miercuri, 16 ianuarie 2013

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Post-Penguin Anchor Text Case Study

Post-Penguin Anchor Text Case Study


Post-Penguin Anchor Text Case Study

Posted: 15 Jan 2013 12:38 PM PST

Posted by Court Tuttle

It's no secret that Google's Panda and Penguin updates caused a lot of panic. SEOs and marketers were FREAKING out and honestly, I got tired of reading about it - I'm sure most of you did too. Although I'm pretty turned off to information about these updates, I've been really interested in the anchor text issues surrounding the Penguin update. If sites that have over-optimized anchors lost traffic due to the update, it seems to make sense that sites can move up with relatively few (or without any) anchored links. I wanted to test that idea and decided that it was time for a good, old fashioned case study.

Designing the Case Study

Instead of trying to sound cool and acting like I designed a super professional case study, I'll just tell you how it really happened. I simply wanted to know if I could take a brand new domain (with no links obviously), and get it to rank for a decently competitive term, in an oft-spammed niche by getting links (mostly non-exact match keyword anchored) from relevant pages of relevant sites.

Finding the Keyword Phrase

So I wanted to use a semi-difficult keyword phrase that was in a spammy niche. That way the case study would be more conclusive. I looked at a lot of different options for keywords - most of them were in the finance vertical and were based on credit cards, loans, or credit. I decided eventually that I would try to find a credit-related keyword. That way, I wouldn't end up with a ranking for a loan or credit card keyword, without being able to provide the actual loan or credit card the searcher was looking for. Credit keywords, on the other hand, are informational in nature and fit better with the content (which is admittedly ghetto right now) I could produce. The phrase I ended up choosing is '650 credit score'. Using the SEOmoz Pro Keyword Difficulty Tool, the phrase has a keyword difficulty score of 50, which is in the range I wanted. It's difficult enough for a good test but not difficult enough to make getting results impossible. Here's what the phrase looks like:

Setting Up the Site

On August 14, 2012, I set up the site on a brand new domain - Doctor650.com (not going to link from here because I don't want to compromise the case study). I used WordPress as my CMS and wrote six articles about having a credit score in the 650 range. The content is passable but honestly, not amazing. I do know a lot about credit and have improved my own credit score from under 500 to over 800. I was also personally in the 650 range for a while. On top of that I spoke with a loan officer to get information about getting loans with a 650 score. That said, I didn't take 10 hours to write each of the articles. The site design is horrendous (not my strong point).

I'm fully aware that the site is not the 'ultimate resource' on this topic, in fact I wouldn't be surprised if the site had 'Panda' issues at some point. My bounce rate is ridiculously high. The keyword phrase I'm going after is on the home page twice - once at the top in a heading, and once as a label for the comments. I'm not using spammy linking strategy inside the site. All of my articles are linked to from the sidebar but I've used anchors that don't contain the exact phrase, on purpose.

Linking Strategy

I wanted to get relevant links from sites that either were exclusively about credit or credit scores, or already had a lot of information on one of these topics. I wrote guest posts for sites that I found in the Finance category of PostRunner (a guest-posting community/portal that I co-founded) as the source of all of the links, with the exception of one link that I got from making a cheesy video that I posted on YouTube (not my greatest accomplishment). This link is of course no-followed like all links from YouTube. Here are the anchors for the links that I used in the case study, in the order that I got them:

  1. here
  2. Doctor 650
  3. my site
  4. Dissecting The 650 Credit Score
  5. here
  6. Doctor650.com
  7. here
  8. http://www.doctor650.com/ (no-followed link from YouTube)
  9. resource on 650 credit scores
  10. Doctor650.com
  11. clicking here
  12. Doctor650.com
  13. 650 credit score

As you can see, I got only one exact-match anchored link but I did get three that contain some version of the phrase.

Results of the Experiment

On Oct 6 - 53 days after I 'launched' the site - the site popped up at #4 in Google for '650 credit score'. It also ranks pretty high for a lot of related terms. It has steadily climbed from where I first saw it (in the 80s) without any major jumps. It's moved a few positions at a time, for the most part. I found it interesting that the site seemed to drop a few positions each time I acquired a new link, and would then come back stronger than ever after a few days. As of today, the site ranks #2 (it's been moving up and down between #2 and #4). Here's the ranking analysis from the SEOmoz Keyword Difficulty Tool:

As would be expected, my domain is by far the weakest in the top six, in fact it's the weakest in the top 20. The site only has 13 links and they are from good sites that aren't exceptionally strong.

