The West's attempts to destroy the Iranian economy through heightened sanctions—including most imports, oil exports and use of banks for trade operations—is having its affect. According to Johns Hopkins University Professor Steve Hanke, Iran is facing hyperinflation, with a monthly inflation rate of nearly 70% per month and its national currency, the rial, plummeting in value against western currencies. Iran is the latest casualty to be placed on his Hanke-Krus Hyperinflation Index, which includes France (1795), Germany (1922), Chile (1973), Nicaragua (1986), Argentina (1990), Russia (1992), Ecuador (1999) and Zimbabwe (2007), countries which experienced price-level increases of at least 50% per month.
Hanke, relishing his role as the world’s expert on this nightmarish phenomenon, has "played a significant role in stopping more hyperinflations than any living economist, including 10 of the 57 episodes" on his Index. He writes that Iran has three options:
- spontaneous dollarization (people unloading rials on the blackmarket for dollars, as happened in Zimbabwe),
- official dollarization (the government withdrawing the currency in favor of dollars, as in Ecuador), or
- a currency board issuing a new domestic currency backed 100% by—you guessed it—dollars.
Hanke insists that the foreign currency doesn't have to be US dollars. Pitcairn Island, for instance, uses New Zealand dollars.
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Those ‘options’ all amount to one: accept US-dollar dictatorship. ...
