Iran escalated its war of words with the United States on Tuesday with a warning to Navy ships to stay out of the strategic Strait of Hormuz, remarks that rattled commodities markets and helped send oil prices soaring.
– Greece Is Not Poor – It Actually Has Massive Uptapped Reserves Of Gold, Oil And Natural Gas (Economic Collapse, Oct 15, 2012):
It turns out that the poster child for the European debt crisis is not actually poor at all. In fact, the truth is that the nation of Greece is sitting on absolutely massive untapped reserves of gold, oil and natural gas. If the Greeks were to fully exploit the natural resources that are literally right under their feet, they would no longer have any debt problems. Fortunately, this recent economic crisis has spurred them to action and it is now being projected that Greece will be the number one gold producer in Europe by 2016. In addition, Greece is now opening up exploration of their massive oil and natural gas deposits. Reportedly, Greece is sitting on hundreds of millions of barrels of oil and gigantic natural gas deposits that are worth trillions of dollars. It is truly sad that Greece should be one of the wealthiest nations in all of Europe but instead the country is going through the worst economic depression that it has experienced in modern history. It is kind of like a homeless man that sleeps on the streets every night without realizing that a relative has left him an inheritance worth millions of dollars. Greece is not poor at all, and hopefully the people of Greece can learn the truth about all of this wealth and chart a course out of this current mess.I have written extensively about the nightmarish economic conditions that Greece is experiencing right now. Just check out this article, this article and this article. Since the depression began in Greece, the Greek economy has contracted by more than 20 percent. In April 2010, the unemployment rate in Greece was only 11.8 percent. Since then it has skyrocketed to 25.1 percent.
The government debt to GDP ratio in Greece is projected to hit 198 percent this year, and there are persistent rumors that Greece will be forced to leave the euro.
But all of this is completely and totally unnecessary. Greece is not actually poor at all. In fact, after you account for untapped natural resources, Greece is actually one of the wealthiest nations in all of Europe.
According to Bloomberg, there is a massive amount of gold in Greece. This recent economic crisis has accelerated the approval of mining activity, and it is now being projected that Greece will soon be the number one gold producing country in all of Europe… Continue reading »
– Syria, Turkey, Israel and a Greater Middle East Energy War (Veterans Today, Oct 11, 2012):
Syria, Turkey, Israel and a Greater Middle East Energy War
…by F. William Engdahl
On October 3, 2012 the Turkish military launched repeated mortar shellings inside Syrian territory.
The military action, which was used by the Turkish military, conveniently, to establish a ten-kilometer wide no-man’s land “buffer zone” inside Syria, was in response to the alleged killing by Syrian armed forces of several Turkish civilians along the border.
There is widespread speculation that the one Syrian mortar that killed five Turkish civilians well might have been fired by Turkish-backed opposition forces intent on giving Turkey a pretext to move militarily, in military intelligence jargon, a ‘false flag’ operation.[i] Continue reading »
Tags: Ahmet Davutoglu, Barack Obama, Bashar Assad, Benjamin Netanyahu, CIA, DHS, Economy, Energy, False flag, Future Combat Systems, Gas, Global News, Government, Homeland Security, Iran, Iraq, Israel, Lebanon, Libya, Middle East, Military, Muammar Gaddafi, Muslim Brotherhood, NATO, Obama administration, Oil, Philip Giraldi, Politics, Recep Tayyip Erdogan, Religion, Syria, U.K., U.S., War
And for some (idiots) this is not enough …
… versus those who can clearly see what is coming:
From the article:
“Even when unwinding its balance sheet would mean sacrificing 30% of US GDP and, let’s be honest about it, civil war.”
