongest currency in the world there was also little reason to challenge the system. But in late 2000, France and a few other EU members convinced Saddam Hussein to defy the petrodollar process and sell Iraq's oil for food in euros, not dollars. In the time between then and the March 2003 American invasion of Iraq, several other nations hinted at their interest in non-US dollar oil trading, including Russia, Iran, Indonesia, and even Venezuela. In April 2002, Iranian OPEC representative Javad Yarjani was invited to Spain by the EU to deliver a detailed analysis of how OPEC might at some point sell its oil to the EU for euros, not dollars.

This movement, founded in Iraq, was starting to threaten the dominance of the US dollar as the global reserve currency and petro currency. In March 2003, the US invaded Iraq, ending the oil-for-food program and its euro payment program.

There are many other historic examples of the US stepping in to halt a movement away from the petrodollar system, often in covert ways. In February 2011, Dominique Strauss-Kahn, managing director of the International Monetary Fund (IMF), called for a new world currency to challenge the dominance of the US dollar. Three months later a maid at the Sofitel New York Hotel alleged that Strauss-Kahn sexually assaulted her. Strauss-Kahn was forced out of his role at the IMF within weeks; he has since been cleared of any wrongdoing.

War and insidious interventions of this sort may be costly, but the costs of not protecting the petrodollar system would be far higher. If euros, yen, renminbi, rubles, or for that matter straight gold, were generally accepted for oil, the US dollar would quickly become irrelevant, rendering the currency almost worthless. As the rest of the world realizes that there are other options besides the US dollar for global transactions, the US is facing a very significant – and very messy – transition in the global oil machine.

The Iranian Dilemma

Iran may be isolated from the United States and Western Europe, but Tehran still has some pretty staunch allies. Iran and Venezuela are advancing $4 billion worth of joint projects, including a bank. India has pledged to continue buying Iranian oil because Tehran has been a great business partner for New Delhi, which struggles to make its payments. Greece opposed the EU sanctions because Iran was one of very few suppliers that had been letting the bankrupt Greeks buy oil on credit. South Korea and Japan are pleading for exemptions from the coming embargoes because they rely on Iranian oil. Economic ties between Russia and Iran are getting stronger every year.

Then there's China. Iran's energy resources are a matter of national security for China, as Iran already supplies no less than 15% of China's oil and natural gas. That makes Iran more important to China than Saudi Arabia is to the United States. Don't expect China to heed the US and EU sanctions much – China will find a way around the sanctions in order to protect two-way trade between the nations, which currently stands at $30 billion and is expected to hit $50 billion in 2015. In fact, China will probably gain from the US and EU sanctions on Iran, as it will be able to buy oil and gas from Iran at depressed prices.

So Iran will continue to have friends, and those friends will continue to buy its oil. More importantly, you can bet they won't be paying for that oil with US dollars. Rumors are swirling that India and Iran are at the negotiating table right now, hammering out a deal to trade oil for gold, supported by a few rupees and some yen. Iran is already dumping the dollar in its trade with Russia in favor of rials and rubles. India is already using the yuan with China; China and Russia have been trading in rubles and yuan for more than a year; Japan and China are moving towards transactions in yen and yuan.

And all those energy trades between Iran and China? That will be settled in gold, yuan, and rial. With the Europeans out of the mix, in short order none of Iran's 2.4 million barrels of oil a day will be traded in petrodollars.

With all this knowledge in hand, it starts to seem pretty reasonable that the real reason tensions are mounting in the Persian Gulf is because the United States is desperate to torpedo this movement away from petrodollars. The shift is being spearheaded by Iran and backed by India, China, and Russia. That is undoubtedly enough to make Washington anxious enough to seek out an excuse to topple the regime in Iran.

Speaking of that search for an excuse, this is interesting. A team of International Atomic Energy Agency (IAEA) inspectors just visited Iran. The IAEA is supervising all things nuclear in Iran, and it was an IAEA report in November warning that the country was progressing in its ability to make weapons that sparked this latest round of international condemnation against the supposedly near-nuclear state. But after their latest visit, the IAEA's inspectors reported no signs of bomb making. Oh, and if keeping the world safe from rogue states with nuclear capabilities were the sole motive, why have North Korea and Pakistan been given a pass?

There is another consideration to keep in mind, one that is very important when it comes to making some investment decisions based on this situation: Russia, India, and China – three members of the rising economic powerhouse group known as the BRICs (which also includes Brazil) – are allied with Iran and are major gold producers. If petrodollars go out of vogue and trading in other currencies gets too complicated, they will tap their gold storehouses to keep the crude flowing. Gold always has and always will be the fallback currency and, as mentioned before, when currency relationships start to change and valuations become hard to predict, trading in gold is a tried and true failsafe.

