Iran Makes First Nuclear Fuel Rods, Fires Mid-Range SAM In Retaliation For Full Blown US Financial Boycott

The political press has been abuzz over the much anticipated signing of the NDAA by Barack Obama on Saturday: this move was not surprising because Obama had already made it clear he would go ahead and enact the law, even though he added some 'stern' language that is supposed to legitimize what some say is a precursor to the establishment of martial law in the US. To wit: "The fact that I support this bill as a whole does not mean I agree with everything in it. In particular, I have signed this bill despite having serious reservations with certain provisions that regulate the detention, interrogation, and prosecution of suspected terrorists." And yet he signed it (full text of Obama's statement on the NDAA, sent while on vacation in Hawaii, can be found here). Perhaps the reason for that unpopular move were some of the more nuanced contents of the Bill, among which is the decision to fully boycott not only Iran, but any bank, including central bank, and other financial institution found to deal with Iran. Which incidentally means most of Russia and China, and probably half of Europe, as all petrodollars generated by the country's petroleum export industry first have to make their way via the international financial community back into the country. The history buffs out there will realize that this form of couched antagonism is nothing short of the US approach to Japan during World War II, which was essentially provoked into attacking Pearl Harbor - read the details of the October 7, 1940 McCollum Memo here, and especially bullet point 10. And unfortunately, it appears that within 24 hours or so, Iran may have already taken the bait. As Reuters and BBC report, Iran has both test-fired a medium-range SAM during the ongoing wargames exercise previously discussed here, as well as made a formal announcement it has made and tested domestically made nuclear fuel rods: precisely the event that the Israel or US-borne Stuxnet was designed to prevent. So as the tennis match of escalation keeps on growing the ball is now once again in the US' court.

Here are some details on the wholesale Iranian financial boycott via Reuters.

U.S. President Barack Obama signed into law on Saturday a defense funding bill that imposes sanctions on financial institutions dealing with Iran's central bank, while allowing for exemptions to avoid upsetting energy markets. The sanctions target both private and government-controlled banks - including central banks - and would take hold after a two- to six-month warning period, depending on the transactions, a senior Obama administration official said.


Under the law, the president can move to exempt institutions in a country that has significantly reduced its dealings with Iran and in situations where a waiver is in the U.S. national security interest or otherwise necessary for energy market stability. He would need to notify Congress and waivers would be temporary, but could be extended.


Sanctioned institutions would be frozen out of U.S. financial markets.


"Our intent is to implement this law in a timed and phased approach so that we avoid repercussions to the oil market and ensure that this damages Iran and not the rest of the world," the senior U.S. official told Reuters.


Iran's central bank is the main conduit for Tehran's oil revenues.


Obama signed the bill during his vacation in Hawaii, just hours after Tehran said it had delayed planned long-range missile tests in the Gulf and signaled it was ready for fresh talks on its disputed nuclear program.


Senior U.S. officials said Washington was consulting with its foreign partners to ensure the new sanctions can work without harming global energy markets. They stressed the U.S. strategy of both isolating and remaining open to engagement with Iran was unchanged.

Ah yes, the precious energy markets. We can't have some unprecedented volatility there, not now when it is now officially an election year. What however we can have, is control over the supply of one of the world's biggest oil exporters. Kind of what happened in Iraq a few years back to stunning success...

So what was Iran's response?

Iran has successfully produced and tested fuel rods for use in its nuclear power plants, state television reported on Sunday, in a snub to international demands that it halt sensitive nuclear work.


The rods, which contain natural uranium, were made in Iran and have been inserted into the core of Tehran's research nuclear reactor, the television reported.


Nuclear fuel rods contain small pellets of fuel, usually low-enriched uranium, patterned to give out heat produced by nuclear reaction without melting down.


"This great achievement will perplex the West, because the Western countries had counted on a possible failure of Iran to produce nuclear fuel plates," the Tehran Times newspaper said.


The development was announced at a time of growing tension between Western powers and Iran after the U.N. nuclear agency reported in November that Tehran appeared to have worked on designing a nuclear weapon. Secret research to that end may be continuing, it said.


The United States and its European allies have increased the sanctions pressure on Iran, one of the world's largest oil producers, to push Tehran to halt the enrichment.


U.S. President Barack Obama signed more sanctions against Iran into law on Saturday, shortly after Iran signalled it was ready for new talks with the West on its nuclear programme and said it had delayed long-range missile tests in the Gulf.

But wait, there's more. From the BBC:

Iran has successfully test-fired a medium-range surface-to-air missile during military exercises in the Gulf, the official Irna news agency reports.


Iranian naval commander, Mahmoud Mousavi, was quoted as saying the missile was equipped with the "latest technology" and "intelligent systems".


The test comes a day after he denied earlier state media reports that Iran had test-fired long-range missiles.


He said on Saturday missile launches would take place "in the coming days".


Iran's 10 days of naval exercises began last week and are taking place in international waters to the east of the strategic Strait of Hormuz.


They come at a time of increased tensions between the West and Iran over its nuclear ambitions.


Tehran reacted angrily last week to reports that Western nations were planning to impose further sanctions targeting Iran's oil and financial sectors.

So little by little the US will escalate pressure on Iran to commit increasingly more glaring acts of outright 'insanity', until finally it does the one thing that according to the US media, which will likely be needed to wash-rinse-spin cycle the newsflow, will push the  American people, who are just not going to take such 'vile' proocations any more, over the edge. At least according to Santorum's Meet the Press interview from this morning which made precisely that point all too clear.