As Iran’s Currency Keeps Tumbling, Anxiety Is Rising

[dkf]

In the Iranian capital, all anyone can talk about is the rial, and how lives have been turned upside down in one terrible week. Every elevator ride, office visit or quick run to the supermarket brings new gossip about the currency’s drop and a swirl of speculation about who is to blame.

“Better buy now,” one rice seller advised Abbas Sharabi, a retired factory guard, who had decided to buy 900 pounds of Iran’s most basic staple in order to feed his extended family for a year.

“As I was gathering my money, the man received a phone call,” said Mr. Sharabi, smoking cigarette after cigarette on Thursday while waiting for a bus. “When he hung up he told me prices had just gone up by 10 percent. Of course I paid. God knows how much it will cost tomorrow.”

--

But those dreams have been shattered. “We can’t even think of the future, of tomorrow, the day after, or the next week,” Maysam said. Foreign trips are out of the question, as even the price of a cup of coffee in Dubai, United Arab Emirates, or Istanbul — favorite destinations for Iranians — has tripled when calculated in rials. Parents of the legions of Iranians studying abroad are calling their children back to Iran, as rents and college fees in countries like the Philippines and Malaysia have become unaffordable.

“I have told my son to come home,” said Shabaz, 60, who is part owner of a printing house, adding that he had spent his life encouraging his son and daughter to study abroad. “We are all losing. His future is gone; I won’t ever witness his graduation; and he won’t find a job.”


http://www.nytimes.com/2012/10/05/world/middleeast/as-irans-currency-keeps-tumbling-anxiety-is-rising.html?hp

[HiPointDem]

1. somebody's attacking the rial, are they? hmm, wonder who it could be. for those folks who keep

bringing up the german hyperinflation and how it was caused by 'printing money,' well no, here's a real life example of how speculative attacks on a currency cause hyperinflation.

While only a few people actually need to exchange the rial for foreign currency, its value is one of the few clear indicators of the state of the economy, and its fall has sharply raised the prices of most staples.

In Tehran, many residents spend their days calling on money changers and visiting banks, deliberating whether to sell their rials now or wait for a miracle that would restore the rates to old levels, or for even a modest rally from the panic-driven lows of the last week.

and fuck the bastards doing it, too. and fuck the nyt for pretending that nobody knows why the rial is falling. 'oooh, what could it be? some people think this and some people think that. maybe it's mismanagement of their economy'


fuck them.

[dkf]

2. What is your speculation?

[HiPointDem]

3. it pretty well tells you in the article, doesn't it? The US and its allies are purposedly

keeping iran from accessing foreign currency & goods, and I wouldn't doubt the same actors are selling the rial short in international currency markets. The object is to destabilize the government of iran by promoting hyperinflation. Which kills people. It's an act of war, and fuck them all.

[dkf]

4. I was hoping that wasn't what you were going to say.

Why would they do it so close to the election? Seems risky to me if Iran decides to screw with the Straits of Hormuz.

[HiPointDem]

5. they didn't just start doing it; our wonderful media just decided to *report* what they were

doing now.

[pampango]

8. Juan Cole: Iran Bazaar Strikes signal Misery, not Sanctions ‘Victory’

Although the US, the EU and Israel’s government will gloat that ‘sanctions are working,’ it is unclear that any such thing is true.

True, Western sanctions on Iran have gone beyond mere boycotts to a kind of financial blockade, in which obstacles are being placed in the way of Iran selling its petroleum to third parties, especially in Asia.

Hyperinflation is caused by printing too much money. President Mahmoud Ahmadinejad has for some time pumped extra money into the economy in the form of subsidies, which has caused the money supply to grow unhealthily in Iran. The rial has probably for a long time been over-valued, partly because of the support for it of an oil state. So it may be that years of easy money are now coming home to roost ...

There is video showing a larger crowd, apparently middle class, some of whom demanded that the regime stop throwing money away in Syria and spend it in Iran instead. This theme is reminiscent of the chanting of the Greens in September of 2009 that Iranians should stop obsessing about Palestine and put the emphasis on Iran’s welfare instead. The remnants of the Green Movement press hailed the demonstrations and reported on them in detail.

http://www.juancole.com/2012/10/iran-bazaar-strikes-signal-misery-not-sanctions-victory.html

Cole states that Iran's oil sales are probably back to normal with markets in Asia taking the place of Europe and the West. The hyperinflation may be caused by printing too much money rather than sanctions. And some in the the middle and working classes want government money spent at home rather than abroad.

