Iran to slash 4 zeros, rename currency

[Hack-Hook]

R

Please don't link to an article. If you have read that article, then tell me its highlights. I can't read an entire article to understand you.

Read the first two page and you see why it will otsolve anything.

1. They say that because Iran's inflation will remain high without fundamental reforms, we will have to do the same thing again in future. After the 1979 revolution, almost every 10 years, Iranian Rial has lost 90% of its value. So, basically, if we drop 4 zeroes from our currency, we will have to do the same 40 years later. So, spending money on something that will happen again is a waste of money. This is a valid argument, but who knows what can happen in 40 years?

Wrong it was the case until second term of Ahmadinejad.
It become faster since that time .
By the way why use a useless thing . do it right and you have done it for the next generations and by doing so you will stop lots of theft .

2. They say that rounding old prices can cause extra inflation. For example, something that previously was 35,000 IRR will probably get rounded to 40,000 IRR. But we all know that inflation in Iran is already past that stage that people care about 5,000 IRR.

Wrong . it show you don't knew the conditions of living of low income people tbe ones who are under absolute poverty line.

3. They say that changing currency can lead to an increase in liquidity and hence an increase in inflation. But the main source of liquidity in our economy is our debt generating banking system. If we implement this reform slowly and collect old papers and coins as we replace them by new ones, this won't be a problem

The banks are not the only problem and why not fix those banks first

On the other hand, people who agree with this reform, including me, believe that slashing 4 zeroes will add to the credibility of our currency.

It will add to shit.
Credibility of currency is based on how you back it . If you can't back it with gold and forex if your people can't provide an acceptable living conditions All these numbers means shit.

It will have a positive psychological effect on many Iranians who think their money is worthless because 1 USD ~ 160,000 IRR. I believe this is a good move that should've been done years ago and the more we delay it, the more we let people think that the Iranian currency is worthless.

Ask any economists and they will tell you it will have a ad psychological effect on market.

 

[QWECXZ]

Read the first two page and you see why it will otsolve anything.

As a matter of fact, I read the article for fun. The point of changing the currency is not to solve the economic problems of the country, but it is a cosmetic measure. It is like a person has cancer but also has developed a skin disorder that has deteriorated his self confidence. Obviously, fixing the skin disorder won't cure his cancer, but will help his mental health.

Wrong it was the case until second term of Ahmadinejad.
It become faster since that time .
By the way why use a useless thing . do it right and you have done it for the next generations and by doing so you will stop lots of theft .

Nope. It is correct. If we ignore the current covid-19 crisis which is unprecedented, US dollar to Iranian Rial exchange ratio grows by a factor of almost 10 every 10 years. So, it will take 40 years for the 4 zeroes to return.

Wrong . it show you don't knew the conditions of living of low income people tbe ones who are under absolute poverty line.

Even low income people who are way below absolute poverty line don't care about 5000 IRR. You can't buy a piece of bread with 5000 Rials. Although that 5000 IRR will be equal to 50 Qirans under the new currency. 100 Qirans will be equal to 1 Toman.

The banks are not the only problem and why not fix those banks first

The banks are the main problem behind Iran's currency devaluation. And our banking system cannot be fixed without improving our production which not only needs fundamental changes inside Iran over a long period, but also fundamental changes in our relations with the world and the distribution of power globally.

Here's the short story: banks provide capital in form of loans and other kinds of contracts to improve production, construction, etc. But since production in our country is usually difficult and not profitable, loans aren't repaid and our banks generate debt. The central bank is then forced to clear the debt by devaluing our currency. If we want to fix this cycle, we will have to have fundamental reforms in the system which will be nothing short of a complete revolution. Either that or we must hope for the US empire to fall which is not going to happen anytime soon. There's no other way.

Meanwhile, I prefer to do a cosmetic surgery on our economy that changes 1 USD to 16 Tomans for a while instead of 1 USD equal to 160,000 IRR. I mean 10 years from now 1 USD will be probably equal to 2,000,000 IRR! Won't you feel ashamed then to tell a foreigner that 1 USD is like 2 million units of your currency? Not to mention that even calculations will become more difficult.

