New Sanctions Kick In: Trump Declares (Trade) War On Iran...And EU!
As promised, a new and sweeping round of US sanctions against Iran will kick in today. Though the EU has sworn to do its best to protect European companies from US sanctions, there is little doubt the Europeans can resist US demands. What's next?
As promised, a new and sweeping round of US sanctions against Iran will kick in today. Though the EU has sworn to do its best to protect European companies from US sanctions, there is little doubt the Europeans can resist US demands. What's next?
As promised, a new and sweeping round of US sanctions against Iran will kick in today. Though the EU has sworn to do its best to protect European companies from US sanctions, there is little doubt the Europeans can resist US demands. What's next?
Hello, everybody, and thank you for tuning in to the Liberty Report.
With me today is Daniel McAdams, our co-host.
Daniel, good to see you.
How are you this morning, Dr. Paul?
Doing very well, thank you.
Rady and Ritter and to go.
That's right.
Today I want to spend some time on the sanctions on Iran that are going into effect this evening and how there's a big fight going on with us and the Europeans.
Who are the sanctions on anyway?
But before we do this, I want to mention a couple items that caught my attention that we might make a comment on.
The first is this ugly anniversary of today.
73 years ago, you know, we dropped a big bomb.
At that time, it was the biggest ever, but we even have bigger bombs now, and there's too many of them, of course.
But it was a big bomb, Hiroshima, and it was said that it was necessary to end a war, and 140,000 people killed in one day, but a lot more people died later on, you know, from injuries and not being counted and radiation problem.
So that was a real disaster because it turns out it probably was totally unnecessary.
I think Eisenhower even said later that he was not in favor of that.
But the war essentially was over, and it was this obsession with unconditional surrender, you know, rub their nose in it.
It was over.
They weren't capable of fighting a war.
But we insisted on doing this.
And one of the arguments was over whether or not they can retain an emperor.
And symbolically, we permitted them to do that anyway.
So all of this, and that was 1945.
I was 10 years old, and I remember the episode and teachers explaining to me and the class, it was absolutely necessary, you know, to end the war.
It was, you know, the propaganda was there.
And it took me a while.
You know, I don't know how old I was.
Maybe it wasn't necessary, but it certainly is something that people should pay attention to and raise the question, do we really need more nuclear weapons and bigger nuclear weapons?
But it's on and on.
There's no signs that the world's going to be getting rid of nuclear weapons anytime soon.
It's just such a pattern.
When the Warhawks want a bomb, they'll give you an offer that you can't accept.
You know, Scott Ritter said that in our conference last year, and they did the same thing with Saddam Hussein.
They made him an offer that he couldn't accept.
They did the same thing in Serbia at Ramboyer, made an offer that they couldn't accept because really what they wanted was war.
The same thing happens there.
The consequences are tragic.
Unfortunately, it seems we haven't learned much from that.
Right.
Now, the other item I want to mention is something that made me chuckle a little bit, but it's also a sad story.
Warhawks And Nuclear Offers00:15:14
And the idea is Maduro was droned.
At least that's the story.
There was a drone attack, and he was at a public forum, and he was not killed.
And the belief is that it was an assassination attempt.
But within an hour or two, once I heard the news, immediately our friend John Bolton said, we didn't do it, we didn't do it.
And I thought, how many other countries immediately said, we didn't do it, we didn't do it.
I didn't hear the Mexican government or the Canadian government or even any country in Europe, we didn't do it, we didn't do it.
But immediately, it really tells you something about what's going on.
But I guess we still don't know exactly who did when, but I imagine there's a lot of people right now not too happy with Maduro.
Yeah, you can imagine he may have done it himself to divert attention away from some of the problems they're having.
But at the same time, as you say, it's a funny thing.
The first thing that enters someone's mind when someone's getting assassinated, it's got to be the CIA.
And of course, that's happened quite a few times over the years.
But we still have to be vigilant and make sure that the Russians never get involved with our elections because they're hovering over us and they can control us.
