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Showing posts from February, 2012

US dollar no longer a safe haven - world turning to gold and silver.

The U.S. dollar has enjoyed a rally since the middle of last year, partly as a result of the debt crisis erupting in Europe, taking the problems of the dollar out of the headlines. However, there are good reasons to believe that this rally is soon coming to an end as the dollar is back under attack again. First, Iran and India announced that they will start trading crude oil using gold instead of dollars. Then shortly after the Fed announced that it is going to keep interest rates low until 2014. The announcement of the Iranian and Indian oil for gold exchange was a direct response to the sanctions put on by the United States and the European Union. The official line has been that Tehran must be punished for its ambitions to develop a nuclear weapon. This punishment has been in the form of sanctions against Iran's oil exports, and now further sanctions against its central bank. These sanctions are nothing short of financial warfare. This latest sanction against Iran's central b
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India paying gold for oil. It this the beginning of the end of the dollar standard?

Media reports suggests that India has agreed to pay the price of crude oil it imports from Iran in gold, which makes it the first country to drop the US dollar for purchasing the Iranian oil. Citing an Israeli intelligence website, The Times of India has reported that India is opting for gold to repay crude oil supplies from Iran. The website, Debkafile, said the transaction will be routed through UCO Bank, the Kolkata-based public sector lender. However, the authenticity of the news could not be confirmed as the Indian government has neither confirmed nor rejected the option of paying in gold for oil imports from Iran. India, which is highly dependent on imports to meet its crude oil consumption needs, is Iran's second-largest oil customer after China and purchases around $12 billion worth of Iranian crude every year, about 12 percent of its consumption. On Dec. 31, 2011, US President Barack Obama signed new sanctions into law, seeking to penalize countries importing Iran's oi
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