I recently blogged at Bullionstar on the topic of the upcoming Iranian monetary blockade. Many years ago when Bitcoin denominations chart was taking a political science class at university, I remember the professor teaching us two criticisms of sanctions. The first is that they don’t really work—people can always get around them. And secondly, even if they are so tight that they can’t be evaded, sanctions don’t change the behaviour of the party being sanctioned.
The Iranian monetary blockade that ran from 2010-2015 seemed to contradict both of these claims. The sanctions were very difficult to evade. And they forced Iran to come to the bargaining table and agree to end their nuclear program in exchange for economic relief. According to the International Atomic Energy Agency, Iran has complied with its promise.
The Trump administration has announced that it is reneging on the nuclear deal and re-imposing sanctions in order to force Iran to agree to a new and stricter terms. Most nations who were signatories remain comfortable with the existing deal. Will the next monetary blockade—the Trump blockade—be as effective as the last one? There’s a good chance that it won’t. I refer to Iran sanctions as a monetary blockade because the U. Think how large retailers like Walmart force suppliers to sign exclusivity agreements, or face the threat of being cutoff from store shelves.