TEHRAN (FNA)- Iran and Russia have replaced US Dollar with their own currencies in their trade ties, a senior Iranian diplomat announced on Saturday.
“Since then, we have acted on this basis and a part of our interactions is done in Ruble now,” Sajjadi stated, adding that many Iranian traders are using Ruble for their trade deals.
“There is a similar interest in the Russian side,” the envoy stated, adding that that Moscow is against unilateral sanctions on Iran outside the UN Security Council, specially the recent sanctions against Iran’s Central Bank (CBI).
“The move (imposing sanction on the CBI) is unacceptable. Russians have clearly announced that they will not accept these sanctions and Iran’s nuclear issue is resolvable just through negotiations.”
Iranian President Mahmoud Ahmadinejad hit back at the US after Washington introduced new sanctions against Iran’s central bank.
President Ahmadinejad told an annual meeting of senior central bank officials that Iran’s central bank would respond with Read more…
Tune into CNBC or click onto any of the dozens of mainstream financial news sites, and you’ll find an endless array of opinions on the latest wiggle in equity, bond and commodities markets. As often as not, you’ll find those opinions nestled side by side with authoritative analysis on the outlook for the economy, complete with the author’s carefully studied judgment on the best way forward.
Lost in all the noise, however, is any recognition that the US monetary system – and by extension, that of much of the developed world – may very well be on the verge of collapse. Falling back on metaphor, while the world’s many financial experts and economists sit around arguing about the direction of the ship of state, most are missing the point that the ship has already hit an iceberg and is taking on water fast.
Yet if you were to raise your hand to ask 99% of the Read more…
A healthy skepticism of government statistics is one of those self-preservation mechanisms that keeps us from hurting ourselves. Misleading official statistics too often lead people and businesses to act contrary to their own best interests and plan for scenarios that never happen.
We have always questioned what the government gives us; it’s not only a self-preservation mechanism, it’s part of our patriotic duty in the democratic system.
Take these two charts, presented by Robin Harding over at the Financial Times Money Supply blog. One is of the U.S.’s real GDP in dollars, and one is of the percent change of real GDP. The green bars are the government’s GDP estimates in June 2010, the blue are estimates from a year later in June 2011, and the red are the most recent estimates, from July 29, 2011.
What the charts are screaming is that the government has a consistent tendency to overinflate GDP numbers, and that the United States never really emerged from recession.
Take the second quarter of 2009—which has been continuously revised lower to the tune of a quarter trillion dollars. That’s enough to pay the annual median income ($52,000) for 4.8 million U.S. families—no small error. The percentage change chart shows something starker—a consistent fall of GDP since early 2010
U.S. President Barack Obama said earlier in the day he had reached a deal with Republican and Democratic leaders to raise the nation’s debt ceiling by at least $2.1 trillion and avoid a default.
The proposed legislation is expected to be put to a vote in Congress later on Monday.
Speaking at a Russian political youth camp, Putin said the U.S. exists to build up its debt by relying on credit.
“It lives beyond its means, taxing the global economy with its problems and living like a parasite off the global economy and the monopoly of the dollar,” he said.
At the same time, the Russian head of government admitted that in the present day situation the United States took a “balanced” decision as a possible default would also have affected the global economy, which would have been “no good at all,” he concluded.
How a default would unfold immediately appears relatively straightforward. It’s the reaction that no one can predict, because it’s never happened before.
The first move will be made by the U.S. Federal Reserve. The Fed is the Treasury Department’s bank, handling government cheques and lending to banks which borrow using U.S. Treasury debt as collateral.
One day — the U.S. government has estimated it will be Aug. 2 — the Fed will serve notice on the government that its account at the Fed will be in overdraft by the end of the day, in violation of the Federal Reserve Act.
On Aug. 3, some Read more…
China And Iran To Bypass Dollar, Plan Oil Barter System, And A Deeper Dive Into The Iranian Oil Bourse
One of the more notable events in the past week was the previously discussed reopening of the Iranian Oil Bourse, an attempt by Iran to launch a venue that bypasses US sanctions against Iran which has prevented payment in the world’s reserve currency for Iranian goods. “Big deal”, some will say, this is not the first time Iran has attempt to upstage the Great Satan. Well, true, although as OilPrice said last week, “what it would take for Iran’s new exchange to survive and flourish are some heavy-duty customers that Washington would be wary of picking a fight with, and Tehran already has one – China… China, the world’s largest buyer of Iranian crude oil, has renewed its annual import pacts for 2011. In 2010 Iran supplied about 12 percent of China’s total crude imports. According to the latest report of the China Customs Organization, Iran’s total oil exports to China stood at Read more…
The markets have not yet thought about it, but the biggest threat to the Euro is not Greece, Ireland or Portugal, but the dangers posed by the fourth largest economy in Europe, which is also the third largest in the Eurozone, that of Italy. Italy is passing austerity measures but the measures may not be enough. The problem that the Euro faces is that there is little central control over the EU economy, control that exists affects states within Europe that have not adopted the Euro, as well as those that have.
Eleven years ago when the merits of the Euro were debated I argued against it. I was not fondly wishing to hold on to the pound sterling for sentimental reasons. I felt that there was a Read more…
Who would have thought that Ron Paul’s ideological ally in his quest to take down the Chairsatan would be none other than the Russian dictator-in-waiting (or rather, in actuality), Vladimir Putin. In a speech before the of economic experts at the Russian Academy of Sciences, the Russian prime minister had the following to say: “Thank God, or unfortunately, we do not print a reserve currency but what are they doing? They are behaving like hooligans, switching on the printing press and tossing them around the whole world, forgetting their main obligations.” What appears to have angered the former KGB spy is the end of QE2. According to RIAN: “Putin’s comments came in the wake of the completion of the US’ quantitative easing (QE) 2 program on June 30, in which the Federal Reserve bought $600 billion worth of Read more…
Charles Gave is the French economist whose research firm GaveKal is fairly well known, and read in some hedge fund circles.
In his latest note, John Mauldin reports on a dinner he attended with several investors and experts, of which Gave was one. At the dinner, he predicted the Euro’s imminent demise.
The section of the note is below.
Will the Euro Survive?
We had dinner on Monday night at the home of Hervig von Hove of Notz-Stucki Bank, where I was speaking the next morning. There were 16 of us at the table, and these people represented a great deal of money as managers and investors. All very well-informed. We sat outside in perfect weather in the Swiss countryside. Charles Gave sat across from me at the middle of the table, and we talked and debated as the rest asked questions and offered opinions for 3-4 hours. The wine was flowing, and it was a most interesting evening. Now, with that set-up…
I was asked if I still thought the euro was going to parity with the dollar, and I said I did, although I was not sure what the euro would look like in three years, or who would be in it. There was some pushback from people who thought the dollar would be the weaker currency. So I asked for a show of hands as to how many people thought the euro would be higher in one year’s time. There were 6 hands raised, but one gentleman said he was actually abstaining. So I asked how many thought the euro Read more…
China began diversifying away from the US dollar in earnest in the first four months of this year, most likely by buying far more European government debt than US dollar assets, according to estimates from Standard Chartered Bank.
China’s foreign exchange reserves expanded by around $200bn in the first four months of the year, with three-quarters of the new inflow invested abroad in non-US dollar assets, the bank estimated.
“It certainly appears that China’s finally following through on its policy to diversify its foreign reserve holdings away from the US dollar,” said Stephen Green, the bank’s chief China economist.
For over six years, Beijing has continued to accumulate Read more…