You might be wondering why Iran has so many dollars, and how it got them.

After all, Iran is a sworn enemy of the United States, and vice-versa, so where did they get these dollars?

The answer is simple. Iran is one of the 12 member states of OPEC. And while the United States actually buys most of its oil from Canada, all oil contracts are settled in dollars.

That’s gotta be a thorn in the side of countries like Iran, and Venezuela. These folks make no bones about hating America.

But I don’t think that trading in dollars for gold is done so purely out of spite.

Look at what happened the preceding 5 years before Iran allegedly began dumping dollars for gold:

The AP is reporting that China has trimmed its holdings of U.S. Treasury’s by $5.8 billion in January. I’m sure members of the doom and gloom economic faction will point to this as solid evidence that the U.S. is losing its ability to fund spending and is inching ever closer to default.   

In my opinion, this line of thinking is completely unrealistic.   

China still holds $889 billion in T-bills. It’s clearly not “dumping” American debt. And as I discussed last week, there is evidence that China is moving to more direct investments in the U.S.  

China’s state-run investment company, the China Investment Corporation (CIC), is already involved in a buyout offer for shopping mall owner General Growth Properties (NYSE:GGP) through Brookfield Asset Management (NYSE:BAM).