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Fri Oct 5, 2012, 02:40 AM

 

Hyperinflation finally arrives… in Iran

It’s worth taking a closer peek at what’s been happening lately in Iran, where U.S. sanctions are biting down and inflicting a vicious bout of hyperinflation on the country. This is obviously a foreign policy story—and, for those who live in Iran, an absolutely miserable situation. But it’s an economic policy story as well.

Since 2010, the United States has been steadily tightening sanctions on Iran. A good chunk of Iran’s $110 billion foreign exchange reserves is locked up in offshore accounts that are now frozen. Overseas banks have been barred from doing business with Iran’s central bank. And Iran is having trouble selling its oil abroad. Add it all up, and those sanctions have restricted the supply of dollars and other foreign currency reaching Iran.


http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/10/04/hyperinflation-finally-arrives-in-iran/


Real-life lesson about the conditions which actually cause hyperinflation. It's not about 'printing too much money' in normal circumstances.

In every known case it involves something that restricts the manufacture or flow of goods & raw materials (war, blockade, sanctions), a/o speculative attack on a currency which cheapens it in international currency markets (which makes external goods more expensive).

It seems Iran is now being subjected to both by us. War by another name.

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Arrow 26 replies Author Time Post
Reply Hyperinflation finally arrives… in Iran (Original post)
HiPointDem Oct 2012 OP
Shuhered Oct 2012 #1
HiPointDem Oct 2012 #2
uponit7771 Oct 2012 #3
loli phabay Oct 2012 #6
HiPointDem Oct 2012 #17
Shuhered Oct 2012 #21
HiPointDem Oct 2012 #22
tama Oct 2012 #10
loli phabay Oct 2012 #12
HiPointDem Oct 2012 #18
tama Oct 2012 #20
Zalatix Oct 2012 #24
tama Oct 2012 #26
Warpy Oct 2012 #4
HiPointDem Oct 2012 #5
AndyTiedye Oct 2012 #8
HiPointDem Oct 2012 #9
HiPointDem Oct 2012 #7
dkf Oct 2012 #11
HiPointDem Oct 2012 #13
HiPointDem Oct 2012 #14
Fire Walk With Me Oct 2012 #15
loli phabay Oct 2012 #16
Fire Walk With Me Oct 2012 #19
Zalatix Oct 2012 #23
HiPointDem Oct 2012 #25

Response to HiPointDem (Original post)

Fri Oct 5, 2012, 02:55 AM

1. Keep The Pressure Up!

As a gay man, their government sickens me. They hung gay men out in the streets to set an example, but of what?!?!?! Of how backwards and stupidly cruel they are to a minority group. I hope the sanctions ruin their government and allow real leaders to come in and allow Iranians to live peacefully. Ayatollahs and Clerics without compassion are not religious men at all, just thugs wearing religious cloaks.

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Response to Shuhered (Reply #1)

Fri Oct 5, 2012, 02:59 AM

2. How do you know what they do except through US media? It doesn't even report domestic

 

protests accurately, why would you think it would report accurately about its enemies?

But what we do know is that hyperinflation & blockade kill people.

Iranians *already* live peacefully; it's *us* who's making that impossible, just as we did in Iraq, afghanistan, libya, etc etc ad infinitum.

On edit: I found the case you are apparently referring to: two teenage boys hanged. Western sources alleged they were hanged for being gay.

Human Rights Watch has stated "There is no evidence that this was a consensual act," and observed that "The bulk of evidence suggests that the youths were tried on allegations of raping a 13-year-old, with the suggestion that they were tried for consensual homosexual conduct seemingly based almost entirely on mistranslations and on cursory news reporting magnified by the Western press." Human Rights Watch also stated that it was "deeply disturbed by the apparent indifference of many people to the alleged rape of a 13-year old."

http://en.wikipedia.org/wiki/Mahmoud_Asgari_and_Ayaz_Marhoni


Hanged for RAPE of a 13-year-old. I don't agree with the penalty, especially since one of the rapists was underage, but I wouldn't start a war over it.