[HiPointDem]

9. oh, bull. food stamps are subsidies, welfare and housing allowances are subsidies, farm subsidies

are subsidies -- but we don't have hyperinflation in the us, and hyperinflation in iran only showed up after the west started, then tightened, its economic blockade.

'probably back to normal' = bs. there's no reason to 'print more money' without shortage.

the west doesn't want to take responsibility for the social misery and undermining of an elected government, that's all. so they feed us bullshit, just like every country feeds their people bullshit.

hyperinflation isn't caused just by 'printing money'. every hyperinflation in history came in conjunction with 1) shortage caused by war, blockade, or similar events; or 2) speculative attacks in international currency markets.

and juan cole is a propagandist, and not only in this matter.

[pampango]

10. Ahmadinejad blames currency collapse on enemies "abroad and within". The latter - the religious

right and business class - do not like him for his "subsidies of the working classes and poor.

Second, the demonstration may have been aimed at unseating President Ahmadinejad, whom the Iranian right and business classes have long loathed because of what they see as his populist and irresponsible mismanagement of the economy. (His subsidies for the working classes and the poor, and easy money policies grated on them). Ahmadinejad has been in bad odor with conservatives since his tiff last spring with the Supreme Leader over key government appointments, including in intelligence. The Supreme Leader won, as might be suggested by his title, and Ahmadinejad is a lame duck.

Although Ahmadinejad is hated in the West, Wikileaks revealed that he has often been the official most inclined to compromise with and negotiate with the West, being blocked by the Revolutionary Guards Corps and other hard liners to his right. For the Iranian far right to unseat Ahmadinejad is anything but a victory for the West.

Ahmadinejad himself blamed the currency collapse on ‘psychological warfare’ waged by enemies ‘abroad and within.’

Severe sanctions almost never work in producing regime change or even in altering major policies of regimes. In Iraq, the severe sanctions of the 1990s actually destroyed the middle classes and eviscerated civil and political society, leaving Iraqis more at the mercy of the authoritarian Baath Party of Saddam Hussein than ever before. The high Baath officials squirreled away $30 billion during the oil for food program, cushioning themselves But the sanctions that denied Iraqis chlorine imports disabled the water purification plants, giving the whole country constant diarrhea, a condition that easily kills infants and toddlers. Some 500,000 Iraqi children are estimated to have been killed this way.b0

Cole presents Ahmadinejad as more supportive of the working class and poor than his domestic opponents in the business class and religious fundamentalists. He clearly states that Western sanction on Iraq destroyed the middle class and civil society without affecting the government they were targeting.

If his statements about internal Iranian politics and the history of Western sanctions on Iraq sound like the words of an "propagandist", you are welcome to your own set of definitions.

China and India have both made clear that they are not bound by sanctions imposed on Iran by the West. If you disagree that the demand for oil in China and India is enough to make up for lost markets in the West, again you are entitled to your opinion.

There are plenty of historical examples of hyperinflation caused by governments that print too much money to pay debts without raising revenue. They are not always tied to wars and blockades, but they are always tied to incompetent government economic policies fueled by speculative attacks in the currency market (which Ahmadinejad believes is at least partially the result of "enemies within&quot .

[HiPointDem]

17. "plenty...examples...hyperinflation caused by governments that print..not tied to war...etc"

name some.

[veganlush]

6. it's the sanctions

The purpose of which is to AVOID war.

[dkf]

7. Worked really well against Japan.

[The Magistrate]

11. So What Should Have Been Done About Japanese Aggression In China, Ma'am?

Go to war sooner, perhaps?

[dkf]

12. Well if we didn't have Japan who could we have tested nuclear weapons on right?

I guess it all served its purpose.

[The Magistrate]

13. So You Favor Slow Starvation Of Civilians, Or Mass Casualties In Invasion, Ma'am?

Either would have killed far more than actually died at Hiroshima and Nagasaki.

And it is noted you did not answer the question, what should have been done about Japanese aggression in China....

[dkf]

15. They killed enough Japanese with conventional weapons and you know it.

The nukes were a gratuitious showcase of nuclear weapons.