But anyway, let's talk a little bit about these sanctions.
You know, not too long ago, we got out of the nuke agreement with Iran.
Trump said he would do it.
He did it.
And he would put on the sanctions, and the day has come, midnight tonight.
The sanctions are going on and they're significant.
But the interesting thing is, and we've mentioned this in some of our programs, is that the Europeans aren't too happy with it.
You know, they want to trade with them.
But the big question is politically political in that will the Europeans resist?
Can they resist?
Are they powerful enough to resist?
Or will they obey us?
Because, you know, just minutes ago, I saw another article on this.
Trump is really threatening the Europeans.
You will go along with this, and you will obey, because we are king of the hill, and we can punish you, too.
So Trump has not let up on this, which sort of doesn't make a heck of a lot of sense, you know.
But the Europeans are trying to figure out what they can do, and they're trying to come up with some resolution among themselves that will give them legal protection, not following our orders, that they still want to trade with them.
The question is, can they really do it, and will they really do it?
Is that going to have an effect?
Or is this grand talk?
And the response, of course, came from Trump.
Don't try it.
Don't mess with us.
But nobody knows what the outcome will be because, of course, we wouldn't have these problems to talk about and worry about if we had our way of trading.
Everything would be bilateral.
We'd be talking to them, and the Congress will have approval.
We wouldn't have this mess.
But right now, it looks like there's a contest going on.
We as a country didn't want to go along with better arrangements with the Iranian government.
So we attack them and go back on our word.
And then the Europeans don't like that.
So whose side are we on?
Now we're on neither side.
It sounds to me like we're certainly not on the European side because they're not too happy with it.
So it'll be interesting to see what happens tonight and next week.
But if these sanctions go on, you know, it's once again, punish the people, punish the people of Iran, drive them further away from us and don't let them talk to us at all.
You know, they are our enemies.
And unfortunately, Trump's been pretty consistent on this.
He has said this for a long time now.
We don't like these Iranians.
I was going to say, you almost sounded like Trump.
I think we have a tweet that he put out a couple days ago where he said that exact theme almost.
Here he goes.
Iran and its economy going very bad and fast.
I will meet or not meet.
It doesn't matter.
It's up to them.
So he's almost happy about it.
But the thing, Dr. Paul, that's so funny, it's so bizarre, not funny.
But usually, as stupid as sanctions are, usually there's a trigger.
Country A does something that country B is angry about, so country B puts sanctions on country A. In this case, nothing has changed.
Iran didn't do anything, but these sanctions kick in for no reason.
They're absolutely illogical and irrational, and the Europeans, as you point out, are trying to figure out what to do to block them.
But I've got a sort of a summary of the six areas of sanctions that will kick in tonight.
And I have a bonus question for you afterwards.
So get ready.
First, sanctions, these are what's going to be sanctions.
Purchase or acquisition of U.S. dollar bank notes by the government of Iran.
Iran's trade in gold or precious metals.
Direct or indirect sales supply or transfer to or from Iran of graphite, aluminum, steel, coal, software for integrating industrial processes, et cetera.
Significant transactions related to purchase or sale of Iranian reals.
Iranian sovereign debt and the automotive sector.
That second one kind of caught both of our attention.
Gold.
Yeah, that's interesting.
Now, before I talk about gold, the universal money is you said nothing really has happened to cause them to put on sanctions.
But in a way, what you're inferring is something negative, and they're going to punish somebody.
But something positive happened.
We've actually opened up arrangements.
We've been trading with them.
The Europeans like it.
So that's the history.
That's true.
It's not only that they didn't do anything bad, they were moving in the right direction.
But anyway, no, the gold, and it's interesting they put on them.
Maybe Trump is doing us a favor here.
He's recognizing gold as money.
He should be arguing with Bernanke.
Bernanke says, gold is not money, but why are they saying you can't trade?
Because they darn well know that gold is money.
And it's been known for a long time, but you know, when we had financial problems in the 30s, what did they do with gold?
