Winston Churchill was famously quoted as saying, “Meeting jaw to jaw is better than war.” We could also make the case that meeting, as it were, economy to economy is better than war. And, when you match the United States and our economy, not to mention our ability to place financial sanctions on rogue states like Iran, well, Iran just can’t match us.
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President Trump, on resuming office, reinstanted the “maximum pressure” campaign on Iran. And it’s working. Iran’s currency, the rial, is in the basement and still sinking.
Iran’s currency hit a new low on Saturday with $1 costing 1,043,000 rials, and it could fall even further as global tensions rise.
The country had just finished celebrating Nowruz, the Persian New Year, during which stores were closed and only informal trading on the streets took place, according to the Associated Press. The outlet noted that this put additional pressure on the market.
Iranian money exchanges and traders have turned their electronic signs amid uncertainty over the value of the rial, the Associated Press reported.
This is going to hit the regular Iranian people hardest, of course. The mullahs and the ruling class won’t be that much affected, personally; rulers of rogue nations like Iran rarely are. However, their ability to influence affairs in the rest of the Middle East will be diminished. Their ability to provide streams of weapons and ammo to their proxies–Hamas, Hezbollah, the Islamic State, and the Houthis–will be likewise diminished.
When President Trump re-assumed the presidency, the exchange rate of the dollar to the rial was much more favorable to Iran. It was not ideal, but it was much better:
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When Trump imposed sanctions on Tehran during his first term, 55,000 rials was equivalent to $1, according to Reuters.
That’s a big, big difference.
See Also: President Trump Sends Explosive Message to Houthis – and Iran
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Iran imports a great deal of materials and products it can’t make. Their top imports are machinery, vehicles, cereal grains, oil seeds, optical and medical equipment, and pharmaceuticals, just to name a few. Cereal grains alone make up many of their imported foods, with corn, rice, barley, and wheat topping the list. All of these things are now more expensive, dramatically so. And that expense, along with the inevitable shortages, will be landing on everyday Iranians.
In summary, Iran’s economy depends in large part on imports, and the Trump sanctions are not only squeezing the rial to near Weimer Republic-level devaluation, but the president has also made inroads into Iran’s major export – oil.
Should we be concerned that this economic crash will fall heavily on everyday Iranians? Sure, we are not savages and can muster some sympathy for people who have little or no say in what their government, the world’s top exporter of Islamic terrorism, does. But if the mullahs and their theocratic state are to be removed, it will have to be the Iranian people who do it. Iran isn’t a nation we can roll over militarily without major losses. Economic sanctions, though, would appear to be working. The mullahs are being squeezed; the Iranian people are being squeezed harder, and the goal here would be to make the Iranian people in their millions decide they’ve had enough.
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There’s an old saying that throughout history, peasant rebellions have frequently succeeded because there are just so many peasants. Iran’s population is a little over 90 million. If a strong plurality of their population decide enough is enough and the mullahs have to go – well, then, the mullahs will have to go. And maybe then, after several decades, Iran can rejoin the civilized world.
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