1) 51,000 just last week. This is what HYPERINFLATION looks like. Why is this happening? A few reasons. Same warnings as usual: you say petrodollars or rothschilds or anything else I deem irredeemably fucking retarded, I block.
2) rferl.org/a/iran-billion… First off, they used money from their CURRENCY RESERVE to pay their security forces, as the Rial was already worthless. This article is wrong in that he currency reserve is NOT a rainy day fund
3) It is the money that smaller economies use to back their currency. Ie, "if things go completely sideways, our currency in total is worth at least this much."
4) Lets say they had foreign currency totalling at least $500 billion. All the rials in the world would be worth AT LEAST (total rials in circulation)/($500 billion). The actual value tends to be higher than this, but again this is a value floor, a rock bottom so to speak.
5) Now, they're taking money OUT of the currency reserve fund. 2015 estimates of their foreign reserves put it at around $120 billion. uk.reuters.com/article/uk-ira…
6) And this is just what we KNOW about them withdrawing, and this is to pay their security forces in a currency more valuable than toilet paper. Assuming their currency has hit its value floor, this is knocking value off the rial directly.
7) Second, and here's the part that make the Iran protestors FUCKING BRILLIANT, is the weaponized bank runs
8) Iran has fractional reserve banking, hypothetically, in which a bank only holds a % of the money deposited and loans out the rest at an interest rate higher than the inflation rate, so as to make a profit.
9) However, Iran's government is theocratic socialism, ie religious authorities with control over major industries and economic sectors, ie the banking sector, where the government has a direct hand in all the major banks, and security forces own the rest
10) So, major regime officials have been withdrawing and laundering money FAR beyond what the banks should have been loaning out. This left them overdrawn and vulnerable. This weakness was pounced upon by the protestors
11) Want to know why that socialist FUCKTARD Bernie Sanders wants to go after the banks? Because if you control the banks, you control the country. Why is the CFPB so fucking dangerous? Because it gives unelected bureaucrats too much control over the banks.
12) So, the Iran protesters, they say, hey, if enough of us withdraw our money from the banks at once, there's only so much money on hand at local branches, so they'll have to shut down.
13) This spreads panic as local branches shut down, causing people not connected to the protests to withdraw their money as well. This is called Contagion, it is infectious fear that causes people to act detrimentally to an economic system in mass.
14) Except unlike normal where a series of economic events and a downturn causes the panic quite by accident, the Iran Protesters, those brilliant rebellious bastards, WANTED to start the bank runs.
15) So, what does this have to do with the inflation rate? Well, the only way to keep the banks open now if for the Iran regime to print a shitton more money so people are able to withdraw their money without collapsing a bank.
16) Normally infusions of capital into the banks wouldn't be noticed, as it mostly goes through invisible large loans between businesses and such.
17) Hoewever, because its being printed and put basically right into the hands of people on the street, the amount of extra money suddenly in circulation is FAR more apparent. People see how many rials there are, and suddenly those rials arent worth nearly as much
18) Remember the earlier equation? # of rials in circulation/amount of $ in currency reserves?
19) Jack up the number of rials by, say, double, and knock off 5% of the currency reserve. Here, I'll help with some hilariously oversimplified math.
20) Last week, it was 51,000 rials to the dollar. We'll assume about $110 billion in the currency reserves, PROBABLY LESS. That means there were 5.61 Quadrillion Rials in circulation or so at the time
5.1 Quadrillion I mean, sorry, bad math
21) Now its at 54,450 rials to the dollar. Assume the currency reserve is the same amount as we dont have information otherwise (its PROBABLY lower), we're at 5.445 quadrillion rials in circulation, ie there is 345 TRILLION more rials that are recognized as being in circulation.
22) This is hyperinflation, folks. Plain and simple. Moral of the story? Socialism: Not even once. /end