– BofA Sees Fed Assets Surpassing $5 Trillion By End Of 2014… Leading To $3350 Gold And $190 Crude (ZeroHedge, Sep 14, 2012):
Yesterday, when we first presented our calculation of what the Fed’s balance sheet would look like through the end of 2013, some were confused why we assumed that the Fed would continue monetizing the long-end beyond the end of 2012. Simple: in its statement, the FOMC said that “If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.” Therefore, the only question is by what point the labor market would have improved sufficiently to satisfy the Fed with its “improvement” (all else equal, which however – and here’s looking at you inflation – will not be). Conservatively, we assumed that it would take at the lest until December 2014 for unemployment to cross the Fed’s “all clear threshold.” As it turns out we were optimistic. Bank of America’s Priya Misra has just released an analysis which is identical to ours in all other respects, except for when the latest QE version would end. BofA’s take: “We do not believe there will be “substantial” improvement in the labor market for the next 1.5-2 years and foresee the Fed buying Treasuries after the end of Operation Twist.” What does this mean for total Fed purchases? Again, simple. Add $1 trillion to the Zero Hedge total of $4TRN. In other words, Bank of America just predicted at least 2 years and change of constant monetization, which would send the Fed’s balance sheet to grand total of just over $5,000,000,000,000 as the Fed adds another $2.2 trillion MBS and Treasury notional to the current total of $2.8 trillion.
In other words, for once we actually were shockingly optimistic on the US economy. Assuming BofA is correct, and it probably is, this is how the Fed’s balance sheet will look like for the next 2 years:
Or, in terms of US GDP, the Fed’s balance sheet will have “LBOed” just shy of 30% of all US goods and services.
It gets worse: Continue reading »
Tags: Bonds, Civil war, Collapse, Commodities, Debt, Dollar, Economy, Fed, Federal Reserve, George Bush, Global News, Gold, Government, Hyperinflation, Inflation, Obama administration, Oil, Oil Prices, Politics, Quantitative Easing, U.S.
– What Does A $4 Trillion Fed Balance Sheet Mean For Gold And Oil (ZeroHedge, Sep 13, 2012):
Earlier we explained why Bernanke’s actions today mean that the Fed Balance Sheet will likely grow to over $4 trillion by the end of 2013. Critically this flood of liquidity will raise the nominal price of every asset (from whimsical pieces of stockholder paper to barbarous relics and black gold). Some of these assets, like stock prices and high-yield credit spreads do have point-in-time ‘value limits’ to their price – though at times it seems a dream that fundamentals would ever matter again; but some have less of a binding constraint – such as gold. Should the Fed proceed, as seems likely, and do its worst/best to blow its balance sheet wad then we estimate Gold will be priced at least $2250 per ounce by the end of 2013(of course higher if the Fed sees no evidence of recovery). Meanwhile, deeper underground, the world’s mainstay source of energy, WTI Crude oil, could jump to record highs over $150 per barrel(which just happens to coincide with the ‘pegged’ value of oil in gold). It will be interesting indeed to see how the world’s socio-economic infrastructure hangs together should that occur – can’t happen? Different this time? Indeed it is now that Ben hit the big red ‘panic’ button.Gold vs Fed and ECB balance sheets… notably for QE2, gold priced in all the Fed balance sheet expansion within around half the period (around six months from Jackson Hole) and then overshot – this would infer we see Gold $2250 around the end of the first quarter next year – and expect some overshoot…
Oil vs Fed balance sheet… (which fits nicely into the 0.07 oz of Gold per barrel ‘peg’ that seems to have been ‘agreed’ with the world’s oil producers).
– Venezuela Ramps up China Oil Exports Unsettling Washington (OILPRIZE, Aug 21, 2012):
The biggest geostrategic change of the past decade overlooked by Washington policy wonks in their fixation on their self-proclaimed “war on terror” is that Latin America has been throwing off the shackles of the Monroe Doctrine.
These ignored developments may well soon refocus Washington’s attention on the Southern Hemisphere, as Venezuela’s President Hugo Chavez reorients his country’s to China.
