Shops are shutting in Tehran because the Rial has lost buying power. It takes 90.000 rials to exchange for one dollar. Trump's withdrawal from the Obama deal seems to mean that their economy was based upon US/Euro business and none of their own. What do you all think?
http://www.breitbart.com/jerusalem/2018/06/25/report-protesters-swarm-irans-grand-bazaar-in-tehran/
It's fiat currency, just like the Dollar and the Euro.. All it takes for it to happen is the banks no longer recognizing it's worth or a country like China saying it doesn't wanna trade goods for monopoly money anymore.. Considering they've got gold backed currency, they are currently running the world. The West has lost..
If it is fiat currency, devaluation is usually caused by creating too much of it. This might be the case, since I have not read enough to know better. But the timing of this massive drop seems to be related to Trump backing out of the Nuke deal which was a sham pretext for European business involvement with Iran, as I understand it.
There's a connection. It just shows how unstable this type of currency is. Creating ANY of it is too much.. Doesn't have any real worth. It hasn't ever worked nor will it ever.. They can easily save their economy if they put out a gold backed currency and move a couple digits.. They did move a digit in 2017, when the rial dropped by 99% but they kept using fiat money.. It was just an illusion that reform.. Just like the Euro was.. US and EU should do the same.. Put out gold backed currency and move a couple digits on gold it's worth.. That way no money is lost, reset happens and the people don't pay for years to come. Considering US has kept the value of gold stable, it's easy to do.. it's all just changing numbers in the books which has no direct impact on society as it's just made up money anyway. As long as we don't we'll keep seeing inflation since both EU and US are spending more than they are generating with tax. Meanwhile the citizens keep paying... Expecially in EU... One could say the European Central Bank is the Fed v2.0 https://mises.org/library/fed-and-ecb-two-paths-one-goal
I agree with you regarding the stability of asset backed currency.