Iranian Currency Loses Twenty Percent of its Value in Two Days After New Sanctions

[Conley]

Meanwhile, Iran’s central bank, which was placed under U.S. sanctions Saturday, intervened to flood the local market with dollars, helping the national currency to appreciate a bit following a steep slide. The currency, the rial, had slipped to unprecedented lows against the dollar after the U.S. move.

But Iranian officials stressed that their own economic policies — rather than the sanctions — were to blame for the rial’s loss of nearly 20 percent of its value in two days, the latest of several currency shocks in recent weeks.

“Sanctions have not created any obstacles for the country, and the enemy is only hoping for psychological tensions,” embattled central bank director Mahmoud Bahmani told the semiofficial Fars News Agency on Tuesday.

Experts said the government is awash in dollars from record oil revenues in the past five years but cannot change them into rials because no one in Iran has funds of that magnitude.

“The government needs around $1 billion a week to pay salaries and costs,” said one influential middleman who spoke on condition of anonymity. He said he was seeking domestic buyers for huge amounts of government dollars in order to get rials.

http://www.washingtonpost.com/world/middle_east/iran-warns-us-carrier-not-to-return-to-persian-gulf/2012/01/03/gIQAm9UEYP_story.html

The government is going to start having to issue IOUs. Reminds me of California!

[MMC]

Lets hope they don't get desperate unless it is their population going after their leaders. If they do it is going be real ugly. Including for their populations.

[Pendragon]

This is another instance of sanctions hurting the general population while the leaders are still able to buy whatever they wish. Think of it like this: 20% less of their oil profits is still a massive amount of money, more than enough to live in luxury while the beggars starve.

[Mister D]

Sanctions didn't do much to hurt Saddam.

[Conley]

Didn't the sanctions gut his military? I honestly don't know, I thought they worked but also hurt the civilian population immensely.

[Mister D]

Didn't the sanctions gut his military? I honestly don't know, I thought they worked but also hurt the civilian population immensely.

From what I understand it had serious effects of the population but I'm not sure about the military. Maybe they tried to tailor the sanctions to hit the military the hardest?

[Captain Obvious]

Sanctions didn't do much to hurt Saddam.

It's suggested that the recent Iranian activity in the straight is related to the effectiveness of the sanctions.

I'm skeptical though but that theory makes sense.

[Mister D]

It's suggested that the recent Iranian activity in the straight is related to the effectiveness of the sanctions.

I'm skeptical though but that theory makes sense.

Interesting. Yeah, that does kind of make sense.

[Conley]

You guys are saying that the military demonstration was in response to the threat of more sanctions? I'm not sure I follow.

[Mister D]

You guys are saying that the military demonstration was in response to the threat of more sanctions? I'm not sure I follow.

I think it's more of a demonstration that they can hurt us economically.

[Captain Obvious]

You guys are saying that the military demonstration was in response to the threat of more sanctions? I'm not sure I follow.

Kind of. The discussion I heard (forgot what show it was on) suggested that Iran wants to trade, they need shit to do their thing and can't get it. So they're threatening a maneuver that could disrupt the trade of the rest of the civilized world.

More posturing maybe but the reaction is interpreted this way by some.

Iran isn't the most cerebral strategist, keep that in mind.

[Mister D]

That's what I figured you meant. I don't think threatening the rest of the world is a wise strategy but, yeah, it's the mullahs.

[Conley]

Ah, yes that does make sense.

If they had stopped with the saber rattling after the war games then I probably would think more highly of their strategy.

Today though with the news that they will attack our aircraft carrier when it returns to the Gulf, I'm thinking they either have a death wish or they're full of it (pretty sure it's the second one). Neither one is a successful strategy long term.

[Captain Obvious]

Ah, yes that does make sense.

If they had stopped with the saber rattling after the war games then I probably would think more highly of their strategy.

Today though with the news that they will attack our aircraft carrier when it returns to the Gulf, I'm thinking they either have a death wish or they're full of it (pretty sure it's the second one). Neither one is a successful strategy long term.

So what do you think BO is contemplating at this moment?

a) Delay returning the carrier to the Gulf
b) Send reinforcements to escort the carrier back to the Gulf
c) Send the carrier to the Gulf as is and hope for the best
d) He's not aware of the issue

[Conley]

I would say probably c, but hopefully b.

I don't see how he could delay the carrier without losing face. Then again this is the guy who wants to negotiate with the Taliban.

[Captain Obvious]

I would say probably c, but hopefully b.

I don't see how he could delay the carrier without losing face. Then again this is the guy who wants to negotiate with the Taliban.

BO has no face to lose.

[Conley]

BO has no face to lose.

And yet he's two faced! :grin:

[Mister D]

lol

[MMC]

Well the Threat to the US Carrier alone.....helped raise the price of Oil by 4 dollars.