Good Company

Good Company
Good Company

Wednesday, October 03, 2012

Iran: On the Downhill Slide

Yesterday there was this BBC report, "Iran currency crisis: Sanctions detonate unstable rial":
In the past seven days, Iran's rial has has lost 25% of its value; it is now, at best, worth only a quarter of what it was 18 months ago. And the freefall seems to have no end in sight.

Recent days in Iran have seen runs on foreign currencies and on gold - assets that are easily liquefied in the domestic market or transferable overseas.

On the one hand Iranians have lost their trust in their government's grip over the economy, and on the other they fear their country may end up in a military confrontation with Israel over its nuclear programme.

Therefore, they have good reason to change whatever they have in hand into currencies whose value is sustained internationally, or into gold bullion which they can throw into a suitcase if they want to hop aboard a flight and leave the country.

And, logically, as the wheels fall off Iranian people are a tad vexed with their government, as set out in the NY Times report,Violence and Protest in Iran as Currency Drops in Value
The first outbreak of public anger over Iran’s collapsing currency and other economic maladies jolted the heart of the capital on Wednesday, with the riot police violently clamping down on black-market money changers, hundreds of citizens marching to demand relief and merchants in the sprawling bazaar closing their shops in protest.
I leave it up to you to decide whether the Iranian economic free fall is destabilizing in itself or simply the sign of a wreck of a country, screwed by the incompetence of those in charge and their thugs.

As for me, I would hazard a guess that the failing bosses will strike out sooner rather than later. You know, while they still have their heads attached to their shoulders. They have little to lose. In short, I go with the gloomy crowd. I hope they do something stupid sooner rather than later and that they get their deserved reward. My hope is that any calmer heads in the Iranian military (if any remain after all this time) can step in a quash these bozos before a whole lot of unnecessary destruction is unleashed.

No comments:

Post a Comment