Iranian Chill Thread

[TheImmortal]

@aryobarzan

I will let you in on a secret. No Iranian worth his weight in gold would put money into a trash depreciating currency like rial.

Right now Iranians can freely buy crypto and make inflation protected returns that dwarf holding your money in an Iranian bank.

example: let’s say Iranian banks pay you 16% to deposit your money. So you deposit for 12 months and get 16%, but in the same 12 months Iranian currency inflation was 14%.....so how much real return did you make? 2%!!!

It’s a joke! You could make 10x, 50x 100x that holding top cryptos! Yes there is risk, but there is risk holding Iranian currency as well or putting your money in an Iranian bank that tommorrow could be in an embezzlement scandal.

So Iranians are either buying gold, real estate, crypto, and stocks or smartly a combination of all of these for proper diversification among asset classes. These do well against inflation.

Investing in rial when their is no light at the end of the tunnel is not a strategy. It doesn’t matter what interest rate banks play, if the currency keeps spiraling into the abyss, Iranians will continue investing in assets that actually make a substantial real return. Making 20% interest when the currency loses 15% of its value during the same timeframe is not great.

 

[aryobarzan]

@aryobarzan

I will let you in on a secret. No Iranian worth his weight in gold would put money into a trash depreciating currency like rial.

Right now Iranians can freely buy crypto and make inflation protected returns that dwarf holding your money in an Iranian bank.

example: let’s say Iranian banks pay you 16% to deposit your money. So you deposit for 12 months and get 16%, but in the same 12 months Iranian currency inflation was 14%.....so how much real return did you make? 2%!!!

It’s a joke! You could make 10x, 50x 100x that holding top cryptos! Yes there is risk, but there is risk holding Iranian currency as well or putting your money in an Iranian bank that tommorrow could be in an embezzlement scandal.

So Iranians are either buying gold, real estate, crypto, and stocks or smartly a combination of all of these for proper diversification among asset classes. These do well against inflation.

Investing in rial when their is no light at the end of the tunnel is not a strategy. It doesn’t matter what interest rate banks play, if the currency keeps spiraling into the abyss, Iranians will continue investing in assets that actually make a substantial real return. Making 20% interest when the currency loses 15% of its value during the same timeframe is not great.

Apart from currency depreciation which is real problem (money printing being the cause)..the situation of interest rate making 2% is better compared to where I am ... here in Canada ..I get barely 1% on my deposits in the bank but real inflation is 3 or 4 %...and on top of that I have to pay tax on my interest ( you guys in US do not pay tax on interest)...so making almost nothing on your bank deposites is a universal matter and iran is no exception.

 

[Maula Jatt]

https://alijavidiri.tumblr.com%2Fpost%2F667038831312306176

this guy seems like a loud mouth character
He talks crap about GOP too, when Afghan team lost a match he said they are involved in betting and we'll investigate and punish them

 

[TheImmortal]

Apart from currency depreciation which is real problem (money printing being the cause)..the situation of interest rate making 2% is the same here in Canada too..I get barely 1% on my deposits in the bank but real inflation is 3 or 4 %...and on top of that I have to pay tax on my interest ( you guys in US do not pay tax on interest)...so making almost nothing on your bank deposites is a universal matter iran is not exception.

Yes and No.

In developed economies there is a suffering from low inflation. Forget what has happened in last 2 years. This is socio engineered inflation in a desperate attempt to keep major fiats becoming the yen (deflation). Inflation will stabilize in major fiats.

Iran is experiencing the type of inflation US was experiencing in 1970-1980s where a treasury bond was paying 15-20% and mortgage rates were above 10%!

Anyway I digress comparing your situation in Canada (1st world country) to Iran (3rd world country...nearly half the country in poverty) is not a fair basis. You have many investment options to make (land, stocks, real estate, and your salary is relatively stable in relation to purchasing goods). Iranians on the other hand have finally got the chance to make the same type of investments, but their salary is maybe 50% of what it was from purchasing standpoint years ago!

