Jamshid Darabian said at the Zoroastrian Chamber of Commerce meeting: “The rich are those who can create wealth in this period of time, and the [poor are those who cannot create wealth.” This expertise meeting started on Friday, Ordibehesht 15 (May 5, 2023), at 9:15 in Iraj Hall.
Mehraban Ardeshirian, as host, introduced the program’s speaker, Jamshid Darabian, and said about his work background: “Jamshid Darabian was born in 1338 and studied social sciences and communication. He has 30 years of experience in Bank Melli and two years of experience in Bank Ayandeh. This activist of the Zoroastrian community, was chairman of the 44th round of the financial commission, and head of the 45th round of the financial commission of Tehran Zoroastrian Association. Ardeshirian continued: “In the meeting before Nowruz on Bahman 15 1401 (February 4, 2023), we discussed how to invest. With this recession and inflation ruling the world, we all want to learn how to prevent financial losses.”
Then, Jamshid Darabian started to speak and tried to transfer his knowledge to the attendants. “I will try to get connected to your experiences and come up with some new ideas.” He started his speech with a verse of Rudaki’s poems. “One who has not learned from experience, will never learn from any teacher.”
Darabian quoted a sentence from Elon Musk “Rich is the one who can create wealth in this era, and poor is the one who cannot create wealth.” According to this definition, a young person who trades on the Internet is rich, but someone born in the 40s, 50s, or 90s but cannot generate wealth, even though he already has wealth, is poor. He then pointed out how America became rich and said that America was poor until the 18th century. When Europeans immigrated to America and started farming and planting cotton after a while, they realized it was a difficult job. They took help from Eli Whitney, who had invented the cotton ginning machine and a weapon manufacturing line. By planting cotton and using cotton gins, America increased the productivity of its fields and exported its surplus cotton to England and France, and imported gold. In the 20th century, America achieved extraordinary wealth with these two products, arms, and cotton.
In the First World War, Germany, the war’s loser, had to pay a ransom of 132 billion marks in trains, gold, and cars. And with change of management in its central bank, Germany began to print unbacked marks, and thus paid its ransom to England, America and France with these unbacked marks. After Germany paid the ransoms this money came back into the country’s economy by other countries buying German goods. This process continued until there was a shortage of goods in the German market, and German people had to work several shifts to produce more goods. After ten years of anomalies, this unsupported money showed itself in America. In 1929, America was faced with a terrible depression. Their research concluded that the cause of America’s misery was the devaluation of the German currency. Everyone wanted to consume German goods, and American goods were no longer wanted. America, who noticed the trend, imposed tariffs on European goods and printed unbacked money. The American economy gradually prospered. Jamshid Darabian continued to talk about the Dutch disease: this disease is called the Dutch disease, because the Netherlands exported oil and gas, like our country, and due to all this export it faced with accumulation of dollar and other currencies, which caused recession in the country. To solve this problem the Dutch created a foreign exchange reserve fund, and they use its profits and do not touch the actual money. But Iran uses its actual money from the cash reserve.
After Japan was defeated in the WWII, in 1945, according to the “Marshal plan”, the US gave loans and technology to all the defeated countries of the WWII, instead of them paying their share of the ransom. Under this plan, 70% of Japanese products flowed to America. And, in exchange, the UD poured dollars into Japan, without any support, until Japan’s foreign exchange resources and economy overtook the US, and the US told Japan at the Plaza Hotel: “It must raise the value of its currency”, which Japan accepted. The same thing happened to our country during the previous regime; with the strong Rial compared to the dollar, the cost of domestically produced products was more expensive than imported products. Because with the abundance of dollars, the value of the dollar decreased. Japan wanted to strengthen its economy by devaluing its currency, but America did not allow it. America had the same plan for China; injecting dollars and cheap oil from the Middle East would make China grow, but China could save itself from the Dutch disease by investing in different countries. Now America is exporting inflation to the world due to printing unsupported and counterfeit money, and China is exporting recession. The entry of cheap Chinese materials will destroy the production wheel of a country. Darabian continued that if inflation is at a reasonable level, it is appropriate to buy bonds; for example, if inflation is 30%, bank interest is 15%, and the interest that the government gives to bonds is 18%, then it is profitable to buy bonds, but if If inflation goes above 50%, it is not beneficial for us when buying bonds, but in general, buying gold is the wisest thing.
There should be a balance between inflation and recession. We have three social classes (prosperous, middle, and poor). If the policy is expansionary, that is, the government invests money, the wealthy class will benefit, but if the procedure is contractionary, the poor class will suffer. Housing prices in Iran are high. In 2001 and 2008, the world experienced an economic collapse, but Iran did not feel this global collapse. Because in 2001, President Mohammad Khatami borrowed 30 billion dollars from the International Monetary Fund and injected it into society. In 2008, President Mahmoud Ahmadinejad injected 47 billion dollars from the International Monetary Fund into society. In order not to put pressure on the wealthy class, the poor class felt the pressure. Darabian further said that he advises everyone not to invest their assets only in houses and housing. At this time, One of the participants asked: Why is investing in housing not working? And why is housing affected? Darabian replied that migration and decreased demand caused housing recession and increased interest on bank deposits has caused increase in housing prices.
During the time of former President Hassan Rouhani, no one bought bonds because they were anti-inflationary. Hassan Rouhani’s government took these bonds to the stock market, which collapsed when they did the same thing. Interest is a bankable deposit that investors do not feel at risk. Right now, out of 100% of loans given by banks only 9% have been returned, which causes the banks to close down. Because in Iran, the capital requirement is high and private banks cannot pay interest on deposits and will go bankrupt.
He further said: “Any collapse in the world affects the price of gold, so the best investment is to buy gold. At this time one of the participants, who has a hand in the gold market, said that you should be careful and not buy old gold because old gold has moisture and rust. The weight of gold will increase at the time of purchase, and recommended that those who want to invest in gold should have knowledge in this field.
In continuation, some participants raised questions about their jobs and talked about their experiences in the market. In the end of the meeting, the Zoroastrian Chamber of commerce commemorative plaque was presented to Jamshid Darabian, the expert in this meeting, by Mehraban Ardashirian and Bahram Partovi, president of the Zoroastrian Chamber of Commerce. The meeting ended at 11:30. At request of the participants, such meeting was decided to be held every month.
