Iran Running Out of Physical Currency, Satellite Broadcasts Dropped in Europe 480
iONiUM writes "In an interesting problem with physical currency, Iran is now running out of hard currency, due to a combination of inflation, and 'Koenig & Bauer AG of Würzburg, Germany, also says it has not responded to an Iranian request for bids to make the presses to print new rials.' Perhaps they should switch to BitCoin."
In addition to not printing money for them, the European currency presses won't sell Iran the equipment needed to print their currency domestically (not unexpected with the embargo). pigrabbitbear adds: "Eutelsat Communications, one of the largest satellite providers in Europe, has just nixed its contract with IRIB, the Iranian state broadcasting company. While IRIB's programming is still mostly up and running in Iran, the decision means that 19 IRIB TV and radio channels have now been axed from Europe and much of the Middle East."
Self-stabilizing system (Score:2, Informative)
If the hard cash is difficult to come by, then doesn't it raise the value of the printed notes thus nullifying the inflation and the need for more printed notes?
Re:Self-stabilizing system (Score:5, Informative)
No, because cash is digital; the paper tokens are just for convenience when you're not using a card or whatever. You're mistaking the symbol for the thing symbolized.
Re:What happened to the presses they already had? (Score:4, Informative)
Re:An experiment in motion (Score:4, Informative)
2. A fiat currency controlled by a state apparatus is not a "free market", no matter which direction they end up choosing.
Re:Big surprise (Score:5, Informative)
this is what happens when you don't cooperate with the Americans, the Europeans, the Turks, the Saudis, the Israelis, the Russians, the Chinese, etc...
there is a price to pay for forging a path that is hostile and has animosity to rest of the world. framing the situation as a country not blindly following just the USA is complete bullshit
Hard vs Physical (Score:4, Informative)
I think its funny that "news for nerds" doesn't know that hard currency and physical currency are two different things to businessmen / economists and /. is getting them confused.
Hard currency is someone else's stable currency or gold. You want that when you're doing the hyperinflation thing like Iran's doing now and the US is attempting to do and Germany did about 90 years ago. Foreigners like satellite broadcasters want "real" aka hard money.
Physical currency is the paper bills. Once a stack of bills can't buy a roll of toilet paper, people start using money instead. Ditto firewood/kindling. Again a symptom of inflation. Most legal foreign trade doesn't involve paper currency so the satellite owner probably doesn't care about Iran's paper currency.
It takes pretty high tech to make cutting edge hard to counterfit paper money. Coinage is possible if you have gold. Paper checks, bank accounts, and credit cards don't care how many zeros are on them. Bitcoin would work but its hardly the only solution and requires a lot more electricity than a checkbook. Its not a huge deal.
Re:Desperation breeds war. (Score:5, Informative)
"It is pretty douchy that Israel didn't have to sign the NPT but gets weapons and reactors."
No one has to sign it, it's entirely option. Note that Pakistan, India, and North Korea all have weapons and reactors but are not signatories either.
The treaty is based on the idea that if you sign up, then if you don't have nuclear weapons, then you don't seek to acquire them, and if you do have nuclear weapons, then you agree to reduce stockpiles with the aim of eventually disarming. In return for agreeing to this, you get access to global nuclear technology and information sharing agreements for peaceful nuclear power generation. The problem with Iran is that it wants access to this information, and the nuclear components market, but it's not fulfilling it's legal obligations to prove that it's not seeking to acquire nuclear weapons.
I hope this clarifies the difference between Israel, India, Pakistan, and North Korea vs. Iran. The former 4 have basically made the calculation that they'd rather have nuclear weapons and worry about sourcing nuclear enrichment and power technologies outside of international frameworks, or alternatively, simply developing it themselves internally. In contrast, Iran is basically saying they want all the benefits of the NPT, whilst fulfilling none of the obligations. You can't do that, you either sign up to all, or nothing.
One final point I'll make though is that action to prevent states becoming nuclear capable can happen whether the NPT is involved or not, so you shouldn't assume the NPT is a tool used to simply beat nations with, it's not. The reason I say this is because the pressure against North Korea (a non-NPT signatory) is as strong as against Iran (an NPT signatory). As you can see, rhetoric, proposed action, or actual action against a nation is simply to do with global politics as much as it is NPT compliance - in other words it doesn't matter if India/Pakistan/Israel are NPT signatories or not, any action against them will happen, or not happen, regardless of their NPT signatory status so Israel signing up to the NPT, or Iran dropping out of the NPT, would have absolutely no bearing on the pressure (or in Israel's case, lack of) against them.
