[AndyA]

IRAN, RUSSIA SAID TO SEAL $20B OIL-FOR-GOODS DEAL: REUTERS

"what JPM may have just done is launch a preemptive strike which would have the equivalent culmination of a SWIFT blockade of Russia, the same way Iran was neutralized from the Petrodollar and was promptly forced to begin transacting in Rubles, Yuan and, of course, gold in exchange for goods and services either imported or exported. One wonders: is JPM truly that intent in preserving its "pristine" reputation of not transacting with "evil Russians", that it will gladly light the fuse that takes away Russia's choice whether or not to depart the petrodollar voluntarily, and makes it a compulsory outcome, which incidentally will merely accelerate the formalization of the Eurasian axis of China, Russia and India?"
Iran and Russia have made progress towards an oil-for-goods deal sources said would be worth up to $20 billion, which would enable Tehran to boost vital energy exports in defiance of Western sanctions, people familiar with the negotiations told Reuters.
In January Reuters reported Moscow and Tehran were discussing a barter deal that would see Moscow buy up to 500,000 barrels a day of Iranian oil in exchange for Russian equipment and goods.
The White House has said such a deal would raise "serious concerns" and would be inconsistent with the nuclear talks between world powers and Iran.
A Russian source said Moscow had "prepared all documents from its side", adding that completion of a deal was awaiting agreement on what oil price to lock in.
The source said the two sides were looking at a barter arrangement that would see Iranian oil being exchanged for industrial goods including metals and food, but said there was no military equipment involved. The source added that the deal was expected to reach $15 to $20 billion in total and would be done in stages with an initial $6 billion to $8 billion tranche.
"The deal would ease further pressure on Iran's battered energy sector and at least partially restore Iran's access to oil customers with Russian help," said Mark Dubowitz of Foundation for Defense of Democracies, a U.S. think-tank.
"If Washington can't stop this deal, it could serve as a signal to other countries that the United States won't risk major diplomatic disputes at the expense of the sanctions regime," he added.

Sounds like a very sneaky move, I believe the Syrian debacle where 'red lines were crossed' without consequences, was a significant moment in the loss of US hegemony. Another 500,000bpd may have an impact on prices, obviously the Russians are not as concerned about prices as the legacy media and George Soros would like to have you think.

[Plantagenet]

I believe the Syrian debacle where 'red lines were crossed' without consequences, was a significant moment in the loss of US hegemony.

Obama's retreat from his "red line" over use of chemical weapons by Syria was just one in a long series of bumbles, retreats and kowtows. The displays of weakness started long before that.

One of Obama's first acts in office was to cancel US deployments of US defensive missile systems to our allies in Poland and the Czechs without bargaining for any concessions in return from Russia. It was weak.

Then Obama pulled all US troops out of Iraq leaving that strategic country to be taken under the wing of Iran. More weakness.

Here we are five years later and Putin is invading Ukraine and stealing their land and claiming that any land with Russian speakers in it is Russian, and the Chinese are claiming all the land in the Pacific Ocean out almost to the coastlines of Indonesia, Malayia, Philippines, Japan, Korea, etc. And the US response? Weak weak weak weak.

[Subjectivist]

Sounds pretty out in the open to me, not a whole lot of sneaking going on.

[AndyA]

Sounds pretty out in the open to me, not a whole lot of sneaking going on.

Sneaky fukn Russian

[ROCKMAN]

Just reminder of how sh*t rolls down hill. The world didn't agree to the sanctions...the P5+1 did. The same P5+1 that was turned into the P4+1 recently when Russia was uninvited to the recent gathering. Just guessing but I'll assume that getting dumped from the "club" as punishment for Crimea the Russians figure they don't have to honor P5+1 promises because they've been kicked out of the club house. And, as seen below, the "law" isn't exactly that tight...exceptions have been made for other countries. The P5+1 is a group of six world powers which in 2006 joined the diplomatic efforts with Iran with regard to its nuclear program. The term refers to the P5 or five permanent members of the UN Security Council, namely United States, Russia, China, United Kingdom, and France, plus Germany.

