FG

I respectfully disagree with FG

I usually like many of your analysis, but I have to disagree with this blog regarding the currency. Iran's rial has a long way to go before collapsing. As long as oil prices hover around where they are, Iran's rial may decline in value, but will probably not collapse. Even with a hyperinflation that is predicted because of the antari's policies, Iran's rial will remain afloat because of its backing by oil.

Another explosion reported in Iran

Explosion Watch. Fars has pulled its article of the large explosion in Isfahan. Bloggers have claimed the
photograph used to illustrate the original story, whether or not it was
intended to represent today's event, is actually of an October grenade attack in Kashmir.

Fars' withdrawal of the story was foreshadowed by Mehr, which --- quoting the Deputy Provincial Governor --- claimed that there was no explosion this afternoon. There is yet another variant on Raja News, which has the Provincial Governor saying that the explosion was part of a military "training exercise".

However, Shafaf and Alef (see 1620 GMT) still carry the original Fars story.

Israel's Channel 10 has been claiming that the explosion was at a Shahab-4 missile site.

1620 GMT: Back from an academic break to find this report from Fars....

The sound of a large explosion
was heard this afternoon in Isfahan. The Fire and Disaster Management
Office have confirmed the news, but provincial authorities have given no
details.

Other websites such as Shafaf, reportedly linked to Tehran Mayor Mohammad-Baqer Qalibaf, and Alef, linked to MP Ahmad Tavakoli, are carrying the Fars report word-for-word, but there is no coverage on the website of State news agency IRNA.

 Farhang Ashti and Mardomak claim that the explosion happened in the area
of Bozorgmehr Street to Darvazeh Shiraz. Isfahan's Military Academy is
situated in the vicinity of Darvazeh Shiraz //www.ashtidaily.com/vdce... and //www.mardomak.org/story/...

Source: Enduring America

(NOTE: "Reza" is a regime

(NOTE: "Reza" is a regime apologist and Ahmadinejad supporter on another site.  Like his counterparts elsewhere he keeps repeating that the 2009 elections were NOT rigged, and assuring everyone that Mahmoud is "overwhelming popular" in Iran today).

Overestimating Mahmoud's popularity.  Reza confuses "populist" with
"popular."  Ahmadinejad is a guy who couldn't win the last election fair
and square even with clerical allies and a ton of bribes.  Once again
his gang appears to have stolen billions from the banks to finance more
election bribery.  Iranians accurately translate clerical complaints about the
scandal to mean "You stole it first before we could."

Assurances that Mahmoud won "fair and square" offered by the equivalent
of tobacco company
scientists or of oil/coal company global warming experts fail to impress.  Nor can Iranians believe that a man who displayed no scruples in
committing
horrific crimes against protestors and critics would balk at rigging
election results--especially if he had much to gain thereby. With only
the hated mullahs as an opponents this time, his faction might prevail if not for Guardian Council vetting or more vote fraud (sweet irony!) 

All populists display fascistic traits, including extreme nationalism
(see Mussolini and Hitler).  Iran's people have figured Mahmoud out: his
faction offers only a rival in-crowd--no less corrupt, brutal and
intolerant of criticism than the mullahs.   Except perhaps on social
freedoms, it's a Tweedley-Dee, Tweedly-Dum choice. 

Does Reza really
think people didn't notice how Mahmoud was up to his neck in supporting
the beatings, torture, imprisonment, show trials, etc.?  Or that the
people swallow Mahmoud's claim (shared with the mullahs) that all such
discontent was a product of foreign schemers?  Iranians chuckle these
days as Mahmoud's cheerleaders get a dose of their own medicine from
former allies.

Populist demagogues lose support fast when people catch on to their
tricks, their unsustainable promises, their obvious corruption and their
extreme incompetence in running a nation.  Way out of touch with Arab Spring demands and every bit as
thuggish as the mullahs, Mahmoud has little appeal to the youth in a
demographical young country .  Merchants and the middle class despise
him. The bazaaris are in the mullahs' camp. 

That leaves a portion of the working class.  Deduct die-hard
Islamists common in that group.  Subtract union members whose leaders
Mahmoud oppressed, as populists always do.   Deduct workers no longer
impressed by Mahmoud's outlandish claims of present or future prosperity
as they go payless for months while prices spiral upward.   Workers
have heard enough "the check is in the mail" nonsense.

Syria's Muslim Brotherhood: Iran offers a lousy model

They are right about that.  Enjoy!

 //www.bloomberg.com/news/2011-11-28/syria-s-muslim-brotherhood-favors-turkish-model-over-iran-s-leader-says.html

The economical disaster facing Iran

Iran's currency collapse is only a symptom of the steadily accelerating economic disaster our country has been facing for the past 32 years.

Those of us who have family in Iran and travel back for visists have been witnessing steady inflation of basic commodity prices (bread, rice, milk, meat...). Factories shutting at an alarming rate. Unemployment is at least running at 25% of the workforce. Huge import/export imbalance. Corruption at the very highest level, where Iran's only real -yet very significant- source of income, oil, just "goes missing".....

is it any surprise that the currency of Iran is becoming  worthless?

"Personal business must yield to collective interest."

So how big is the bank fraud?

A lot more than $2.6 billion apparently.

 //www.enduringamerica.com/home/2011/11/26/iran-feature-so-how-big-is-the-bank-fraud.html

 خبرهاايران

//www.voanews.com/persian/news/Iran-Economy-2011-11-24-134462103.html 

"It is the chain of communicat­ion, not the means of production­, that determines a social process."

