The US is moving to broaden its 'blockade' efforts of Iran to the movement of pure gold into the Islamic Republic. The US-led embargo of Iranian crude succeeded in slowing the flow of petrodollars into the nation but as Foreign Affairs committee chairman Edward Cohen remarked, there is "no question that there is gold going from Turkey to Iran."
While the official line from US elite such as Bernanke remains that
'gold is not money' it appears that increasingly other nations would
disagree, as Cohen admitted, "in large measure what we're seeing is
private Iranian citizens buying gold as a protection against the falling
value of Iran's currency." It would seem somewhat self-evident that the
US is admitting, by attempting to embargo this gold flow, that outside
the US, the Dollar is becoming increasingly irrelevant (see China's gold demand); and that for many countries the petrodollar no longer exists, having been replaced by 'Petrogold'.
With Iran's currency already hit hard by European and Asian
participation in the U.S.-led embargo of Iranian crude, Mr. Cohen
asserted that his staff is broadening its efforts to include blocking the movement of pure gold into the Islamic republic.
"I can assure you that we are looking very, very carefully at any evidence that anyone outside Iran is selling gold to Iran," he said.
The remark came after Rep. Edward R. Royce, California Republican and
the Foreign Affairs Committee's chairman, asked whether the
administration was aware of recent reports indicating an uptick in the
flow of gold into Iran.
"With its currency now in free fall, the Iranians desperately need gold,"
said Mr. Royce, who noted that a U.S. law authorizing the Obama
administration to sanction anyone selling gold to citizens inside Iran
does not take effect until July 1.
With existing U.S. law only allowing sanctions on the sale of gold
directly to the Iranian government, Mr. Cohen told lawmakers the
administration is keeping a close eye on the situation.
While Mr. Cohen acknowledged that U.S. authorities have "no question that there is gold going from Turkey to Iran," he said that "in
large measure what we're seeing is private Iranian citizens buying gold
as a protection to the falling value" of Iran's currency, the rial.