Monday, January 23, 2012

India to pay gold instead of dollars for Iranian oil.

This is truly stunning. I think there are several important things to take note of here, the least of which is India’s breaking the oil embargo in Iran. From Debka:

India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, debkafile's intelligence and Iranian sources report exclusively.  Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran's total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.
By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank's assets and the oil embargo which the European Union's foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran's oil exports.
The vast sums involved in these transactions are expected, furthermore, to boost the price of gold and depress the value of the dollar on world markets.
Its no surprise that people have begun holding gold as a store of value in turbulent times. After all, the global currency wars have most all countries in a race to devalue their own currencies. But who would have thought that less than six months after Federal Reserve chairman Ben Bernanke denied that gold was money, we would hear about not individuals, but countries, using gold as a medium of exchange, and here is the key, instead of DOLLARS? Since the Bretton Woods agreement, the US dollar was the world’s reserve currency. Even after the US dropped the gold standard in 1971, the US dollar remained THE international currency medium of exchange. Much talk in recent years has been made about what would become of the dollar which has been effectively devalued by around 33% in just the last ten years alone.

Today, we see the death of the dollar and the re-emergence of gold as the “currency of kings”. When nation states begin not just acquiring gold but using it for large transactions we are surely in a new era.

One last thought: as India is willing to use its central bank gold stockpiles to secure oil and preserve its economic future, our own President here in the US has determined that its in America’s national interest to block the proposed Keystone Pipeline from our neighbors in Canada to the US which would help secure our own economic future and oil independence in North America.

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