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Gold is money?! Indians to pay for Iranian oil with gold

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Published : January 25th, 2012
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Category : GoldWire

 

 

 

 

Markets enjoyed another “risk on” day yesterday, with stock markets and commodities all recording gains on the back of a weakening US dollar. The Dollar Index fell below 80, with the gold price also benefiting from increasing brinkmanship between Iran and western nations, with the European Union announcing the implementation of an embargo on Iranian crude oil.

Comex gold futures for February delivery gained 0.9% to settle at $1,678.30 per troy ounce. Silver for delivery in March gained 1.9% to settle at $32.27 per troy ounce – another solid day for the white metal, though it keeps banging up against selling resistance around $32.50.

Greece is once again the topic of market conversation this morning (surprise surprise), following the news that talks between eurozone finance ministers and private finance have again been brought grinding to a halt – with both sides disagreeing on how high the coupon should be on newly-issued Greek debt. The UK’s Office of National Statistics also released data this morning showing that the UK’s public sector net debt (excluding financial interventions such as bank bailouts) has passed the trillion-pound mark for the first time in the country’s history. Alan Mattich has written an interesting article at The Wall Street Journal about the “zombification” of the UK economy that is well worth reading.

The debt picture for the UK is even worse when one considers that, as in the US, official public sector net debt disguises many off-balance sheet commitments. These include the likes of public sector pensions and Private Finance Initiative (PFI) projects. These off-balance sheet liabilities are worth another £1.1 trillion.

Meanwhile, the US dollar’s reserve currency status continues to die a slow death. Last week saw the news that China has entered into a new currency swap deal with the United Arab Emirates, worth 35 billion yuan (US$5.6bn), a deal that will last for three years (though it's extendable) and that is designed to enhance bilateral trade, investment and financial cooperation. All of this is part of Beijing’s slow move towards introducing the renminbi as a unit of account in international trade, and away from the US dollar.

Yesterday also brought forth the highly interesting news that India will use gold to pay for Iranian crude oil, while China is expected to follow suit. China and India combined buy around 40% of the 2.5 million barrels of oil Iran produces each day. Looks like the Chinese, the Indians and the Iranians didn’t get Ben Bernanke’s memo.

 

 

Data and Statistics for these countries : Iran | United Arab Emirates | All
Gold and Silver Prices for these countries : Iran | United Arab Emirates | All
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The world order is changing. Lord Montgomery once said and I quote,"Men apart every man an emperor". Similarly, all nations of the world, big or small, weak or strong have started to exert themselves against internal strife(Iraq/Libya) or external pressures(Iran). This new dimension is unpardonable to say the least and will lead to fresh centres of power and conjectural wars. So make a head start by hoarding gold and silver. They will stand you in good stead in uncertain times ahead.
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The world order is changing. Lord Montgomery once said and I quote,"Men apart every man an emperor". Similarly, all nations of the world, big or small, weak or strong have started to exert themselves against internal strife(Iraq/Libya) or external pressu  Read more
Papli - 1/26/2012 at 11:47 PM GMT
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