Re:But we're still buying their oil, right? (Score:5, Informative)
Actually that's been a primary reason for Iran's economic collapse so far - both the US and Europe actually put their money where their mouth is for once and actually stopped buying Iranian oil. Whilst China has picked up some of the lost sales, it's not picked up even close to all of it, and worse, because China is no longer competing with the West for Iranian oil, and Iran desperately needs to sell that oil, China has been able to bargain for lower prices for it. Saudi Arabia has increased output to support the loss of Iranian oil to the US and Europe which is why they've been able to pull it off.
Europe (and presumably the US?) have also just this week now extended that to gas too, which will hurt Iran's economy even more.
Re:Will someone remind me ... (Score:4, Informative)
"why there are all these sanctions against Iran."
The two primary reasons are:
1) Refusing to fulfil it's obligations as an NPT signatory. It is fairly unique in this regard.
2) Sponsorship of groups on US/European terrorism watch lists. This is something other nations do (including the US/Europe ironically).
But it is point 1) that would normally be used as the reason for separating Iran from other nations, though it may be worth reminding you that Syria and North Korea have also both been under sanctions for many years for these reasons also so it's not as if they're being applied to just Iran, though I will agree with you, they are still applied somewhat selectively - for example, Pakistan is also complicit in funding terrorist organisations, and has a nuclear programme (though like North Korea, is not an NPT signatory) but because it's a US ally, it gets away with these things.
Re:Self-stabilizing system (Score:2, Informative)
You have money in your savings account, but that money is actually invested in someone else's mortgage
No - this is the amazing thing about our banking system. When a bank gives you a mortgage for $100,000, they create that "money" from thin air. It doesn't exist before that point: it is not shifted-over from someone else's savings.
It does not exist until the bank makes it exist.
And in return you have to scrape-together that $100,000 plus interest over the next 30 years to make the new virtual amount real.
Re:How would you feel if the USA were banned (Score:5, Informative)
They are free to build their own printing presses.
The EU is simply refusing to give them one.
Re:Outraged! (Score:4, Informative)
printing billions in quality counterfeit western currency
Actually; that's what our governments do too..
It's called 'quantitative easing'.
Re:Desperation breeds war. (Score:5, Informative)
With all due respect, your information is either out of date, or in place, completely and utterly wrong.
"As a signatory to the NNPT, Iran has every right to develop nuclear power, enrich uranium and have access the full nuclear fuel cycle."
It has the right to obtain peaceful nuclear technology, whilst it is also fulfilling it's obligations under the NPT. The problem is, as it's not currently fulfilling it's obligations under the NPT, it also does not have the right to obtain peaceful nuclear technology via NPT supported mechanisms.
"Israel and the USA are attempting to deny this capability to Iran because they *might* build a nuclear weapon."
It's not about might, it's about the fact that as an NPT signatory to gain the benefits of NPT mechanisms for transfer of peaceful nuclear technology you have to fulfil certain obligations. Iran is currently in breach of those obligations and it's nothing to do with what the US or Israel thinks as the IAEA is a multinational organisation staffed by as many of US/Israel's foes as it is their allies. If you do not believe me that it is the IAEA condemning Iran for not fulfilling it's obligations and simply US/Israeli say-so, then see here, read it directly from the horse's mouth:
http://www.iaea.org/newscenter/focus/iaeairan/index.shtml [iaea.org]
Or specifically the most recent report here, asking Iran to fulfil it's obligations:
http://www.iaea.org/Publications/Documents/Board/2012/gov2012-50.pdf [iaea.org]
"National Intelligence assessments concluded that Iran had abandoned its weapons program 10+ years ago."
This is true, but only a half-truth. You've missed the fact that the IAEA believes there is some evidence the programme may have restarted, and it is up to Iran to fulfil it's obligations to prove otherwise if it wants to be in compliance with the NPT. So sure they did abandon it, but that doesn't mean they didn't start it again.
"Iran has bent over backwards to accommodate UN (i.e. USA) demands for access to its facilities"
No it hasn't, you've got a number of things wrong here:
1) Iran hasn't bent over backwards to accomodate the UN (IAEA), on the contrary, the IAEA has bent over backwards to accomodate Iran. Specifically, Iran barred a number of IAEA inspectors from it's site from countries it has a distaste for (including the US). A country is not meant to be able to pick and choose what inspectors it allows in as that defeat the object of impartial observations of a nuclear programme. Despite this the IAEA let it do it and got on with it's job anyway. If there is any bending over backwards, it's from the IAEA not Iran.