– ATP Oil And Gas Files For Bankruptcy, CEO Blames Obama (ZeroHedge, Aug 18, 2012):
Now that the “alternative energy” industry is in shambles following one after another solar company bankruptcy, as the realization that at current prices, alternative energy business models are still just too unsustainable, no matter how much public equity is pumped into them, more “traditional” companies have resumed circling the drain. First, it was Patriot Coal, which finally succumbed to reality a month ago. Now it is the turn of ATP Oil and Gas, which filed Chapter 11 in Texas last night. And sure enough, in a world in which nobody is to blame, and everything is someone else’s fault, the CEO promptly made a case that he is blameless and it is all Obama’s fault. According to Forbes: “The founder and chairman of [ATP Paul Bulmahn] wants the world to know that the Obama Administration—and its illegal ban on deepwater drilling in the wake of the BP disaster—is to blame for the implosion of his company. Not him. “It is all directly attributable to what the government did to us,” he rails. “This Administration has gone out of its way to create problems for my company, the company that I formed from scratch.”
– What To Do When Every Market Is Manipulated (ZeroHedge, Aug 16, 2012):
Hint: cut the strings
If you don’t know who the sucker at the card table is, it’s you.
~ old gambler’s saying
What do the following have in common?
LIBOR, Bernie Madoff, MF Global, Peregrine Financial, zero-percent interest rates, the Social Security and Medicare entitlement funds, many state and municipal pension funds, mark-to-model asset values, quote stuffing and high frequency trading (HFT), and debt-based money?
The answer is that every single thing in that list is an example of market rigging, fraud, or both.
– Gold, Silver, Corn, And Brent Are Best Performers On The 5-Year Anniversary Of The Great Financial Crisis (ZeroHedge, Aug 9, 2012):
Five years ago today BNP Paribas stopped withdrawals from three of their investment funds – because they couldn’t value their holdings following the subprime fallout – and arguably marked the start of the Great Financial Crisis as money markets seized up and the ECB did its first emergency liquidity pump. In the five years hence, as Deutsche’s Jim Reid notes, its been a pretty good run for commodities and most fixed income assets. Given all that’s gone on over this period it’s fair to say that returns have been pretty good if you’ve been in the right areas. The authorities have played a big part in ensuring the period wasn’t a disaster even if there have been frightening periods and very poor returns in some areas. Given that there are still numerous unresolved issues, the authorities need to continue to be on full alert for the next 5 years to ensure that when we do the 10 year anniversary there haven’t been set-backs in many of these assets.
Source: Deutsche Bank
– Oil And Gold Seasonals Suggest BTFD (ZeroHedge, July 23, 2012):
The long-term seasonal data for gold and oil has not just remained relatively highly correlated over time but, as Barclays points out today, has very clear periods of bearishness, consolidation, and bullishness. While Gold may have another month of treading water, the period from September to mid-October is empirically bullish while Brent’s August to mid-October period is the most bullish segment of the year. Given gold’s stability in the past month or so since the EU Summit, and oil’s surge (and modest pull-back very recently), seasonals certainly provide some technical support for BTFD here in these QE-sensitive, real assets.
Brent Crude’s two major bullish seasonals…
and Gold’s three periods of bullish seasonality…
– 11 International Agreements That Are Nails In The Coffin Of The Petrodollar (The Economic Collapse, July 18, 2012):
Is the petrodollar dead? Well, not yet, but the nails are being hammered into the coffin even as you read this. For decades, most of the nations of the world have used the U.S. dollar to buy oil and to trade with each other. In essence, the U.S. dollar has been acting as a true global currency. Virtually every country on the face of the earth has needed big piles of U.S. dollars for international trade. This has ensured a huge demand for U.S. dollars and U.S. government debt. This demand for dollars has kept prices and interest rates low, and it has given the U.S. government an incredible amount of power and leverage around the globe. Right now, U.S. dollars make up more than 60 percent of all foreign currency reserves in the world. But times are changing. Over the past couple of years there has been a whole bunch of international agreements that have made the U.S. dollar less important in international trade. The mainstream media in the United States has been strangely quiet about all of these agreements, but the truth is that they are setting the stage for a fundamental shift in the way that trade is conducted around the globe. When the petrodollar dies, it is going to have an absolutely devastating impact on the U.S. economy. Sadly, most Americans are totally clueless regarding what is about to happen to the dollar. Continue reading »
YouTube Added: Jul 17, 2012
In this episode, Max Keiser and co-host, Stacy Herbert, discuss how market participants are never more than a few milliseconds away from the next act of fraud and how a teaspoon of collateral leads to economic martial law. They also discuss German economists proposing that the wealthy be forced to buy bonds while in Spain the government and EU force bank losses on cooks and pensioners. In the second half of the show, oil analyst, Chris Cook, about how, despite sanctions, oil will always find a home; the Enron technique of pre-pay now being used by Enron’s former counterparties; and how stability is the death for the oil market middlemen.
