The Lion’s Tail

Iranian President Rouhani threatened the U.S. and our President when he issued a statement to President Trump not to play with the Lion’s tail as it would end in regret.  Rouhani also repeated a famous quote from the former Iraqi President Saddam Hussein that war with Iran would be the mother of all wars.  President Rouhani should remember how that worked out for Saddam Hussein.  Typical of President Trump the threat from Rouhani was met with a threat of Trump’s own.  Rouhani is under extreme economic and political pressure since our President withdrew from the Iran nuclear deal.  The Iranian currency, the rial, has fallen tremendously in value in 2018.  At the beginning of 2018 the value of the rial vs the dollar was 42,890 rials/dollar.  Thanks to further currency devaluation the rial is now more than 90,000 rials/dollar.  As a result import costs have skyrocketed and many businesses in Tehran have closed.  Funding for Iran’s military operations in Yemen and Syria have placed a severe burden on Iran’s financial resources.  As a consequence the civilian populace has experienced inflation and shortages.  Add to that record unemployment levels and there is a great deal of civil unrest and protests.  Oil exports are the chief source of revenue for Iran and President Trump is pushing the Europeans and others to boycott Iranian oil.  Expansion of American oil production has already placed price constraints on Iranian oil production and boycotts will hurt revenues even further.    Secretary of State Mike Pompeo gave a sobering assessment of the situation in Iran in a speech at the Ronald Reagan Presidential Library.  He accused the ruling ayatollahs of being more concerned with riches over religion and of lining their pockets at the expense of ordinary Iranians.  He further likened Ali Khamenei, the Supreme Leader of Iran, to the mafia and of running a $95 billion hedgefund for personal use.

Iranian citizens are recognizing that there is widespread corruption among the religious and secular leaders of government.  Senior government officials become wealthy at the expense of average Iranians.   In the meantime the rial plummets in value, one-third of Iranian youth are unemployed and one-third of all Iranians live below the poverty level. This is a recipe for disaster and the Iranian economy and government could collapse into chaos.  A large protest in the city of Khorramshahr took place over a shortage of clean water.  That protest resulted in police clashes and death.  The regime responds to all protests with force and protestors are arrested, some of whom are never seen again.  As the leading sponsor of terrorism in the region, Iran’s goals include spreading their version of Islam and controlling Persian Gulf and Red Sea commerce including all the oil that flows through them.  Europe and the other Arab states can join us in enforcing an oil boycott and encouraging civilian discourse.  Rouhani is striking out in desperation because he knows that his time may be limited.

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