So what exactly just happened over the weekend? Negotiations took place between the 6+1 (US, Russia, China, France, Britain, Germany and Iran) group and talks broke down because of the French? Actually it’s been reported that the French and Saudis have formed some sort of alliance and both were not in favor of a deal. “Sides” are being blurred and changed as in this case the U.S. and Israel were apparently on two separate sides? The U.S. and Europe (sans France) have sided with Russia …and China checked in late with their blessing. Saudi Arabia (and Egypt) has been cutting deals with the Russians and Chinese recently, THIS is something that NEVER could have happened in the old “norm.” It is very confusing and complicated because past alliances have changed where friends have taken sides against former friends and foes have seemed to ally together.
My two cents as usual will ask more questions than give answers but so many new questions arise from this that may point toward something. First, Saudi Arabia has been a U.S. ally since the 1940’s and agreed back in the early ’70’s to accept only dollars for their oil. In turn for the “dollars for oil” deal, the U.S. agreed to act as their protector. If you recall, several weeks ago a split in relations showed up between the U.S. and the Saudis over Syria. Saudi Arabia (and Israel) wanted the U.S. to attack Syria which would have surely (eventually) led to actions against Iran. If you remember, the Brits and France both backed away before Putin performed “Nobel Peace prize” negotiations. I do want to mention that it was France, back in the late 1960’s that called upon U.S. gold and basically were the reason for the failure of the London gold pool’s $35 pegged price.
With this background, is it possible that this “new alignment” between nations could turn into anything more than just a failed treaty? Please keep in mind that the Saudis have a large position of dollars and treasury bonds, they also own a fair amount of gold while the French own a large cache of gold, just over 2,400 tons. Is it possible that this “break” in alliances has anything to do with the dollar? For Israel AND Saudi Arabia to take the other side of a dispute with Iran is a shocker although it is the U.S. who changed positions here and became willing to negotiate. Is France using its veto to the deal to drive a golden stake into the heart of the dollar? Are they hoping for some sort of revaluation where their lofty holdings of gold can get re marked up in price to bail them out from their socialistic bankruptcy nightmare?
It is curious that “we” have changed positions here and pushed for a deal with Iran. I say this because the deal that John Kerry was pushing would have been almost no skin off the Iranians nose and would have allowed them the liquidity that has been frozen for some 3 decades. I do not really understand the “why” here because the U.S. stance all along has been that Iran needed to back down its nuclear program, this deal would not have done much in that department. Did the Russians and Chinese put any pressure on us to change our stance? And what of the long standing side by side relationship with Israel? Is that finished?
Zero Hedge suggested that we may see some comical alliances in the near future as the current “sides” seem queer by any standards or looked at from any angle. My only comments are that “this is not what we have come to know of U.S. policies.” This is a big change. It is a big change in “alliances.” It suggests to me that even bigger surprises may be right around the corner. You might ask, “What changes?” Your guess is as good as mine, besides, it wouldn’t be a “surprise” if we were on the inside and knew exactly what was coming! If it did not have such huge economic, financial and social implications it might be fun to watch with some popcorn but this is really big stuff and will affect us in many ways not even thought of yet.