Interesting Tweets of the Past Week: Gold, Opioids, Amazon, China, More

Mish

Here are some tweets that caught my attention this past week that I did not write about. The ideas merit thinking about.

Go for the Gold Says Steve Hanke

Last December, the Iranian government of Hassan Rouhani passed a bill to change the name of Iran’s national currency from the rial to the toman. This would require a redenomination in which one zero was lopped off Iran’s unit of account, as 1 toman is equal to 10 rials. Without a change in the monetary and exchange rate regime, the proposed changes amount to a great illusion.

Iran’s currency is, of course, one of the many reasons for Iran’s economic dysfunction. Indeed, since the Islamic Revolution of 1979, the rial has officially lost virtually all of its value – 99.8% to be exact. Judged by the magnitude of this theft, the Revolution has been a total disaster.

While inflation has come down from its October 2012 peak, which I measured at a rate of 62% per month, the rate is still quite elevated, with the official annual inflation rate sitting at 9.6%. But, that rate is the official rate, and official statistics in Iran are always a bit dodgy. My calculations put the current inflation rate close to 20% – double the official rate.

There is a solution – an elegant solution. Iran should go for gold, a “currency” that is not issued or controlled by a sovereign. Iran could do this and retain its own currency, too.

Opioid Use

Amazon Earnings

Shadow Banking

Real Yields

Venezuela

Fed Tightening

Krugman

Chinese Debt

Mike "Mish" Shedlock

Comments (7)
No. 1-7
Medex_Man
Medex_Man

Steve Hanke is an academic professor. He should stick to the imaginary world of college campuses and stop giving advice to a real world he rarely ever visits

Medex_Man
Medex_Man

Amazon earnings? You must be talking about the US Post Office subsidy, because Amazon itself loses money.

Medex_Man
Medex_Man

Mish -- you should also talk about Chinese ASSETS, not just debt. Talk about accounts receivables, specifically the vendor financing scheme called US Treasuries. If China overtakes the US as the global reserve currency, then the US loses said status (duh!) -- which means the largest market priced asset on China's books (its UST holdings) suddenly lose a lot of value. I have no idea if China will or will not become the global reserve currency, just saying if it does...

While China's assets are questionable, their debt levels are growing like Obama was in charge not Xi. Exploding debt levels, while asset quality declines? The One Belt One Road initiative is revealed as the Hail Mary pass that it really is... China MUST make it work or it will collapse. And (this is an entire blog post in itself) -- Putin knows just how vulnerable Xi is.

Realist
Realist

What? China added more debt than the US this year? Trump won't stand for that. He wants the US to be #1 in Debt. "Bring me some Debt!" "Fast!"

klemke
klemke

on an iPad, only the first tweet story shows up. Just headlines on the rest.

SweetKenny
SweetKenny

There's so many spinning plates - where China goes, the world goes.

RobinBanks
RobinBanks

I was in Iran in April and most people already store their wealth in gold. They use the tissue paper currency for buying day to day essentials. The gold souk in Esfahan was the most impressive I've seen (and no security)!