Iranians have begun exporting their savings into international banks, also buying gold at an accelerated rate, according to the Wshington Times. This panic demonstrates that the Iranians understand the position that Ahmadinejad has placed their nation -- or perhaps it demonstrates something else entirely:

Threats of an international financial squeeze stemming from the showdown over Iran's nuclear program have sent Iranians scrambling to get their savings out of the country, or if that won't work, to convert them into gold.

An estimated $200 billion has left the country since last year's election of Mahmoud Ahmadinejad as president, accompanied by panic buying of gold. The Iranian stock exchange lost an estimated 20 percent of its value even as other bourses in the region rose.

"The most tangible effect of the threat of sanctions in the private sector is downsizing," said Farhad Sanadizadeh, a Tehran-based oil and gas consultant who has let 40 employees go in the past six months. "A lot of companies are not hiring new people and reducing their work force."

Last week, it was disclosed that most European banks are no longer facilitating money transfers from Iranian banks. Iran has already removed most of its capital from European banks, according to press reports, fearing a possible assets freeze.

The explanation of avoiding sanctions makes some sense, especially for the gold purchases. Gold never loses much value, and in a time of economic chaos, it carries a unique cachet (diamonds might share it) that magnifies its worth. However, if international sanctions were to be applied, then the act of sending the funds to overseas accounts makes no sense at all. The sanctions would leave Iranians unable to access those funds from inside Iran.

That kind of strategy appears more likely a preparation for war. If the US attacks Iran, which this seems to indicate is the prime worry of the Iranian people, then any funds in Iranian banks might well be lost if the nation collapses. In the final extremity, the mullahcracy might confiscate those funds, leaving Iranians who kept their savings in domestic banks destitute. Moving $200 billion outside of Iran ensures that survivors of the feared conflict could once again get back on their feet in short order.

Either way, it demonstrates that the Iranians are very worried about the direction Ahmadinejad has taken with his nuclear brinksmanship. This unrest translates into a high-stakes gamble with the West. If the West calls Iran's bluff, the economic panic could easily trigger a political crisis that could topple the mullahcracy altogether. It reveals a highly pessimistic attitude among Iranians, and the risk for the US would be in contradicting their expectations. Remember, the German people went through the same roller coaster with Hitler in the several diplomatic confrontations with the West prior to 1939, and his diplonatic victories against seemingly impossible odds convinced more and more of them of Hitler's invincibility and their own.

We need to remain firm in our resolve, and not allow Ahmadinejad to win such an important victory. The Iranians are on the run financially, and we need to make sure they stay that way.

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