Dear visitor,

I was planning to update this page in the summer of '07, but there have been a dramatic shift in Persian rug prices and I felt compelled to edit this sooner rather than later.
Since the summer of 2006, there has been a tremendous rise in the cost of Persian rugs and it is a direct result of the domestic and political situation in Iran at this time. The Iranian government began in mid 2005 to increase many wages, pensions, and to subsidize programs that were meant to benefit the low-income families. In addition, the government also began to boldly rub it's nose at the rest of the world and we all have been watching plenty of it on the news. Many believe that this is due to the high cost of oil and the huge profits that come with it, since the Iranian government can now afford to spend on domestic and foreign programs that it simply could not before.
As a result of the political and financial upheaval, there have been some unpleasant repercussions that I do not believe that the Iranian government or people quiet expected. For one, the inflation rate has simply gone through the roof. Whereas officially it is around 10% annually, which is absolutely huge, it is in reality closer to 20-30%. As a result, the prices of everything from basic goods like food and clothing to high end products are just going through the roof. My family always uses three examples to tell me how things are and those are bread, kebabs, and real estate. The price of bread has more than doubled in the last year and going out to dinner for some delicious kebabs is becoming somewhat interesting. As my mother recently pointed out, all of the menus have their prices covered up and there is a penciled new price next to the old one, which seems to change every month. Another good way to measure the current situation is to look at real estate, which is just going through the roof without any clear reason. Unemployment is still very high and there seems to be little demand, but the prices of real estate is going up simply to keep pace with the inflation. Remember, even at 20% inflation, a house at $200,000.00 would have to be sold for about $250,000.00 a year later just to keep up with the value of the currency.
During unstable economic times, the Iranian people tend to take shelter in three different commodities and the way of thinking is very different than ours. Whereas we would save money and cut our spending, many Iranians will actually increase their spending since the prices will climb faster. The three popular investments in Iran are gold, foreign currency (Euro & US dollar), and rugs, since they are a safe bet. As the country's inflation and overall situation gets worse, the currency will fall which will raise the prices of these three commodities. Another example of how things are is my father's savings account with the main Iranian bank, which is now getting a whopping 17% interest (interest in Iran is non-taxable).
The bottom line is that the prices of rugs have gone up about 15% between the summer of '06 and the beginning of '07 and I have no clue as to how much higher they can go. There comes a point, where nobody can afford to buy them and hopefully then, the prices will stabilize and actually come down. Then again, I have been waiting for this for over 3 years now and lost most of my hair and patience in the process. I will update this page again in April and hopefully will have some better news for you.

In case you are interested in reading some more, there was an news article that also shares some more light on the situation in Iran. Most of the news we get is always geared to support one group or another, but this article is actually very good since I was easily able to verify the information with my own family. Just click on the link below and it should take you to an article.
http://www.msnbc.msn.com/id/16676448/

To give you an example of how the prices have changed, I want to show you three Tabriz rugs that are very virtually identical in quality, size, and have a similar design.  All three would be prices the same if they were made and sold at the same time, so they are an accurate example for how the prices and values of Persian rugs have changed.

Each of these Tabriz rugs measures roughly 8x11 and is a 50 raj piece.

Completed in 2004 Price: $5900.00	Completed in 2006 Price: $7900.00	Completed in 2008 Price: $9800

There is not one single factor for the price increases in Persian rugs, but rather a combination of many. The weakness of the US dollar compared to the Euro and other currency including the Iranian rial means that we need to pay more for the goods that are imported into the US. I was hoping that after the nosedive of 2004, the dollar would recover and it was heading in fact higher in 2005, only to have fallen off again in late 2006 and who knows how bad it will get. My clients from Canada and Europe seem to be very happy since they can buy more and spend less with their currency, but it's been brutal for us.
Another problem for our rug prices is the inflation in Iran, which has actually increased in the last couple of years. Thanks to high oil prices and huge profits, the Iranian government has decided to give billions to the people by tripling their paychecks, social assistance, and other programs that are geared towards helping the poor. There are of course many people who say that there are political reasons for this domestic policy, but this is not about politics and I like to keep my views to myself. But what this huge government spending has done, is to put a lot of money in the hands of the people, which is better known as inflation. Since the Iranian treasuries are printing more bills than ever, it has caused just about every product to go up in price and Persian rugs are of course very important to the folks in Iran, so the net result means even higher prices. My mother, who lives in Tabriz, likes to point to the fact that every home now has stainless steel appliances and large big screen TV's courtesy of cheap imports from China. Whereas before, only the Iranian upper middle and high class could afford luxury items, now even the lower middle class can afford to buy many goods that were unattainable just a few years ago. As a result, every luxury item and especially real estate has shot up in value and banks offer over 10% interest on savings accounts, which tells you how bad the inflation must be.