Iran To Dump 45 Billion Euros For Gold Bullion & Dollars
Gulf states also begin to flee from collapsing single currency
Paul Joseph Watson
Wednesday, June 2, 2010
The Central Bank of Iran is set to dump a whopping 45 billion euros in exchange for gold bullion and dollars as Gulf states also prepare to flee from the ailing single currency amidst debt turmoil in Europe that threatens to disintegrate the entire region.
According to the Iranian state website Press TV, Iran’s central bank has already begun converting its euro reserves into gold and dollars as a response to the “downward spiral” of the euro, in the first of a three phase movement to flee from the currency.
The report also claims that Gulf states are also beginning to switch their euro reserves into dollars and gold as some forecast the single currency could sink to parity with the U.S. dollar by next year.
“The new decision comes as the financial crisis that began in the US about two years ago resulted in the sharp devaluation of the dollar, pushing the Iranian government to order the replacement of the greenback with the euro in the country’s foreign exchange accounts,” adds the report.
This is all a far cry from the days when businesses in New York accepted payments in euros as the currency reigned supreme over the beaten up U.S. dollar.
The European Central Bank has blatantly been manipulating currency markets over recent days in an effort to rescue the euro, which has been in free fall.
Sinking to as low as $1.2111 yesterday, the euro staged a rapid and dramatic recovery against the dollar, soaring back to 1.2339, an intraday move of 250 pips and a transparent intervention that had “all the grace of a drunk Keynesian at an Austrian economists meeting,” reports Zero Hedge.
But while central bank interventions would in the past keep a currency buoyant for days or weeks, the euro immediately slipped down again, indicating a clear crisis of confidence and a currency in terminal decline.