Meanwhile, the US has committed to a course that will kill people without respecting their sexuality, age, or anything else -- but we can be sure that "the people" will suffer much more than those in power.

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Response to HiPointDem (Reply #2)

Fri Oct 5, 2012, 03:15 AM

3. +1!

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Response to HiPointDem (Reply #2)


Response to loli phabay (Reply #6)

Fri Oct 5, 2012, 04:17 AM

17. In 2011, per amnesty, there were 360 executions in iran in a population of 17 million people.

 

According to Amnesty International, there were 156 death sentences passed and 360 executions carried out in Iran in 2011...The overwhelming majority were drug related (up to 74%), and almost all executions were carried out for murder, aggravated rape, deadly robbery/kidnapping, or large scale drug trafficking.

http://en.wikipedia.org/wiki/Capital_punishment_in_Iran


In the US in 2011 there were 43 executions in a population of 300 million.

http://en.wikipedia.org/wiki/Capital_punishment_in_the_United_States



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Response to HiPointDem (Reply #2)

Fri Oct 5, 2012, 09:35 AM

21. Apology

Thank you for the update. I read the initial report from a CNN archive. My mistake. Governments are almost always incongruent in their global actions with the will of their individual citizens. To clarify, I'd like to see the government in Iran peacefully converted to a progressive and caring one, corny as I know that must sound. My government has its many faults, on this we can agree. I am proud and thankful that I can voice such opinions without fear of lethal reprisal. This freedom in no way permits me to be irresponsible with what I say. Accept my apology for my hurtful words, and Happy Weekend to you! Ma'a Ssalama!

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Response to Shuhered (Reply #21)

Fri Oct 5, 2012, 03:50 PM

22. a progressive & caring one -- like ours? where 5% of black men are in the prison system, & 3%

 

of americans are? where we spend more on imprisonment than education?






Crazy Country: 6 Reasons America Spends More on Prisons Than On Higher Education
Dollars doing to prisons will soon outpace dollars going to higher education in every state of the union.

http://www.alternet.org/education/crazy-country-6-reasons-america-spends-more-prisons-higher-education


how do you bring about progressive, caring government by impoverishing the people?

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Response to Shuhered (Reply #1)

Fri Oct 5, 2012, 03:47 AM

10. Compassion

 

Would you want similar sanctions against American people to "ruin US government"?

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Response to tama (Reply #10)


Response to loli phabay (Reply #12)

Fri Oct 5, 2012, 04:18 AM

18. Neither the us government nor the iranian government is, however.

 

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Response to loli phabay (Reply #12)

Fri Oct 5, 2012, 04:29 AM

20. US government

 

is murdering innocent people every day, gay and not gay, as "collateral damage", by supporting rw death squads, through war against drugs, etc etc.

Yet those who resist neoliberal word order all over the globe don't wish ill for American people, but stand in solidarity with Americans beaten and jailed by fascist and racist system.

You are not alone. Solidarity!

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Response to tama (Reply #10)

Fri Oct 5, 2012, 03:53 PM

24. Now that is a hell of a good argument.

 

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Response to Zalatix (Reply #24)

Fri Oct 5, 2012, 04:35 PM

26. Golden/Silver rule

 

Though perhaps not 100% universally accepted there seems to be strong enough consensus - how ever potential - to keep on trying to base ethical arguments on it.

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Response to HiPointDem (Original post)

Fri Oct 5, 2012, 03:22 AM

4. Maybe this will be enough for them to get rid of the Mad Mullahs

because it's a very young country that has wanted to dump those old fools for a couple of decades.

They bloody nearly did a few years ago.

If the rest of the world would stop sabre rattling, then they'd finish the revolution that got derailed in 1978 by a bunch of ultra organized religious nuts.

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Response to Warpy (Reply #4)

Fri Oct 5, 2012, 03:24 AM

5. we had to destroy the village to save it, is that the idea?

