Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Iran’s Currency War Heats Up, And The People Rush to Metals

Politics / Fiat Currency Feb 03, 2012 - 01:06 AM GMT

By: Dr_Jeff_Lewis

Politics The EU and the United States have implemented fresh sanctions against Iran targeting its oil exports. The tough measures are intended to curtail Iran’s nuclear program that Western nations believe is aimed at making nuclear weapons, while Iran claims that their nuclear program is for peaceful energy generation purposes instead.


The sanctions were met with an increasingly intense currency war as Iran and Russia plan to replace the U.S. Dollar with their own currencies for bilateral trade. The replacement of the U.S. Dollar for Iran’s trade with Russia was agreed upon after Iran had already replaced the Dollar in its oil transactions with India, China and Japan, according to the Iranian state run Fars news agency.

Making yet another case for holding gold and silver is that the European Union nations have been banned from trading in gold, silver, diamonds and petrochemical products with the Iranian central bank and with eight other entities to be named on January 26th.

EU Implements Iranian Oil Ban, Iran Threatens to Close Straight of Hormuz

Furthermore, on January 23rd, the European Union (EU) placed a ban on all new contracts to import, purchase or transport Iranian crude oil. The EU makes up Iran’s second largest oil purchaser after China.

According to Reuters, “EU countries with existing contracts for Iranian oil and petroleum products will have until July 1, 2012 to complete those contracts. The sanctions follow fresh financial measures signed into law by U.S. President Barack Obama on New Year’s Eve, and will mainly target the oil sector, which accounts for some 90 percent of Iranian exports to the EU.”    

“Today’s decisions target the sources of the finance for the nuclear program, complementing already existing sanctions” the EU stated in Brussels on Wednesday, adding that the EU had already “banned imports of Iranian crude oil and petroleum products.”

Iran retaliated to the news of the EU sanctions, with a member of the Iranian parliament stating that Iran will “certainly close the Strait of Hormuz”. The highly strategic Strait of Hormuz is currently under Iranian control and handles roughly 20 percent of global crude oil transport.

Iran Central Bank Hikes Rates Over 20 Percent as Rial Plummets

Iranian President Mahmoud Ahmadinejad raised interest rates on Iranian bank deposits to up to 21 percent on January 23rd, according to the official Iranian news agency IRNA. Iran’s central bank also urged Iranians to buy U.S. Dollars only if they were traveling abroad and not to hoard them as a hedge against economic uncertainty.

The move by the Iranian central bank exacerbated the already steep plunge in the Iranian Rial, which has lost more than 50 percent of its value against the price of U.S. Dollars in the open market over the last month.

The ominous slide in the Rial began in April when the Iranian central bank decided to cut rates to a range of between 12.5 to 15.5 percent in April, prompting people to put their money in safe havens like precious metals and the U.S. Dollar. Inflation in Iran is currently running at 20 percent.

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com and Hard-Money-Newsletter-Review.com

    Copyright © 2012 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in