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1) We are now in the endgame for the Iran regime. The people have finally figured it out. Protests, strikes, attacking IRGC banks, and now, full withdrawal of their savings. They're INTENTIONALLY creating bank runs. #IranProtests #IranUprising
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by @HeshmatAlavi view original on Twitter
2) See, NORMALLY, bank runs are mob mentality. One bank which is a complete fuck-up runs out of cash. That bank collapses. Suddenly, people believe that ALL the banks are in danger, and start withdrawing their money in mass.
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3) That's not happening here.
Iranian banks were already in dire straights, and several government or IRGC-owned banks had collapsed at one point or another, screwing investors and depositors out of millions.
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4) Side note, thank you @TessHottenroth for collecting these links.
5)
So, the banks have for a few weeks been on the verge of collapse due to massive amounts of and sized fraudulent loans made to those who were politically-connected or part of the government.
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6) They've stopped allowing private lenders to form, these private lenders being basically Ponzi schemes where massive interest is promised and paid for a time until they dole out all the money to the richest investors, then collapse and screw the rest. bloomberg.com/news/articles/…
7) Many regime officials have been hiding their wealth elsewhere in the region.
Sure would be a shame if something were to happen to all those nice deposits.
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8) Oh, and the protestors are still burning banks. So that's always good times.
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9)
But, back to my main point. WHY IS THIS TWEET IMPORTANT?
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10) Because people are WEAPONIZING BANK RUNS. They're TRYING to get people to withdraw all their money from the banks to collapse them. You have to realize, ALL of the government-backed banks are partially owned by the government. Kill the banks, kill the regime.
11) Is this going to cause economic problems?
The Rial, the Iranian currency, is already in free-fall. Its BEEN in free-fall.
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The Rial, the Iranian currency, is already in free-fall. Its BEEN in free-fall.
12)
Iran's economy is ALREADY FUBAR.
13% drop in value in just a few weeks.
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Iran's economy is ALREADY FUBAR.
13) Protests, nationwide strikes, the security forces suddenly unable to get paid because remember, Iran has already begun using its reserve currency, aka the foreign money they keep on hand to back the rial, to keep paying security forces, and that's an acid bandaid basically
14) The people have decided that they're going to intentionally bring the entire economic system and the regime to its KNEES by intentional bank runs, by intentionally collapsing the banks. This is... insane. Fantastic. Wonderful. BRILLIANT.
15) Here's what you need to realize. The entire Iranian banking system was predicated on middle and lower class families having to deal with insane interest rates (because of Islamic law, abusive fee structures replace interest but functions the same) on small loans
16) Meanwhile, politically connected people and regime officials could borrow whatever they want, not pay it back, and face virtually no repercussions, at worst losing the collateral which was worth a fraction of what they borrowed.
17) The rich and the regime were quite literally stealing money from the poor and middle class, because the banks were government-owned it was assumed this arrangement could continue basically forever.
18) And with the government unwilling to prosecute any IRGC officials, clerics, government officials, or wealthy politically connected industry folks, there was nothing stopping them.
19) On paper all the stolen money was still in the bank, so all the deposits were still technically there. The loans were just 'owed money' to the bank. But Iran's socialist government let the corruption get so far, they became vulnerable and overdrawn.
20) And yes, Iran is a socialist government. Unlike the US, all the Iranian banks are at least partly government-owned. The religious branch now effectively appoints the head of the central bank. Its a socialist theocracy.
21) And now, the people are pulling the Kobayashi Maru of uprisings. If the government banks are all so vulnerable and so dependent on their deposits, just take all the money out.
22) Here's the beautiful thing: even if its only a small percentage of people who withdraw their money, the minute the bank runs out of liquid cash, its screwed. People can't withdraw their money. Even those who DIDNT take part can't withdraw their money.
23) Want to get the whole country, even the armed brutes facing down the protest, on your side? Let them know that the government bank just lost all their money due to corruption. /game /end
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