Probable Conclusions

  • It's possible to positively influence rankings using significantly few exact match anchored links if they are from highly relevant pages on relevant sites.
  • It remains possible to rank for fairly difficult phrases quickly with a brand new domain.

Things I Wish I Had Done Differently

  • I wish I had NOT used the main keyword in any of the links. Now I'm interested in designing a similar case study that doesn't use any exact-match anchored links. My thought process in using one was that this site doesn't have the necessary swag to get some on its own but now I'm wondering where the site would be ranked without that link.
  • I wish that I had not made the YouTube video. I made it mostly because I wanted to see where the video would rank on its own since I know that I could push traffic from the video to the site. But, it's impossible to measure whether the video is affecting the case study and I wish it wasn't there. I considered deleting it, but wanted to leave it there in the spirit of TAGFEE. It was created and I wanted to disclose that.

The Future Of the Case Study

Right now the case study is in a holding pattern. It's still moving up even though it hasn't had any new links since mid-September (that I'm aware of). It might get to #1 on its own but it might not. If it doesn't move up in the next month or so, I'll get a few more links that aren't anchored with keywords. I'm also interested in expanding the site into a more valuable resource, one that can better stand the test of time. To be honest I'm not sure exactly what the searcher who searches for this phrase wants, so I'm going to have to figure that out. If you have ideas that can help me turn this site into a better resource, I'd love to hear them. You and I both know that it needs help.


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Watch Live at 11:55 a.m. EST: An Event on Reducing Gun Violence

The White House Your Daily Snapshot for
Wednesday, January 16, 2013
 

Watch Live at 11:55 a.m. EST: An Event on Reducing Gun Violence

Tune in live to watch President Obama and Vice President Biden at 11:55 a.m. EST today as they unveil a package of proposals to reduce gun violence.

Watch live on WhiteHouse.gov/Live

Photo of the Day

President Barack Obama talks with Kathryn Ruemmler, Counsel to the President, in the Outer Oval Office, Jan 15, 2013. (Official White House Photo by Pete Souza)

President Barack Obama talks with Kathryn Ruemmler, Counsel to the President, in the Outer Oval Office, Jan 15, 2013. (Official White House Photo by Pete Souza)

In Case You Missed It

Here are some of the top stories from the White House blog.

Why We’re Raising the Signature Threshold for We the People
We're making another adjustment to ensure we’re able to continue to give the most popular ideas the time they deserve.

The Home Office Tax Deduction: Simplifying Rules And Helping Small Business Owners Succeed
See how President Obama and the IRS are working for small business owners by providing easier ways to file their taxes this year.

Change the World: Join the Foreign Service
Read about how the State Department is encouraging Americans to make a difference abroad.

Today's Schedule

All times are Eastern Standard Time (EST).

10:00 AM: The President and the Vice President receive the Presidential Daily Briefing

11:55 AM: The President and The Vice President hold an event at the White House to unveil a package of proposals to reduce gun violence WhiteHouse.gov/live

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Seth's Blog : When a conference works (and doesn't)

 

When a conference works (and doesn't)

When we get together with others, even at a weekly meeting, it either works, or it doesn't. For me, it works:

...If everything is on the line, if in any given moment, someone is going to say or do something that might just change everything. Something that happens in the moment and can't possibly be the same if you hear about it later. It might even be you who speaks up, stands up and makes a difference. (At most events, you can predict precisely what's going to be said, and by whom). In the digital age, if I can get the notes or the video later, I will.

...If there's vulnerability and openness and connection. If it's likely you'll meet someone (or many someones) that will stick with you for years to come, who will share their dreams and their fears while they listen to and understand yours. (At most events, people are on high alert, clenched and protective. Like a cocktail party where no one is drinking.)

...If there's support. If the people you meet have high expectations for you and your work and your mission, but even better, if they give you a foundation and support to go even further. (At most events, competitiveness born from insecurity trumps mutual support.)

...If it's part of a movement. If every day is a building block on the way to something important, and if the attendees are part of a tribe that goes beyond demographics or professional affiliation. (At most events, it's just the next event).

The first law of screenwriting is that the hero of a great movie is transformed during the arc of the story. That's the goal of a great conference, as well. But it's difficult indeed, because there are so many heroes, all thinking they have too much to lose.



