Gold price plunge could be to punish Iran oil for gold program?Submitted by gilhodges on Mon, 05/20/2013 - 02:11
As many people know the United Stated placed heavy sanctions on Iran. This has had a crippling effect on the Iran economy. Also as many of you know the gold and silver price have taken a beating in recent months. Many wonder if manipulation is involved in the paper markets of gold and silver. As I was sitting here tonight reading a couple article something dawned on me. Iran in a work around of the US sanctions has been trading oil for gold for some time. The US has since included gold within the sanctions to limit Iran trading of oil for gold. As anyone with a brain is aware, the US dollar is the reserve currency of the world. This reserve currency statue’s allows the US to export inflation to other countries, by forcing them to buy US dollars to purchase oil (petro dollar). Iran has broken this chain with the oil for gold program, they are now selling oil to China, India and Russia for gold and bypassing the US dollar. This program has 2 hugely negative effects on the US dollar. First, it creates strong demand for gold around the world. As countries scramble to purchase gold to pay Iran for oil imports gold should rise in value. Thus exposing the US dollar is losing value against hard assets (not good for the US dollar). Second, it creates a means for other countries to purchase oil without having to purchase US dollars first. This would create the means for countries to limit the amount of US dollars they need, creating downward pressure.
This is a MAJOR threat to the US reserve currency statue with dire repercussions if other oil exporting countries were to adopt this policy.
Could it be the US government is pushing down the Gold price to punish Iran for their oil for gold program? In my opinion this program is the biggest threat to the US economy (and that includes a dysfunctional President and Congress). If the petro dollar where to be removed the US money printing days could be numbered in days maybe even hours.
Just thought I would throw this out and look forward to hearing your opinions.