According to the International Iranian Stone Exhibition, Hossein Raghfar and Ehsan Soltani published their 16th economic report addressed to the people. The report states: The destruction of the earth is due to the poverty of the people; And the poverty of the people is due to the plunder of their property by rulers who do not trust the future of their government, and do not learn from the past.

(From the letter of Imam Ali (AS) to Malik Ashtar)

Policies of liberalization, privatization, deregulation, monetization, and commodification of social and economic phenomena are responsible for the current economic, social, cultural, and political crises of the country after the imposed war. The contribution of the devaluation of the national currency as the most important macroeconomic variable in macroeconomic destabilization, stagflation, widespread unemployment, unprecedented socio-economic inequalities; Astronomical wealth for the oligarchs; Unprecedented corruption in the administrative, cultural and social context; Continuous weakening of people's purchasing power; And the livelihood crisis of large communities; Social harms including the spread of opium addiction; The growth of crime; Violence and suicide; Prostitutes; Working children; Brain drain and capital; Faults have caused socio-political security.

Inflation tax

In the one-product economy of Iran, the only conventional and accessible solution to eliminate the budget deficit and financial bottlenecks is the exchange rate, and ignoring the roots and key factors, the version of increasing the exchange rate and basic items is introduced as the only key strategy of the economy. This version, in order to run the day-to-day affairs of government and continue to reap the benefits of rents, transmits all pressures to the public by imposing inflation taxes. Meanwhile, for the benefit of state-owned and quasi-state-owned enterprises and a small segment of society, the real private sector and the people are becoming weaker and weaker day by day. Instead of addressing inflation and addressing the root of the problem, policies focus on a treatment that plunges the economy into an inflationary spiral and a destructive cycle of "exchange rate rise> inflation rate rise> exchange rate rise." This means an inflation tax that basically puts pressure on the poor and middle classes. In the inflation tax scenario, instead of "cutting non-government and unnecessary government spending", "cutting or at least gradually distributing and reducing rents" and "taxing the rich and high incomes", by creating inflation (by raising the price of items Key, government services and exchange rates) The pressure of all this is transmitted to the general public, which results in increased poverty and inequality, intensified recession in the private sector and unemployment.

The winners of this rent-friendliness-loot economy are the businessmen of the sanctions and the elites of the dominant coalition, the oligarchs. Their main assets (such as currency, gold, land, housing, raw materials, goods) along with their incomes are non-rials or denominated in dollars, and the losers are the general public whose incomes are denominated in rials (undervalued) and their expenses in dollars. (Overvalued) and are looted by inflation tax. Now that the news of the shadow of sanctions is fading, the businessmen of the sanctions are at the forefront of opposing the realization (reduction) of the key variable of the dollar price and consequently other assets and the emptying of the asset price bubble.

It is important to pay attention to two events in recent months. First, the sharp increase in the country's foreign exchange earnings (both due to the sharp rise in prices of industrial raw materials such as metals and chemicals and the increase in exports and improved crude oil prices) and second, the real decline in the dollar (sharp rise in prices of raw materials and industrial raw materials And food in the world). These two events mean that even with the depreciation of the dollar, not only the profits of private and quasi-private enterprises producing and exporting raw materials (such as steels and petrochemicals) are maintained, which will be even higher than last year. With the strong resistance of domestic oligarchs against falling prices, especially the price of currency, and also due to the sharp rise in prices of raw materials and industrial and food in the world, we should expect a third inflation shock - followed by two price shocks in 1397 to 1399 - It was from the second half of 1400. The predictions that have been reflected in the yellow media since the beginning of 1400 with the howling of predatory wolves indicate the new oligarchy plan to continue the economic, social and political destabilization of the country.

Land and housing stakeholders are the second largest group after corporations and private banks to benefit from currency and price shocks in sanctions. These big businessmen of sanctions, while strongly resisting the evacuation of the land and housing price bubble, are now leveraging the pressure of the yellow economic media and affiliated economists, injecting bank funds (from the printing of money) into the real estate market to create demand and Consequently, they have proposed to the Central Bank to maintain the land and housing price bubble. The bitter comedy of the recent stances of these media and monetary economists is that they are the ones who strongly opposed the government's withdrawal of central bank resources to support the people against the corona, a move that has taken place in all the industrialized countries of the world. According to the oligarchs, there is nothing wrong with creating money to secure the interests of private banks or housing stakeholders, but any supportive action to alleviate the suffering of the people is a challenge, because public discontent must remain at critical thresholds. These false claimants of the market economy suggest that instead of adjusting prices based on the supply and demand mechanism, the central bank should print money and inject it into the housing market to prevent the housing price bubble from popping up and prices from becoming real.

