Posted on 11/04/2012 6:13:20 PM PST by blam
Panic In Persia As Hyperinflation Hits Iran
Economics / HyperInflation
Nov 04, 2012 - 05:45 PM
By: Steve H Hanke
For decades, the Iranian economy has been cobbled together by religious-bureaucratic regimes that have employed mandates, regulations, price controls, subsidies and a wide variety of other interventionist devices, in an attempt to achieve their goals. It's all been kept afloat – barely afloat – by oil revenues.
Shortly after Mahmoud Ahmadinejad took power as president, Iran began to draw the ire of the United States, Europe and their allies over a number of issues related to Iran's nuclear ambitions. Of late, this loose coalition of ‘allies' has ratcheted up economic sanctions against Iran.
Has the cascade of sanctions had an effect? The Iranian rial's exchange rate tells the tale. When US President Barack Obama signed the Comprehensive Iran Sanctions, Accountability, and Divestment Act in July 2010, the official exchange rate for the rial to the US dollar was very close to the black market rate. Since these sanctions took effect, however, the official and black market rates have increasingly diverged.
collapses in the demand for the Iranian currency. With each collapse, there has been something akin to a ‘bank run' on the rial – with a sharp rise in the black market (read: free market) exchange rate to the greenback. Ironically, Iranians are clamoring for US dollars.
On September 8, 2012, the black market exchange rate was 23,040. In the course of just under a month, after the two big sell-offs, the rate settled at 35,000 on October 2, 2012. This represents a 34.2% depreciation of the rial relative to the greenback.
(snip)
In short, it is this process – a sort of Persian panic – that is feeding the hyperinflation.
(Excerpt) Read more at marketoracle.co.uk ...
This is really misleading. Iranians don’t have dollars and do not use them. The government of Iran subsidizes food and fuel.
There is hyperinflation among the money changers. But not on Main Street.
Let them eat Falafel...
That sounds so above board. I'm sure sanctions include printing trillions of Iranian rials. If there's one thing Barky can do is print money.
ping
I feel positive that the Iran Central Bank is manipulating the value of their currency to convince the world that they are hurting, while the average street citizen goes on buying their dates, goat meat, and hummus at about the same price.
The exchange rate is NOT just a manipulation of the money changers but a highly controlled dollar rate set by the Central Bank.
Iranians, even provincials (above village level) use dollars frequently. For business, to send to relatives or children abroad (several million of these all over the world)and though replaced by barter deals, for oil transactions.
Like Obama raising taxes - amazing how in tandem Obama is with Iranian Mullahs, the Iranian authorities are announcing increase in taxes on a broad cross section of the populace to wean the country off an oil based economy into a general tax based one. Including raising costs like Obama of retail vehicle fuels etc., (higher costs at the pump).
Pres. Ahmadi-Nejad has nine months before the end of his term in office. After which he is dogmeat.
Lots more conflict in progress among the Larijanis, Supreme Ruler Khamenei and various other senior clerics with Prez. Ahmadi-Nejad’s only chance to be alive in 12-months is if he can leak some of the Supreme Ruler’s secrets and those the sons and threatens to expose the mind-boggling Billions (dollars) they have stolen from oil deals and various other kick-backs.
Too tired to continue. More later
The exchange rate is NOT just a manipulation of the money changers but a highly controlled dollar rate set by the Central Bank.
Iranians, even provincials (above village level) use dollars frequently. For business, to send to relatives or children abroad (several million of these all over the world)and though replaced by barter deals, for oil transactions.
Like Obama raising taxes - amazing how in tandem Obama is with Iranian Mullahs, the Iranian authorities are announcing increase in taxes on a broad cross section of the populace to wean the country off an oil based economy into a general tax based one. Including raising costs like Obama of retail vehicle fuels etc., (higher costs at the pump).
Pres. Ahmadi-Nejad has nine months before the end of his term in office. After which he is dogmeat.
Lots more conflict in progress among the Larijanis, Supreme Ruler Khamenei and various other senior clerics with Prez. Ahmadi-Nejad’s only chance to be alive in 12-months is if he can leak some of the Supreme Ruler’s secrets and those the sons and threatens to expose the mind-boggling Billions (dollars) they have stolen from oil deals and various other kick-backs.
Too tired to continue. More later
The exchange rate is NOT just a manipulation of the money changers but a highly controlled dollar rate set by the Central Bank.
Iranians, even provincials (above village level) use dollars frequently. For business, to send to relatives or children abroad (several million of these all over the world)and though replaced by barter deals, for oil transactions.
Like Obama raising taxes - amazing how in tandem Obama is with Iranian Mullahs, the Iranian authorities are announcing increase in taxes on a broad cross section of the populace to wean the country off an oil based economy into a general tax based one. Including raising costs like Obama of retail vehicle fuels etc., (higher costs at the pump).
Pres. Ahmadi-Nejad has nine months before the end of his term in office. After which he is dogmeat.
Lots more conflict in progress among the Larijanis, Supreme Ruler Khamenei and various other senior clerics with Prez. Ahmadi-Nejad’s only chance to be alive in 12-months is if he can leak some of the Supreme Ruler’s secrets and those the sons and threatens to expose the mind-boggling Billions (dollars) they have stolen from oil deals and various other kick-backs.
Too tired to continue. More later
“thanks” for the interesting commentary ... have you thought about creating an “Iran Ping List” ? if so, please add me ...
Interesting thanks for posting, blam. Thanks for the ping/post, FARS. Interesting thought, Reeses...thanks for posting.
Thanks FARS.
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