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marți, 15 ianuarie 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Over 25% of 401Ks Tapped to Pay Current Bills; Dead-Fish Housing Assets; Walking Away Yet Again

Posted: 15 Jan 2013 10:06 PM PST

At an increasing rate, even during the alleged recovery, consumers are tapping their 401Ks to pay current bills according to a study by advisory firm HelloWallet as describe in the Washington Post article 401(k) breaches undermining retirement security for millions.
A report due out this week from the financial advisory firm HelloWallet found that more than one in four workers dip into retirement funds to pay their mortgages, credit card debt or other bills. Those in their 40s have been the most likely culprits — one-third are turning to such accounts for relief.

The withdrawals, cash-outs and loans drain nearly a quarter of the $293 billion that workers and employers deposit into the accounts each year, undermining already shaky retirement security for millions of Americans.

Fresh data from Vanguard, one of the nation's largest 401(k) managers, show a 12 percent increase in the number of workers who took loans against their retirement accounts or withdrew money outright since 2008.

In 2010, 28 percent of participants reported having an outstanding loan against their retirement accounts, an all-time high, according to a survey of 110 large employers by Aon Hewitt, a human resources consultancy. And nearly 7 percent of employees took hardship withdrawals that year — roughly a 40 percent increase since the recession, while 42 percent of workers cashed out their plans rather than rolling them over when they changed jobs.

"401(k)s are not being used for retirement by a large and growing share of workers because they are misaligned with the very basic financial problems most workers face and must address," said Fellowes of HelloWallet, which provides benefits advice to companies.

Using data from the Federal Reserve's Survey of Consumer Finances and the Survey of Income and Program Participation, conducted by the Census Bureau, the report said 30 percent of households earning less than $50,000 a year had cashed out a retirement plan for non-retirement purposes. Only 12 percent of households earning between $100,000 and $150,000 a year and 8 percent of those earning more than $150,000 a year have cashed out a retirement account, the report said.

"The investment advice out there needs to recognize that a large share of participants is not going to use the money for retirement, so they should not be exposed to risky investments," Fellowes said. "There is no investment adviser in the country who would put workers in the stock market if they were told the money being invested was for short-term needs."
Mortgage Connection?

The Washington Post article failed to note "why" people were tapping their 401Ks.

I suspect, but cannot prove, that many low-income households are desperately clinging to their underwater houses, from which they would be better advised to seek council, then walk away.

Higher income groups seem to have less aversion to walking away than those who struggled all their lives to get a home, only to get one at exactly the wrong time.

Dead-Fish Assets 

The mentality "My house is the only thing I have" is tough to fight. However, the reality is many homes are worth less than zero because of underwater situations.

Unfortunately, the financial industry is geared to giving the worst advice to the least well off. Counseling groups (typically bank-sponsored) encourage people to keep their dead-fish "assets", best flushed down the toilet.

There are other possible reasons of course, and right at the top of the list is car loans, another depreciating asset.

Lose Your Job, Then You're in Trouble

I do not advise tapping your 401K for numerous reasons, but right at the top of the list is the lost-job nightmare.

Please consider these problems as excerpted from the 401K Calculator article Everything You Need To Know About Borrowing Against Your 401K.

  1. If you lose your job or if you decide to leave your employer, you will be required to pay off the loan in a lump sum. If you don't, you face the potential of the loan defaulting, which will result in a taxable event.
  2. As you pass-up the tax-free compounding of the money you withdraw, you could end up with a significantly smaller fund on your retirement.
  3. Interest payments from a 401(k) loan are not tax deductible. 
  4. You will also pay taxes twice on the amount you took out for a loan.  Your 401k loan payments are deducted after taxes have been taken out of your paycheck. However, since pre-tax money is usually used to fund a loan, the payments are put back into your 401(k) as pre-tax funds. This means that when you take the money out later, you will have to pay taxes on it again.
  5. There is no flexibility with the terms of repayment and your loan repayment is done automatically through payroll deductions, which will reduce your take-home pay.


Recommended Options

401K Calculator writes "Before you take out a 401k loan, it's vital that you explore other options. Using savings or other types of loan may be a more suitable alternative to borrowing against your retirement funds. You should be careful not to jeopardize your retirement just for a quick cash fix now."

I concur, while adding ... If the reason for the loan is to make a mortgage payment on an underwater home, or if you are for any reason close to bankruptcy, please consult a bankruptcy/mortgage attorney in your state for other options.

"Walking Away" and/or bankruptcy may be far better options than tapping 401Ks.

