Iran is just moving their transactions outside the dollar zone because
we can freeze any funds that would clear back to them, if we had to.*
There will be an overhead penalty for any bourse participants and any
efficient market(oil) will ignore such a provincial bourse. It is only
really there as a contingency, insurance, given the fact that most of
Iran's foreign exchange is from petrochemicals and they are becoming
increasingly dependent on it for consumables (refined product).
Customers on Iran's bourse** will have trouble trading on other
markets if our relationship with Iran ever really goes south. I can't
imagine being a market maker on the floor of that bourse, think about
selling into a down tic - you might get away with doing it
once...maybe.
Any financial institution (bourse) in a regime that forbids interest
is a complete fish out of water, and is unlikely to grow beyond it's
granted feedstocks and government inspired churning - The important
informational effects one expects from an open and efficient market
are unlikely to develop. On the other hand, a bourse operated in
compliance with Islamic religious law should have some appeal to
traders in the region, and would make a very interesting case-study. I
just don't think it would draw much volume from what are some of the
most efficient markets to date. So, I don't think there is any
strategy to derail an Iranian bourse on the "not-worth-the-bullet"
basis. (or anchor in this case) I recommend coexistence and study as I
see the primary value, outside of Iran, as limited to a few Economics
Doctoral candidates.
If Iran ever drops off the Internet, I would expect it to be a
decision made by Iran's leadership. And, I wouldn't expect it to be
very effective due to the architecture of the Internet.
Ed - OT and yes I am procrastinating....
* This establishes a structure for "cut outs" designed to handle a
decent volume of transactions over time.
**The usual level of transparency created by a bourse is welcome in a
society normally unable to get beyond the private/state deal.
On Feb 7, 2008 2:26 AM, Charles Jones <
charles.jones@ciscolearning.org> wrote:
> Kristian Erik Hermansen wrote:
> > Good info, but we have to add "OT" to the thread so that people can
> > filter this convo if they like.
> You're absolutely right, and I meant to do that, but I totally dropped
> the ball, thanks for correcting me...sorry folks!
>
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