Yaser Jabraeili and Seven False Claims Part Two

Yaser Jabrail and Seven False Claims Part Two

Yaser Jabrail and Seven False Claims

Yaser Jabrail and Seven False Claims – According to Iran Gate, Yaser Jabrail’s strange claims, the head of the Strategic Evaluation and Supervision Center for the Implementation of General System Policies in the Islamic Republic Broadcasting, have provoked reactions from many of the country’s economic experts. Although he claims not to discuss economic matters, he has practically meddled with scientific foundations in the field of economics and attempted to distort concepts.

In the first part of the report examining Jabrail’s unscientific claims, three of his strange claims were analyzed. In the second part of this report, Jabrail’s claims about issues such as the roots of inflation and the impact of the energy market on the economies of developed countries are scrutinized.

Fourth Claim: Tracing Inflation with Yaser’s Lens

In a program broadcast on the Ofogh channel, Jabrail claims that the source of inflation is what is known as cost-push inflation. He claims that it is the increase in production costs that has caused the prices of consumer goods to rise as well. According to the example he provides,

if the price of chicken feed in the market increases, the price of each kilogram of chicken will also increase proportionally and sometimes even more. In this example, Jabrail falls into a clear and obvious contradiction because he does not explain why the cost of production inputs, which in his example is poultry feed, has increased.

Simply put, he tries to divert public attention with fallacy from the notion that liquidity growth is the cause of inflation spikes and ultimately price increases. Therefore, he claims that it is the increase in production costs that has led to the rise in consumer goods prices in the market. As mentioned, such a cost increase in the production inputs market has not occurred in a vacuum; rather, the increase in poultry feed prices also has a specific source, which is the inflation spike following the growth of liquidity. This growth is driven by the government’s decision to meet current needs and pay salaries and benefits to government employees, using a tool called the non-independent Central Bank.

Therefore, this claim by Yaser Jabrail is also questioned, and he can be challenged with the question of what his intention is in misrepresenting propositions whose accuracy has been agreed upon by the vast majority of economists for decades.

Fifth Claim: Rising Oil Prices Cause Inflation

The head of the Strategic Evaluation and Supervision Center for the Implementation of General System Policies continues to claim in this program that the increase in oil prices is another factor exacerbating inflation worldwide and consequently in Iran. This claim, which has been repeatedly made by system officials, is a kind of forward escape and shirking of the government’s responsibility in managing the country’s economy. However, to verify Jabrail’s statement, it is worth examining the root of the inflation that has also posed social and political challenges for developed countries.

According to Jabrail’s claim, inflation spikes in the West have occurred following the rise in global energy prices. Yet, we must revisit the points raised a few paragraphs earlier. Inflation is a financial phenomenon and has no cause other than liquidity growth following the expansion of the monetary base. Everything known as price hikes or increases are all consequences of inflation spikes that lead to the devaluation of the national currency.

In reality, it is not the prices of goods that increase, but rather the national currency that loses its value in a flawed cycle. In other words, the value of consumer goods has not risen, but it is the citizen whose money has depreciated and is forced to protect the value of their assets by getting rid of cash and converting it into stable assets such as gold, coins, stocks, or global currencies.

However, in this regard, attention should be drawn to the supportive policies of the United States government after the global wave of the COVID-19 pandemic subsided. The Biden administration, immediately upon taking office, passed a bill through Congress that required the government to provide extensive financial aid to those affected by the COVID-19 pandemic. Similar bills were passed by governments in European countries, and the simultaneous implementation of these measures resulted in widespread inflationary consequences for the world’s major economies.

As mentioned earlier, when governments expand the monetary base to meet current needs and expenses, unsupported liquidity grows and inflation intensifies. In the case of financial aid from developed countries to those affected by the COVID-19 pandemic, this is exactly what happened because the ratio of liquidity growth to GDP decreased due to long-term shutdowns and quarantines, and the economic growth process was halted. Therefore, any issuance of unsupported money increased the velocity of money in parallel markets. Naturally, in such conditions, no society would experience anything other than intensified inflation.

In simpler terms, monetary policy in developed countries that recently emerged from the grip of the COVID-19 pandemic paved the way for inflation growth. The increase in energy carrier prices, including oil, was also a consequence of this policy. Additionally, Russia’s invasion of Ukraine in February 2022 further contributed to the situation and created conditions for even more significant price increases in the energy market. Therefore, it can be said that Yaser Jabrail’s fifth claim is also invalid.

Muslim Communists Pave the Way for Inflation Part One