128 THE BiG DROP
called SWIFT — Society for Worldwide Interbank Funds
Transfers — and you can pay in Euros, Yen, Australian dollars
or any other reserve currency.
The U.S. then got together with its allies and prevailed on
them to kick Iran out of SWIFT. Now Iran was stuck. They
could ship oil but they couldn’t get paid for it, at least not in
any currency that you would want. They began to do a num-
ber of workarounds, acquiring massive amounts of gold from
Turkey so they could arrange gold for import swaps. They were
selling oil to India, for example.
India could pay Iran in rupees, deposit it in an Indian bank
account for them that was outside the payment system I de-
scribed. But then Iran has rupees, and what can you do with
those?
You can buy things in India, but I’m not sure how much
curry the Iranians actually needed. Indian merchants were
very inventive because the rupee is a convertible currency they
got dollars, imported goods to India and then sent them to Iran
for Rupees, converting them back to dollars and taking spreads
all along the way. It was very costly to Iran, but it worked.
As a result of this, the Iranians themselves tried to take
their money out of the bank because there was a black mar-
ket for dollars — some of which were smuggled in from Iraq,
which can get dollars. They could pay the smugglers in Dubai
to bring the computers and the cellphones and the printers
and all the things we enjoy, across from Dubai.
That caused a run on the bank because people were taking
the little currency they had out to go to the black markets. In
response, the Iranian government raised interest rates to try to
keep the money in the bank, and inflation broke out.
We really came close to destroying the Iranian economy
with, as I say, financial weapons. No boots on the ground, no
missiles and a little bit of sabotage here and there but not
much more than that.