So major fiat still has so much demand for its currency and doesn’t suffer from money printing issues that a country like Iran does thus they have NO NEED to offer interest rates at bank level.

Furthermore, in the US they are binded to the fed funds rate which is near zero. Thus banks can’t offer much in the way of interest when they go off of treasury rates. If Iran kept interest rates near zero like US it would further lead to run away inflation, basically what Erdogan is doing to Lira by refusing to raise rates.

So while situations LOOK alike (Canada and Iran) they are actually very very different. A tale of two stories basically on how currencies who have power can leverage the **** out of it with no consequence while the brown guy’s currency gets severely punished for any economic wrong doing.

 

[QWECXZ]

I like to thank @QWECXZ and @sha ah for their inputs into the Interest rate discussions...and I am not an "economist" just interested on the subject...I fully understand the concept of people not wanting to lose money in a transaction and yes the "Inflation" vs "Interest rate" is a vicious cycle feeding on each other..It must be stopped..how do U stop it.....BOOST PRODUCTION...oh yes very easy to say but very hard to do but I also know raising interest rate is not the answer it simply adds more to the inflation and cycle continuous.

Where do U start:
I think we all agree that to kill the inflation you need to boost the production..remember the definition of inflation.."too much money chasing few goods"

Channel the money that is looking to grow away from chasing the interest rates and into "Production"..the stock market was supposed to do that but we all know it has turned into a quick make money scheme..(yours truly played it for two years and made a ton of $$$ but that was when the market crashed in 2008 when DOW dropped to almost 6000 points)..

How do U channel the money into "production" if stock market is not doing the job...I have some ideas but I say much smarter people in Raisi economics team are working on it...I like to know what plan they come up with and what they do with Interest rates (and exchange rate)..

Side note: if Iran fixes the economy then this airforce/buy/build/funds/lack of funds ..etc all go away. When you have money coming in Tech is no issue for Iran..same as China.

There are some major differences between the banking system and the stock market:

1. The banking system is supposed to be a risk free option. It is guaranteed that you will not lose your money.
2. You can withdraw your money from a bank any time you want 24/7, but in the stock market, you can sell your shares only in working hours and your money can be trapped there for weeks after a crash.
3. The stock market is for well-established large businesses and few corporations in Iran can enter the Tehran Stock Exchange. For example, the minimal capital of a company in the Tehran Stock Exchange is 1 trillion rials.
4. Most importantly, banks can give people loans. Stock market does not do that and cannot channel money into production as widely as banks can do. Stock market does not channel money into production because only a handful of companies in Iran are in the stock market. They do not comprise even 10% of businesses in Iran even by volume of capital. And definitely less than 1% of registered businesses in Iran by number.

Even newly established companies will find it difficult to work in an economy where inflation is too high but bank interest is low. Companies usually estimate their costs and revenues at the beginning of a fiscal year and they keep their capital (of shareholders) in a bank account. If inflation is high but bank interest is low, they will need to constantly fight inflation by selling more and more at a higher price than what they had initially planned (besides other obstacles that they face during their growth period) and if they cannot win the battle against inflation, either their shareholders will eventually pull out or they'll go bankrupt. People wouldn't really benefit much from companies like these that have to keep fighting inflation and depreciation of their capital at their expense. This happens a lot in Iran actually. So, this whole idea that you can bring down inflation by boosting production, while true in theory, is impossible to realize without extra measures for curbing inflation first.

Just look at inflation in Iran in recent years. If you want to talk about the USD/IRR exchange ratio, the geometric mean of the last 10 years is about 34%. For the last 5 years, the geometric mean would be about 49%. If you want to talk about inflation using the Consumer Price Index, we have experienced figures such as 52%, 48% and 42% in recent years. Why would anyone keep their money in a bank with a 16% interest when inflation is well above twice, or even three times of this number by any reasonable measure? This is in no way similar to the situation in Canada. They are completely different situations.

 

[Hormuz]

salam baradaran
is there any website for buying used cars in Iran?