-- Robert Anton Wilson

Responses

To Vildemose: Sorry, can't read Persian.

To Mammad

re: Ahmadinejad and his team are manipulating the currency in order to
obtain the necessary funds for their campaign for Majles elections in
March

That could be so but I'm not sure it would account for all of it.  No doubt they like to bribe voters willing to still live under the system but all those bribes didn't get Ahmadinejad nearly enough votes to win the election last time so pre-planned election day rigging became essential.

You are assuming Ahmadinejad's faction will be allowed to run.  Ahmadinejad's faction can never outvote the pro-democracy faction if the latter felt there was any point in voting (Obviously not).  

Assuming the Guardian Council permits enough Ahmadinejad supporters to run, which I doubt, most reformers stay away and the rest will vote "lesser of two evils" or "Anyone but the mullahs.  I have no doubt MA wins in that case.   But will those votes be counted?

Meanwhile the clerics will blame bribery exclusively even if bribes didn't trouble them last time.  The mullahs will also ignore the second reason for being outvoted: their massive unpopularity, NOT Ahmadinejad's popularity which is greatly dimished for this role in suppressing free speech and press, rigging elections and repressing demonstrators.

Can Iran survive the collapse of oil-based economies?

Some studies suggest Iran could face a bright future and recover quickly after the chain and anchor of the Islamic Republic are ditched.  I hope so, but I'm not sure.  It's theoretically possible.

First, the Iranians must avoid having any major change co-opted by the same forces which have grown rich through the Islamic Republic.  The second problem is longer range but it's coming, almost surely in the lifetimes of Iran's relatively young population--how to cope with the impending world wide decline in oil production once world-wide production peaks.   Once production declines afterward, it can do so at a very sharp rate, as happened in the USA.  You can find charts on that.

A shortage of oil affects almost everything in modern world economies--not just prices at the pump.  So many thinks are made from oil--plastics, fertilizers, pestisides, car tires, storage bags, clothing materials, etc., with modern agriculture especially hard hit especially in its effect on the only five countries who still produce an agricultural surplus.

Don't be fooled by talks of new oil finds to come (we know where most of the world's remaining oil is located and it's much harder to extract so any net increase in production is limited).  Don't be fooled by talk of electrical cars, which indirectly depend on other souces, including coal.  Don't be fooled by ethanol, which oil company lobbyists have permitted since it costs more than a barrel of fossil feul to make one ton of ethnanol.  With corn subsidies, it also keeps farmers happy politically while reducing food productions.

When peak production is passed, everything will get more expensive.  Agriculturally, there is no way the world can support its present 7 billion let alone a "projected" 50 billion down the road. Meanwhile powerful oil lobbyists (who include the Koch Brothers who finance the tea party) have torpedoed mass transport, discouraged conservation measures (remember Jimmy Carter's proposals), cut spending for research into alternative fuels and promoted the idea that global warming is a hoax played by scientists against business interests.

So why bring up Iran, which has some of the world's largest oil deposits?  If Iran had a more diversified economy, it would be in a far better position than many countries.  However, thanks to the mullahs, Iran produces little else.  Cheap imports, which will get expensive, have driven hundreds of firms out of business with agricultural production especially hard hit.  Thus any gain from increased costs per barrel of oil will be offset by the need to import much that should not need to be imported.

Whatever you do, I'd recommend you don't count on the typical religious cliche: "God will provide."  I'd think the Iranian people--more than anyone--should have learned better over the past 30 years.

Several interesting videos are available on the likely consequences of an oil crash.  

//movies.netflix.com/WiMovie/A_Crude_Awakenin...

//movies.netflix.com/WiMovie/Blind-Spot/70122...

FG: DO you read Persian?

 //iranian.com/main/news/2011/11/26-0

"It is the chain of communicat­ion, not the means of production­, that determines a social process."

-- Robert Anton Wilson

My apologies but.....

     Your statement (quoted below) is utter nonsense or worse!

   "If were were talking about a week, not four or five days, that would equivalent in annual rate to 3 x 52 weeks or 156%--ASSUMING the drop continues at the same rate.  Since the period involved was well under a week, the rate would equate to more that 200% annually if maintained."

     This is what is called "Linear" lunacy! :-)

Do not be naive

Ahmadinejad and his team are manipulating the currency in order to obtain the necessary funds for their campaign for Majles elections in March. Once they have enough funds, they flood the market with $$ and lower the price. This is not the first time this is done, and will not be the last either.

Mammad

Something is Wrong! (The post-mullah crisis)

Currency collapse alone may not bring down the regime,   Zimbabwe experienced hyperinflation yet Mugabe still rules there.   Iran's situation vis-a-vis hyperinflation may be different because of its strategic location and because so many other factors are coming together at the same time.

Should the Islamic Republic fail, Iranians will no more be out from under than the Egyptians after Mubarek.  Should that fall seem inevitable, certain parties (the military, Rafsanjani, Ahmadinejad) may switch side but they won't give up their stolen loot or their tendencies to corruption, bribes and nepotism if given charge of a provisional government.  You get many of the same people carrying out the same detested policies under a new guise.

Thus, Iran--like Egypt--may need two back-to-back revolutions to free itself from a situation the mullahs created.  To grasp what that can mean and how it works in practice, you will never get a better picture than via the following link.  It should be mandatory reading for Iranians concernd about what the future holds in store.

//www.enduringamerica.com/home/2011/11/27/egy...