2) The UN isn't the USA, and the USA isn't the UN. I think you'll find there are a number of UN members, including Iran themselves who'd take offence to you determining that their UN votes are controlled by the USA.
3) There are a number of facilities and sections of facilities the IAEA has requested access to, but have had their request deny. This is one of the reasons the IAEA has determined Iran non-compliant. See the most recent report here for evidence of this complaint by the IAEA:
http://www.iaea.org/Publications/Documents/Board/2012/gov2012-37.pdf [iaea.org]
Specifically, near the top of page 3:
"Iran has not responded to the Agencyâ(TM)s initial questions on Parchin and the foreign expert; Iran has not provided the agency with access to the location within the Parchin site to which the Agency has requested access; and Iran has been conducting activities at that location that will significantly hamper the Agencyâ(TM)s ability to conduct effective verification."
"but EVERY TIME Iran has compromised, the USA and Israel create another hoop for them to jump through."
Again, it's nothing to do with the US and Israel, the US's
Re:Will someone remind me ... (Score:2, Informative)
The Shah became a dictator when the USA overthrew [wikipedia.org] the democratic government in 1953.
Re:Self-stabilizing system (Score:5, Informative)
Bank collapse is not a bad thing. Honestly they should have let the banks collapse here in the USA.
Yeah, it went pretty well for Iceland.
http://www.washingtonsblog.com/2012/08/top-economists-iceland-did-it-right-everyone-else-is-doing-it-wrong.html [washingtonsblog.com]
People just don't seem to get that when you see a sharp horse trader who is the richest man in town, you know he's going to screw you in any business dealings you have with him because that's how he got to be the richest man in town. So, when he tells you "I refuse to do business with you", the correct response is "Thank you".
Re:Outraged! (Score:5, Informative)
Re:Self-stabilizing system (Score:4, Informative)
The problem with that is we don't have enough precious metals to back all the currencies in the world. It's one reason we left the gold standard behind.
Re:Self-stabilizing system (Score:5, Informative)
If you set items to have a price based on an ounce of gold, that's great, but it does mean that if you keep price stability, you need to have enough gold to pay for things. Wikipedia tells me that we have mined 142,000 metric tons of gold, which is about six trillion dollars worth of gold at current rates, not even close for supporting the dollar, let alone every other currency out there. Presumably there is more to be mined, but like oil, it isn't limitless and there is a rate of production. That rate of production becomes a factor that could be, and eventually *will be* a limit on the growth of an economy.
Even if you were to say that you are now setting the value of the dollar to less gold than it used to be, after that point, you can't change it or you inflate or deflate the currency. So, you get to say that an ounce of gold is worth 1 million dollars just once, after that, you have to live with it.
Further, unlike money created via digital data, gold can be hoarded and its market cornered like any other commodity. We've already seen what can happen if someone forms an oil cartel, and there is absolutely nothing that prevents a gold producer's cartel from forming. There are also actual uses for gold in industry which would have some effect on the value of gold.
The free market allows for hoarding of resources, and because gold does not lose value due to spoilage, there is no pressure to sell. That means that *anyone* can hoard. You might want a bank for your gold, but if you were untrusting of banks, you could just periodically set aside gold to bury as your savings. Since (initially) stable value exists, there is no reason to invest and the gold is just as safe there as in a bank, but with the added problem that the bank cannot make loans based on the gold, and neither can you.
And let's be clear, nothing prevented governments from debasing coinage when they were on a standard. Of course, you could just trade weights of gold, but then every vendor needs to be able to prove that they are getting the weight in gold as opposed to gold coating a slug of lead. Welcome back to the Wild West. I'll be over here setting up my scale and touchstone business.
The reason we dropped the gold standard was deflationary shocks to the economy, which were generally considered to be worse than the sort of shock you would get based on a floating currency. There are suggestions that this is was a major cause of the Great Depression and certainly, the value of gold did cause economic problems around the turn of the century, so much so that American politics was filled with discussions of the gold or silver standard or bimetallism.
We do need to get control over monetary policy, that's for certain, but I don't think anything is going to work in the long run without curbing the desire to spend more than we have without increased economic strength to support it. I am definitely not against free market operation, but I think you may well be unaware or underestimating what would happen today if we shifted to a metal standard without a lot of rethinking of how it was going to work. While I understand that decreasing value of money has problems, those who trade in commodities that are perishable (like crops futures) still manage to make money and produce profits over time and their goods are always in the process of becoming worthless. In some ways, the need to "use it or lose it" is very instructive on how economies work.