August 9, 2012: Saudi Arabia announced that it would attack any Israeli aircraft that flew over Saudi Arabia on their way to bomb Iranian nuclear weapons facilities. This does not guarantee that the Saudis will actually oppose an Israeli attack on Iran, as the Saudis and Israelis have been holding secret talks for years. But it's not politically correct in the Moslem world to admit that sort of thing.

Despite the Saudis insisting they don't want war with Iran, the Gulf Arab states continue increasing their stocks of modern weapons. In the last two months alone, the Gulf Arabs have ordered over $11 billion worth of weapons and military equipment. While the Iranians are historically better fighters, the Gulf Arabs are encouraged by the fact that Iraq fought Iran to a draw in the 1980s, mainly because of over $50 billion worth of modern weapons bought with loans or gifts from the Gulf Arab states. The Iranian government budget for a year is about $40 billion.

The Iranian riyal continues to lose its value against foreign currencies. Now, it costs over 20,000 Iranian riyals to buy one U.S. dollar. At the beginning of this year it cost 16,000. A year before that it only cost 10,000. So not only are smugglers demanding higher fees to get forbidden goods to Iran (because of the increased risk of getting caught and prosecuted) but it costs more and more to buy foreign currency to pay the smugglers or legitimate suppliers of goods. All this grief doesn't get much attention in the foreign press but in Iran it's big and seemingly unending bad news.

Since July 1st, the new sanctions have cut Iranian oil shipments by nearly half (to about 1.1 million barrels a day). That is costing Iran over $41 billion a year in oil revenue. Other producers, particularly the Gulf Arab states, have replaced the lost Iranian production and the price of oil continues to decline. This hurts Iran even more. Shortages, unemployment, and the growing inflation have caused more anti-government sentiment. Many Iranians also consider government corruption as a key factor in all the economic problems.

In response of the falling revenue, the government has cut many popular programs, including birth-control efforts. The birth rate is below the replacement rate and the population is 75 million (double what it was when the Shia clerics took over in the 1980s). Most of the population is under 35, and too many younger Iranians are unemployed and unhappy with the government. The clerics encouraged births during the 1980s war with Iraq but now most (71 percent) Iranians live in cities where it's impossible to support a family if you don't have a job. Younger Iranians don't want to have kids while the country is ruled by a corrupt religious dictatorship.  Few of these young Iranians want to return to the countryside and subsistence farming.

President Mahmoud Ahmadinejad continues to lose his struggle with hardline, and usually corrupt, political rivals. The hardliners have been prosecuting or dismissing Ahmadinejad allies in the government and making it increasingly difficult for Ahmadinejad to keep his anti-corruption campaign going.

August 8, 2012: The military announced that it had developed a new, more accurate, guidance system for its Fateh 110 missile (range 300 kilometers). No proof was provided, which is pretty typical of these announcements. This sort of thing is mainly to raise Iranian morale and justify the huge chunk of the national wealth taken by the military and their associated companies (that produce lots more besides wonder weapons).

August 7, 2012:  In Syria president Assad appeared on TV with an Iranian diplomat. This was the first public appearance by Assad since a bombing in his headquarters three weeks ago killed four of his key aides. Iran repeated its willingness to stick with Assad. Assad said that the rebels would be crushed, no matter what it took to do so. It appears that Iran and Syria have agreed to mass murder of Syrian civilians as a way to stop the 17 month old rebellion. Iran repeated its accusations that Turkey and the Gulf Arab states are arming the rebels and that the rebellion is all the fault of the United States and Israel.

August 6, 2012: A major British bank, Standard Chartered, has been accused by American regulators of helping Iran illegally move over $250 billion through the international banking system in the last decade. Standard Chartered insists that most of those transactions were at least technically legal and will vigorously defend itself in court. Several other major Western banks have been accused of aiding Iran in moving its cash despite the sanctions. While some banks have been fined, all banks are now leery of doing any business with Iran, even if it is technically legal.

August 5, 2012: Iranian TV broadcast the confessions of 14 Iranians (including six women) who said they were recruited and trained by Israel (in Israel) to carry out assassination attacks that killed five Iranian nuclear scientists. The TV show accused Israel, the United States, and Britain of complicity in this plot. No proof was offered beyond the confessions of some of the 14 accused. Iran already prosecuted and executed one Iranian a year ago for a 2010 assassination of a nuclear scientist.

August 4, 2012: Syrian rebels captured 48 Iranians, who were travelling by bus in Damascus. The rebels accused the Iranians of being military personnel in civilian clothes on a reconnaissance mission and demanded that the Syrian government stop its attacks on civilians if they wanted the Iranians released. Iran said the 48 were pilgrims on their way to the airport and a flight home. Three of the pilgrims were killed a few days later when a Syrian air strike destroyed the house they were held in. The Iranian government later admitted that the men were military veterans. One thing these Iranians may have discovered in Syria is that Iranian Kurdish separatists are helping arm and train Kurdish rebels in Syria.

August 2, 2012: The government allowed the Taliban to open an office in eastern Iran and may provide the Sunni Islamic terrorist group with portable anti-aircraft missiles for use in Afghanistan. The Iranians are not so much supporting the Taliban (who believe Shia Moslems, which most Iranians and many Afghans are, are heretics and must be killed), as they are simply assisting Afghans (usually guys in their teens and 20s) who are willing to fight against the foreign (NATO) troops. The Iranians don't want to make the Afghan drug gangs stronger either but training and arming gunmen for them (the drug gangs pay well) does just that. In fact, there is a disagreement in the Iranian leadership about how to deal with this problem, and the solution seems to be to let everyone do what they feel is best. So while Iranian border guards will shoot on sight if they see Taliban or drug smugglers, Iran also hosts training camps for Afghan tribesmen and smuggles weapons into Afghanistan to arm these young fellows once their training is complete. All this despite the fact that when the Taliban ran most of Afghanistan in the 1990s, they killed thousands of Afghan Shia.

July 31, 2012: In Libya (Benghazi) militia gunmen kidnapped seven Iranian aid workers. There were no ransom, or any other, demands made for the release of the Iranians. The militiamen only said that they were questioning the captives to see if they were in Libya to try and spread Shia Islam. Iran has the largest Shia population on the planet, but most Sunni Islamic radicals consider Shia heretics and often kill them. Iran has appealed to the UN to get its aid workers released.

July 30, 2012: Indian police concluded that Iranian sponsored terrorists were behind attacks on Israelis in India last February. Iran is a major trading partner with India and India has tried to avoid accusing Iran of backing this attack. But the evidence was overwhelming (despite Iranian denials) and it was apparently thought best to go public with it, rather than suffer from leaks of the truth running into official Indian denials. India was not happy with Iran carrying out terrorist operations in India, and the public release of the investigation results apparently was meant to send a message to Iran.

July 29, 2012: Four Iranian bankers were sentenced to death after being convicted of corruption (for their part in a $2.6 billion bank fraud). Others were sentenced to life in prison. The trials have been going on since February. Trials like this are rare, as major criminals can usually bribe their way out of prosecution or conviction.