We immediately, the FDR took the gold away from the people.
So it's always been a political and economic weapon.
At the same time, when the people really have to resort to something, it is gold.
And I think the Iranians are sympathetic to gold because they know, you know, the challenge of the dollar hegemony and that someday they'd like to participate in an alternative.
And right now there are several countries that are buying gold and using it possibly for a reserve currency, but only time will tell.
But if anything, I would say that is a meager type of positive for gold being important because not many people are using it in industry.
It is used in industry and jewelry and other things, but it's not recognized as, or they don't want you to recognize it as money.
But what he's talking about, trading in gold, paying bills in gold.
And I think there's been some of those transactions already with gold.
The Iranians, I think, bought a bunch of gold in the last few days, anticipating this.
The one other thing that struck me is it shows how the European Union is so it's not independent, it doesn't have any ability to have an independent foreign policy.
To see them flailing around talking about this blocking maneuver to try to help European countries, try to encourage them not to pull out of the deal.
If I was the head of a large European firm and I was doing business in Iran, there's no way I would trust Brussels to bail me out if my billion-dollar investment in Iran is going to be threatened by Trump and the United States.
Yeah, and that means you're making the argument for why the sanctions are going to go through and Trump's going to win the battle and he's more aggressive.
But someday there will come a time when our ability financially and militarily won't be quite the way it is now.
Right now we're still king of the hill.
We have the dollar as the supreme currency of the world and most likely they are in the driver's seat and they will be able to do this.
But someday something will come along to disrupt that whole thing and they will use alternative currencies.
You know what happens if the world sees some shaking up which approaches something like what's going on in Venezuela?
People aren't going to worry about sanctions on the dollar and other things.
For now though, it looks like we will be in charge.
And generally speaking, the Europeans aren't and haven't been willing to stand up to all the shortcomings of our foreign policy because we're part of their problem with the migrants.
I mean we stirred up the trouble in the Middle East.
But oh yeah, we'll take care of them, send them in, but don't send them to us and we'll let you have them in Europe.
So it is, of course, I think this is a reflection of how insignificant the EU is.
I never thought it could work.
But I think of unions as coming together voluntarily, you know, free trade and travel, but putting them together and having a government above them and telling each country what to do and having a universal currency like the Euro controlled by the Germans, it's just going to lead to trouble.
And then you have countries that don't do so well, and Italy and Spain and some other countries, you know, run up their debt too much.
And I think it's a very weak organization.
And I think that, I mean, I sort of wish there would be a more competition and that maybe they would stick their guns and trade and weaken this whole thing about sanctions, that we have this authority to threaten everybody and they have to obey our use of or even our threat of sanctions.
But I imagine that I think you're closer to what might happen, that this will be a little bit more insignificant than some of the Europeans would like.
Well, the interesting thing that you point out is how this policy is hurting our European allies.
It's definitely hurting them financially, hurting them in terms of business.
But as always, with moves like this, there are unintended consequences.
And this is what I find fascinating.
I was thinking about this earlier, is it's opening up great market opportunities for other countries.
The Chinese, and you probably saw this on Zero Hedge today, they're furious with Trump.
They're very angry about this trade war.
They're not going to go along with the Iran sanctions.
This, to me, looks like a golden opportunity for China to take advantage of the stupidity of the Trump policy and the ineptness of the European Union.
And I was looking, so they need a lot of planes in Iran.
And now they bought a couple of quick ones before the sanctions kicked in.
They need more commercial airliners.
There's a Chinese company called COMAC that's just kind of starting up.
It's making commercial airlines.
They currently use the GE consortium for engines, for the motors for the planes.
But, you know, who knows, maybe they'll develop their own.
They seem to be able to do things like that.
What about cars?
The car industry was singled out.
The Europeans are currently selling quite a few cars in Iran, believe it or not.
And they were planning a lot of manufacturing plants in Iran.
I think that's going to be gone.
But what's China going to do?
I see it as a golden opportunity.
