Monday, June 23, 2008

Averted Vision

From last week:

Iran has withdrawn around $75 billion from Europe to prevent the assets from being blocked under threatened new sanctions over Tehran's disputed nuclear ambitions, an Iranian weekly said. ...

"Part of Iran's assets in European banks have been converted to gold and shares and another part has been transferred to Asian banks," Mohsen Talaie, deputy foreign minister in charge of economic affairs, was quoted as saying. ...

"About $75 billion of Iran's foreign assets which were under threat of being blocked were wired back to Iran based on Ahmadinejad's order," the weekly said. ...

Iran is making windfall gains from record global oil prices and said in April its foreign exchange reserves stood at more than $80 billion.

Iran's foreign reserves figure has been climbing steadily. Some analysts say that, alongside rising oil revenues, Iran has been helped by its decision to shift away from the U.S. dollar into other currencies as the dollar has weakened.

You know how it's sometimes easier to see an object if, instead of staring right at it, you look slightly to one side? Star-gazers do it. As speculation increases about military action against Iran, look past the headlines about what the U.S. intelligence community says is a non-existent nuclear weapons program and focus on a more immediate and existential threat. If you think pulling money from Western banks, loudly shunning the dollar, and buying gold with oil proceeds doesn't represent one -- particularly right now, with the Federal Reserve's back against the wall -- go outside during the next starry night and give your retinas a good workout.


Anonymous Anonymous said...

Oy. Fred Hiatt (!!!) writes something about Iran that makes me slightly optimistic, and you have to toss actual reality at me......
-- sglover

6/23/2008 1:48 AM  
Anonymous Anonymous said...

Cool reference for us part time astronomers.

6/23/2008 9:21 AM  
Anonymous smart said...

Saudi Arabia has already boosted its production by 300,000 barrels a day, or about 3 percent, to 9.45 million barrels a day last month. But that has had little impact on soaring prices. Oil futures in New York have gained more than 40 percent this year. They rose 2 percent to $134.62 a barrel before the meeting on Friday.

very interesting: Will the market implode or rally??

6/23/2008 12:01 PM  
Blogger LFC said...

The Bush policies have pummeled the dollar, so the Iranians no longer wish to accept them. Additionally, Bush rebuffed overtures from Iran when he was feeling all high and mighty, and now threatens them. I ask you, what would you advise if you were a gov't official in Iran? I bet you'd suggest that your country avoid U.S. dollars and safeguard its assets.

Basically, Bush has backed them into a corner. They have two choices; a) shut down any semblance of a nuke program and completely open their country to inspections, or b) withdraw from much of the Western world. After seeing Bush throw U.N. inspectors out of Iraq so he could attack using trumped up intelligence as a justification, do you really think they'll choose (a)? I wouldn't.

This doesn't mean that I'm comfortable Iran getting nukes. I'm not. But if I was in their position, I'd be supporting the same moves they're making. Both Bush and McCain are too stubborn (and/or stupid) to understand that. They neither know nor care what Iran wants. They simply want to make demands.

6/23/2008 4:02 PM  
Anonymous Anonymous said...

So right. Volcker said the one mistake they made back in the day was not controlling the price of gold. Of course, it was easier back then when the US/US futures markets TOTALLY controlled the price and the environment. Now, they are trying hard to keep it down, but the cracks are becoming obvious. Today's action --- a lightening bashing down 20 points -- that it would be comical if it weren't so terrifying. Gold should be nearing the 2K mark given the pace that Ben is printing cash......and it will more than likely get there before the end of the year.

I'm certainly not lining up to buy dollars ......with the precious metals i've way in hell. no way in hell.

6/24/2008 12:26 AM  
Anonymous Anonymous said...

One more thing, gold has always been the outlet for those trying to preserve their wealth in the face of inflation. Essentially Ben's actions have closed off that .... the people who want out, looked for another alternative. Got oil?

Some how nothing this administration or Fed does is ever thought one ever seems to consider the ramifications of their actions, or ever seems to develop a Plan B. So....we're going to have oil at 200 before too long and every other commodity will be shooting to the moon with it...but by god, gold will still be under 900, so there really will be no inflation, right?

rock on everyone, buy gold, buy silver. protect yourself.

6/24/2008 12:29 AM  
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