From last November: Reuters - The U.S. State Department extended six-month Iran sanctions waivers on Friday to China, India, South Korea and other countries in exchange for their reducing purchases of Iranian crude oil earlier this year. The waivers had been expected. Under a law governing sanctions imposed on Iran's disputed nuclear program by the United States, the State Department is required to determine whether the Islamic Republic's oil consumers have reduced their purchases.The decision comes even after the United States and five other global powers, known as the P5+1, agreed in Geneva this month to ease Iran's access to about $4.2 billion in foreign currency reserves for six months in exchange for Tehran's taking steps to curb its nuclear program.

And as far as barter trades centered on oil exports (and thus avoiding $'s) that's becoming rather common around the globe.

[AndyA]

And the US response? Weak weak weak weak.

Well to be fair it's not exactly a US problem, or job to police the world.

[SteveO]

And the US response? Weak weak weak weak.

So, let's just start the real war to end all wars, nuke 'em till they all glow!

[Plantagenet]

let's just start the real war to end all wars, nuke 'em till they all glow!

I don't think your plan to start a nuclear war is very well thought out. Its likely to have unintended consequences far beyond just making "them" glow.

[Tanada]

I prefer not to spend the second half of my natural life span eking out a subsistence lifestyle in a post war collapsed scenario, but thanks for playing What If.

The US of A is in its declining days, but the UK has been there for 70 years and is still a rather nice place to live, France had its best days before 1870 and it is also still a decent place to live. The 21st Century belongs to China or India, but that doesn't mean life in the US of A has to be a miserable existence for us any more than it was for France or the UK.

[Plantagenet]

The US of A is in its declining days, but the UK has been there for 70 years and is still a rather nice place to live, France had its best days before 1870 and it is also still a decent place to live. The 21st Century belongs to China or India, but that doesn't mean life in the US of A has to be a miserable existence for us any more than it was for France or the UK.

Yup. Thats exactly right---and hopefully it will turn out that way, with the USA descending into a well-deserved and quiet "retirement" from its position as world leader.

However, France and Britain had the good fortune to go into decline as the US became ascendant, and the US has for the most part been a friendly and beneficent hegemon in its dealings with the UK and France.

Its not clear that China and/or India will play the world domination game the same way the US did. China in particular seems to have a long list of territorial claims and grievances it is working out against Japan and its other neighbors.

[Pops]

check my thinking . . .

fewer barrels traded in dollars means less demand for US dollars
Less demand for $ makes dollars worth less (though not worthless)
That makes US exports relatively cheaper
And to export stuff you need to make stuff (i.e. sales associates aren't exported)
So this deal then is a good thing?

[AndyA]

check my thinking . . .

fewer barrels traded in dollars means less demand for US dollars
Less demand for $ makes dollars worth less (though not worthless)
That makes US exports relatively cheaper
And to export stuff you need to make stuff (i.e. sales associates aren't exported)
So this deal then is a good thing?

Well to export stuff, you need stuff to export and a willing buyer. Of course as Japan has discovered, when you are a net importer (trade deficit) a lower dollar does have 'costs.' Not sure how your excellent premise gels with the talking heads who are saying Russia is now in trouble because the Ruble has crashed, even though it has a trade surplus, or the rating agencies who are downgrading or shifting the outlook to negative.

[Plantagenet]

check my thinking . . .
Less demand for $ makes dollars worth less ....So this deal then is a good thing?

Devaluing a currency tends to make people poorer.

a. Everything imported gets more expensive, because those currencies gain at the expense of the weak dollar. Everything from food to cars will be more expensive.
b. Anyone with savings or fixed income finds those dollars are worth less.
c. People on social security get wiped out a bit more slowly, but SS isn't fully indexed for inflation so as the value of the dollar goes down they lose purchasing power.
d. The Russia-Iran deal isn't what is driving the dollar down---its the massive printing of dollars by the FED and their QE program.


