Let’s be clear about something – gold is money, nothing else. The U.S. has
made a mess out of the middle east, especially Iran, Libya and Syria. These
nations are tied directly to China, Russia and the other nations around the
heartland including India. Their allies will ensure Iran has what it needs
regardless of sanctions or any other monetary nonsense the U.S. globalist
attempt to put into place.
Gold has always been money and now, if you want to rent an apartment in
Iran the cost is two gold coins, not 40million rial notes. We have been
writing endlessly about the changes in monetary policies across the
heartland, Russia and China and now we are beginning to see real change and
gold is beginning to emerge from the shadows and the market is demanding gold
for payment instead of other currencies – crypto or any other fiat paper
currency – they are not welcome and the market says – “bring me physical
gold”.
The decline of the rial is increasing rents and forcing many residents in
Tehran to leave the city
It’s the commodity which becomes a safe haven at times of economic crisis.
Now, with the crash of the rial, Iranians are using gold for more everyday
payments, most notably rent – but the resulting price hikes are starting to
affect the demographics of Tehran itself.
The currency began to slump in December, when Washington flagged that it
would withdraw from the 2015 nuclear deal.
That decline accelerated in May after US President Donald Trump made a formal announcement that the US was pulling
out of the deal with world powers and reimposing economic sanctions on Iran.
While the offical rate peaked at around 45,000 rials to the dollar, this
was only available for a small group of importers and businesses, leaving
most Iranians to pay double that.
On 29 July, in the runup to fresh US sanctions, money exchanges in Tehran were
charging around 100,000 rials for one dollar; within 24 hours this had
increased to 110,000 rials.
Iranians have traditionally saved gold coins for major purchases such as
wedding costs. That behaviour has become more common, however, with the
re-imposition of US sanctions in August, when gold purchases hit a four-year high.
Meanwhile one gold coin neared 40m rials, although that rate has
since decreased to 36m rials.
Rents go up as purchasing power falls
The downward spiral of the rial has led some landlords to try to safeguard
their income by turning to gold.
Hesam Oqabai, the chairman of the Real Estate Agents Union of Tehran
province, said the housing market accounts for about 45 percent of activity
in the Iranian economy.
“Given our country’s economic condition, the fluctuations in the foreign
exchange market are affecting the housing market,” he said.
****
Why landlords turn to gold
Esamil Jalali is a landlord in Vanak, a wealthy and well-connected
bustling neighbourhood in northern Tehran.
He is one of those property owners who not only has increased his rents
but also asked for payment in gold rather than in rials.
Vanak has become increasingly expensive for
many tenants looking to rent (Wikipedia/CC)
Currently he is asking prospective tenants to pay two gold coins to rent a
95 square metre apartment for one month.
“I know that many may not be able to afford it,” he said, “but when I see
that the currency I may get from my tenants would have less value compared to
the previous month, then that leaves me with no choice. If I continue to rent
out my apartment in return for rials, then I would face financial loss.”
Some landlords are also known to be demanding payment in dollars from
their tenants, although such widespread behaviour, while not illegal, is
frowned on by the authorities. Source
If the U.S. and her western allies continue down this path of monetary
monkey business we are going to see other nations forced to to use
alternative currencies. Cryptocurrencies are not stable enough for this
purpose and the wild swings in price make them very unattractive to someone
conducting retail business. I understand these digital blimps on a screen
have an audience, however, it is very limited.
Gold backed cryptocurrencies could be the next step in the evolution of
currency. Gold on the blockchain would eliminate market rigging and would
identify every ounce on the blockchain. Until there is a stable, widely
accepted gold backed anything (currency, cryptocurrency or otherwise),
citizens and businesses are left to conduct business using the real thing –
physical gold.