"The Japanese had, in fact, already sued for peace. The atomic bomb played no decisive part, from a purely military point of view, in the defeat of Japan." Fleet Admiral Chester W. Nimitz, Commander in Chief of the U.S. Pacific Fleet.[89]
"The use of [the atomic bombs] at Hiroshima and Nagasaki was of no material assistance in our war against Japan. The Japanese were already defeated and ready to surrender because of the effective sea blockade and the successful bombing with conventional weapons... The lethal possibilities of atomic warfare in the future are frightening. My own feeling was that in being the first to use it, we had adopted an ethical standard common to the barbarians of the Dark Ages. I was not taught to make war in that fashion, and wars cannot be won by destroying women and children." Fleet Admiral William D. Leahy, Chief of Staff to President Truman.[101]

"There is little point in attempting precisely to impute Japan's unconditional surrender to any one of the numerous causes which jointly and cumulatively were responsible for Japan's disaster. The time lapse between military impotence and political acceptance of the inevitable might have been shorter had the political structure of Japan permitted a more rapid and decisive determination of national policies. Nevertheless, it seems clear that, even without the atomic bombing attacks, air supremacy over Japan could have exerted sufficient pressure to bring about unconditional surrender and obviate the need for invasion.

Based on a detailed investigation of all the facts, and supported by the testimony of the surviving Japanese leaders involved, it is the Survey's opinion that certainly prior to 31 December 1945, and in all probability prior to 1 November 1945, Japan would have surrendered even if the atomic bombs had not been dropped, even if Russia had not entered the war, and even if no invasion had been planned or contemplated."[88][89]

In the documentary The Fog of War, former U.S. Secretary of Defense Robert S. McNamara recalls General Curtis LeMay, who relayed the Presidential order to drop nuclear bombs on Japan,[75] said:

"'If we'd lost the war, we'd all have been prosecuted as war criminals.' And I think he's right. He, and I'd say I, were behaving as war criminals. LeMay recognized that what he was doing would be thought immoral if his side had lost. But what makes it immoral if you lose and not immoral if you win?"[76][77]

http://en.m.wikipedia.org/wiki/Debate_over_the_atomic_bombings_of_Hiroshima_and_Nagasaki#section_2

[The Magistrate]

16. Citing Wikipedia, Ma'am, is Abject Confession Of Ignorance

Tossing one liners at me on this subject is extremely foolish. It is one of my subjects, Chinese history in the twentieth century being of especial interest to me for many years.

It is quite true that fire-bombings and blockade killed great numbers of Japanese, and quite possible the continued lethal pressures of 'air supremacy' ( which in fact meant wholesale bombing, and harrying by fighter-bombers strafing anything that moved ) would have had the desired effect short of invasion, but of course that is one of the things you were asked whether you favored in preference to the use of the first two atomic bombs. You have not answered, merely made an extreme 'left pacifist' posturing, which carries no weight at all. You would be much better served, by the way, to look into the thing from the view of the Japanese, the government structure, and balance of powers, military and civilian, there. It will be much more illuminating, and more useful to understanding, than after the fact comments by U.S. military figures, statements that are in fact bound up with inter-service rivalries in the immediate post-war years, or have little substantiation. The idea of LeMay, for instance, expressing moral qualms about 'killing Japs' hardly rings true to anyone familiar the record of the man during the war, and in the first decades of the Cold War.

So on this sideline, we have the following as a record:

You do not answer what should have been done about Japanese aggression in China, a passage of extraordinary atrocity shocking the conscience of the world.

You do not answer what course you would have found superior to the use of atomic bombs in 1945, and indeed, display abject ignorance of the subject.

On the question of the present day, let us see how you do.

Do you feel Iran should be allowed to develop a nuclear weapons capability?

Do you believe Iran is seeking such capability?

Do you believe economic sanctions are an appropriate measure to discourage Iran from developing a nuclear weapons capability?

If such sanctions are effective, is this a good thing or a bad thing?

If you feel sanctions are not a proper course, what do you consider a proper course?

[MadHound]

14. Since there is an election on, we can't conduct a real, live war,

So now we're conducting a covert economic war.

And Americans wonder why Iranians, and others, hate our country. Shit like this.

[hifiguy]

18. Iran is very similar to Egypt, demographically speaking.

It's a young country. Tens of millions of under-30s with no job prospects suffering under a stifling theocracy is by definition a potentially explosive mixture, especially in an interconnected age. The average Iranian is not going to have a lot more patience with a government that makes his or her life miserable on a day-to-day basis. Also, the average Iranian has no particular bone to pick with the US. The Shah has been gone for more than thirty years.

The fuse has been lit by the latest economic problems. It likely will not end well for the mullahs even if they send the Revolutionary Guard into the streets.