Is Gold Money? Iran Says Yes
According to commodities traders in the Europe, Iranian "grain deals are being paid for in gold bullion and barter deals are being offered. Some of the major trading houses are involved." Traders from southeast Asia are even more reticent to do business and trade in Iran. "I can confirm that Singaporean firms have stopped [trading]. We don't want to go anywhere near Iran at this moment, it is too risky," said a trader with a Singaporean firm that ships Indonesian palm oil to the Middle East. Palm oil shipments have been halted due to uncertain payment terms from both Malaysia and Indonesia. These two sources account for 90% of global supply of the oil, a staple ingredient for products from margarine to sweets.
A trading source from Saudi Arabia, who runs a 16,000-ton-a-year plant that refines food oil in Iran said the sector was barely operating. A margarine factory owner in Tehran told Reuters he expected to halt production within months because of a shortage of raw materials. The impact of limited supply of raw goods was reflected locally in a Tehran pastry shop. "We are going bankrupt and probably will be closed within weeks," said the owner of the shop. "All my ingredients come from abroad. Either the prices suddenly doubled or they stopped being shipped. We are doomed."
The imposition of trade and currency wars on the people of Iran is an important tool in destabilization. Officials in Israel, Iran's arch foe, openly say time is running out for air strikes to destroy Iran's nuclear program if they don't change their ways. Business and trade are now being conducted in alternative currencies as dollars are no longer an option due to sanctions, which came about because of Iran's oil policies. Will this tactic backfire, as Asian trading partners get used to pricing and conducting business using gold-clause contracts?
Another trader commented: "As the shipments of grain are so large, barter or gold payments are the quickest option." What this means is that the good old U.S. dollar is ceasing to be a medium of exchange—and gold has supplanted it as the ultimate arbiter of value in Iran.
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