Unfortunately, I highly suspect many have trashed their 401K to keep or buy rotten fish. Most of the rest are likely bankrupt and on borrowed time, wasting their 401K in a futile attempt to prove otherwise.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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"Debt Doom Loop" in Spain; Deficit Target Impossible Once Again; Bond Rally Masks European Macro Problems

Posted: 15 Jan 2013 04:55 PM PST

Magicians at the ECB have temporarily convinced market participants that Europe is in some sort of recovery. It isn't.

All of Europe is now in recession, including Germany as noted earlier today in German Economy Shrinks Most in Three Years; Situation Significantly Worse Than Mood.

"Debt Doom Loop in Spain"

Bloomberg reports Draghi's Bond Rally Masks Trapping Spain Debt Doom Loop.
The bond rally has sent Spanish borrowing That costs to 10-month lows has distracted attention from the nation's growing debt pile.

Spain's budget deficit probably exceeded 9 percent for a fourth year in 2012 as Europe 's highest unemployment rate, a third recession in four years and the cost of bailing out its banks offset almost all of the government's 62 billion euros ($ 83 billion) of spending cuts and tax Increases, According To Economists at Societe Generale SA (GLE) , Lombard Street Research and the Madrid-based Applied Economic Research Foundation.

Total debt will reach 97 percent of gross domestic product This year, the International Monetary Fund forecasts.

"This is a classic example of the doom loop," Societe Generale's London-based chief European economist, James Nixon, said in a telephone interview Jan. 10. "They just Are not making any progress."

"It's very Difficult To Have promised at home and abroad to deficit of 6 percent and to end up Recognizing That You have almost 9 percent," Deputy Prime Minister Soraya Saenz de Santamaria said today, Referring to the 2011 budget figures delivered by the previous Socialist administration. Pledged Rajoy to deliver a deficit of 6.3 percent for 2012.

'Recovering Confidence'

"We are recovering confidence and credibility Which is Something That is lost very Quickly and Is Difficult to regain," Saenz added in an interview on Antena 3 TV.
No Credibility

There is no credibility and if there is any confidence, there shouldn't be. Yields in Spain, Italy, and Portugal have crashed, but I wonder for how long.

Italy and Spain are known basket cases. More importantly, France, the Hidden Zombie in Europe, is about to take a deep plunge.

"Confidence" may be robust for now, but it's all a mirage based on low rates that cannot last and the foolish notion that Europe has turned the corner just as Germany and France head down the sinkhole.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

German Economy Shrinks Most in Three Years; Situation Significantly Worse Than Mood

Posted: 15 Jan 2013 11:31 AM PST

Germany is in recession. It's not a "technical recession", no matter how anyone labels it. And the recession will pick up steam as the year progresses.

Please consider Germany's economy shrinks most in 3 years as crisis hits eurozone powerhouse.
WIESBADEN, Germany — The German economy was hit hard by the eurozone crisis in the final quarter of last year, shrinking more than at any point in nearly three years as traditionally strong exports and investment slowed, the Statistics Office said on Tuesday.

Economists expect Germany to bounce back after forecasts for weak growth in the first quarter but Europe's largest economy will be less of a pillar of support for the rest of the currency bloc, where many of its peers are deeply in recession.

Gross domestic product shrank by 0.5% in the final three months of 2012, the worst quarterly performance since Germany fell into a recession during the global financial crisis in 2008/2009 and only the second contraction since it ended.

The parlous fourth quarter pushed overall growth for the year down to 0.7%, a sharp slowdown from the 3.0% registered in 2011 and a post-reunification record of 4.2% in 2010. The 2012 figure was a tad below a Reuters consensus forecast for growth of 0.8%.

The government is due to publish an estimate for 2013 growth on Wednesday. An official from the Economy Ministry said growth would be 0.4% this year, less than half the government's existing forecast of 1.0%.
Situation Significantly Worse Than Mood

"The situation is significantly worse than the mood. But the eurozone crisis is far from over. It's wishful thinking to expect otherwise," said Clemens Fuest, incoming head of ZEW research institute.

I certainly concur with Feust. Note the GDP downgrade from 1.0% to .4% for 2013. Expect another and another. The only thing that Europe has going for it is a recovering bond market but don't expect that to last either.

Italy and Spain are known basket cases. More importantly, France, the Hidden Zombie in Europe, is about to take a deep plunge.

Finally, the recent pickup in China is not sustainable, and the US is clearly weakening.