YouTube Added: 23.01.2009
Talk by Dr. Doug Rokke, former head of the Pentagon’s Depleted Uranium Project speaking about depleted uranium November 16, 2002 at University Baptist Church in Seattle.
Tags: Americium, Cancer, Chemicals, Civilians, Depleted uranium, Dictatorship, Doug Rokke, Environment, Fascism, Genocide, Global News, Government, Gulf War, Gulf War Syndrome, Health, Immune System, Military, New World Order, Nuclear, Oil, Pesticides, Plutonium, Politics, Society, Soldiers, Squalene, U.S., Vaccination, Vaccine, War, War Crimes
YouTube Added: 11.02.2011
Tags: 9/11, Afghanistan, Agent Orange, AIDS, Al-Qaeda, Al-Qaida, autism, Banking, Barack Obama, Bush administration, Cancer, Cesium-137, Chernobyl, China, Chris Busby, CIA, Club of Rome, Congress, Cynthia McKinney, Debt, Dennis Kucinich, Depleted uranium, Diabetes, Dick Cheney, Dictatorship, DNA, Donald Rumsfeld, Drugs, Economy, Energy, Enriched Uranium, Environment, Europe, False flag, Fascism, FEMA, Genocide, George Bush, George H. W. Bush, George Soros, Germany, Global News, Google, Government, HAARP, Health, Henry Kissinger, Hiroshima, HIV, Human Genome Project, Inside job, Iraq, Israel, Korea, Lebanon, Leuren Moret, Manhattan Project, Military, Milk, Nagasaki, Nanoparticles, NASA, New World Order, Nuclear, Nuclear reactors, Obama administration, Oil, Opium, Patriot Act, Plutonium, Police State, Politics, Radiation, Religion, Rockefeller, Rothschild, Royal Society, Science, Skull & Bones, Society, South Africa, Technology, Terrorism, Terrorists, Turkey, U.N., U.S., Ukraine, Uranium, Vietnam, Vietnam War, Vladimir Putin, Wall Street, War on Terror, WHO, WTC, WW II
– Iran lawmakers prepare to close Hormuz Strait (RT, July 2, 2012):
Iranian lawmakers have drafted a bill that would close the Strait of Hormuz for oil tankers heading to countries supporting current economic sanctions against the Islamic Republic.
“There is a bill prepared in the National Security and Foreign Policy committee of Parliament that stresses the blocking of oil tanker traffic carrying oil to countries that have sanctioned Iran,” Iranian MP Ibrahim Agha-Mohammadi told reporters.
“This bill has been developed as an answer to the European Union’s oil sanctions against the Islamic Republic of Iran.”
Agha-Mohammadi said that 100 of Tehran’s 290 members of parliament had signed the bill as of Sunday.
– The Best Reason in the World to Buy Gold (Forbes, April 22, 2012):
Beijing is planning to avoid U.S. financial sanctions on Iran by paying for oil with gold. China’s imports of the metal are already large, and you can guess what additional purchases are going to do to prices.
On the last day of 2011, President Obama signed the National Defense Authorization Act for Fiscal Year 2012. The NDAA, as it is called, attempts to reduce Iran’s revenue from the sale of petroleum by imposing sanctions on foreign financial institutions conducting transactions with Iranian financial institutions in connection with those sales. This provision, which essentially cuts off sanctioned institutions from the U.S. financial system, takes effect on June 28.
