A growing number of states are seeking shiny new currencies made of silver and gold.

Worried that the Federal Reserve and the U.S. dollar are on the brink of collapse, lawmakers from 13 states, including Minnesota, Tennessee, Iowa, South Carolina and Georgia, are seeking approval from their state governments to either issue their own alternative currency or explore it as an option. Just three years ago, only three states had similar proposals in place. (Read more)

Warning: DEBKA is an unreliable source. If true, this story is huge, but that’s a big ‘if.’

India has reportedly agreed to pay Tehran in gold for the oil it buys, in a move aimed at protecting Delhi from US-sanctions targeting countries who trade with Iran. China, another buyer of Iranian oil, may follow Delhi’s lead.

The report, by the Israeli-based news website DEBKAfile, states that Iran and India are negotiating backup alternatives with China and Russia, should the US and EU find a way to block the gold payment mechanism.

Delhi’s move is seen as surprising, as earlier India and Iran said they would switch to yen and rupees. China, another major importer of Iranian oil, may follow Delhi’s lead, the report adds.

India and China need to switch from the dollar in bilateral trade, since the US and EU have issued unilateral sanctions against the Iranian oil industry and financial institutions. The sanctions would ban any bank involved in oil trade with Iran from dealing with American and European counterparts. (Read more)

The Iranian geopolitical tension is supporting gold as Britain, America and France have delivered a clear message to Iran, sending six warships led by a 100,000 ton aircraft carrier through the highly sensitive Strait of Hormuz.

Reuters report that the EU has agreed to freeze the assets of the Iranian central bank and ban all trade in gold and other precious metals with the Iranian Central Bank and other public bodies in Iran.

According to IMF data, at the last official count (in 1996), Iran had reserves of just over 168 tonnes of gold. The FT reported in March 2011 that Iran has bought large amounts of bullion on the international market to diversify away from the dollar, citing a senior Bank of England official.

Currency wars continue and are deepening.

Many Asian markets are closed for the Lunar New Year holiday which has led to lower volumes. (Read more)

Wow!

Very cool descriptions of all the gold in the world here.

The best estimate at the end of 2011 is that around 165,000 metric tons (or tonnes) have been mined in all of human history. That’s about 181,881 ordinary tones . . . or 5,820,203,717 ordinary ounces . . . .

3.42 Olympic-sized swimming pools could contain all the gold . . . Another way to imagine this is to think of all the gold in the world ever mined as a single cube. That would be a cube with each side just over 20 meters, or 67 feet in length. . . .

[The] annual production of gold would fit in a cube whose sides were 5 meters.

Gold broke below $1,600 an ounce for the first time since early October, as a sharply weaker euro and losses in other markets prompted investors to raise cash by selling precious-metals holdings.

Gold, which has tarnished its image as a haven in recent months by moving in step with riskier assets like stocks and other commodities, tumbled 5% Wednesday as a broad-market rout saw investors shed holdings in favor of cash. (Read more)

Zero Hedge: Gold “Rehypothecation” Unwind Begins: HSBC Sues MF Global Over Disputed Ownership of Physical Gold.
physical gold in the hands of the very same insolvent financial syndicate of daisy-chained underfunded organizations, where the premature (or overdue) end of one now means the end of all, is also just as unsafe, if not more. Which is why we read with great distress a just broken story by Bloomberg according to which HSBC, that other great gold “depository” after JP Morgan (and the custodian of none other than GLD) is suing MG Global “to establish whether he or another person is the rightful owner of gold worth about $850,000 and silver bars underlying contracts between the brokerage and a client.” The notional amount is irrelevant: it could have been $0.01 or $1 trillion: what is very much relevant however, is whether or not MF Global was rehypothecating (there is that word again), or lending, or repoing, or whatever you want to call it, that one physical asset that it should not have been transferring ownership rights to under any circumstances. Essentially, this is at the heart of the whole commingling situation: was MF Global using rehypothecated client gold to satisfy liabilities? The thought alone should send shivers up the spine of all those gold “bugs” who have been warning about precisely this for years. Because the implications could be staggering.

The last two years marked a significant shift in central banks’ attitudes toward gold. Since 1988, central banks have been net sellers of the precious metal. Lacking convertibility of their paper currencies into the commodity, this occurrence makes perfect sense. Why hold a physical asset with costly storage fees when there is no risk that it will ever be needed? Better to hold an interest-bearing (and easily stored) asset like a government security to earn a profit in the interim. So goes the typical explanation for why central banks load their balance sheets with financial assets instead of physical ones.

Yet over the last two years a dramatic shift in gold purchases has occurred. In the third quarter of this year alone, net gold purchases by central banks amounted to 150 tons — more than double the amount of the whole yearly total of 2010. For the first time in over 20 years, central banks of the world are buying more gold than they are divesting themselves of.

Yet if central banks deal exclusively in nonconvertible (and fiat) money, what explains the sudden change of heart? (Read more)

A very well-written, straight forward explanation here, by Hans Hermann Hoppe. He covers many important libertarian ideas.

If this man wins the primary, I’m going to have rethink my portfolio. I’d be thrilled to do that.

At 7:40 he announces that as president, he wouldn’t accept a salary higher than the median U.S. income: $39k.