In The News Today

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Jim Sinclair’s Commentary

Brinksmanship in an election year is world class scary.

EU bans Iranian oil, Tehran responds with threats | Reuters
By Hossein Jaseb and Justyna Pawlak
Mon Jan 23, 2012 3:00pm EST

(Reuters) – Iran accused Europeans on Monday of waging "psychological warfare" after the EU banned imports of Iranian oil, joining the United States in new sanctions aimed at preventing Tehran from getting nuclear weapons.

The Islamic Republic, which denies trying to build an atom bomb, scoffed at efforts to choke its oil exports, as Asia lines up to buy what Europe scorns. Some Iranians also renewed threats to stop Arab oil from leaving the Gulf and warned they might strike U.S. targets worldwide if Washington used force to break any Iranian blockade of a strategically vital shipping route.

Yet in three decades of confrontation between Tehran and the West, bellicose rhetoric and the undependable armory of sanctions have become so familiar that the benchmark Brent crude oil price edged less than 0.5 percent higher, and some of that was due to unrelated currency factors.

"If any disruption happens regarding the sale of Iranian oil, the Strait of Hormuz will definitely be closed," Mohammad Kossari, deputy head of parliament’s foreign affairs and national security committee, told Fars news agency a day after U.S., French and British warships sailed back into the Gulf.

"If America seeks adventures after the closure of the Strait of Hormuz, Iran will make the world unsafe for Americans in the shortest possible time," Kossari added, referring to an earlier U.S. pledge to use its fleet to keep the passage open.

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Jim Sinclair’s Commentary

It started very subtle, but now it is becoming visible. That is good for gold, and eventually not good for the dollar.

In 2012 actions will be taken. They may not be solutions, but there will be consequences.

2012’s true range in gold will be $1700 to $2100.

India to pay gold instead of dollars for Iranian oil. Oil and gold markets stunned 
DEBKAfile Exclusive Report January 23, 2012, 5:57 PM (GMT+02:00)

India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, debkafile’s intelligence and Iranian sources report exclusively.  Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran’s total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.

By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank’s assets and the oil embargo which the European Union’s foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran’s oil exports.

The vast sums involved in these transactions are expected, furthermore, to boost the price of gold and depress the value of the dollar on world markets.

Iran’s second largest customer after China, India purchases around $12 billion a year’s worth of Iranian crude, or about 12 percent of its consumption. Delhi is to execute its transactions, according to our sources, through two state-owned banks: the Calcutta-based UCO Bank, whose board of directors is made up of Indian government and Reserve Bank of India representatives; and Halk Bankasi (Peoples Bank), Turkey’s seventh largest bank which is owned by the government.

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. The switch to gold was kept dark.

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Jim Sinclair’s Commentary

2012 is going to be a year of contradictions that can only be understood by seeing the big picture, the long term plans and the waste of time and money that is being used to treat the symptoms.

The dollar is the endangered species this year.

Greece deal will stabilise eurozone: Goldman

A massive debt writedown for Greece will stabilise the eurozone by removing a threat posed by its "weak link," a strategist with investment bank Goldman Sachs said in an interview published on Sunday.

Greece needs a so-called PSI, or private-sector involvement, deal to be ironed out, as well as a second EU bailout, if it is to be able to make a debt repayment of 14.4 billion euros on March 20.

With those two deals in place, a "systemic danger in the eurozone, which comes from the weak link, that is, Greece," will be removed, Francesco Garzarelli was quoted as telling the Greek daily To Vima.

Garzarelli, head of the US bank’s macroeconomic research section, said that by 2014 much of Greece’s debt will be transferred from the private sector to eurozone institutions, while a new balanced budgets treaty will apply to all member states.

He said the sovereign debt of Greece, Italy and Spain, for example, would become a debt for the entire eurozone, dissipating the previous threat, adding: "The eurozone will be stabilised."

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