Iran Low on Options as Hyperinflation Concerns Spark Gold Dash!

• What is happening in Iran will be repeated throughout the world when the global currency meltdown strikes!
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  Iran Low on Options as Hyperinflation Concerns Spark Gold Dash! 
  by Dana El Baltaji, http://www.businessweek.com/ 
  Iran has few policy options to end turmoil in its currency markets, as the U.S. and allies seek to inflict enough economic pain to force the Islamic republic into concessions over its nuclear plans, analysts said.
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  The rial has depreciated as much as 40 percent against the dollar in street markets since August and gold purchases have surged as residents seek to shield savings. The currency plunge led to unrest in Tehran’s markets last week as police used tear gas to end protests. Iran has raised interest rates on deposits and opened an exchange center to stabilize the currency market.
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  The U.S. and European Union are starving Iran of foreign currency by blocking sales of oil, its main export, and other transactions in dollars and euros. Israel has threatened to attack to stop Iran’s nuclear program if the sanctions don’t succeed in curbing it. Iranian leaders say they won’t bow to the pressure, even as the country’s crude output plunges to the lowest in more than two decades.
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  “I don’t see what Iran can do on the economic front other than try to avoid sanctions by exporting to countries that are prepared to use their currency as payment,” said John Williamson, a senior fellow at the Peterson Institute for International Economics in Washington. “I don’t think monetary policy changes will make any difference. People aren’t going to examine interest rates when their savings are being confiscated.”
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  ‘Hyper-Inflation’
  The run on the rial has exacerbated inflation that had already been pushed up by the removal of subsidies on energy and food. The official rate rose to 23.5 percent in August. The real rate, which adjusts for the currency depreciation, is three times that, according to Steve Hanke, a professor of applied economics at Johns Hopkins University in Baltimore.
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  “We’re getting into what is technically hyper-inflation,”with an “implied inflation rate” of about 70 percent a month, Hanke said. Concern that savings are being eroded is leading Iranians to other assets, including gold and property.
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  Turkish sales of precious metals to Iran jumped to $6.2 billion through July from $21.9 million in the same period last year. Wealthy Iranians in Turkey are collecting gold and exporting it to Iran, the Istanbul-based Zaman newspaper said July 11. Iranians in Dubai and India are also collecting gold and sending it to the central bank, Zaman said, citing a Turkish economy administration official it didn’t name.
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