The NDAA gives the president the power to waive the sanctions depending on the availability and price of supplies from non-Iranian sources. He can also exempt financial institutions from countries that have significantly cut back purchases of Iranian petroleum. Last month, the State Department announced waivers for Japan and ten European countries. China, which has received American waivers in the past under other Iran legislation, is now Tehran’s largest oil customer and investor as well as its largest trading partner. Given the new mood in Washington, Beijing cannot count on getting more exceptions in the future.
As the Wall Street Journal noted in early January, the sanctions are “an attempt to force other countries to choose between buying oil from Iran or being blocked from any dealings with the U.S. economy.” The strict measures put Chinese officials in a bind. They apparently believe their geopolitical interests align with those of Tehran, but their economy is becoming increasingly reliant on America’s.
– Eastern Libya pulls away from central government (San Francisco Chronicle, Mar 6, 2012):
BENGHAZI, Libya (AP) — Tribal leaders and militia commanders declared oil-rich eastern Libya a semiautonomous state on Tuesday, a unilateral move that the interim head of state called a “dangerous” conspiracy by Arab nations to tear the country apart six months after the fall of Moammar Gadhafi.
Thousands of representatives of major tribes, militia commanders and politicians made the declaration at a conference in the main eastern city of Benghazi, insisting it was not intended to divide the country. They said they want their region to remain part of a united Libya, but needed to do this to stop decades of discrimination against the east.
The conference declared that the eastern state, known as Barqa, would have its own parliament, police force, courts and capital — Benghazi, the country’s second largest city — to run its own affairs. Foreign policy, the national army and oil resources would be left to the central government in the capital Tripoli in western Libya. Barqa would cover nearly half the country, from the center to the Egyptian border in the east and down to the borders with Chad and Sudan in the south.
– According To Reuters, Soaring Energy Prices Are A Good Thing (ZeroHedge, Mar 4, 2012)
When it comes to reporting the news, Reuters ability to get the scoop first may only be rivaled by its ability to “spin” analysis in a way that will make a normal thinking person’s head spin. Such as the following piece of unrivaled headscrathing titled “The good news behind oil prices” whose conclusion, as some may have already guessed, is that “the surge in crude oil is looking more like a harbinger of better days.” Let’s go through the arguments.
From Reuters: The good news behind oil prices
- “the Iran-driven spike masks a broader underlying trend, and as long as military strikes are avoided, it appears to pose only a limited risk. In other words, there is a good news story.”
Translation – Logic aside (namely that there is absolutely no connection between the precedent and antecedent sentences, but we’ll let that slide) the fact that at least $140 billion has been removed from consumers’ pockets YTD on an annualized basis (0.9% of GDP per $10 oil price increase), and has offset all the benefits from the payroll tax extension and then some, is not only irrelevant, but is apparently good news. Ignore that retail sales are abysmal for 3 months running, consumer spending has plunged and has already cost the US economy 0.3% in Q1 GDP, and all this happened even before the oil price surge, not to mention and European inflation is already above expectations on record Brent in Euros. All that matters is consumer confidence which is based on media “arguments” such as the one being deconstructed. Continue reading »
… and study the Weimar Republic!
– David Rosenberg: “It’s A Gas, Gas, Gas!” (ZeroHedge, Feb. 27, 2012):
Once again, if one wants to get nothing but schizophrenic noise from several momentum chasing vacuum tubes which very way may take the market to all time highs on 1 ES contract churned back and forth, by all means focus on the “market” which for the past three years is merely a policy vehicle of the monetary-fiscal fusion regime (thank you Plosser for confirming what we have been saying for years). For everyone else, here is the traditionally solid economic commentary from David Rosenberg. Considering that the central planners have pumped $7 trillion, or 50% of their balance sheet, in the stock market in the past 4 years, to offset precisely the warnings that Rosenberg issues on a daily basis, we are far beyond debating whether or not those who observe the economy realistically are right or wrong. The only question is whether the central banks can continue to expand their balance sheet at an exponential phase to offset the inevitable. Answer: they can’t. Continue reading »
$15 for a loaf of bread … coming to a store near you.
