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THERE IS NO HYPERINFLATION IN IRAN The Real Story Is Much More Interesting
Business Insider ^ | October 6, 2012 | Matthew Boesler

Posted on 10/06/2012 3:28:35 PM PDT by GiovannaNicoletta

Contrary to reports, there is no hyperinflation in Iran right now at all.

In fact, the Western sanctions imposed on Iran's oil trade are failing miserably to meet their objectives.

And a regime collapse – or even, coming short of that, another popular uprising reminiscent of June 2009 – seems further away from Iran than ever.

Meanwhile, the Iranian regime is using the current sanctions imposed against it by the West as a weapon to weaken its own fiercest domestic threat – the educated, relatively pro-Western Iranian constituency that comprises the middle class.

(Excerpt) Read more at businessinsider.com ...


TOPICS: Foreign Affairs; Miscellaneous; News/Current Events
KEYWORDS: iranhyperinflation; iraninflation; iransanctions

1 posted on 10/06/2012 3:28:37 PM PDT by GiovannaNicoletta
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To: GiovannaNicoletta

?


2 posted on 10/06/2012 3:31:46 PM PDT by null and void (Day 1355 of our ObamaVacation from reality - Obama, a queer and present danger)
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To: GiovannaNicoletta

Interesting article. It made me really get a feeling for what it must be like for the “educated and intelligent” citizens of Iran or other dictatorial mideast hellholes. We could be in the same boat if we don’t stop it.


3 posted on 10/06/2012 3:40:27 PM PDT by EggsAckley ("There's an Ethiopian in the fuel supply!")
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To: GiovannaNicoletta

I don’t buy it.


4 posted on 10/06/2012 3:47:38 PM PDT by Mamzelle
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To: EggsAckley
As pointed out in the article, the opposition to the government comes from the exploited middle class, while the support comes from the subsidized poor, who supply the Basij thugs who beat up anybody opposing the regime.

(I'm sure that Obama and his pals are studying the Iranian regime's methods intently)

The problem for Iran is that if the mullahs are overthrown, the poor are going to not like it, and will rise up the minute some ayatollah comes along to lead them. The problem for the middle class is that they will never have peace and freedom as long as the underclass physically exists.

5 posted on 10/06/2012 3:52:08 PM PDT by PapaBear3625 (Charlie Daniels - Payback Time http://www.youtube.com/watch?v=EWwTJj_nosI)
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To: Mamzelle
I don’t buy it.

Smart!

This is one of the most contrarian articles I've read on this usually-contrarian website.

Prices are reportedly rising at some 70% a month in Iran. The poor may, indeed, be insulated from the drop in the rial's foreign exchange value, but that can't last. Iran has to import a lot of its consumer goods.

You can only survive on figs and unrefined oil for so long.

70% ... a month! Riots soon.

6 posted on 10/06/2012 3:52:29 PM PDT by BfloGuy (Teach a man to fish and you lose a Democratic voter.)
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To: Mamzelle

The article is probably correct. However, once you’ve destroyed the middle class, you will also have destroyed the productivity class as well.

You can’t feed a lot of poor people, when you have low productivity to create the wealth.


7 posted on 10/06/2012 3:53:22 PM PDT by Jonty30 (What Islam and secularism have in common is that they are both death cults.)
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To: EggsAckley

So many fallacies. The article is in the end total bs. Why? Food and fuel. The poor can only go get a chicken only as long as there are chickens to have. Since a large portion of food and 80-90% of fuel is imported, everyone is having issues. Reports are the middle class has been wiped out, the merchant class, which installed the islamists are pissed as they too loose everything. Major demonstration are occurring. So if you don’t have fuel, how do you move food to where the poor an buy it?

The lower the currency the less it can buy from overseas. Internal pegs are meaningless.

The ubber wealthy also won’t get the goodies they are used to. Expect more high level defection, like iamanutajobs camera man that brought 3 years of vids and pics of the nukes sites with him, to NYC to film at the UN


8 posted on 10/06/2012 3:54:30 PM PDT by waynesa98
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To: Jonty30

That there’s more to this than hyperinflation, maybe, probably...but it’s still hyperinflation.


9 posted on 10/06/2012 4:08:36 PM PDT by Mamzelle
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To: GiovannaNicoletta
The article actually makes very little sense. If the Iranian regime was using hard currency to subsidize specific sectors, the middle class and merchant class could easily invest in non-perishable / semi-perishable commodities being subsidized in order to diminish the inflationary impact, or even buy dollars or other hard currency directly.

Even if they cannot do that because of political oppression, the price in rials of their existing property is appreciating dramatically in rial (but not real) terms. Eventually, they will either be able to sell that property for hard currency or many more rials than they paid for it.

The fact that the government effectively props up its soft currency in specific sectors doesn't stop wealthier people from buying in those sectors. It also doesn't stop entrepreneurs from buying in those sectors and then turning around and selling in inflated soft currency at higher prices when the inevitable shortages occur.

The author is advancing a claim that money -- even the "internal" money of an autarky can have different values in different parts of an economy. This is silly because no oil exporting country in the Middle East can possibly be an autarky. But it's even sillier for the reasons just given: rials can buy anything in Iran, and that means that once the subsidized goods enter the market, they are traded implicitly or explicitly against rials, and their price becomes hyper-inflated as well.

A far more likely explanation for the regime's distress is 1) increased production by the Saudis and Iraqis is cutting into the Iranians' margins and 2) they've used up most of their reserves of hard currency that they've been using to buffer the rial from hyperinflation since the sanctions began. If the latter, we will know in a matter of days or weeks.

10 posted on 10/06/2012 4:42:59 PM PDT by FredZarguna (And that's the end of our show! Doink.)
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To: GiovannaNicoletta

Yep. Good find. Other countries in Asia, including China and India, will buy all of the oil that Iran can produce. Other countries, yet, continue to buy other products (e.g. pistachios, rugs,...), no doubt. What we’ve been seeing to the contrary is free traitor propaganda. They’re afraid of Iranian oil being subtracted from the world supply and of angering other Islamist nations (other trade, product prices, etc.).


11 posted on 10/06/2012 4:43:48 PM PDT by familyop ("Wanna cigarette? You're never too young to start." --Deacon, "Waterworld")
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To: GiovannaNicoletta; silverleaf

read later


12 posted on 10/06/2012 5:49:06 PM PDT by silverleaf (Age Takes a Toll: Please Have Exact Change)
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To: PapaBear3625
(I'm sure that Obama and his pals are studying the Iranian regime's methods intently)

The problem for Obama and his pals is that many of the subsidized poor in America believe that they can escape to the middle class. Obama is working hard to extinguish that hope.

13 posted on 10/06/2012 6:00:59 PM PDT by Mike Darancette (Take two Aspirin and call me in November - Obama for Hindmost.)
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To: PapaBear3625
(I'm sure that Obama and his pals are studying the Iranian regime's methods intently)

The problem for Obama and his pals is that many of the subsidized poor in America believe that they can escape to the middle class. Obama is working hard to extinguish that hope.

14 posted on 10/06/2012 6:01:38 PM PDT by Mike Darancette (Take two Aspirin and call me in November - Obama for Hindmost.)
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To: Mike Darancette

Business Insider is notoriously liberal.
And the articles there are oftentimes just wrong.
Read some of the comments there.


15 posted on 10/06/2012 6:10:07 PM PDT by Treeless Branch
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