They already sell 11 marks in Iran, car marks in Iran.
They signed a deal in 2016.
The Chinese firm Brilliant signed a deal to sell cars in Iran.
Seems to me like the Chinese are just going to walk in the door saying, hey, thanks a lot, Trump.
Yeah, the other thing the Chinese are doing right now that sort of gets Trump's goat is this currency warfare.
You know, first it was a trade fight.
Now it's a currency fight and the Chinese, and Trump's already many times threatened, don't you come up with a weak currency?
Of course, we manipulate our currency more than anybody else because we have the reserve currency.
We had low interest rates is usually synonymous with a weaker currency.
So we had it down there, down at zero for a long time.
But now China's playing hardball with the currencies too.
But China still has their problems.
They have an inflationary climate there and they'll have to have some corrections for their malinvestment.
And they've accumulated debt and we can handle our debt because we're still right now privileged.
But ultimately the debt will have to come down and this warfare will go on.
But you're right.
They have some opportunities that we're in a lot of countries in Africa, but so is where they're militarily wasting money and wasting resources.
China's in Africa and they have a lot of nerve.
They're acting like capitalists.
Maybe they're state capitalists, but they're acting like capitalists.
They actually buy businesses and they have controls of minerals in Africa, which is more like what the United States used to do.
But no, the Chinese are acting differently.
But they still have a few hurdles.
If you read Jimmy Rogers, he would argue the case for China, that they are strong enough and in a position where they will move in the direction that you suggested.
And speaking of Chinese capitalists, I'm sure you saw this.
Jack Ma, the great Chinese capitalist industrialist, said how stupid the U.S. is.
You've wasted trillions on your military.
You should be building your infrastructure.
I thought that was a great one.
Well, the other thing, I guess, if we're getting ready to close out, the last thing I would just say is interesting how these sanctions may hurt.
And I just was looking at a piece before we started, may hurt some of our stabilization efforts in Afghanistan because there's a joint project with Iran putting together a port in Afghanistan.
So we may actually be hurting our own foreign policy in a place where we say it matters.
But I would close by saying if you're not a subscriber to the Ron Paul Institute updates, I do a sort of a weekly update to everyone.
It's RonPaulInstitute.org.
Go there and just hit subscribe.
This week I'm going to be writing about a very surprising spate of Twitter bannings, people in the anti-war movement who've been banned from Twitter.
So it's a big controversy and I'll be exploring it in a piece that I do later today for our subscribers, Dr. Paul.
Well, very good.
And once again, I think an incident like what's going on now with trade with the Europeans and Iran is typical of managed trade, too much intervention, unsound currencies.
But it also is a time when we can point these things out that we can offer different solutions and try to explain what free trade is really all about and why you need to have sound currencies.
But right now, it'll be interesting to see what happens tonight.
My guess is probably no fireworks.
I don't know whether there'll be big moves in the market tomorrow, whether it's in gold or stocks or anything else.
But tonight, when these sanctions go into effect, they could eventually lead because it's not settling things.
It's just further perpetuating the rocky relationship we've had with Iran, which has happened this last year or so.
And so it hasn't improved things in any way that I can see.
And even when people do something, some people might ask, and I have been asked about the nuclear arrangement with Iran.
Rocky Relationship with Iran00:00:56
Why would I be sympathetic with maintaining it rather than walking away from it?
And because I don't even believe in it, I wouldn't have had that as a solution.
But it was a movement in a direction where countries were talking to each other and there was going to be more trade and was beneficial.
So I've always looked at it.
If you are moving in that direction, even though you still are incorporating something that already exists, you don't have a whole lot to work with.
If you say, well, this is what we have, I'm not going to do anything until we have perfect freedom.
Well, it's not, that doesn't work that way.
So right now, I think this fight that's going on between the Europeans and Iran and us is not moving in the right direction.
Let's hope they read a little bit of Rothbard and Mises soon and understand what free trade is real about and what liberty means for all of us.
I want to thank everybody for tuning in today to the Liberty Report.