– Everything Not Nailed Down Being Bought (ZeroHedge, Feb. 27, 2012):
When in doubt – buy. When in doubt what – everything. As the chart below shows starting with the open of the US market, literally everything has been bought: stocks, bonds, crude, gold, and ‘logically’, the VIX. It took the market virtually no time to remember that when trillions in liquidity are being injected into the market courtesy of central planners, a downtick is verboten. Next up: waiting for WTI $110. Should take a few minutes at most.
For your information.
– “Oil Won’t Stop Until The Economy Breaks” (ZeroHedge, Feb. 24, 2012):
As gold strengthens on the back of the extreme experimentation of the world’s (now-sheep-like) central bankers’ easing and printing protocols, it does no real harm to the world, but as John Burbank (of Passport Capital) notes, the painful unintended consequence of all this liquidity is energy costs skyrocketing – and it won’t stop until the economy breaks. The negative feedback loop, that we pointed to yesterday as potentially the only thing to stall a magnanimously academic response to the insolvency we see around the world (and the need for deleveraging at this end of the debt super-cycle), of oil prices into the real economy will be devastating not just for US but for EM economies, though as the bearded-Burbank reminds us – Saudi benefits greatly (and suggests ways to trade this perspective). Flat consumer incomes while costs are rising is never a good thing and while we make new highs in oil in terms of EURs and GBPs, he warns we may soon in USDs also. Summing up, his perspective is rising tensions in the Middle East combined with central bank liquidity provision are a huge concern: “We’re actually quite bearish. The only reason all this liquidity is coming into the market is because things are really bad. It’s not because things are good. It’s hard to know where things are going to go. The point is, just because they’re putting liquidity in the market doesn’t mean the economy is improving.”
Edited Transcript below:
On the price of oil and his Saudi investments:
“[Oil] is up 16%, more than any of the indices. It’s a big problem for the rest of the world – central bank easing and liquidity providing presents a lot of problems for the average consumer here but also for emerging markets around the world.”
– Saudi Arabia Cuts Oil Output, Export: Industry Report (CNBC, Feb. 19, 2012):
The world’s top oil exporter, Saudi Arabia, appears to have cut both its oil production and export in December, according to the latest update by the Joint Organizations Data Initiative (JODI), an official source of oil production, consumption and export data.
The OPEC heavyweight saw production decline by 237,000 barrels per day (bpd) from three-decade highs of 10.047 million bpd in November, the JODI data showed on Sunday.
From the article:
“Surely, when it comes to shooting itself in the foot, Europe truly has no equal.”
– Iran Stops Oil Sales To British, French Companies (ZeroHedge, Feb. 19, 2012):
The geopolitical game theory escalates once again, as Iran, which four days ago halted exports to peripheral European countries took it up a notch, and has as of this morning halted sales to British and French companies. Reuters reports: “Iran has stopped selling crude to British and French companies, the oil ministry said on Sunday, in a retaliatory measure against fresh EU sanctions on the Islamic state’s lifeblood, oil. “Exporting crude to British and French companies has been stopped … we will sell our oil to new customers,” spokesman Alireza Nikzad was quoted as saying by the ministry of petroleum website.” Here is the actual statement from MOP.ir. As a reminder, on January 27 we said how Iran was about to “Turn Embargo Tables: To Pass Law Halting All Crude Exports To Europe.” And so it has – now, the relentless media campaign about China isolating Iran in response to American demands has to be respun: recall that in early February Reuters told us that “China will halve its crude oil imports from Iran in March compared to average monthly purchases a year ago, as a dispute over payments and prices stretches into a third month, oil industry sources involved in the deals said on Monday.” Apparently that may not have been the case, as there is no way Iran would have escalated as far as it has unless it had replacement buyers of one third of its crude. Incidentally, this is just as we predicted in “A Very Different Take On The “Iran Barters Gold For Food” Story.” The end result of this senseless gambit by the west: Europe has less oil, the Saudi fable that it has endless excess suplies is about the be seriously tested, China has just expanded a key crude supply route, and Russia is grinning through it all as Brent prices are about to spike. Iran didn’t invent chess for nothing.
This is what we cautioned in early February:
“I was personally present when the deputy economics minister of Iran was talking to a foreign society in Berlin”
“And the gentleman said very openly to the shocked audience ‘OK.
