As Iran’s Currency Keeps Tumbling, Anxiety Is Rising

[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.