Early this morning, Iran hanged the notorious currency trader Vahid Mazloumin.
Mazloumin, better known as the “Sultan of Coins,” was sentenced to death for hoarding gold and “spreading corruption across the earth”.
Sounds serious, right?
Well, in case you haven’t been paying attention to this case — or Iran’s justice system in general — let me tell you this has been a bizarre, brutal, and short ride.
Typically, in the Iranian legal system, the death penalty is saved until after a convicted criminal completes a full-length prison sentence.
(The thinking is that if you execute someone quickly, they don’t have time to reckon with the full weight of their crimes. And it leaves a window open to “maximize the possibility of forgiveness and reaching a settlement.”)
But the execution of Mazloumin — as well as that of his assistant — was fast-tracked through the system at an eye-watering pace.
The “Sultan of Coins,” as newspapers in the Middle East like to call him, was arrested in July. Sentenced in October. And executed less than a month later.
That’s the type of swift justice you’d expect for the leader of a terrorist organization… or a recently overthrown dictator… not a white-collar criminal.
Mazloumin’s crime — what the courts refer to as “spreading corruption on the earth” — was manipulating the price of gold.
Or to be more specific, hoarding two tons of gold (worth about $128.6 million) with the express intention of inducing a spike in gold prices.
Now, white-collar criminals tend to get off a bit too easy in my book — usually nothing more than a slap on the wrist and a fat severance package. Hardly a just punishment for folks who ruin as many lives as they do.
But did Mazloumin deserve the death penalty? No appeals? Barely four months between his arrest and the gallows?
I sincerely doubt it.
To understand why the Iranian courts have taken such a hard line position in this one case, you have to understand the current financial climate in Iran… and the value of gold in a crisis.
A Coup de Trump
Here at Money & Crisis, we always recommend an allotment in physical gold as a hedge against inflation and serious financial crises.
You see, gold is a hard asset that will hold its value even as your primary currency is being devalued by hyperinflation. And that’s what’s going on in Iran right now.
Since Trump was elected in 2016, economic and political uncertainty over the Iran nuclear deal has contributed to a steady decline in the value of the Iranian rial. And with their own currency becoming more worthless every day, Iranians have taken to trading in more secure foreign currencies and, of course, gold.
Owning gold is common enough in Iran. Even before this financial crisis. It’s part of their culture.
That said, most Iranians try to save their coins for big occasions such as weddings or buying a house. But these days, as the rial plummets and rent and housing costs skyrocket, folks are spending their family coins on everyday costs like bills and rent.
In the capital of Tehran, where landlords have stopped accepting any payment other than gold, residents have no choice but to fork up their gold stash or risk losing their home.
Landlord Esamil Jalali charges his tenants two gold coins a month to rent a 95 square meter apartment.
“I know that many may not be able to afford it,” Esamil told London-based news outlet the Middle East Eye. “But when I see that the currency I may get from my tenants would have less value compared to the previous month, then that leaves me with no choice. If I continue to rent out my apartment in return for rials, then I would face financial loss.”
As you can imagine, the demand for gold in Iran has skyrocketed in the last two years. Which is why our friend the “Sultan of Coins” faced such hard and swift judgment. The subject of gold and its availability is a sore subject right now. So Iran decided to take care of this case as quickly as possible — even if they had to break a few human rights laws in the process.
I’m not saying it’s right. Far from it. A man should not have been executed for what is essentially a non-violent crime.
But the wider story does provide some much-needed perspective. And, as a whole, it illustrates the utmost importance of holding physical gold in case of a crisis.
All the best,
Editor, Money & Crisis
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