As Further Sanctions Loom, Plunge in Currency’s Value Unsettles Iran
NY Times / Rick Gladstone
21-Dec-2011 (5 comments)

Iran’s currency, the rial, tumbled in value to its lowest level ever against the dollar on Tuesday in panic selling caused in part by the country’s increased economic isolation from international sanctions, an unbridled inflation problem and worries that government officials there are ideologically incapable of devising a workable solution.

The rial’s value has been weakening for months, but the traumatic drop on Tuesday reflected what Iranian economists called a new level of economic anxiety in the country, exacerbated by conflicting information coming out of the Tehran hierarchy that reinforced a sense of indecision and confusion.

... the Iranian currency has plunged in value by more than 50 percent against the dollar in the past few months... The currency crisis could hardly come at a worse time for Iran

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FG

Can the regime survive this?

by FG on Wed Dec 21, 2011 09:26 AM PST

Whether or not the regime can survive this is unclear, especially if the alleged trade breach with the UAR can be damned up--at least temporarily.  Any reprieve would be offset soon by panic overan impending oil boycott.. You may have already noted how much the mullahs have been boasting lately about how "prepared" they are to survive one.   It resembles similar Saddam-like military boasting.  The more huffing and puffing such regimes do, the greater their fear.  Both of these examples recall a man whistling past a graveyard. 

See my blog above for two subposts related to the curreny crisis.  You'll find a link to a Washington Post story last night.  Secondly, I wrote about how Iran can squeeze out of the current crisis, why that is not in the best interests of most Iranians and what they can to to prevent it.   I'd like to deal right now with a two important questions anyone should want to ask: Can the mullahs get UAR to back off?  If so, for how long? The UAR will get tremendous counterpressure from neighboring gulf states and the Saudis reasons explained in my earlier subpost.  The UAR will have to choose sides.  The issue then comes down to who has more clout. 



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vildemose

Where does this money come

by vildemose on Thu Dec 22, 2011 08:11 AM PST

Where does this money come from? What purpose does it serve??

Iran launches state-funded Spanish language TV channe

//www.bbc.co.uk/news/world-middle-east-16305650

 

Information is the currency of democracy. ~Thomas Jefferson

It's not enough that faith claims to be the solution to all problems but is now demanded that such a preposterous claim be made im


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ilovechelokebab

This regime survived the Iran Iraq War so.....

by ilovechelokebab on Thu Dec 22, 2011 12:53 AM PST

The Regime survived the Iran Iraq war but who is to say if the general population is willing to tolerate any more bull shit with the latest looming crisis. Its weird though, I've talked to some friends nd family and they told me that for now, they are still dong alright and that they aren't concerned.....I'm not there and I don't know....


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FG

5 Iranian "engineers" arrested in Syria

by FG on Wed Dec 21, 2011 10:25 AM PST

 

 Five Iranian technicians have been kidnapped in the restive city of Homs, according to Iran's Press TV.
The report said the culprits were "unknown armed gunmen", adding:
"Armed gangs have recently kidnapped many Syrian civilians and security
forces in the city."

 (Were they Al-Quds?  Or did they function as informers for the Syrian government?)

 


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FG

More on the currency crisis for those interested

by FG on Wed Dec 21, 2011 10:08 AM PST

Enduing America has its own analysis of thre crisis

Iran Snap Analysis: The Currency Falls --- What Does It Mean?

//www.enduringamerica.com/home/2011/12/21/ira....

Don't miss the subposts from Pak1987. He obviously has had some training in macroeconomics & microeconomics (as I have). 

Pak raises several good points, especially regarding the harsh effects of a weakened currency is an economy heavily dependent on imports, which are now made more expensive by sanctions as well.  That's a double whammy. One by one Pak goes over possible solutions and then concludes:

"... Iran's economy is screwed, even without the sanctions.
Iran needs experienced, educated technocrats to at least make a decent
attempt to weather the storm. But how likely is that? Instead we are
subjected to... a new model that the rest of the world should adopt...

(I'd say the brain drain doesn't help--a problem compounded by replacing real economists with political favorites, a process similar to the firing of long-time academics who are replaced by Islamists in Irans universities).

Re: Manouchehr1911 (a regime apoligist who previously posted as Reza).

This writer clearly has no background in formal ecomics but writes as if he did got his PhD on Goebbels from the local propaganda ministry. As all dictators do (and certain monarchists here) he blames the West for all Irans problems-- economic (incompetence, corruption and sanctions earned by its own aggressive actions) and politica.

Iranians wouldn't want human rights or democracy if not for a tiny number of western agents operating in a police state where it's easy to avoid getting noticed.  Against all these obstacles CIA operatives somehow won over an iranian people who were once fervent believers in mullah rule and who are famous known for touchy nationalism that had been pumped up further by endless xenophic rallies.   Those must be the world's greatest secret agents.

***

EA also has more on the economic crisis in its regular daily report on Iran: 

1) How Turkey has provided the mullahs with some relief.

2) Portions of an analysis from the Financial Times.

//www.enduringamerica.com/home/2011/12/21/the...

 


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