Friday, January 29, 2010

Iran Continues Downward Spiral

This from Michael Ledeen:
"So it shouldn’t surprise anyone that people are racing to the banks to get their rials and toumans out, and convert them to some harder currency. But the banks won’t give them all their money; withdrawals are limited to $15,000 per account, and there have been many angry scenes. The people know that the rulers are shipping out their own wealth, and they hear terrible rumors about the impending failure of major banks.

This bespeaks a far broader malaise, a slow descent of the Iranian state into the inferno. As Ahmad Alavi, a thoughtful economist, put it, the state now faces a crisis of legitimacy. The people are acting on the basis of their experience, and, lacking reliable information and confidence, the only way they have to conserve their assets is to take it from the bank."


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