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Behind the Iran deal

Discussion in 'U.S. Politics' started by Dr.Who, Nov 26, 2013.

  1. Dr.Who

    Dr.Who Well-Known Member

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    For a few days now I have been hearing critics and fans talk about the presidents handling of the Iran deal. The vast vast majority of the criticism has been on how the US allowed Iran more freedom to keep their program than they had before but gained nothing in the course of the deal.

    Putting that up on a shelf for a moment I have been watching the economy with new eyes. A lesson that has been taught to me is that right now the US debt is the driving force behind a huge number of economic and political decisions. There is less in the news than one would imagine there should be when our country is so far in debt as to be unsustainable in the very near future if that has not already happened without our knowledge. I hope that the gov, the fed, and other movers and shakers can find a path out of this trap we find ourselves in but at the same time I don't see too many ways out.

    If I were to devise a plan to fix this mess it would certainly not include making the people more dependent on government and less able to produce goods and services so that through their efforts our economy might actually heal. But that seems to be exactly what both political parties want. Do they know something I don't know? Is it already too late? Are those crazy, and I do mean crazy, rumors about FEMA camps actually rumors about a means to protect Americans when TSHTF? maybe universal health insurance even with death panels is exactly what we need in a Mad Max world? Lets hope that crazy talk like that really is crazy. After all the rumors of the NSA building massive computers to spy on all of our communications turned out to be false...

    Anyway, back to that item on the shelf. Why would the President make a deal in which he gains nothing but gives up sanctions on a country that is producing uranium? Well the answer is that he did not gain nothing. We are in a ^&^% load of trouble when it comes to our debt. The dollar is poised to lose value in a massive way compared to gold - the benchmark comparison. And what has Iran been doing recently? Iran the fourth leading producer of oil. Iran has stopped selling oil for dollars, that's what they did. They started trading oil for gold. And that is an action that has the serious potential to destabilize the dollar sending it into a death spiral much like will happen to Obamacare unless both receive intensive care.

    And using the principle of economic determinism, this time the major determinitive factor being our debt, the president in his deal with Iran let them keep their uranium and in exchange they will stop trading their oil for gold.

    Now let that sink in. Our dollar is in such jeopardy that it is better to let a rogue nation that would love to drop a nuke on us keep working on their nuclear program rather than to let them keep trading oil for gold. If our economy falls apart we will be in no position to stop Iran from developing nukes. But if the economy struggles on (at the expense of the vast majority of everyday Americans who foot the bill while Washington Cronies get rich) then at least we can fight Irans nukes another day. I sure hope it is not too late by then.
     
  2. BigRob

    BigRob Well-Known Member

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    There is no evidence that the agreement demanded Iran trade oil for dollars. It may or may not be the case - but either way the impact will be minor.
    All of that aside, Iran stopped trading oil for dollars in early 2009, but the overall impact has still been crushing US sanctions which have cut exports from Iran to around 1 million barrels a day, down from an average of 2.5 million a day in 2012. The agreement states this will be held constant, reversing the policy that was driving it down even lower.

    I would argue that Iran resorted to trading oil for gold simply because they were losing access to financial markets and banks under these sanctions, and gold was just an easier way to do it.

    Trading oil for gold by Iran doesn't really have much impact on the dollar on its own -- if they got all of OPEC together and enacted that it might be a different story -- but they tried that, and it was a nonstarter.

    I think you might be reading a lot into the deal that is not necessarily there.
     
  3. Dr.Who

    Dr.Who Well-Known Member

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    I agree that there was no demand Iran trade oil for dollars. The deal was that must not trade oil for gold.

    Here is one source:

    "While Iran will be allowed to buy and sell precious metals, including gold, it will be barred from accepting them as payment for oil or any other sanctioned transaction, according to the officials, who asked not to be identified discussing the details."
    http://www.bloomberg.com/news/2013-...billion-in-sanctions-relief-under-accord.html

    Any increase in the demand for gold raises its price and weakens the dollar. IMO the US gov is concerned about the price of gold and has been driving the price down in multiple ways.

    And now that they wont be using gold will they use dollars again? That can only be good because with all the money the fed is printing the only way it wont cause inflation right away is if that money is held overseas. As soon as all that money comes back to our shores we will have domestic inflation.


    That is the most likely reason Iran did it. It still hurts our dollar and the Pres still wants them to stop.

    Maybe their use of gold does not effect the dollar much on their own. Or maybe as a huge producer of oil it does. I was not aware that they tried to get other countries to stop using the dollar. That kind of goes against the theory that they merely used gold because they could not use dollars.

    Maybe I did. Maybe their use of gold would not have effected the dollar much. The president still demanded that they stop using gold for trade. Why?
     
    Last edited: Nov 27, 2013
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