It will add to shit.
Credibility of currency is based on how you back it . If you can't back it with gold and forex if your people can't provide an acceptable living conditions All these numbers means shit.

Wrong, wrong, wrong. It can have a positive psychological effect.
The value of a fiat currency, unlike what you think, is based on the trust and confidence people have in it, not FOREX reserves or gold. Of course trust and confidence need rational reasons but the value is not necessarily based on any real commodity in reality. If I give you a dirty toilet paper and tell you that I have partners or friends that sell you goods for this worthless dirty toilet paper, that toilet paper will be valuable. The same is true about digital currencies and fiat currencies.

The Petro Dollar agreement is a good example of how a political agreement can keep the value of a currency without any actual commodities. The value of the US dollar is based on the trust and confidence the world has in the US capabilities.

Ask any economists and they will tell you it will have a ad psychological effect on market.

Hemmati, the current Head of Iran's Central Bank, has a PhD in economics from University of Tehran. So, think twice before saying any economists. And no, many economists think this change is necessary. Stop thinking that your idea is supported by many. lol

 

[Hack-Hook]

W

As a matter of fact, I read the article for fun. The point of changing the currency is not to solve the economic problems of the country, but it is a cosmetic measure. It is like a person has cancer but also has developed a skin disorder that has deteriorated his self confidence. Obviously, fixing the skin disorder won't cure his cancer, but will help his mental health.

Well treating the cancer help a lot with that skin disorder.

Even low income people who are way below absolute poverty line don't care about 5000 IRR. You can't buy a piece of bread with 5000 Rials. Although that 5000 IRR will be equal to 50 Qirans under the new currency. 100 Qirans will be equal to 1 Toman.

Just think about how many item you purchase on daily bases . now consider how many it will be in a month and then you see how much it matter for some people.

The banks are the main problem behind Iran's currency devaluation. And our banking system cannot be fixed without improving our production which not only needs fundamental changes inside Iran over a long period, but also fundamental changes in our relations with the world and the distribution of power globally.

What it had to do with production . as a matter of fact if you fix banking system then your production will increase.

Meanwhile, I prefer to do a cosmetic surgery on our economy that changes 1 USD to 16 Tomans for a while instead of 1 USD equal to 160,000 IRR. I mean 10 years from now 1 USD will be probably equal to 2,000,000 IRR! Won't you feel ashamed then to tell a foreigner that 1 USD is like 2 million units of your currency? Not to mention that even calculations will become more difficult.

I feel ashamed if I think superficial instead of fundamental.

The value of a fiat currency, unlike what you think, is based on the trust and confidence people have in it,

No it's not and as you call it a cosmetic surgery won't increase people confidence.

The Petro Dollar agreement is a good example of how a political agreement can keep the value of a currency without any actual commodities. The value of the US dollar is based on the trust and confidence the world has in the US capabilities.

Sorry to tell you a secret . nobody have such trust in us.knew why ? Because we think of cosmetic surgeries.

As a matter of fact, I read the article for fun. The point of changing the currency is not to solve the economic problems of the country, but it is a cosmetic measure. It is like a person has cancer but also has developed a skin disorder that has deteriorated his self confidence. Obviously, fixing the skin disorder won't cure his cancer, but will help his mental health.


Nope. It is correct. If we ignore the current covid-19 crisis which is unprecedented, US dollar to Iranian Rial exchange ratio grows by a factor of almost 10 every 10 years. So, it will take 40 years for the 4 zeroes to return.


Even low income people who are way below absolute poverty line don't care about 5000 IRR. You can't buy a piece of bread with 5000 Rials. Although that 5000 IRR will be equal to 50 Qirans under the new currency. 100 Qirans will be equal to 1 Toman.


