Whats Iran doing with Turkish gold?

[AsifAmeer]

http://blogs.ft.com/beyond-brics/2012/07/09/whats-iran-doing-with-all-that-turkish-gold/?catid=491#axzz20AUtuBeI

What’s Iran doing with Turkish gold?

July 9, 2012 8:10 pmby beyondbrics

By Humay Guliyeva and Pan Kwan Yuk
That is the question beyondbrics found itself asking after it had a look at Turkey’s latest trade figures.

According to data released by the Turkish Statistical Institute (TurkStat), Turkey’s trade with Iran in May rose a whopping 513.2 per cent to hit $1.7bn. Of this, gold exports to its eastern neighbour accounted for the bulk of the increase. Nearly $1.4bn worth of gold was exported to Iran, accounting for 84 per cent of Turkey’s trade with the country.

So what’s going on?

In a nutshell – sanctions and oil.

In recent months, western powers, notably the US and the European Union, have tightened financial sanctions on the Islamic regime in an attempt to force Iran to scale back or halt its efforts to enrich uranium.

In March, Iran was cut off from from Swift, the global payments network, effectively blocking the country from performing any international financial transactions.

With Tehran struggling to repatriate the hard currency it earns from crude oil exports – its main foreign currency earner and the economic lifeblood of the country - Iran has began accepting alternative means of payments – including gold, renminbi and rupees, for oil in an attempt to skirt international sanctions and pay for its soaring food costs.

“Iran is very keen to increase the share of gold in its total reserves,” says Gokhan Aksu, vice chairman of Istanbul Gold Refinery, one of Turkey’s biggest gold firms. “You can always transfer gold into cash without losing value.”

Turkey’s gold exports to Iran are part of the picture. As TurkStat itself noted, the gold exports were for “non-monetary purpose exportation”. Translation: they were sent in place of dollars for oil.

Iran furnishes about 40 percent of Turkey’s oil, making it the largest single supplier, according to Turkey’s energy ministry. While Turkey has sharply reduced its oil imports from Iran as a result of pressure from the US and the EU, it is unlikely to cut this to zero. The country pays about $6 a barrel less for Iranian oil than Brent crude, according to a recent Goldman Sachs report.

According to Ugur Gurses, an economic and financial columnist for the Turkish daily Radikal, Turkey exported 58 tonnes of gold to Iran between March and May this year alone.

“I saw the surge back in March, when gold exports increased by 36 times compared to March of 2011,” Gurses told beyondbrics. “I waited to see if the trend would evolve. Effectively, Iran converted $3bn of its reserves into gold through financial operations with Turkey, bypassing sanctions.”

Iran’s woes have proved to be a boon to Turkey’s current accounts. Turkey’s trade deficit narrowed by $1.6bn in May, compared to the same period last year. For the year to end of May, the deficit narrowed by $8.3bn, compared to the same period last year.

 

[aliasghar81]

I wonder how long can Iran survive with all these sanctions??

 

[Believer12]

iran have black gold and exchanging with gold is a good strategy can survive thousand years without any problem, but problem will start if USA decide to attack directly.

 

[itsnotme90]

USA will never attack iran. I think its a good start & all muslim countries should start their trades in gold if they cant pay in dollars.

 

[AsifAmeer]

I think its best to use Gold to create local currency/gold parity but international trade should be done in the country's respective currency.
http://blogs.thenews.com.pk/blogs/2011/12/09/we-make-it-the-%E2%80%98mighty%E2%80%99-dollar/

USA will never attack iran. I think its a good start & all muslim countries should start their trades in gold if they cant pay in dollars.

 

[Temojin]

Why do we believe in mainstream media so much that our opinions reflect it. We would think about the matter in a "religious" fashion or east vs west refusing to understand that people who are businessmen would actually start worshipping other's gods if they see long-term benefits in it.

Coming to the point, the issue here is that industry and infrastructure need oil and anyone who would offer good prices would ultimately be a favourable candidate for being a seller. Now the sanctions can work but for how long would the world go on when other suppliers knowing that Iran is no more in the game would start taking rates to new levels where everything would start to shake. So Turkey in fact is doing a good job to keep on getting oil from Iran and make a trust for the future to come and Iran on the other hand knows this fact too so it is getting gold for payments so when things get to normal, they can actually start off bigger than ever.

About America attacking Iran, well, that is totally another story. If it does, it will only do it if military-industrial complex and the narcotics corporation (yes it is a bigger corporation than most of them out there) thinks its more beneficial than to go behind the curtains as it is going right now. We are fools to think that Iran's narcotics trade is crumpled by the so called Islamic regime or that it doesn't serve its monetary interests above its religious beliefs, the country hasn't survived thousands of years without practical approach! Moreover, why would we think that the top men of Iran are in anyway less practical than other countries' top men? Any country attacks Iran, so be it, the people who run the show wouldn't be harmed. Of course, chances stand there that some of them get assassinated too but we forget that it is not the president of the councils who run the country but power brokers within the country who survive every chaotic situation and they play safe by not getting prominent but keeping a low profile while running the show from behind the curtains. I see people saying that we shouldn't think like this but going way mainstream isn't the way either. There have always been power brokers in this world called badshahgar in our language and they will stay there till this power game is being played. We have seen one of the servants in the form of Malik Riaz recently when people came to know how influential he was but trust me, he isn't a power broker either. He is sort of a middleman who tried to get big but couldn't reach even at the intermediate level. Anyway, this discussion is just another topic which is only shared amongst very serious and informed people and ironically, when these people reach at a certain level, either they are inducted into the power galleries at some level or terminated and this termination includes getting their reputation down the drain, getting them by a place where they can take a chance or actually getting them terminated. I have seen this happen and this will keep going on due to human greed and nature. They will approach you first and you might be all patriotic and good at first but then you too see actual benefits (so do Iran's power brokers) and get in with them or you really are firm at your point and give your repute, ethics or life in this manner and people's thoughts are at the same time being engineered through various approaches, mainstream media being one of them.