Originally posted on Tuesday, November 27th, 2012
National and international government officials justifiably complain about the use of the dollar as the international reserve currency and the attendant deformities in the world monetary system. Yet officials seem fixated on artificial and impractical solutions, such as designating the IMF’s SDR — merely a basket of fiduciary currencies — as an alternative.
Closeup of some of the pigments used on the illuminated opening page of the Persian manuscript, Gulistan by the thirteenth-century poet, Sadi, one of Persia’s great literary masters, courtesy of the Turnbull Library
Meanwhile, hidden in plain sight, as it were, is gold. De Gaulle: “Yes, gold, which never changes, … which has no nationality and which is eternally and universally accepted as the unalterable fiduciary value par excellence.”
According to a recent report in ArabianBusiness.com:
To see one of Iran’s financial lifelines at work, pay a visit to Istanbul’s Ataturk International Airport and find a gate for a flight to Dubai.
Couriers carrying millions of dollars worth of gold bullion in their luggage have been flying from Istanbul to Dubai, where the gold is shipped on to Iran, according to industry sources with knowledge of the business.
The sums involved are enormous. Official Turkish trade data suggests nearly US$2bn worth of gold was sent to Dubai on behalf of Iranian buyers in August. The shipments help Tehran manage its finances in the face of Western financial sanctions.
The sanctions, imposed over Iran’s disputed nuclear program, have largely frozen it out of the global banking system, making it hard for it to conduct international money transfers. By using physical gold, Iran can continue to move its wealth across borders.
“Every currency in the world has an identity, but gold means value without identity. The value is absolute wherever you go,” said a trader in Dubai with knowledge of the gold trade between Turkey and Iran.
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