 

[aryobarzan]

I

There are some major differences between the banking system and the stock market:

1. The banking system is supposed to be a risk free option. It is guaranteed that you will not lose your money.
2. You can withdraw your money from a bank any time you want 24/7, but in the stock market, you can sell your shares only in working hours and your money can be trapped there for weeks after a crash.
3. The stock market is for well-established large businesses and few corporations in Iran can enter the Tehran Stock Exchange. For example, the minimal capital of a company in the Tehran Stock Exchange is 1 trillion rials.
4. Most importantly, banks can give people loans. Stock market does not do that and cannot channel money into production as widely as banks can do. Stock market does not channel money into production because only a handful of companies in Iran are in the stock market. They do not comprise even 10% of businesses in Iran even by volume of capital. And definitely less than 1% of registered businesses in Iran by number.

Even newly established companies will find it difficult to work in an economy where inflation is too high but bank interest is low. Companies usually estimate their costs and revenues at the beginning of a fiscal year and they keep their capital (of shareholders) in a bank account. If inflation is high but bank interest is low, they will need to constantly fight inflation by selling more and more at a higher price than what they had initially planned (besides other obstacles that they face during their growth period) and if they cannot win the battle against inflation, either their shareholders will eventually pull out or they'll go bankrupt. People wouldn't really benefit much from companies like these that have to keep fighting inflation and depreciation of their capital at their expense. This happens a lot in Iran actually. So, this whole idea that you can bring down inflation by boosting production, while true in theory, is impossible to realize without extra measures for curbing inflation first.

Just look at inflation in Iran in recent years. If you want to talk about the USD/IRR exchange ratio, the geometric mean of the last 10 years is about 34%. For the last 5 years, the geometric mean would be about 49%. If you want to talk about inflation using the Consumer Price Index, we have experienced figures such as 52%, 48% and 42% in recent years. Why would anyone keep their money in a bank with a 16% interest when inflation is well above twice, or even three times of this number by any reasonable measure? This is in no way similar to the situation in Canada. They are completely different situations.

Talking about economics on line when words and sentences do not come out right is hard..

What I meant by stock market was that the initial idea of a stock market is so that companies can raise capital by selling their shares to the general public...a good way to grow so every one who has some money but not able to create a company can use the money and buy a small piece of a working enterprise..removes the liquidity from the hands of people and puts it into production...

The concept worked well in the US but in iran ..do not know..

 

[QWECXZ]

I
Talking about economics on line when words and sentences do not come out right is hard..

What I meant by stock market was that the initial idea of a stock market is so that companies can raise capital by selling their shares to the general public...a good way to grow so every one who has some money but not able to create a company can use the money and buy a small piece of a working enterprise..removes the liquidity from the hands of people and puts it into production...

The concept worked well in the US but in iran ..do not know..

Yes, but for well-established companies. Not a new business.
Look at initial public offerings in Iran. They are all companies that have been around for many years with huge capital. The law specifically demands companies that want to join the stock exchange to have at least 1 trillion rials of capital and have a proven record of profit for at least 3 years.
This by no means applies to small businesses or new businesses.

That's why they created Farabourse. But even Farabourse is not capable of being a replacement for bank loans.

 

[aryobarzan]

Yes, but for well-established companies. Not a new business.
Look at initial public offerings in Iran. They are all companies that have been around for many years with huge capital. The law specifically demands companies that want to join the stock exchange to have at least 1 trillion rials of capital and have a proven record of profit for at least 3 years.
This by no means applies to small businesses or new businesses.

That's why they created Farabourse. But even Farabourse is not capable of being a replacement for bank loans.

Glad to know that..yes smaller enterprises need different treatment...risks for investors will be high but the rewards also massive...we call them "small caps" in here and I liked them a lot..very dynamic if you are a player of market.

 

[sha ah]

Iran produces each barrel of oil for around $10. Importing oil for $80 a barrel is insane. There would be massive protests, the largest since the revolution.

During the Shah Iran produced 6 million barrels per day. Now it's 4 million, so in a sense Iran is saving for future generations.