You don’t want to buy our goods. Well, the Chinese do.”
– Christoph R. Horstel
– Iran, Gold and Oil – The Next Banksters War (Batr, Jan. 29, 2012):
Remember the real reason why Moammar Gadhafi is dead. He dared to propose and started creating an alternative currency to the world reserve U.S. Dollar. The lesson learned in Libya is now ready for teaching in Iran. Forget all the noise about going nuclear, the true message is that the banksters rule and nation states serve their ultimate masters. The hype and disinformation that surrounds the push for war is best understood by examining the viewpoint of Iranian MP Kazem Jalali. The Tehran Times quotes him in saying,
“The European Union must be aware that it can never compel the Islamic Republic to succumb to their will and undermine the Iranian nation’s determination to achieve glory and independence, access modern technologies, and safeguard its rights, through the intensification of the pressure.”
“The European Union is seeking to politicize the atmosphere ahead of nuclear talks with Iran and is aware that sanctions on Iran’s oil exports cannot be implemented since the world is not limited to a number of European countries”
Many political commentators warn that an embargo is an act or war. Chris Floyd provides this observation of the recent oil embargo against Iran.
“This week, the warlords of the West took yet another step toward their long-desired war against Iran. (Open war, that is; their covert war has been going on for decades — via subversion, terrorism, and proxies like Saddam Hussein.) On Monday, the European Union obediently followed the dictates of its Washington masters by agreeing to impose an embargo on Iranian oil.
The embargo bans all new oil contracts with Iran, and cuts off all existing deals after July. The embargo is accompanied by a freeze on all European assets of the Iranian central bank. In imposing these draconian measures on a country which is not at war with any nation, which has not invaded or attacked another nation in centuries, and which is developing a nuclear energy program that is not only entirely legal under international law but is also subject to the most stringent international inspection regime ever seen, the EU is “targeting the economic lifeline of the regime,” as one of its diplomats put it, with admirable candor.”
The most important aspect of the Iranian response lies in the way that changes oil settlement for delivery and the futile effect of the US/Anglo/EU imperialist dictates have in the marketplace.
Debkafile reports that India (and probably China) will pay for Iranian oil in gold.
– IMF warns over risk of Iran oil price shock (BBC News, Jan. 25, 2012):
The International Monetary Fund (IMF) has warned of a 20-30% oil price spike if Iranian exports are disrupted.
The IMF warned that if the West imposed financial sanctions on Iran, it would be tantamount to an oil blockade, and the shock to the market could be as bad as from Libya’s revolution last year.
Ironically, and as has been stated here many times before, by enacting the proposed sanctions and embargo, the US, but mostly Europe is doing nothing but shooting itself in the foot, as it opens up a brand new pathway of not only outright defiance, and thus political brownie points domestically, of the US, but it will allow it to buy even more crude, at cheaper prices, while in the process it is forced to build closer monetary relations with its neighboring countries, relations that rely less and less on the world’s increasingly less relevant reserve currency.
– EU Agrees Iranian Oil Embargo (Guardian, Jan. 23, 2012):
Foreign ministers’ deal in Brussels could lead to soaring fuel prices and Iran closing the strait of Hormuz
The long-running standoff between Iran and the west over Tehran’s nuclear programme has shifted into a more unpredictable phase after Europe decided to impose an oil embargo on the Islamic republic.
The decision by EU foreign ministers at a meeting in Brussels raised the stakes dramatically in the war of wits between Iran and the west.
The EU decided no further oil contracts could be struck between the member states and Iran while existing oil delivery deals would be allowed to run until July.