2012 might end up being most famous as the year in which the world defected from the US dollar as the global currency of choice. Imagine the rest of the world doing the math and, little by little, beginning to do business in their own currencies and investing ever less of their surpluses in US Treasuries. It constitutes nothing less than a slow but sure decimation of the dollar.

That may not be a bad thing for the United States. The country's gargantuan debts can never be repaid as long as the dollar maintains anything close to its current valuation. Given the state of the country, all that's really left supporting the value in the dollar is its global reserve currency status. If that goes and the dollar slides, maybe the US will be able to repay its debts and start fresh. That new start would come without the privileges and ingrained subsidies to which Americans are so accustomed, but it's amazing that the petrodollar system has lasted this long. It was only a matter of time before something would break it down.

Finally, the big question: How can one profit from this evolving situation? Playing with currencies is always very risky and, with the global game set to shift to significantly, it would require a lot of analysis and a fair bit of luck. The much more reliable way to play the game is through gold. Gold is the only currency backed by a physical commodity; and it is always where investors hide from a currency storm. The basic conclusion is that a slow demise of the petrodollar system is bullish for gold and very bearish for the US dollar.

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Thu, 02/09/2012 - 16:30 | 2143370 warren.buffett
warren.buffett's picture

Of course if Iran has to liquidate gold (indirectly liquidating India's and China's gold) on the market, expect gold to crash

Thu, 02/09/2012 - 16:35 | 2143390 Fukushima Sam
Fukushima Sam's picture

Uh-oh, I see the new thinking from the Feds now:

Iran uses gold to get around our sanctions, therefore terrorists must like gold, therefore if you own gold you are a terrorist.

Coin store dealers are about to get some "See Something, Say Something" fliers from the DHS!

Thu, 02/09/2012 - 16:42 | 2143418 SMG
SMG's picture

This barter system is most likely the real reason they want to invade.   The Illuminati control the world through fiat money and central banks, threaten that and expect a kinectic action in your immediate future.

Thu, 02/09/2012 - 17:01 | 2143486 Jefferson
Jefferson's picture

You got it backwards.

It is the Illuminati that want to destroy the dollar and all other competing fiat currencies so they can institute their single global currency plans.

It is the Illuminati that are destroying the economies and financial systems of the developed economies and in the process undermining confidence in their currencies.

The conflict with Iran is simply a pretext for keeping the momentum toward another world war, thereby, providing the Illuminati an opportunity to further consolidate power and control over the world in a final putsch.

Thu, 02/09/2012 - 17:07 | 2143510 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You are both correct: 

Two different phases of the same plan.

Thu, 02/09/2012 - 22:31 | 2144433 Harlequin001
Harlequin001's picture

Patriotism aside, the logical option is to support Iran. The authorities here in the West control your every action through the banking system.

The banking system undermines investors with capital that wish to lend at say 7% with new paper 'capital" which they lend at 0-0.25%. No wonder we can do nothing but sit here and wait in the full knowledge that the authorities will skin us financially and brand us terrorists for fighting the system. We only want to keep hold of what's rightfully ours.

Since the State's now control the media and the courts, Iran is literally our only way out...

It's getting pretty bad when the destruction of your own country is your only salvation. It says a lot for the state of our governments and the people who elect them...

Fri, 02/10/2012 - 01:46 | 2144867 The4thStooge
The4thStooge's picture

Iran sends Obama a Lovely Pink Stealth Drone

http://rt.com/usa/news/iran-us-drone-obama-933/

Only 4 Benny Bux for one these bad boys? Fuck yeah where can I get mine?

Fri, 02/10/2012 - 03:11 | 2144921 StychoKiller
StychoKiller's picture

Pink drone, how ghey is that? :>D

Tue, 02/14/2012 - 23:47 | 2160523 laosuwan
laosuwan's picture

very gay. maybe that's why we never see a mrs. ahmidinijad?

Thu, 02/09/2012 - 17:08 | 2143513 trav7777
trav7777's picture

Iran is problematic because we need a credible threat to destroy KSA to keep them under our protection.

If we knock off all their enemies, they could tell us to GFY

Thu, 02/09/2012 - 20:52 | 2144204 Gromit
Gromit's picture

Even a stopped clock is right twice every day!

Fri, 02/10/2012 - 10:19 | 2145518 XitSam
XitSam's picture

A clock that is 5 minutes slow is never right.

Sat, 02/18/2012 - 11:35 | 2172803 GMadScientist
GMadScientist's picture

Then we'd be one of "their enemies". Who'd be their sugar-daddy and keep the angry young peasants from beheading-back then? 

