India to Buy Oil with Gold, not US Dollars [Archive]

ximmy

24th January 2012, 10:10 PM

"World's Second (China) And Third Largest (Japan) Economies To Bypass Dollar, Engage In Direct Currency Trade (http://www.zerohedge.com/news/news/worlds-second-and-third-largest-economies-bypass-dollar-engage-direct-currency-trade)", "China, Russia Drop Dollar In Bilateral Trade (http://www.zerohedge.com/news/article/much-ado-about-nothing-china-russia-drop-dollar-bilateral-trade)", "China And Iran To Bypass Dollar, Plan Oil Barter System (http://www.zerohedge.com/news/news/china-and-iran-bypass-dollar-plan-oil-barter-system-and-deeper-dive-iranian-oil-bourse)", "India and Japan sign new $15bn currency swap agreement (http://www.bbc.co.uk/news/business-16351065)", and now this: "Iran, Russia Replace Dollar With Rial, Ruble in Trade, Fars Says (http://www.bloomberg.com/news/2012-01-07/iran-russia-replace-dollar-with-rial-ruble-in-trade-fars-says.html)."" Today we add the latest country (http://www.reuters.com/article/2012/01/20/india-iran-idUSL3E8CK3C120120120)to join the Asian dollar exclusion zone: "India and Iran have agreed to settle some of their $12 billion annual oil trade in rupees, a government source said on Friday, resorting to the restricted currency after more than a year of payment problems in the face of fresh, tougher U.S. sanctions." To summarize: Japan, China, Russia, India and Iran: the countries which together account for the bulk of the world's productivity and combined are among the biggest explorers and producers of energy. And now they all have partial bilateral arrangements, and all of which will very likely expand their bilateral arrangements to multilateral, courtesy of Obama's foreign relations stance which by pushing the countries into a corner has forced them to find alternative, USD-exclusive, arrangements.

http://www.zerohedge.com/news/india-joins-asian-dollar-exclusion-zone-will-transact-iran-rupees
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India has decided to pay Iran in gold for the oil it purchases, according to a report carried by an Israeli news website DEBKAfile.

The move is an attempt to work around the sanctions imposed by the United States and Europe over Iran's alleged nuclear programme.

India had earlier indicated that it was in talks with Iran to pay for the oil in either rupees or in yen, but now it seems that India has decided to switch to gold.

An Indian delegation visited Tehran last week to discuss payment options in view of the new sanctions.

The two sides were reported to have agreed that payment for the oil purchased would be partly in yen and partly in rupees. Plan to make the payment in gold was apparently kept a secret.

India has been looking at ways to switch from dollar as the US and EU have imposed sanctions on Iran's oil industry and financial institutions.

The embargo means any bank dealing with Iran would be banned from transacting with American and European financial institutions.

India has refused to join the sanctions, saying it will only support United Nations-backed embargo. The move by India, if true, will have other unintended consequences: it will bring down the value of dollar.

If India does decide to pay Iran in gold, the decision will certainly push the price of gold high, especially as vast sums are involved in such transactions, and that would hurt the value of the dollar.

http://www.rediff.com/business/report/india-to-pay-for-irans-oil-in-gold/20120124.htm

ximmy

24th January 2012, 10:15 PM

LOL...

Reuters report that the EU has agreed to freeze the assets of the Iranian central bank and ban all trade in gold and other precious metals with the Iranian Central Bank and other public bodies in Iran.
According to IMF data, at the last official count (in 1996), Iran had reserves of just over 168 tonnes of gold. The FT reported in March 2011 that Iran has bought large amounts of bullion on the international market to diversify away from the dollar, citing a senior Bank of England official.
Currency wars continue and are deepening.

http://www.zerohedge.com/news/currency-wars-iran-banned-trading-gold-and-silver

http://www.youtube.com/watch?v=fk-X1uW07ag