The banks are the main problem behind Iran's currency devaluation. And our banking system cannot be fixed without improving our production which not only needs fundamental changes inside Iran over a long period, but also fundamental changes in our relations with the world and the distribution of power globally.

Here's the short story: banks provide capital in form of loans and other kinds of contracts to improve production, construction, etc. But since production in our country is usually difficult and not profitable, loans aren't repaid and our banks generate debt. The central bank is then forced to clear the debt by devaluing our currency. If we want to fix this cycle, we will have to have fundamental reforms in the system which will be nothing short of a complete revolution. Either that or we must hope for the US empire to fall which is not going to happen anytime soon. There's no other way.

Meanwhile, I prefer to do a cosmetic surgery on our economy that changes 1 USD to 16 Tomans for a while instead of 1 USD equal to 160,000 IRR. I mean 10 years from now 1 USD will be probably equal to 2,000,000 IRR! Won't you feel ashamed then to tell a foreigner that 1 USD is like 2 million units of your currency? Not to mention that even calculations will become more difficult.


Wrong, wrong, wrong. It can have a positive psychological effect.
The value of a fiat currency, unlike what you think, is based on the trust and confidence people have in it, not FOREX reserves or gold. Of course trust and confidence need rational reasons but the value is not necessarily based on any real commodity in reality. If I give you a dirty toilet paper and tell you that I have partners or friends that sell you goods for this worthless dirty toilet paper, that toilet paper will be valuable. The same is true about digital currencies and fiat currencies.

The Petro Dollar agreement is a good example of how a political agreement can keep the value of a currency without any actual commodities. The value of the US dollar is based on the trust and confidence the world has in the US capabilities.


Hemmati, the current Head of Iran's Central Bank, has a PhD in economics from University of Tehran. So, think twice before saying any economists. And no, many economists think this change is necessary. Stop thinking that your idea is supported by many. lol

He says whatever his boss tell him.

 

[QWECXZ]

Well treating the cancer help a lot with that skin disorder.

I think you are missing the point. If the cancer can't be cured right away, it doesn't mean that the patient has to suffer from lack of confidence, which can be cured even if the cancer remains uncured.

Just think about how many item you purchase on daily bases . now consider how many it will be in a month and then you see how much it matter for some people.

To be fair, many items I buy these days have already been rounded up. But regardless of that, that's why there's a denomination called Qiran.

What it had to do with production . as a matter of fact if you fix banking system then your production will increase.

Let me explain. You own a medium-sized company that produces something, let's say shoes for simplicity. You apply for a loan, you receive it. Now you have to make shoes and profit to pay it back but then when you want to produce your shoes, you realize there's a lack of skilled human capital and modern machinery. You also face inflexible tax laws, social security laws, outdated intellectual property laws, etc. You also can't export your shoes to foreign countries. So, your margin of profit becomes small and you can't pay back your loan. That's a tangible story. Isn't it? Now if the judiciary system wants to put all of these people in prison, not only all Iranian businesses will get closed and more people will get unemployed and our economy will come to a halt, but prisons will be full as well. Now add corruption to the story. Add the scandal of unauthorized banks like what happened few years ago and hasn't been resolved fully yet to it. All of these factors force the central bank to devalue the currency to clear debts.

Sorry to tell you a secret . nobody have such trust in us.knew why ? Because we think of cosmetic surgeries.

It's because we are not powerful. We can't offer much to people. Our country has been run as an oil-dependent economy for years. We have no strategic products that can't be replaced. We are not a super power like the US to offer a military umbrella to other countries. People don't line up in front of the Iranian embassy to visit Iran or study at our universities. That's why. It has nothing to do with cosmetic surgeries.

The US foreign debt has exceeded its GDP and the US pays back countries by printing money. Normally, if a country like Venezuela wants to do that, it will lead to hyperinflation. But why does it work in the case of the US? Because dollar makes up like 70% of FOREX reserves of central banks around the world because the US controls a lot of goods in the international economy: from Arab oil to civilian airplanes. Arabic countries ensure the status of the US dollar by selling oil in US dollar only. US in return provides them with security and technology. Can Iran do that in the next 3 decades?