Thu, 02/09/2012 - 17:09 | 2143514 Sabibaby
Sabibaby's picture

It's almost like the US is prepping Iran for a currency collapse and Iran is taking the needed action but the US isn't prepping at all for a collapse because that could never happen in the US.

Thu, 02/09/2012 - 17:25 | 2143582 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The US will blame Iran when the dollar collapses.

Thu, 02/09/2012 - 18:35 | 2143815 gmrpeabody
gmrpeabody's picture

One Achmed 12...   One Achmed 12

Thu, 02/09/2012 - 19:56 | 2144049 Thomas
Thomas's picture

I sure hope the Iranians have nukes cause, if not, this is genocide. (It may still be.)

Thu, 02/09/2012 - 20:15 | 2144098 Michael
Michael's picture

I love Iranian financial inovation.

Thu, 02/09/2012 - 22:19 | 2144421 Harlequin001
Harlequin001's picture

Iran doesn't need nukes. It has China and Russia.

Prepare for a new world order in which the US doesn't figure, but China and Russia do, very prominently.

Thu, 02/09/2012 - 22:38 | 2144461 palmereldritch
palmereldritch's picture

Shit's about to get rial

Thu, 02/09/2012 - 18:00 | 2143690 CompassionateFascist
CompassionateFascist's picture

The "Illuminati" don't exist. Rich Zionists do, and they have real names: Rothschild, Warburg, De Beers, Oppenheim, Soros, Icahn, Paulson, "Russian"  (Jewish) Mafia, Greenspan, Rubin, Blankfein, Summers, Bernanke, Draghi, etc. etc. The Iran War, like most major catastrophes is overdetermined: partly an effort to save the dollar/debt ponzi, and partly to secure Zionist GHQ - Israel - from a potential military threat. And TPTB are NOT looking to have a World War; a radioactive cinder benefits no one. Just a useful, regional blow-up and massacre which they expect to contain. We'll see.  

Thu, 02/09/2012 - 18:05 | 2143700 YC2
YC2's picture

While at least you used some names instead of the usual "them" in NWO type posts, I am curious why you think these geniuses would pick such a terrible GHQ?  Co-opting religious sites?  I dunno, still seems like bad logistics...

Thu, 02/09/2012 - 18:24 | 2143774 CompassionateFascist
CompassionateFascist's picture

"terrible GHQ"? Not really. So long as they retain their grip on Wall St., Washington, and Hollywood.

Fri, 02/10/2012 - 10:44 | 2145648 YC2
YC2's picture

Israel is a pretty volitile place to be.  Not sure what that location has to do with controlling Wall St or Hollywood.  You might have a case for Washington, but, seriously, if I was some kind of global shadow puppetmaster, I would put the GHQ somewhere much nicer and safer.

Sat, 02/18/2012 - 11:38 | 2172805 GMadScientist
GMadScientist's picture

Belgium, Luxembourg, Switzerland...

Thu, 02/09/2012 - 18:12 | 2143727 SMG
SMG's picture

That's not true.   Some of those you mentioned are Illuminati, some are not.  While those mentioned have Jewish sounding names, and may publicly proclaim to be Jewish, privately they follow a Luciferian based religion, with different beliefs.   Blaming others is a common Illuminati technique, and has been used by them over the past several hundred years to help them get away with their crimes.  It is my hope that this time true justice will be served.

Thu, 02/09/2012 - 18:25 | 2143780 CompassionateFascist
CompassionateFascist's picture

Yes, I know. You and David Icke are going to hunt down the reptilian shape-changers.

Thu, 02/09/2012 - 18:35 | 2143810 SMG
SMG's picture

Actually the whole alien thing is a bunch of baloney, and David Icke is probably part of a COINTELPRO operation, or just horribly misguided.

Now do I beleive that a bunch of powerful people formed a club to benefit themselves and don't talk about it?

Well look around, we are living with the results of that.

Thu, 02/09/2012 - 20:22 | 2144119 john39
john39's picture

The reptilian theme is more properly understood as a metaphor illustrating the basic nature of the individuals currently in control.

Thu, 02/09/2012 - 20:44 | 2144174 Vagabond
Vagabond's picture

What's the proper way to understand the moon-spacecraft?

Thu, 02/09/2012 - 20:57 | 2144210 Xkwisetly Paneful
Xkwisetly Paneful's picture

The slow demise! LOL,

not even Hollywood has created more deaths of the same entity.

Up to eight since 1974. All the while even with the inclusion of the farce pan euro currency global commerce in petro dollars has plummeted from 75% to 65%.