Electric cars will get rid of pollution but also as time passes internal combustion engines are becoming more and more efficient, emitting less pollution.

Once the price of electric cars becomes on par with gasoline cars you will see many more in Iran purchase them, however right now the math does not add up.

If Iran saved it's oil income as a national asset like Norway, sure let's dig ditches. However, currently the opportunity cost of oil far outdoes that of maintaining the status quo. Yes, electric cars or renewables are a case in point. So yes, Iran turning into an importer will trigger far more industrialization. Oil has been a weight on our shoulders.

You're right, which is why interest rate needs to be higher than inflation

A low risk account 2% higher and 5% or more as risk increases just like the west.

Remember crypto is a risk, speculating is risky. Average people with children want stability.

I feel sorry for people in Turkey. Inflation is out of control and Erdogan keeps lowering interest rates.

@aryobarzan

I will let you in on a secret. No Iranian worth his weight in gold would put money into a trash depreciating currency like rial.

Right now Iranians can freely buy crypto and make inflation protected returns that dwarf holding your money in an Iranian bank.

example: let’s say Iranian banks pay you 16% to deposit your money. So you deposit for 12 months and get 16%, but in the same 12 months Iranian currency inflation was 14%.....so how much real return did you make? 2%!!!

It’s a joke! You could make 10x, 50x 100x that holding top cryptos! Yes there is risk, but there is risk holding Iranian currency as well or putting your money in an Iranian bank that tommorrow could be in an embezzlement scandal.

So Iranians are either buying gold, real estate, crypto, and stocks or smartly a combination of all of these for proper diversification among asset classes. These do well against inflation.

Investing in rial when their is no light at the end of the tunnel is not a strategy. It doesn’t matter what interest rate banks play, if the currency keeps spiraling into the abyss, Iranians will continue investing in assets that actually make a substantial real return. Making 20% interest when the currency loses 15% of its value during the same timeframe is not great.

 

[sha ah]

I wouldn't call Iran a third world country. Maybe 2nd world but 3rd world refers to nations that are completely undeveloped, failed states.

If Iran is third world then what is Ethiopia or Afghanistan ?

Remember in Iran gasoline is still dirt cheap and the electricity is still running. There are countless opportunities to make a profit. A few years ago converting 50 million Rial to USD and today you would have 270 million.countless Iranians have made fortunes on the stock market.many have lost but the majority of amateur traders lose everywhere because of over confidence, greed or lack of knowledge.

Could lran be doing better ? Of course but compare Iran to Iraq or Afghanistan and the people in Iran have alot to be thankful for in comparison.

Yes and No.

In developed economies there is a suffering from low inflation. Forget what has happened in last 2 years. This is socio engineered inflation in a desperate attempt to keep major fiats becoming the yen (deflation). Inflation will stabilize in major fiats.

Iran is experiencing the type of inflation US was experiencing in 1970-1980s where a treasury bond was paying 15-20% and mortgage rates were above 10%!

Anyway I digress comparing your situation in Canada (1st world country) to Iran (3rd world country...nearly half the country in poverty) is not a fair basis. You have many investment options to make (land, stocks, real estate, and your salary is relatively stable in relation to purchasing goods). Iranians on the other hand have finally got the chance to make the same type of investments, but their salary is maybe 50% of what it was from purchasing standpoint years ago!

So major fiat still has so much demand for its currency and doesn’t suffer from money printing issues that a country like Iran does thus they have NO NEED to offer interest rates at bank level.

Furthermore, in the US they are binded to the fed funds rate which is near zero. Thus banks can’t offer much in the way of interest when they go off of treasury rates. If Iran kept interest rates near zero like US it would further lead to run away inflation, basically what Erdogan is doing to Lira by refusing to raise rates.

So while situations LOOK alike (Canada and Iran) they are actually very very different. A tale of two stories basically on how currencies who have power can leverage the **** out of it with no consequence while the brown guy’s currency gets severely punished for any economic wrong doing.

