Iran

"The most difficult challenge in writing about the Iranian Terror Plot unveiled yesterday is to take it seriously enough to analyze it"

While it is unclear if the news reported by Shia-News, and amplified by Bahrain News, is in retaliation for the recent deterioration in Iran-US relations following an allegation that Iran sought to assassinate diplomats and blow up embassies in the US using Mexican hitmen, or if this is what led to it, it appears that Iran is playing hard ball. As Bahrain News reports, referencing a new posting in Shia-News, "The Iranian leaders, furious over the Saudi intervention in Bahrain and what they call crimes against the Shiites of that country, have openly created centers to recruit volunteers for suicide bombings against Saudi Arabia’s interests worldwide. Several grand ayatollahs in Iran have issued a fatwa for Muslims to come to the aid of their Shiite brothers in Bahrain, who they claim are suffering horrific crimes from their government in collaboration with the Saudi armed forces. They further emphasized that the people of Bahrain have every right to demand freedom and their fair share from the state. Shia-News, a site associated with Ayatollah Mesbah Yazdi (a hard-line Shiite Twelver and an influential figure in the suppression of Iranians during their uprising to protest the fraudulent presidential election of 2009), is registering volunteers to participate in suicide bombings against Saudi interests around the world. Hundreds have already registered. Reports from inside Iran indicate that an alert has gone out to the Revolutionary Guards Quds forces throughout the world to prepare for attacks on Saudi establishments."

All you need to read.

That there are theories (and facts) blasting manipulation by various central banks to supress the price of gold over the years is not a secret to anyone (which incidentally is good for anyone who wishes to purchase gold at cheaper price, but that is the topic for another day). Yet one "conspiracy" we had not heard of until now is that America is actively doing what it can to send gold higher. That is no longer the case. A few days ago, none other than the capo di tutti Mexican cappi, Iran president Mahmoud Ahmedinejad, proclaimed that "Iran's enemies were deliberately causing the price of gold and foreign exchange to rise in a bid to undermine the Islamic Republic's economy. "The enemies and ill-wishers want to make a fuss and present wrong information to provoke and deviate the market." The plot thickens. From Reuters: "In order to disturb the market they buy a lot of gold coins with their huge amount of money ... they do the same in the foreign exchange market. But we have got enough reserves to meet all the country's needs." And there you have it: America is willing to risk the reserve status of its currency and send everyone chasing after gold simply so it can destabilize the Iranian economy... And now we've heard it all.

All you need to read.

The Slovak Parliament rejected the EFSF ratification bill late yesterday, which spurred risk-aversion overnight and in early European trade. However, in a stark reversal of fortunes, market sentiment changed following news that a new bill could be introduced in the Slovak Parliament as soon as this afternoon. Also, markets took positively comments from Chancellor Merkel who said that the EFSF changes will get full approval before the EU summit on the 23rd October, as well as a much lower than anticipated USD-allotment in the ECB's 3-month USD-operation, which waned some concerns surrounding the Eurozone banks' funding. Strength in equities weighed upon Bunds, whereas the Eurozone 10-year government bond yield spreads with respect to Bunds narrowed across the board. Bunds came under further pressure following a "technically uncovered" 30-year bond auction from Germany. Elsewhere, moving into the North American open, WTI and Brent crude futures ventured in positive territory as risk-appetite gathered pace and the USD-Index weakened... Moving into the North American open, markets look ahead to minutes from the FOMC meeting of 20th-21st September, together with the API inventories report. Any comments pertaining to the EFSF ratification in Slovakia will also be keenly watched. In terms of fixed-income, USD 21bln 10-year Note auction, allied with Fed's Outright Treasury Coupon sales in the maturity range of Mar'13-Oct'13, with a sale target of USD 8-9bln are scheduled for later in the session.

Support is at $1,600/oz, $1,580/oz and below that strong support is seen at the lows reached on September 26th of $1,532.70/oz. Market participants are divided as to whether this is consolidation prior to a resumption of the bull market, whether a further sell off takes place or whether a bear market has commenced. Strong physical demand being seen internationally, but especially in Asia, would suggest that gold may have bottomed and the bull market is set to continue in the traditionally strong autumn and winter months. The fundamental factors that have driven the gold market in recent years - macroeconomic, monetary, systemic and geopolitical risk – also suggest gold’s bull market is set to continue. Geopolitical risk is seen in the bizarre alleged plot by the Iranian revolutionary guard to use a purported Mexican drug dealer to assassinate Saudi Arabia's ambassador to the United States.

