Biden's Feckless Iranian Policy
"Just by getting elected, Trump destroyed Iran’s economy."
By Chuck Warren
Trump has hardly started doing anything about Iran, and Iran is already in deep trouble simply out of fear.
When Trump got elected in November, the Iranian currency rial to dollar exchange rate was stable at around 507,000. When Trump was inaugurated, it had jumped to 665,000. Just by the mere fact of getting elected, Trump had caused the Iranian currency’s value to drop by more than 30%.
Today, the exchange rate has increased even more, standing at 978,000. That’s a more than 90% increase.
What’s going on is that, during his first term, Trump brought Iran’s oil exports down to nearly zero. When Biden took over, he allowed Iran to sell oil again, mainly to China at a bargain. It was good for both sides and bad for America dually: Iran’s exports reached the pre-sanctions peak, and China was buying oil at a huge discount.
Some time ago, Iran tried to change its reserve currency from the dollar to the euro, but it did not solve Iran’s problems. Being the world’s reserve currency, access to the dollar is very important. To do anything, terrorism or trade—though the two are sometimes the same thing in Iran—Iran needs dollars.
When Trump got elected, the Islamic Republic feared that its access to the dollar would be cut. So it started taking precautionary measures. The government restricted the flow of the dollar into the economy. On the other hand, private businesses, both Iranian and foreign investors, are being cautious. Iranian merchants are also not spending their dollars extravagantly, and foreign investors are no longer taking their money to Iran, which reduces the flow of the dollar into Iran.
If this is too confusing, here’s a simple way to put it. There are three actors here: the government, Iranian merchants, and foreign investors. Fearing Trump, none of them are spending their dollars inside Iran. This means that the supply has been drastically cut, boosting the price of the dollar and ruining Iran’s currency value.
And it gets even worse!
It is currently the Nowruz holiday in Iran. In the last 100 days before the holidays, Iranian schools had been closed down for 50 of them. Government offices had been closed down routinely too. Planned power outages happened in residential areas. This is due to energy shortages.
The official line in Iran, repeated by “credible” outlets like the New York Times, was that the shortage was caused by aging energy infrastructure. But aging infrastructure does not cause sudden crises. They decay over a long period, and the effects reveal themselves slowly. None of these brilliant reporters bothered to mention this. (One of them has long been suspected by Iranian–Americans to be too close to the Islamic Republic and was once caught on a hot mic telling her colleague not to interview Iranian dissidents. So there might be an explanation other than incompetence for why she repeated the official state line.)
The real answer is that Iran is mining Bitcoins, and mining Bitcoins requires a lot of energy. For reference, the annual energy used to mine Bitcoins is the equivalent of Poland's entire annual energy consumption. Fearing that Trump will not allow them to use the dollar, and having failed to use alternative currencies like the euro as a substitute, Iran is freezing its own people to mine Bitcoin to substitute it for the dollar.
Of course, none of this is to feed its own people—after all, if Iran were really worried about the welfare of Iranians, it wouldn’t freeze them to mine cryptocurrency. This is all to reconstitute the forces that Israel has destroyed over the past year and a half and to accelerate its nuclear weapons program.
In preparation for Trump, Iran also sacked its economic minister and strategic adviser to the president. Both of these guys believed that a deal with the U.S. would buy Iran time, get Iran cash, and bring back foreign investors. But the ayatollah does not agree. He thinks that he’d never get a good agreement with Trump. Instead, he thinks that it’s best for Iran to enter a policy of economic austerity. Rather than trade with the world to increase economic conditions, the ayatollah has decided to produce the essentials, like food and weapons, domestically and accept that sanctions are here to stay.
Just by getting elected, Trump destroyed Iran’s economy. And now he is taking action, too. Biden was so scared of China that it let China buy oil from Iran. Last week, Trump did what Biden would never do: He added a Chinese company to the list of sanctions for buying oil from Iran. He is also giving support to the government of Iraq—another thing Biden never did—to stand up to Iran. Iraq is now trying to get rid of the Iran-backed militias and also coming out and saying that Iran is using forged papers to sell its oil posing as the Iraqi government. Of course, Iraqis had known this for a while, but they never felt safe from Iran to say it out loud under Biden.
The Biden team was full of very experienced people who thought through every detail before taking action. The only problem was that they spent so much time thinking that they never got to the doing part.
Trump's Administration has one certainty: When you are the most powerful country in the world, you can sometimes throw your weight around, and others will follow your lead or cave.
And as we are witnessing, Iraq is following America’s lead, and China and Iran are caving.
Regarding Iran, the legacy media and their ActBlue viewers are wrong: Trump is not reckless. It is actually that Biden was feckless.
Note: the opinions expressed herein are those of Chuck Warren only and not his co-host Sam Stone or Breaking Battlegrounds’ staff.
