The Iranian rial has crashed. Over the past 36 hours, it has lost almost 30 percent of its value. The value of the dollar against the rial is now up around 300 percent from what it was just a couple years ago. After long denying that the sanctions have had any effect on Iran, President Mahmoud Ahmadinejad now blames outside “enemies” for the country’s economic trials. As the price of foodstuffs climbs for ordinary Iranians, the Iranian leadership hopes that it can blame economic hardship on the West and on sanctions. They will be fooling themselves. While Iranians would rally around the flag in the event of military confrontation or should any foreign power partner with the terroristic and cult-like Mujahedin al-Khalq against the regime, at no point have ordinary Iranians accepted their leaders’ attempts to blame the West for Iran’s financial predicament. Iranians are not fools: they recognize the result of the regime’s gross economic mismanagement.
While some in the Obama administration may breathe a sigh of relief on the logic that biting sanctions may bring the regime to the table and buy time against a potential Israeli strike, they should remain wary. A regime dominated by Islamic Revolutionary Guard Corps (IRGC) alumni does not much care about the economic hardship ordinary Iranians face. After all, much more so even than the grandpa who marched uphill both ways barefoot in the snow, IRGC veterans will dismiss the complaints of anyone who did not suffer the deprivations of the Iran-Iraq war front.
The real danger is that, given the Iranian government’s dependence on high oil prices to subsidize basic foodstuffs and gasoline, that government will now lash out in order to create a price spike which they can take to the bank. This might mean renewed threats to close the Strait of Hormuz, or it could mean provoking an incident against a foreign tanker or American vessel in the Persian Gulf. In no way, however, will it increase the likelihood of Iran negotiating sincerely.
The rial has reportedly lost more than 80% of its value since 2011 because of US-led trade sanctions. n nThat is a true zinger, Mitt.
I may be missing something, but can Iran both cause the price of oil to spike and sell its oil on the open market? I would assume that the only way to cause a price spike would be to cause a crisis, which would also prevent Iran from selling any of its over-priced oil.
Rubin's logic does, indeed, seem faulty on that point. The price of oil would spike only if middle east oil, Iran included, is halted. Except maybe for a day or two.
My fear – Iran gets the bomb – faces economic ruin – and so let's her go – bring on the 12th Iman.
The truth of the matter is that the leadership really doesn't care how much the common people suffer, or what burdens they have to bear, in order to carry on, when the currency crashes. n All that happens is : the Chinese and Russians continue to buy the Iranian oil at better prices, while the man in the street in Iran pays the price. n The mad Mullahs will stop at nothing to acquire nuclear weapons, which is their only goal right now, and the rest of their country and the world be damned.
Not FAST ENOUGH!
"Iranian President Mahmoud Ahmadinejad has blamed the "enemies" of his country for the sharp falls in its currency, the rial." n nObviously, this is Bush's fault because Ahmadinejad is leading cheers for Obama. n nOf course, if Iran is looking for some cash, I understand that their enriched uranium would draw a large price on the world market.