Active TopicsActive Topics  Display List of Forum MembersMemberlist  CalendarCalendar  Search The ForumSearch  HelpHelp
  RegisterRegister  LoginLogin  Old ForumOld Forum  Twitter  Facebook

World Politics
 IslamiCity Forum - Islamic Discussion Forum : Politics : World Politics
Message Icon Topic: Iran Sanctions Post Reply Post New Topic
Author Message
Senior Member
Senior  Member

Joined: 05 October 1999
Online Status: Offline
Posts: 4872
Quote abuayisha Replybullet Topic: Iran Sanctions
    Posted: 11 January 2012 at 7:03am

If you can take your eyes off the primary election coverage, watch Geithner. The US is engaged in a love trapezoid. The four corners are Beijing, Teheran, Tokyo, and Washington. Treasury Secretary Geithner is the Obama Administration’s front person. Track the news for the names of the other agents.

This is a very serious time. The pieces are linked. Some bullets as you watch the news flow.

1. The US faces the pressure of follow-through on Iran sanctions. Iran is an exporter of oil to Asia. Japan is dependent on imported oil. China is not self-sufficient. One part of this trapezoidal geometry is about oil.

2. Iran is feeling the heat from sanctions. The US wants to tighten them. It cannot do so without help from Asian “friends.”

3. China and Japan are each buyers of US Treasury securities. They each help finance the American fiscal deficit and the ongoing current-account deficits. They each want to diversify their reserves. They are not sellers, but they are reluctant additional buyers. This is truer for China than for Japan, but it is true in both cases.

4. China is glacially proceeding toward world reserve-currency status. It gradually allows its currency to strengthen against the dollar. It follows a policy that is fully rational for the Beijing oligarchs. It shrugs off political threats from Washington politicians (Schumer, Graham) who love to bash China while talking to their American constituents. China understands our political processes and our weaknesses. However, China also understands “realpolitik” and uses it. They learned US use of realpolitik from Nixon and Kissinger. Expect them to smile publicly but put some very intense private heat on Geithner.

5. Japan faces enormous economic pressure and sees the yen strength as now threatening. In order to weaken the yen, it must acquire other currency holdings in large quantity. (See the Cumberland website,, for G4 central bank charts, and flip to those on the Bank of Japan. You will be able to observe how Japan expanded its balance sheet several years ago and subsequently contracted it. We expect them to expand it in 2012 as they seek to arrest yen strength.)

6. Japan is negotiating with China so that it may acquire reserve debt instruments denominated in Chinese currency. Beijing likes this because it is a step toward achieving world reserve-currency status. Geithner now worries, because the trend points toward a gradual and long-term weakening of the US position, as the world’s second (China) and third (Japan) largest economies maneuver their global positions.

7. Our Asian friends know that the US election cycle creates maximum vulnerability for the United States. That also makes circumstances more dangerous and raises risk profiles. Europe is of no help to us, given its internal crises.

We recall that a three-legged stool is a stable form. A four-legged stool is less stable. A four-legged stool with a trapezoidal top is least stable. Especially when one of the legs is Iran.

Watch Geithner in Asia and the news flow. Read between the lines, since the public statements will all be scripted and self-serving. Risk is high. Also, stay overweight energy. We are.

IP IP Logged
Post Reply Post New Topic
Printable version Printable version

Forum Jump
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum

The opinions expressed herein contain positions and viewpoints that are not necessarily those of IslamiCity. This forum is offered to stimulate dialogue and discussion in our continuing mission of being an educational organization.
If there is any issue with any of the postings please email to icforum at or if you are a forum's member you can use the report button.

Note: The 99 names of Allah avatars are courtesy of

Sponsored by:
IslamiCity Donation Program
Complete Domain & Hosting Solutions
Home for Muslim Tunes
Islamic Video Collections
IslamiCity Marriage Site