Money to burn?

[EdwinSm]

Iran, with high subsidies is not doing well, and may hit problems raising prices.

The honeymoon with the new government is over. Iranians are coming back from their New Year holidays to see their utility bills go up, some by 24%.

Petrol prices are also due to rise, a move that usually prompts discontent and triggers inflation.

Starved of cash, President Hassan Rouhani's government has no choice but to cut state subsidies for fuel and energy.

... this week's 20% increase in household gas prices.

The Iranian New Year started on 20 March, and with it came a hike in utility prices. Electricity bills have gone up by 24% and those for water by 20%.
...
In an attempt to reform the economy three years ago, Iran started to cut hefty state subsidies for fuel and energy. Estimated at around $60bn (£36) a year, these subsidies were blamed for making petrol cheaper than bottled mineral water.

To curtail a rate of inflation that topped 40% last year, the government of Mr Rouhani put the subsidy reform on hold when taking office in August.
.....
Three years ago, 10,000 rials could buy $1. Today, a dollar is worth 30,000 rials.

Petrol is sold at Iranian pumps for only 30 cents per litre, almost one third of its price in the region.

The government says price adjustment would also help stop petrol being smuggled over the border to neighbouring countries and could reduce domestic consumption.

http://www.bbc.com/news/world-middle-east-26867987

[Plantagenet]

Starved of cash, President Hassan Rouhani's government has no choice but to cut state subsidies for fuel and energy.

I wonder what happened to the billions of dollars that Obama gave Iran when he unfroze their bank assets in exchange for them agreeing to talk to John Kerry.

Did the billions of dollars go straight into the Mullah's pockets?

[Plantagenet]

Now its getting serious between the US, Russia and Iran

US threatens more sanctions over Russia-Iran oil swap deal

Obama doesn't seem to understand that the Russia-Iran oil deal is a scheme to break US sanctions on Iranian oil exports. Threatening more sanctions for breaking past sanctions isn't likely to deter people who are planning together to bypass all sanctions.


Putin vs. Obama----strength vs. flexibility

[radon1]

let's just start the real war to end all wars, nuke 'em till they all glow!

I don't think your plan to start a nuclear war is very well thought out. Its likely to have unintended consequences far beyond just making "them" glow.

But if you don't start it you might look weak. This would be horrible.

[Plantagenet]

let's just start the real war to end all wars, nuke 'em till they all glow!

if you don't start it you might look weak. This would be horrible.

Nuclear war is a really, really dumb idea.

[AndyA]

We suspect these sanctions would have more teeth than some travel bans, but, as we noted previously, it is just as likely to be another epic geopolitical debacle resulting from what was originally intended to be a demonstration of strength and instead is rapidly turning out into a terminal confirmation of weakness.

Russia is making it look easy. Like a game of chess, where the US is constantly in zugzwang. The US has become so predictable, which is the opposite of Sun T'zu advice 'be subtle even to the point of fromlessness, be mysterious even to the point of soundlessness.' The US may be better served to resign and stop minding other peoples business, though I suspect the public can't handle that, so it will be folly all the way. Most people don't like being told what to do by a hypocrite. As Jefferson said, Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government...

I guess you could say that the US is a benevolent despot, and better then most, but a lot of the world disagrees. Which is where we are now. I'm sure there were a lot of people who viewed Great Britain as a benevolent despot back in the day. History doesn't repeat...........

[radon1]

Now its getting serious between the US, Russia and Iran

US threatens more sanctions over Russia-Iran oil swap deal

Glaziev has some crazy ideas about economics. If he is given a free ride, he may produce a lot of trouble.

The entire "petro-ruble" idea also looks crazy for now. You cannot buy anything of significance using rubles. The only case for this idea to go on is for the ruble to be backed by natural resources, i.e. used in the same way as the Ukrainian farmers used their wheat to hedge against hryvna devaluation recently.