– India Joins Asian Dollar Exclusion Zone, Will Transact With Iran In Rupees (ZeroHedge, Jan. 21, 2012):
Two weeks ago we wrote a post that should have made it all too clear that while the US and Europe continue to pretend that all is well, and they are, somehow, solvent, Asia has been smelling the coffee. To wit: “For anyone wondering how the abandonment of the dollar reserve status would look like we have a Hollow Men reference: not with a bang, but a whimper… Or in this case a whole series of bilateral agreements that quietly seeks to remove the US currency as an intermediate. Such as these: “World’s Second (China) And Third Largest (Japan) Economies To Bypass Dollar, Engage In Direct Currency Trade“, “China, Russia Drop Dollar In Bilateral Trade“, “China And Iran To Bypass Dollar, Plan Oil Barter System“, “India and Japan sign new $15bn currency swap agreement“, and now this: “Iran, Russia Replace Dollar With Rial, Ruble in Trade, Fars Says.”” Today we add the latest country to join the Asian dollar exclusion zone: “India and Iran have agreed to settle some of their $12 billion annual oil trade in rupees, a government source said on Friday, resorting to the restricted currency after more than a year of payment problems in the face of fresh, tougher U.S. sanctions.” To summarize: Japan, China, Russia, India and Iran: the countries which together account for the bulk of the world’s productivity and combined are among the biggest explorers and producers of energy. And now they all have partial bilateral arrangements, and all of which will very likely expand their bilateral arrangements to multilateral, courtesy of Obama’s foreign relations stance which by pushing the countries into a corner has forced them to find alternative, USD-exclusive, arrangements. But yes, aside from all of the above, the dollar still is the reserve currency… if only in which to make calculations of how many imaginary money one pays in exchange for imaginary ‘developed world’ collateral.
On India’s induction into the dollar unluck club, from Reuters.
Effectively, the measures will force companies and financial institutions throughout the world to choose between the United States and Iran as their business partner.
We are already at war with Iran!
In other news:
– Iran threatens U.S. ships, alarms oil markets (Washington Post):
– Iran fires long-range missiles (Telegraph – Video):
Iran has test-fired a surface-to-surface cruise missile in a naval drill, after the country threatened to close the strategic Strait of Hormuz, the passageway for 40 per cent of the world’s oil supply, if sanctions were imposed on its crude exports.
– Iran-US tensions over Gulf send oil prices soaring (Guardian):
Brent crude spot prices rise from $107 to $111 after Tehran threatens US aircraft carrier over use of crucial shipping route.
– Crude Surges On News Europe Agrees To Ban Iran Oil Imports (ZeroHedge, Jan. 4, 2012):
As if the situation in the Gulf was not enough on edge, here comes Europe with news, via Reuters, that EU governments have reached a deal to ban Iranian oil imports. The only thing pending is the determination of the starting date and other details. The result, as expected, is another leg up in crude. Sooner or later, this relentless rise higher will spill through to the pump, which according to the Michigan Bizarro confidence indicator will sent consumer optimism to historic levels. And now, the escalation hot grenade is back in Iran’s court. Expect more missiles to be fired into the water and more rhetoric about Straits of Hormuz closure in 5…4…3…
European Union governments have reached a preliminary agreement to ban imports of Iranian crude to the EU but have yet to decide when such an embargo would be put in place, EU diplomats said on Wednesday.
Diplomats said that EU envoys held talks on the issue in the last days of December and that any objections to the idea, notably from Greece, were dropped.
“A lot of progress has been made,” one EU diplomat said, speaking on condition of anonymity. “The principle of an oil embargo is agreed. It is not being debated anymore.”
And the response:
And so it begins.
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– Obama signs ‘toughest yet’ Iran sanctions (Deutsche Welle, Jan. 1, 2012):
Mounting tensions between the United States and Iran are likely to flare even further after US President Barack Obama has signed new sanctions against Iran’s financial and oil sectors.
US President Barack Obama has signed into law tough new sanctions targeting Iran’s banking and oil sectors. Effectively, the measures will force companies and financial institutions throughout the world to choose between the United States and Iran as their business partner.
The sanctions, conceived to punish Iran for its nuclear program, are part of a $662 billion (511 billion-euro) defense spending bill Obama signed on Saturday, December 31, during his vacation to Hawaii.
Firms and financial institutions, including foreign central banks, could be barred from trading on US financial markets if they continue ties with Iran’s central bank or oil industry. Iran’s central bank is essential to processing income from Iranian oil exports. Continue reading »