The housing slump is rooted in the unprecedented rise in housing prices and falling purchasing power. Housing purchasing power has fallen to less than half the long-term average. The ratio of housing prices to people's incomes has not only reached its highest historical level in the country but also one of the highest ratios in the world, so that today Iran has the highest share of housing in the cost of households among the countries of the world. In the last 20 years, Iran has had the highest real housing price growth in the world.

The urban housing crisis stems from the concentration of investment in luxury housing and certain urban areas and the inadequate and incorrect investment in affordable housing available to the public. Housing business intensified with the influx of private banks and financial institutions into the luxury urban housing sector, which was followed by a sharp rise in prices and a slump in housing became another cause of banks' toxic assets. The conversion of housing into capital goods has intensified speculative and speculative activities in this sector. Maintaining the housing price bubble has led to high rents and socio-economic problems for rent-seeking households, especially in Tehran and large cities. Thus, the resistance to the "emptying of the price bubble" by the ruling oligarchy will cause the housing stock to continue to increase, inflation and living pressures to continue for at least the next three years. Funding to stimulate demand is of no benefit to the people, and all of these resources will go to the housing mafia and housing traders by maintaining the price bubble or increasing housing prices. Those who hoarded housing over the past year and saw prices continue to rise are now waiting for new waves of inflation to reap another huge benefit. The solution to the housing market situation is to make the necessary and sufficient use of tax tools, as well as to provide the necessary incentives for housing production (for the middle and lower middle classes), for consumption and not for business, which is done in all industrialized countries.

 But the government and the central bank have been using every means to justify raising the exchange rate for three years. They have used all sorts of tricks to honor the central bank's reserves, using the clichéd clichés of "marketing, capital outflows, currency appreciation, currency suppression, Dutch disease, and production support" to engineer public opinion. An important part of the current crisis and recession is the result of two consecutive unprecedented currency shocks in the Iranian economy, which can only be attributed to sanctions. Because even now that the shadow of sanctions is waning, sanctions and media and oligarch-affiliated economists continue to advocate high prices for currency, housing, and goods.

In the meantime, the role of the parliament should not be neglected, as together with the government and the central bank, it seems that the only task they have is to maintain the price bubble of currency and assets (land, housing, raw materials, goods, stocks) to secure the illegitimate interests of superiors. 

 Although the currency shock has become a good tool for the people to plunder by the dominant coalition, it has resulted in the destruction of socio-economic structures and foundations, non-competitiveness of the economy, widespread stagflation, corruption and rent-seeking, and social instability.

A study of inflation in the last three decades shows that when there are no currency fluctuations, the inflation rate is around 14 to 15 percent, which can be significantly reduced by government financial discipline and directing resources to productive activities in the real sector. 

The main cause of inflation in Iran is cost push inflation, which is mainly caused by an increase in the price of currency (devaluation of the national currency), an increase in transaction costs (inefficiency and corruption) and, as a result, an increase in production costs. Therefore, the proposed solution is to target both inflation and exchange rates. To do this, we must target the real exchange rate, and of course inflation targeting does not have the same pattern anywhere.

Since the government itself, in coordination with the parliament, has tried to increase the price of currency to cover the financial indiscipline deficit of the public sector, reducing the price of currency from about 25 thousand tomans to 10 thousand tomans should be the first government action to strengthen the national currency. Follow those ongoing measures to strengthen money by paying attention to production.

Given that the main source of foreign exchange is the resources obtained from the sale of natural capital and belong to all the people of this land - not only the present generations but also future generations - these capitals can only be converted into other forms of capital, which results in intergenerational stability. To follow.

Currency pricing should only be determined by the two points that control it. First, public welfare - especially given the purchasing power of low-income families - and second, the ability to produce domestically so that the production costs of real producers in the economy are such that they can compete with the FOB price of foreign goods. It should be noted that the prices of domestically supplied goods have risen sharply due to rising transaction costs (inefficiency and corruption) and the presence of intermediaries and brokers within the power structure. There is only one political determination that can rise up to destroy the price bubbles, but there is no sign of that determination yet.