Since Germany cannot export to itself, its export machine will grind to a halt as I said well over a year ago.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Obamacare Sticker Shock; Expect Insurance Premiums to Soar; Aetna CEO Says Some Rates Will Double

Posted: 15 Jan 2013 09:22 AM PST

Consumers are about to find out that the Affordable Care Act, widely known as Obamacare is not exactly affordable. The Wall Street Journal says Health-Insurance Sticker Shock is just around the corner.
Health-insurance premiums have been rising—and consumers will experience another series of price shocks later this year when some see their premiums skyrocket thanks to the Affordable Care Act, aka ObamaCare.

The reason: The congressional Democrats who crafted the legislation ignored virtually every actuarial principle governing rational insurance pricing. Premiums will soon reflect that disregard—indeed, premiums are already reflecting it.

Central to ObamaCare are requirements that health insurers (1) accept everyone who applies (guaranteed issue), (2) cannot charge more based on serious medical conditions (modified community rating), and (3) include numerous coverage mandates that force insurance to pay for many often uncovered medical conditions.

Guaranteed issue incentivizes people to forgo buying a policy until they get sick and need coverage (and then drop the policy after they get well). While ObamaCare imposes a financial penalty—or is it a tax?—to discourage people from gaming the system, it is too low to be a real disincentive. The result will be insurance pools that are smaller and sicker, and therefore more expensive.

Eight states—New Jersey, New York, Maine, New Hampshire, Washington, Kentucky, Vermont and Massachusetts—enacted guaranteed issue and community rating in the mid-1990s and wrecked their individual (i.e., non-group) health-insurance markets. Premiums increased so much that Kentucky largely repealed its law in 2000 and some of the other states eventually modified their community-rating provisions.

While ObamaCare won't take full effect until 2014, health-insurance premiums in the individual market are already rising, and not just because of routine increases in medical costs. Insurers are adjusting premiums now in anticipation of the guaranteed-issue and community-rating mandates starting next year.

Although President Obama repeatedly claimed that health-insurance premiums for a family would be $2,500 lower by the end of his first term, they are actually about $3,000 higher—a spread of about $5,500 per family.
Aetna CEO Sees Obama Health Law Doubling Some Premiums

Bloomberg reports Aetna CEO Sees Obama Health Law Doubling Some Premiums
Health insurance premiums may as much as double for some small businesses and individual buyers in the U.S. when the Affordable Care Act's major provisions start in 2014, Aetna Inc. (AET)'s chief executive officer said.

While subsidies in the law will shield some people, other consumers who make too much for assistance are in for "premium rate shock," Mark Bertolini, who runs the third-biggest U.S. health-insurance company, told analysts yesterday at a conference in New York. The prospect has spurred discussion of having Congress delay or phase in parts of the law, he said.

"We've shared it all with the people in Washington and I think it's a big concern," the CEO said. "We're going to see some markets go up as much as 100 percent."

The Obama administration said last year that "middle-class families" buying insurance through the law's new online exchanges may save as much as $2,300 a year starting in 2014. Nick Papas, a White House spokesman, declined to comment on Bertolini's predictions.

The CBO estimated in 2009 that the law will increase premiums 10 percent to 13 percent for individuals and have little effect on small and large-employer plans. After the subsidies are factored in, individual bills will go down by about 60 percent, the agency predicted.
Fantasyland CBO Projection

Obamacare pretty much did what Romneycare did and the results will be the same - higher premiums.

Specifically, Obamacare mandated acceptance of anyone, provided insufficient penalties for the young and healthy to drop out, and mandated an increase in things that are covered.

The CBO added all of that up and concluded prices would go down by as much as 60 percent.  I wonder what alternate universe the CBO lives in.

How Much of an Increase?

Expected increases depend on existing state rules as well as company size. States foolish enough to already have Obamacare-like mandates will be impacted the least.

Big employers will fare best, small companies and individuals will be hit the hardest. Wasn't Obamacare supposed to fix that?

The Journal notes that residents of New York, New Jersey, and Vermont already pay twice what others pay. Those in Massachusetts (the home of Romneycare) shell out almost as much.

Residents of Arizona, Arkansas, Georgia, Idaho, Iowa, Kentucky, Missouri, Ohio, Oklahoma, Tennessee, Utah, Wyoming and Virginia will likely see the largest increases — somewhere between 65% and 100%. Another 18 states, including Texas and Michigan, could see their rates rise between 35% and 65% says Journal writers Merrill Matthews and Mark Litow.