My friend why didn't you put your savings in TSX (Toronto Stock Exchange, Canada's largest for those who don't know) In the last year it's increased 20%

In the west, in general the indices generally go up over the years except when there's an economic downturn like the recession but when that happens pull your money out or better yet short the market like the wealthiest 1%

Apart from currency depreciation which is real problem (money printing being the cause)..the situation of interest rate making 2% is better compared to where I am ... here in Canada ..I get barely 1% on my deposits in the bank but real inflation is 3 or 4 %...and on top of that I have to pay tax on my interest ( you guys in US do not pay tax on interest)...so making almost nothing on your bank deposites is a universal matter and iran is no exception.

 

[sha ah]

So right now Iran is giving out 1 MILLION Covid 19 vaccine doses on a daily basis

65% have had 1 shot and 45% 2 shots in Iran.

In the big picture, considering the sanctions Iran has done well with it's vaccine drive.

As I predicted, by the end of the year the majority of Iranians will be vaccinated

At this rate, in 1 month pretty much everyone who wants to be vaccinated in Iran will be.

The only question is what percentage will want the vaccine and what percentage won't want it.

The global average seems to be 60-70%. Many EU nations it's 60%

In Russia it's 30% which is not nearly enough

China has vaccinated 1 billion people meanwhile India 300 million people although many agree India has likely reached herd immunity after hospitals were locked down and bodies burned in the streets became a common sight

The only question is will Iran introduce a vaccine passport and restrictions for public venues or events to encourage vaccination ?

After the majority of Iranians are vaccinated Iran should donate Iranian made vaccines to Afghanistan, Lebanon, Syria and others. This will give Iran a positive image in the region as well as encourage those nations to purchase Iranian vaccines once they've tried it.

I wonder how much Iran will charge per dose ? Pfizer is $20 a dose, Russian and Chinese vaccines around $10 a dose.

If vaccines are in short supply Iran can charge $10 if not perhaps $8 or less I'm guessing ?Astra Zeneca costs $4 but it has a bad reputation for blood clot issues.

 

[sha ah]

So according to this source 80% of Iran's eligible population have had 1 dose with 54% being fully vaccinated. So the majority are finally fully vaccinated.

Iran Gives First Covid Dose to 80% of Target Population

Health Minister Bahram Einollahi announced on Thursday that some 80% of Iran’s target population have been given a first dose of Covid-19 vaccine.

financialtribune.com

The source below is from yesterday and the numbers vary. Why the discrepancy between sources ?

Well the source below takes into account Iran's entire population, not just the eligible population

So assuming that nearly everyone who gets 1 dose will take the second dose, Iran's eligible population will have a vaccination rate of 80% within a month or so. This is higher than most western countries. Wow I didn't expect this.

 

[Bahram Esfandiari]

 

[sha ah]

Houthis have successfully taken southern outskirts of Marib. Houthis forces from the west and south of Marib have now linked up and are right outside the city. They continue to target Saudi backed forces with ballistic missiles and drones.

The pincer has tightened around Marib but it seems to be a hard nut to crack. MBS wants it held at all costs.

If Marib falls it's basically game over for the Saudis. All that remains after Marib is Taiz, which is also surrounded and Aden. The Houthis have already take the main highways which lead to Aden. After that all that will remain is eastern Yemen which is all deserts and small towns.

A Houthi missile hit Marib city moments ago Marib, Ma'rib Governorate - Interactive map of Yemen war - Yemen news live map- yemen.liveuamap.com

A Houthi missile hit Marib city moments ago. Yemen Civil war and Saudi-led intervention news on live map in English

yemen.liveuamap.com

Houthi Forces at Marib Dam Lake's Southern shore have linked up with Houthi Forces coming from Jabal Murad, and Al-Bayda and Shabwah Marib - Interactive map of Yemen war - Yemen news live map- yemen.liveuamap.com

Houthi Forces at Marib Dam Lake's Southern shore have linked up with Houthi Forces coming from Jabal Murad, and Al-Bayda and Shabwah. Yemen Civil war and Saudi-led intervention news on live map in English

yemen.liveuamap.com