When shit hits fan like in DEC '08, US bond yields which are obviously denominated in dollars go negative-this long before they started wiping their own ass on the long end- with costs included.

Slow demise.

 

Aslam Alekem brothers! Enjoy tonights adulterer flogging.

Thu, 02/09/2012 - 23:11 | 2144554 Bringin It
Bringin It's picture

Thread assasin.

Sat, 02/18/2012 - 11:40 | 2172807 GMadScientist
GMadScientist's picture

I love it when the different flavors of mentally insane turn on each other.

Fri, 02/10/2012 - 10:23 | 2145538 XitSam
XitSam's picture

Well since you seem to have the official reference list of who is and who is not the Illuminati, please post the list. I want to make sure I don't include those with Jewish sounding names.

Thu, 02/09/2012 - 21:25 | 2144289 roccman
roccman's picture

nope

 

the aldobrandinis, farneses, maximus, este...the UBER elite

Thu, 02/09/2012 - 22:56 | 2144508 Tompooz
Tompooz's picture

The families or individuals behind Rothschild, Warburg, De Beers, Oppenheim, etc

can be assumed to already own most of the world's stored gold.

Taking profit on the ponzi-fiat before it's final evaporation actually aligns their interests with goldbugs.

No wonder Kitco employs Jon Nadler.. 

Sat, 02/18/2012 - 11:41 | 2172809 GMadScientist
GMadScientist's picture

Now you're thinkin' outside the (safe deposit) box!

Fri, 02/10/2012 - 03:49 | 2144935 BlackholeDivestment
BlackholeDivestment's picture

...yes Jefferson, but, the new world order needs another 911 with a WMD twist to establish the goal. NYC is the ripe ''peace'' fruit for that. One theater type detonation of any kind will seal the new world order global economic goal of singularity and it will put fear into all the nation so that the prophetic false peace with Israel and all the United Nation will be completed. They already told you that the White Black Muslim Christian in their White House is their nuclear nonproliferation Nobel Prize, which nobody can deny. They already sat him in the U.N. Security Chair and only the U.S. President is the host for the job. 

Fri, 02/10/2012 - 08:18 | 2145130 Urban Redneck
Urban Redneck's picture

Reuters quoted two unnamed commodities traders who are apparently so freshcut in the industry and low on the totem pole that they don't even understand the way then Men in their line of work do big deals... Perhaps a better title for the article would be "Iran REturns to barter for food as sanctions cripple imports", since the grain trade is significantly older than the gold trade, and both are significantly older than fiat currency itself.  As the Persians, Chinese, Indians, et al. love to point out- they have thousands of years of documented culture, civilization, and sophistication. 

If Parent and Hafezi at Reuters knew much about the commodities business themselves- they would have been asking Paul Conway (if, and if so, how) the structuring of Cargill deals with Iran has actually changed as a result of the New Year's sanctions.  But that would have make for an Illuminating article, it is probably much more entertaining for TPTB and MSM when the truth lies in front of the uninformed and unwashed masses and they demonstrate their inferiority by continuing their lemming march with that dazed look in their eyes, completely oblivious to what lies before them.  

Oil for gold is nothing new; it is the formula beneath the original Aramco concession, and the Gulbenkian deals on the other side(s) of the bathtub.  More recently there is the oil for food fad, but US-Russia and the UNCC are merely the tip of that iceberg.  TPTB are, and have always been, neck deep in the barter game, since outside of the banking industry- they aren't starved for worthless fiat that central bankers can debase at will to maintain the appearance of stability and satisfy the desires of the wanna-be PTB. 

 

Thu, 02/09/2012 - 17:03 | 2143496 Dasa Slooofoot
Dasa Slooofoot's picture

Iran uses gold to get around our sanctions, therefore terrorists must like gold, therefore if you own gold you are a terrorist.

 

Haha. Remember the "if you smoke weed you're supporting the terrorist" commercials after 9-11?  We'll be bombarded with "owning Canadian Maples supports the terrorist" commercials next!

Thu, 02/09/2012 - 17:11 | 2143533 Dr. Kenneth Noi...
Dr. Kenneth Noisewater's picture

http://www.infowars.com/dhs-video-portrays-average-americans-as-terrorists/

 

“Anyone can become a victim of terrorism, any time, anywhere. Together, we can change this. Each of us has a responsibility to protect our community and we can do so by recognizing the signs of terrorism and taking proper action to stop it,” says Elway.

The clip characterizes all manner of mundane activities as potential signs of terrorism, splitting them into eight different categories, and shows other Americans reporting people to the authorities for such behavior.