Ignore Slovakia: everyone has a price. This is the real news:

• RPT-SAUDI EMBASSY IN U.S. SAYS PLOT IS "DESPICABLE VIOLATION" OF INTERNATIONAL NORMS
• SAUDI OFFICIAL SAYS IRAN PLOT TO ASSASSINATE SAUDI AMBASSADOR "IS NOT GOING TO PASS EASILY"

And logically:

• IRAN REJECTS AS "PRE-FABRICATED SCENARIO" US ACCUSATION ON TWO IRANIANS ALLEGEDLY PLOTTING AGAINST SAUDI ENVOY - STATE TV

Take home: Talk is cheap but Brent here is even cheaper... Either way, it is a win win for Saudi which needs crude to go up in price.

The war watchers (such as Marc Faber and everyone else who knows what follows an episode of epic Keynesian failure) have just lowered DefCon to level 2 after in a very surprising development the US accused Iran of backing a plot to assassinate the Saudi ambassador to the US and to blow up the Saudi and Israel embassies in Washington. "The plot was part of a $1.5m “international murder-for-hire scheme” that was directly linked to Iran’s Islamic Revolutionary Guard Corps, said Eric Holder, attorney-general." Now, any press report that details Eric Holder being active in any capacity is almost certainly a confirmation of a false flag, although we will gladly reserve judgment for now. However, if this is indeed the precursor to war, at least CVN 74 and CVN 77 will be quite busy in the next few months. Also, the price chart of Brent will surely to quite surely point from the lower left to the parabolic up.

All you need to read.

Three things in life are certain: death, taxes, and political theater in Washington. Goldman summarizes: A holiday today, but a busy week starting tomorrow with passage of currency legislation, consideration and likely passage of bilateral trade deals, consideration of the President's jobs legislation, the proposed Volcker Rule, and continued private meetings of the fiscal "super committee" (no public meetings scheduled yet for this week).

• Risk-appetite gathered pace during the European session after Germany and France demonstrated a united front in tackling the ongoing Eurozone crisis. Meanwhile, Russia said that it may help the EU and Spain with the debt crisis, and is ready in principle to buy the Spanish government debt
• S&P affirmed France's ratings at AAA, with a stable outlook, and affirmed Belgium's ratings at AA+, with a negative outlook
• Slovak government party SAS turned down a compromise offer from coalition partners on the EFSF ratification, however the Slovak Parliamentary Budget Committee recommended the EFSF approval
• Weakness in the USD-Index provided support to EUR/USD and GBP/USD
• The governments of Belgium and France agreed to nationalise the Belgian subsidiary of Dexia

All you need to read.

Could more conspiratorial environmentalistas’ interpretations of our times be correct, that is, someone has been putting something in the water and we are all being lobotomized, even without major brain surgery?  You could make the case this week. Much of the world’s leadership, even though presumably suckling their bottled water, exhibits all the manifestations of imbibing something adversely affecting the normal cognitive processes

It was only a matter of time: the weakest link in the otherwise awesome idea that is a remote-controlled military, represented by the thousands of Predator and Reaper drones, has always been its biggest strength: the fact that it is remote-controlled. Which means that with no person on location, the system has always been susceptible to infiltration in the form of intermediation between the offsite pilot and the actual equipment. Such as a virus. And as Wired reports, a viral infestation, the biggest nightmare for the the US drone fleet, has just struck. "A computer virus has infected the cockpits of America’s Predator and Reaper drones, logging pilots’ every keystroke as they remotely fly missions over Afghanistan and other warzones. The virus, first detected nearly two weeks ago by the military’s Host-Based Security System, has not prevented pilots at Creech Air Force Base in Nevada from flying their missions overseas. Nor have there been any confirmed incidents of classified information being lost or sent to an outside source. But the virus has resisted multiple efforts to remove it from Creech’s computers, network security specialists say. And the infection underscores the ongoing security risks in what has become the U.S. military’s most important weapons system." Well that is truly Ironic: the "western" world tried to cripple (and failed) Iran's nuclear program with Stuxnet; it will, then, be supremely ironic if Iran retaliates by maxing out the credit cards of the US Air Force logging the credit card number as pilots purchase stuff online, and uses these to buy weaponized plutonium from Russia using Uncle Sam's credit card.