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.
I don’t buy it.
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.
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.).