Iran and Us

Clifford F. Thies presents a general overview of the process of hyperinflation for Students, with a economic critique of Iranian economic performance. The nationalization process which is continuing in Iran has a deeply religious bent, the Iranian President preferring religious fervor to business acumen. Iran is claimed to be in the early stages of hyperinflation in Theis’ view, though I do not believe it has even reached this stage as yet; Oil revenues have been devoted to promotion of Terrorism and development of nuclear weapons systems, while taxes have been increased along with extended use of the Printing presses. There is little outside investment in the Country, little internal investment inside the Country, lack of investment in the Oil industry, and huge Government payments to fund non-economic activities. Iran may have very bad times ahead.

Cactus at Angry Bear may give a better picture of why the Iranian economy faces deep challenges; because of strict adherence to the Koran by the Iranian Government. Cactus, though, only approaches one-half of the Problem; the other half of the Problem remains Capital aggregation, in order for Banks to function. The Solution in the old Iran was for Oil-Rich Capitalists to start their own Banks, or buy a piece of other Banks for a hefty Price. Nationalization of the Oil industry has eliminated the Oil-Rich Business leadership. Banks are fundamentally limited in their extension loans, even to the Government, so the Government resorts to printing money; thereby destroying what remaining Bank integrity that Bankers managed to retain.

Does the Above review gives Americans a feeling of superiority? It should not! I am One of the few, mayhaps only, Individuals who believe the U.S. Mint made a mistake in the issuance of the new Currency. It should have been Pro-rated to the 1904 Dollar prior to Issuance, and exchange rates established with the older Currency based on that equivalence. I could go back to a Nickel cup of Coffee. The economics of the situation possess actually greater advantage. A mathematician will tell you that Capital levels make no difference to the accrediting of Interest. An Economist will tell you that the increased amounts of discernable spending units will increase the dispersal of said units, with more rapid distribution of economic power (think Capital de-aggregation). lgl