Can you imagine a time in our lives where energy producing countries ask Iran for protection, security and technology? I can't.

He says whatever his boss tell him.

Fair enough. But let's be honest, we have to do it some day. We can't postpone it forever.

P.S. I felt an earthquake in Tehran as I was writing this.

 

[Aramagedon]

Since great Afsharid Empire Iran hasn't changed its current currency so it's a great decision.

Yankee donkeys didn't even existed in that era. These terrorists lived somewhere underground.

Meanwhile China recently removed dollar and replaced it with Yuan forever and it seems many more countries are following.

https://www.thestar.com.my/business...unctional-alternative039-to-dollar-settlement

For eternal salve mentality people , Persians used different types of currency +3000 years ago while other humans on earth used cattle for busines.

Then conquered Rome Egypt and others learned from Iranians but with lower quality. Meanwhile 95% of Europeans couldn't count 1 to 10 in medieval time eras.

https://en.numista.com/catalogue/persia-1.html

 

[Hack-Hook]

I think you are missing the point. If the cancer can't be cured right away, it doesn't mean that the patient has to suffer from lack of confidence, which can be cured even if the cancer remains uncured.

start the treatment right now , if you don't do that the treatment of cancer become harder ,you may need a Mortuary makeup artists instead of a cosmetics treatment if you wait long

To be fair, many items I buy these days have already been rounded up. But regardless of that, that's why there's a denomination called Qiran.

that can help to some extent not completely

Let me explain. You own a medium-sized company that produces something, let's say shoes for simplicity. You apply for a loan, you receive it. Now you have to make shoes and profit to pay it back but then when you want to produce your shoes, you realize there's a lack of skilled human capital and modern machinery. You also face inflexible tax laws, social security laws, outdated intellectual property laws, etc. You also can't export your shoes to foreign countries. So, your margin of profit becomes small and you can't pay back your loan. That's a tangible story. Isn't it? Now if the judiciary system wants to put all of these people in prison, not only all Iranian businesses will get closed and more people will get unemployed and our economy will come to a halt, but prisons will be full as well. Now add corruption to the story. Add the scandal of unauthorized banks like what happened few years ago and hasn't been resolved fully yet to it. All of these factors force the central bank to devalue the currency to clear debts.

the problem is not with small shoe making company poor guy already paid to his nose with collateral and ..... the problem are these guys .
https://www.eghtesadonline.com/بخش-...بزرگ-بانکی-بیش-از-هزار-میلیارد-تومان-بدهکارند
fix that aspect of our banking system

It's because we are not powerful. We can't offer much to people. Our country has been run as an oil-dependent economy for years. We have no strategic products that can't be replaced. We are not a super power like the US to offer a military umbrella to other countries. People don't line up in front of the Iranian embassy to visit Iran or study at our universities. That's why. It has nothing to do with cosmetic surgeries.

the power here is not military , its economical power and it won't come to you by cosmetic measures .
let me tell you something a japanese yen is equal to 0.0094 United States Dollar do they have plan on lashing zerro from their currency .

Fair enough. But let's be honest, we have to do it some day. We can't postpone it forever.

we have to do it , but we must do it after inflation become under 5 % , after we get rid of dependence of our natural rssources and foundamentally changed our economy . after our central bank and banking system become so independent that if a politician gave a guy a letter to go to bank and get milliards of loan , the banking system throw the letter in dust bin without fear of anything. when at the time of selling companies don't agre to sell them to guys who brought nothing on table.
https://www.mashreghnews.ir/news/994550/رنجنامه-هپکو-و-تاراج-بزرگی-به-نام-خصوصی-سازی-چگونه-غول
this is the problem with our economy , if you dont fix it , a new venezuella or Zimbawe is in making so you can talk about cosmetic measures and boosting morals