Iran, Bourse and the US Dollar; the REAL reason for hostility

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Originally posted by Zagros

Originally posted by gcle2003

Originally posted by Zagros

Originally posted by gcle2003

In the seventies, as Director of Research at Insead, I managed a study commissioned by the Shah's government of the Iranian aconomy and its future. (Though I wasn't one of the people that actually did the study.) 
It was evident then that Iran was nothing like self-sufficient, particularly in food, and its economic infrastructure badly needed development that could only be financed through oil. Since the study was highly critical of the Shah's government it wasn't very well received, but the conclusion was not substantially challenged.
As far as I can see, the revolution and the deposition of the Shah, no matter how justified, did nothing at all to improve the economic situation and if anything worsened the situation by distracting attention from it.
The Iran-Iraq war of course didn't help, so I'm not blaming the situation on the Iranians entirely, just being objective. 

A lot has happened since that time, the shah put into motion a series of five year plans aimed at making Iran self sufficient.  

Our study was commissioned as part of that project.

In teh last 30 years the IRI have pretty much achieved that ambition, albeit in less effective and more squandering ways.
If Iran was completely cut off from the world, economically what would change in Iran?  Not much really.

It would starve.
http://www.fao.org/es/ess/toptrade/trade.asp?dir=imp&cou ntry=102&ryear=2003
Or search for Iran at 
http://www.fao.org/documents/show_cdr.asp?url_file=/docrep/0 04/y0252e/y0252e07.htm
or, more recently,
http://www.tradearabia.com/tanews/newsdetails_snAGRI_article 101146.html
Iran is in a worse position, with regard to other oil-producing states, simply because of its population.

There would be hardship (there already is), but it would be no worse than that of the 80s.  Unlike most other oil producing nations, Iran has swathes of fertile and arable land.

It may have more than the desert countries, but it has a heck of a lot more people. Only 10% of Iran's land is arable. While food production has been improving over the last twenty-odd years, food production per capita has been going down, leading to its current increasing dependence on food imports (including imports of animal and poultry foodstuffs).
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And Iran destabilising the US economy would be more of a strategic coup than a propaganda coup, the US would be ill positioned to finance its imperial ambitions should the dollar devalue, 

It's in a lousy enough position to do that now. (For instance, as recent UN security council votes have shown, it no longer can rely on financial pressures to with smaller members over: they're now much more dependent on the EU than the US, and that's the way they vote.)
Devaluing the dollar wouldn't destabilise the US economy, it might even help. If it forced the Chinese to cut the ties to the dollar, US consumers might finally stop queuing up to buy Chinese goods and buy their own instead. (Same goes for Indian outsourcing.) 
It might lead to inflation, but that would help the US government pay off its debts, and inflation associated with increased employment as US goods became more attractively priced than imports could also be good. Inflation also leads to increased taxation without the government having to pass new taxes, and the US has been deeply in need of increased taxation for over a decade now. This might be a great new way of beinging in taxes by the back door.
Which is all of course speculation. 
Frankly I don't think the oil bourse idea is going to make too much difference to anything. it certainly isn't going to make as much difference to the oil markets as the Iraqi situation has. And look around you - how much actual impact on the world economy has that had?
Almost none. Some people and companies are richer and some poorer. The important changes have all come from further east than Iraq and Iran, and will continue to do so.
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and it would also get them off Iran's back (if even for five years) giving Iran enough time to become untouchable, unless armageddon was the goal of any potential aggressor or sabateur nation.
Lack of those listed agricultural supplements would not cause starvation and even at a worst case scenario, Iran would never be faced with a food embargo.

You said 'If Iran was completely cut off from the world'. If it was completely cut off it would starve. You can't say 'If it was completely cut off from the world it wouldn't be faced with a food embargo.'
http://tinyurl.com/mdsrm has a good analysis of Iran's current economic situation, including the recent decline in the balance of payments with strong growth in imports, although high oil prices have enabled the country to stay in surplus. (In the late 90s it was in deficit.)
With its exports barely covering its imports, and 80% of those exports being oil, Iran is very dependent on the oil price staying high. It should be very grateful to the US for cutting off Iraqi production. 