Mr. Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. Mr. Litow is a retired actuary and past chairman of the Social Insurance Public Finance Section of the Society of Actuaries.

Aetna Overstating Increases?

It's possible, if not likely, that Aetna is trumping up the increases so when they do happen,  a mere 35-50% will not seem so large vs. the projected 100% increases. Then again, Aetna may fully intend to hike some rates by 100% over the course of a few years.

It's also possible that some individual policy-holders in high-cost states may benefit slightly, but if so it will be at huge expense to everyone else. 

Thank Obama and Romney

Thanks Obama, and while we're at it, thank you too Romney because Obamacare and Romneycare are for all essential purposes, one and the same.

If you get a raise this year, don't be surprised if all of it (if not more than all of it)  is eaten away in higher health-care premiums.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Iran Removes Euro and Dollar From Trade Exchanges; More Symptoms of Iranian Hyperinflation

Posted: 14 Jan 2013 11:53 PM PST

Inquiring minds note that Iran removes euro and dollar from its trade exchanges.
Minister of Economic Affairs and Finance Shamseddin Hosseini said Monday that Iran would no longer use euro and dollar in its trade exchanges according to a decision made by the government's economic working-group. Iranian state news agency IRNA writes about this.

"Iran's government is determined to remove euro and dollar from its foreign trade and is to change its foreign trade pattern," said the minister while speaking to reporters at the end of a meeting with the representatives of the Economic Cooperation Organization (ECO) member countries.
Symptoms of Hyperinflation

Iran removed the Euro and dollar from its foreign trade patterns not because it wished to do so, but rather because it has no euro or dollar reserves it can use.

Regardless of its official statements on trade, euros and dollars are hoarded by Iranian consumers in the black market.

I spoke about the inflation nightmare in Iran on October 4, 2012 in Hyperinflation Hits Iran; Monthly 70% Inflation Rate; Reflections on Economic Warfare. Here are a few snips:
The oil embargo against Iran has worked, assuming one defines "work" as a destruction of the Iranian riall which has fallen 33% in a week, 57% in three months and 75% in a year vs. the US dollar.

On Wednesday, the Tehran bazaar closed in turmoil and police used teargas and batons on demonstrators protesting the currency crisis.

Monthly 70% Inflation Rate

Steve Hanke, Professor of Applied Economics at Johns Hopkins University, has also been following the Iranian currency crisis. He pinged me with these thoughts yesterday.
Hello Mish

For months, I have been following the collapse of the Iranian rial, tracking black-market exchange-rate data from foreign-exchange bazaars in Tehran. Using the most recent data, I now estimate that Iran is experiencing a monthly inflation rate of nearly 70%, indicating that hyperinflation has struck in Iran.

Cordially,
Steve
Iran's Lying Inflation Statistics

As soon as I saw trade exchange news I looked for an update from Steve Hanke. You can find one written January, 9 on Cato: Iran's Lying Inflation Statistics
Today, the Central Bank of Iran released its inflation statistics for 2012. Remarkably, despite all of the international notoriety surrounding Iran's outbreak of hyperinflation in October, the Central Bank claims that Iran experienced an annual inflation rate of only 27.4%.

The Central Bank has a habit of failing to release useful economic data, and what it does release often has what I would describe as an "Alice-in-Wonderland" quality. Indeed, the Central Bank's official annual inflation rate is grossly off from the true rate. Using a well-established methodology, I estimate that Iran experienced an annual inflation rate of 110% during 2012.

The use of lying statistics is not a first for a country with hyperinflation. Indeed, when inflation begins to spiral out of control – such as the most recent cases in Zimbabwe and North Korea – it's all too common for governments to wrap their statistics in a shroud of secrecy.
Official Exchange Rates and Clouds of Secrecy

One way to hide in a cloud of secrecy is to prohibit trades in other currencies. Iran did just that.

Officially, trade is in the Iranian rial. Unofficially, euros and dollars are precious on the black market.

By the way, anyone remember the silly claims the US went to war with Iraq because it was about to price oil in euros? If not, here is a refresher course.



Iranian oil is no longer available for either euros or dollars. Yet hyperinflation hit Iran, not the US, not Europe.

Iran's biggest problem is the embargo, of course. However, it is still humorous to read the silly pontifications regarding the demise of the dollar if oil was not priced in dollars.

Oil priced in euros did not matter then, and it would not matter now, embargo or not.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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