 

starve the people so that they'll do what *we* want? (Not what *they* want, actions taken in the face of penury & starvation don't represent acts of free will.)

Iran's economy is vulnerable on two fronts. Over-reliance on oil exports, which account for 80% of her foreign currency revenues, is compounded by a high degree of import dependence for major items, both for feeding the population and for keeping industrial units afloat...Similar sanctions against Iraq under Saddam Hussein pushed millions below the poverty line, increased infant mortality and stepped up the brain drain without altering the government's foreign policy.

The problem is that the first of these "mechanisms" flies in the face of evidence: both the "Arab spring" and Iran's 1979 revolution followed periods of relative prosperity, not deprivation and hardship.


http://www.guardian.co.uk/commentisfree/2012/oct/03/iran-economy-sanctions-nuclear

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Response to Warpy (Reply #4)

Fri Oct 5, 2012, 03:44 AM

8. Has a Popular Uprising EVER Overthrown a Theocracy Anywhere?

I cannot think of even one example.

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Response to Warpy (Reply #4)

Fri Oct 5, 2012, 03:47 AM

9. "sanctions are destroying the sources of societal change in iran"

 

Over the past month, as EU and U.S. sanctions on Iran have escalated and the White House and Congress roll out new "crippling" measures on an almost biweekly basis, the situation for ordinary Iranians has become increasingly dire. Health organizations are reporting medicine shortages that could endanger the lives of tens of thousands of children. The price of food and basic goods has skyrocketed. And middle class households are facing an increasing sense of economic doom.

Many in Washington, including in the Obama administration, continue to assert that the pain inflicted by broad sanctions on ordinary Iranians is simply an "unintended consequence." But the pro-sanctions lobby is increasingly singing a different tune. A recent piece in the Wall Street Journal, for instance, states that "Stronger sanctions will not persuade the regime to accept compromise over its nuclear program" and acknowledges that, "While government fat cats are unaffected, ordinary Iranians must contend every day" with the sanctions.

These are not the words of a sanctions skeptic, but rather a major sanctions supporter. Those that helped craft the sanctions and sell them as the best means to achieve a diplomatic resolution to the nuclear dispute are now saying sanctions are indeed designed to impose collective punishment on the Iranian people to pressure them to rise up against the regime. According to this logic, sanctions will simply make life so dire for the average Iranian that an opposition movement will manifest from within the despair and topple the regime. Others in the pro-sanctions camp have argued that sanctions will drive Iran's working class to join and revitalize Iran's indigenous democratic Green Movement. But all of these analyses ignore the long and destructive history of embargo-level sanctions, which have failed to produce democratic regime change.

Instead of speculating from afar, we should listen to the Iranians on the ground who are actually struggling for democracy firsthand. The leaders of the Green Movement and Iranian human rights and democracy defenders have adamantly opposed broad sanctions and warned that confrontation, isolation and broad economic punishment only undermine the cause of democracy and rule of law in Iran. A new report by the International Civil Society Action Network (ICAN) documents how sanctions are destroying the sources of societal change in Iran. "The urban middle class that has historically played a central role in creating change and promoting progress in Iran are key casualties of the sanctions regime," according to the report.

http://mideast.foreignpolicy.com/posts/2012/08/02/sanctions_cripple_irans_middle_class_not_the_regime

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Response to HiPointDem (Original post)

Fri Oct 5, 2012, 03:37 AM

7. Food prices, inflation rise sharply in Iran

 

Prices for beef and lamb had already soared out of reach, meaning fewer of the kebabs and stews beloved by middle-class Iranians. But when the cost of yogurt spiked this week, Iran’s economic troubles hit home for virtually every household in the country.

“Last year you could buy a carton for 2,000 tomans,” about $2, Mehdi Khalaji, an Iranian-born scholar and blogger now living in Washington, said Thursday, referring to the creamy side dish that is de rigueur at all Iranian meals. “This week the same amount costs 5,000 or even 6,000 tomans.” Protests over such price hikes brought thousands into the streets this week in central Tehran....

