Police Clash with Currency Protesters… in Iran
October 8th, 2012Money Monday
Last week hundreds of protesters gathered in Iran’s capital Tehran outraged over the plunging Iranian rial. The State greeted their peaceful demonstration with riot police and tear gas. The rial has lost more than 80% of its value in the last year, which has largely been blamed on Western sanctions, but the reality is that collapse is the destiny of all paper currencies. The rial currently trades at about 36,100 to the dollar, but as long as analysts use the dollar as a standard they aren’t reporting real inflation because it doesn’t account for the devaluation of the dollar in the same period.
Aljazeera reported, “Hundreds of police in anti-riot gear stormed the capital’s currency exchange district of Ferdowsi, arresting illegal money changers.” Think about that, “illegal money changers.” It is a crime for honest merchants to exchange one baseless fiat paper note for another baseless fiat paper note because the sociopaths that issue those notes don’t get along.
The head of the national police, Esmail Ahmadi Moghadam, said that, “a special unit comprised of police chiefs and government economic officials had been created to combat those perturbing the currency market.” Had added that “many people were keeping stashes of foreign currency and gold at home, which is having a negative effect on the economy”.
That’s ugly business, when central planners are doing ride-alongs with police to bust merchants for what the FBI would call “economic terrorism” in the US. The protest took place in Tehran’s historic Grand Bazaar, which is the largest market of its kind in the world, and included many currency exchange dealers. It was quickly disbursed by police.
Iran’s president, Mahmoud Ahemedinjad said the currency plunge was, “part of an economic war waged by the West” and “a psychological war on the exchange market.” But Mehdi Mohammadi, part of Iran’s Supreme National Security Council said, “Is the currency situation in the market due to sanctions? No … The problem is not a lack of currency.”
So, they’re all Keynesians now. Not just the Republicans and Democrats, but Iran’s Central Bank as well.
Don’t think for a moment that these problems are unique to Iran. Fiat money is a global problem, and it’s going to cause a global crisis. Some currencies will collapse before others, and currency wars harm some more than others, but they are all insolvent, and will disappear from this earth eventually. We have seen police in the US put down protests with tear gas. We have seen government officials in the US target counter economic activity. And we will see dramatic down turns in the value of the US dollar. This crisis is coming to our shores. You can count on it.
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