Under the heading of “funding,” the video shows an image of U.S. Liberty Head gold coins, suggesting that people who buy or handle gold bullion are probable terrorists. In the same montage, an image of a handgun is flashed, implying that gun owners are also under suspicion.

Using a watch, a pair of binoculars, or donating to a charity are all potential Al-Qaeda behavior, the video implies.

Do you use e mail or the telephone to find out information about things? You’re probably a terrorist, according to the DHS, which classifies such behavior as “elicitation,” one of the eight signs of terror.

Do you occasionally monitor police radio, as thousands did during the recent G20 protests in Pittsburgh? You’re a terrorist.

Do you notice surveillance cameras or occasionally attempt to watch big brother back? You’re a terrorist.

Petty criminal behavior such as theft and trespassing is also flagged as a sign of terrorism.

“The success of defending our community’s safety depends upon our shared commitment,” says Elway at the end of the clip. “It’s a beautiful day here in Colorado and there can be many more like this with the help of people like you.”

 

Thu, 02/09/2012 - 21:32 | 2144314 gmrpeabody
gmrpeabody's picture

Per John Elway..., if you're not a 'stand in the pocket' type of quarterback, you may be a terrorist.

Per Peabody..., John ain't what he used to be!

Fri, 02/10/2012 - 03:47 | 2144932 slewie the pi-rat
slewie the pi-rat's picture

still, the top car dealer in the history of stanford?

leland woulda loved him!

denver is great, even w/ all the elway lic plate frames

i wonder if rickAckerman trades w/ him?  surely elway's "hidden pivot point" hasn't escaped him? even tho denver is not exactly local for rick...  L0L!!!

in '76 i coasted over theDivide and saw denver sparkling in the plain, below.  it looked like there was a restaurant on top of that tall building.  yup!  it was a great june sunset as we took our table a in the revolving tourist trap in the sky, but everyone was nice as we looked pretty crazed coming in from berkeley after that concert at the greek theater a few nights prior...

i recall watching the waiter's mouth move, but all i could hear was the damned road.  my son, who would be 3 that fall, addressed the waiter from his high chair:  "i think i would like the escargot, tonight, please"

that's when i realized he probably should have been driving since we left utah...

Sat, 02/18/2012 - 06:37 | 2172589 Uchtdorf
Uchtdorf's picture

Darn good story from 1976. You really have a way of unfolding a tale.

Thu, 02/09/2012 - 22:28 | 2144438 Harlequin001
Harlequin001's picture

and remember it's only a beautiful day because the DHS exists, right...

The sooner that budget pressures require that these agencies be cut, the better...

Thu, 02/09/2012 - 18:01 | 2143642 Randall Cabot
Randall Cabot's picture

The Iranians must have read Hitler's playbook from 1933 when jewry declared economic war on Germany. Don't listen to empty-headed loudmouths like Alex Jones who rants on and on about the bankers who funded Hitler-they did in a very limited way early on, it was Germany going to a barter system based on their manufaturing productivity that defeated the jewish boycott and fueled Germany's economic boom.

http://www.wintersonnenwende.com/scriptorium/english/archives/articles/jdecwar.html

Thu, 02/09/2012 - 20:44 | 2144172 Big Sky
Big Sky's picture

Interesting to look at corporate support - American complanies - in the 1930s for the re-armament of Nazi Germany. Consider a FW 190, the aluminum supplied by alcoa, the electronics by AT&T's precursor ITT, the fuel oil by standard oil - which even continued through the war via shipments to Spain, then into Germany, and even the ammunition by an American maunfacturer, perhaps Remington, but I may be in error on correct one. Nevertheless, the corporations were making money regardless of the political of social milieu. Why would anything change now? and it would also be interesting to know if corporations are beginning to accept alternative forms of payment for their products such as barter or other hard assets. (Maybe there are tax benefits etc)

Thu, 02/09/2012 - 20:54 | 2144209 njdoo7
njdoo7's picture

It's not alex jones who said that, it was Antony Sutton, alex references his work:

http://en.wikipedia.org/wiki/Antony_C._Sutton#Employers

Antony Sutton studied and researched WWII as a fellow at Stanford's Hoover Institution for five years and wrote several books on his findings, one of them titled Wall Street and the Rise of Hitler

http://www.amazon.com/Wall-Street-Hitler-Antony-Sutton/dp/0945001533

Or full text here:

http://reformed-theology.org/html/books/wall_street/

 

 

Sun, 02/12/2012 - 01:01 | 2150280 ZeroSpread
ZeroSpread's picture

Well, we already have "sell something, say something" so it's not really far off!

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