The Remonification of Gold.

I've written many times that the remonification of gold would be a given.  Look through my past posts and you will even see some of the signs that I believed we would see that would be important proof points that it is happening.   Recently, Jim Sinclair pointed out that a huge sign is happening right here, right now (as Jim likes to say), and it is taking the form of China paying for Iranian oil using gold.

It's no secret to say that the US has it in for Iran.  Part of the reason is probably the stated reason: fear of what Iran might do with an atomic bomb.  Or maybe it is just fear that Iran might be able to defend itself from illegal attacks by big militaries like that of the US or a US led coalition.  Truth is, we do have a reputation of shooting first and asking questions later in that region.  Some of it probably has to do with the fact that war is good business for scum bags and con men and the world is running out of countries to attack without the US being publicy thought of as a hotbed of war criminals.  Perhaps a bigger part of it than most people understand is that Iran is calling BS on the US dollar with its Iranian Oil Bourse which will accept payment for oil in anything EXCEPT US dollars.  Such things are not good for the USA's monopoly on monopoly money...

Whatever the reason, the US has led the economic sanctions against Iran using the excuse that Iran is trying to build a nuclear weapon.  The fact that Israel's top general is on the recent record saying an Iranian bomb is not a credible threat really doesn't seem to matter much.  The Bush-bama war mongering machine will never be satisfied until they get to kill more people and take more things that don't belong to them.  The first step, of course, is to use economic sanctions in order to starve the people into overthrowing their own government.  If this doesn't work then of course, the tanks will roll.

One aspect of the economic sanctions is to not allow Iran to clear any international payments made to it using the so called SWIFT system.  SWIFT is an acronym for the Society for Worldwide Interbank Financial Telecommunication.  In other words, it is an electronic money clearing house for international trade.  Think of it as PayPal for countries.  The US got SWIFT to kick out Iran's banks as part of the sanctions.  This leaves no easy way for other nations to pay for Iranian oil.  The US basically told Iran, "It's our money system and you can no longer play in it.  Go starve.  Go collapse.  Go whatever as long as it is away."

The arrogance of this action is obvious.  The US believes it can push everyone around, foreign and domestic.  But as is often the case, the law of unintended consequences is raising its head and tossing Iran out of SWIFT is having very important but unintended consequences.  You see, China is a major purchaser of Iranian oil and China is really not against Iran having nuclear weapons.  China knows that if Iran launches one weapon against China that China will obliterate the whole country in nuclear rain.  In other words, Iran cannot be a real threat to China (or to Russia or to the US for that matter).  China does not intend to stop buying Iranian oil just because the US said so.  But SWIFT payments no longer work so now China has taken to paying for Iranian oil using gold.  Doop!

As I have written many times, physical gold lives outside of the debt Ponzi.  It is real money, controlled by nobody.  This is why the Ponzi operators hate gold and call any gold standard a "barbarous relic".  Those who trade for goods using physical metal are beyond taxation, beyond sanctions, beyond the control of the evil bastards who are running the global Debt Ponzi.  Gold is money whether or not the US likes it and China is proving that right now by trading gold for Iranian oil.

This has got to be pissing a lot of self-important D.C. bureaucrats off big time.  First of all, China didn't vote for the sanctions so this is not a matter of "cheating".  Second, China is too important to the US to effectively start a trade war with.  China would be hurt but it would wake a lot of sleepy American sheeple up from their slumber if it caused store shelves that used to be full of low cost Chinese goods to suddenly go empty.  A trade war would certainly impact American quality of life in a negative manner.  And it's a way of life we aren't even working for - we just finance it all with debt that we have zero intention of ever paying back.  Messing up that scam will not be politically healthy for con men and politicians should they take on China.

Finally, Iran receiving gold for oil means they need to spend gold in order to run their oil operations.  It's not all pure profit you know.  There are expenses.  If Iran is getting paid in gold it has to be paying others in gold.  That means those people are not getting paid in dollars like the US wants them to.  It proliferates gold into the global economy as a means of exchange, a store of wealth and a unit of accounting.  If this goes on, then companies who have been indirectly supplying Iran with oil mining materials (many of which live in the USA) will start showing gold on their books as assets.  This action is actually speeding up the global remonification of gold even though I suspect that a big reason for doing the sanctions in the first place was to punish Iran for trying to abandon the dollar in it oil sales operations.

Iran is definitely getting the better end of this deal!  The US has suppressed gold prices which means China is paying a lot more gold to Iran than it would otherwise have to in exchange for oil.  This is pushing more gold into Iran and thus into the global trade than it would have done if gold was allowed to rise to a natural price of perhaps $3500-$5k per troy oz.  The US better be very careful about next steps.   Everything Sinclair stated in his article is true.  The past gold price suppression has left the physical gold supply much lower than it should be today.  Any sort of global shock that involves gold (i.e. the need for Iran to rapidly fund a war) could actually cause gold prices to skyrocket.  This alone would wreck more havoc upon the US economy than anything Iran could ever hope to achieve militarily even if it had a nuke!  Rapidly rising metals prices have always been a signal to the people that confidence is being lost in the fiat currency.  If the US isn't careful it could in fact start a stampede out of the USD with its continued economic attacks on Iran.