Economists have been reporting distress signs in Iran’s economy since the beginning of the year, as new economic sanctions and an embargo began squeezing oil exports, Iran’s chief source of foreign currency. Sales of Iranian crude are down about 40 percent compared with last year, depriving the country of billions of dollars a month, industry analysts say. This week, the rial lost 40 percent of its value.

Shrinking oil revenue in turn weakened the rial, driving up the inflation rate and joblessness. But in recent weeks, the slow upward creep in prices turned into a gallop...Based on an analysis of Iran’s black-market currency exchanges, Hanke said prices in Iran now appear to be doubling every 40 days, depleting both the savings and purchasing power of ordinary Iranians, particularly in the cities.

http://www.washingtonpost.com/world/national-security/food-prices-inflation-rise-sharply-in-iran/2012/10/04/44521436-0e69-11e2-bb5e-492c0d30bff6_story.html


May americans experience half the horror they will for other people.

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Response to HiPointDem (Original post)

Fri Oct 5, 2012, 03:51 AM

11. Krugman says this...

 

Hyperinflation is actually a quite well understood phenomenon, and its causes aren’t especially controversial among economists. It’s basically about revenue: when governments can’t either raise taxes or borrow to pay for their spending, they sometimes turn to the printing press, trying to extract large amounts of seignorage — revenue from money creation. This leads to inflation, which leads people to hold down their cash holdings, which means that the printing presses have to run faster to buy the same amount of resources, and so on.

http://krugman.blogs.nytimes.com/2010/03/18/stagflation-versus-hyperinflation/

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Response to dkf (Reply #11)

Fri Oct 5, 2012, 04:07 AM

13. You're seeing in real time what causes hyperinflation, and it wasn't because iran started running

 

its printing presses.

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Response to dkf (Reply #11)


Response to HiPointDem (Original post)

Fri Oct 5, 2012, 04:08 AM

15. It is all and only about the oil. And the evil people in the Israeli government.

 

Holding cartoon bomb drawings in front of the UN. Why not just scream WMD! like the BFEE?

I've met Iranian people and they are just like us. They just want to live freely and to be happy. Probably the same with the average Israeli (they've been protesting by the tens of thousands but that doesn't get on our news channels).

Shit's gotta change for the better, and it requires the elimination of war-mongering governments as well as the oil interests sucking the planet like mosquitos.

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Response to Fire Walk With Me (Reply #15)


Response to loli phabay (Reply #16)

Fri Oct 5, 2012, 04:26 AM

19. Yes, but I give them a bit of buffer because of the whole CIA-installed Shah regime thing.

 

Having had your country ruled for how long by a CIA puppet....UGH.

As they say in Occupy, "Shits, fucked up; shit's fucked up and BULLshit". Iran's government also has to go, but it has to go to the Iranian people, who are again being slagged by those interested in stealing their oil. It's the last of the big five reserves on the planet not yet "part" of the UAE etc. Iraq used to be free as well. Remember when Bush (CIA again) /Reagan gave weapons to Iran to fight Iraq? And the photos of Rumsfeld shaking hands with Saddam? They armed both countries hoping for them to send each other into the dark ages, so oil interests step in and claim it for themselves. Didn't work so we had to troll Saddam into giving us a reason to attack. He didn't so we created "WMD" and boom, the oil is owned by someone else. "Peak oil" and all that.

The problem is, Russia and China work with Iran regarding that oil and they don't want it going to forces somewhat more aligned with the US. This is a very bad situation.

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Response to HiPointDem (Original post)

Fri Oct 5, 2012, 03:52 PM

23. DING!!! Hyperinflation is caused by RESOURCE SHORTAGES.

 

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Response to Zalatix (Reply #23)

Fri Oct 5, 2012, 03:55 PM

25. real, or artificially created.

 

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