Thread: Iraq/Dinar News. 09/05 to 01/14/07

I received two $500.00 Iraqi dinars paper bills, can anyone give me more information about this? I am a newby and have no idea if they are worth anything and does any USA bank cashed them if they are legal to do so?
Awaiting some response from the ones who are in the know how about this,
befo*****d, I thank you for your effort, Bea Blessing ( beabless )

Originally Posted by Offshore-Wealth.com

Exactly correct,

That is what most people miss, the mindset in Iraq and region is beyond our comprehension from the west. That is why we are now hearing what a disaster it was to go into Iraq, for just like in Viet Nam, the U.S. failed to try and understand the unique belief system which is so opposite ours. We value life, they value death, you cannot use traditional war to win this battle, this is not possible as we all now see.

Always nice to see opinions of those who are in region and I appreciated your excellent perspective on why we are seeing what we are. It is almost impossible to see the U.S. winning as Bush would like to phrase it, no one wins in a religious war, it just goes on and on forever, just as it has in many other countries, so forget more troops, this is not the answer. As we are now seeing, opinions are shifting to the more reality side of issue, get out is the solution we are now hearing with democrats in control of house and senate. Now we hear Charlie introducing draft again, now that is going to shake up people real fast.

As I see it talking to my contacts, there is only one solution, and it is not what the west or neighbors want to hear, but it is the only way it will work. You need seperation, for just as you stated, these people never forgive, nor do the forget, so seperation of sects is only solution. Yes, you have the same consitution, the same laws, shared oil wealth, etc., but it is time to get real and institute regions where people have a choice which side of the road they want to live and work on. This is what the people in Iraq want, I know the Kurd's do, and the shiites do, so it is the Suni power which is why Baghdad is such a disaster, as Tony Blair let slip out the other day. The first thing that should be done is payoff everyone on the first installment from oil, and hang the carrot out there that if anyone is caught supporting killing and bombings. they and there families lose this oil share income. Money talks, always has always will, so give everyone enough to move to wherever they want, and then warn each faction to honor their borders, and the majority of problems and killing will end.

Good luck to all, Mike

Excellent post!

Cheers!
DayDream

Originally Posted by lndmn_01

I have to disagree with the idea of separation. As of right now it sounds like a good idea to many Iraqi's as they see it as the only way out of the current situation(as long as everyone gets there fair share of the oil revenues). However I believe that in the long run this is a bad idea as it will lead to a further segregation of each group, weakening the central government of Iraq and allowing an influence, if not control of certain regions by Iran and Syria. I've heard a lot of talk about the tribal mentality of the Iraqi people and it has been said that due to such tribal allegiances Iraq can never be united. The one factor that can end the violence and bring the Iraqis together(or at least stop the violence is wealth. If you look at other countries in the M.E. you can see that the problems tend to arise in those countries with no economy or corrupt dictators. If you look at countries such as Saudi, the U.A.E., and Kuwait you will see Islamic States that have many different religious sects and yet little or no violence, all do to a strong government, strong economy, and most importantly individual wealth.

Exactly, money talks, as I stated is wealth, and that IS the only way to end the majority of sectarian violence as I see it. Divisions are the other, and since the gov is already ineffective, or weak as you referred, this is even more reason to divisionalize, but not give in to outside insurgents. Border protection is far more managable than interior in fighting, just look at the mess and you will see that. Speration under one government is the issue, not seperate countries. Kurdistan has proven this works already, and if wealth is shared, it will work for shiites and suni's as well. At this point you have to follow system that works, and these people already understand.

Good luck to all, Mike

Sounds like Iraq is just playing the countries for full debt relief. I think once they get it we will see our reval. Hopefully Dec 12th at the latest.

Iraq calls for striking off debts still due to EU

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BRUSSELS, Nov 20 (KUNA) -- EU External Relations Commissioner Benita Ferrero-Waldner affirmed on Monday the importance of upgrading the EU-Iraqi trade and economic cooperation.

Speaking to newsmen here after wrap up of the first session of trade and cooperation talks with conflict-torn Iraq, she said this allows cooperation shores up the EU commitment to help the Iraqi people and the new Iraqi government to enter the international fold.

In turn EU Trade Commissioner Peter Mandelson who took part in the talks underlined the need for the Iraqis to believe that the EU stands firmly be their side.

Iraq's Deputy Premier Barham Saleh called on the EU to write off the 20 percent of the debts still due for payment by Iraq, noting that this was discussed with the European officials during last Paris Club meeting.

Reminding, he said there was agreement to write off 80 percent of the debts due for payment by Iraq to the EU.
http://www.kuna.net.kw/Home/Story.as...en&DSNO=924537

Originally Posted by beabless

I received two $500.00 Iraqi dinars paper bills, can anyone give me more information about this? I am a newby and have no idea if they are worth anything and does any USA bank cashed them if they are legal to do so?
Awaiting some response from the ones who are in the know how about this,
befo*****d, I thank you for your effort, Bea Blessing ( beabless )

You can go to the CBI website and check for security features

Originally Posted by worf

If you take your 103.32 from the 1470 average rate during the year, you get 1366.68. That is mighty close to the stated objective of the cbi to raise the value of the dinar to by the end of the year ( I think they said 1365 ). But if they don't change it all at once, then the inflation monster coninues to erode the iraqi's spending power. (Spreading it out over a month actually puts them behind slightly).

But is that really enough to stem inflation? I don't think so. Why? Because even at the improved rate of 1366, imported items are still going to be priced out of reach for the average Iraqi. IMO they need to r/v to at least 1 dinar = .30 us to begin to get a handle on it. Why?

Because with even that rate imported items are still 3x as expensive as other countries pay for them. ie Big Mac costs 2.00 us, costs 6.00 Iraqi dinars. At that rate at least things are beginning to get reachable/affordable to the average Iraqi. Also some of the neighborhood ie Saudia Arabia, Iran, Isreal, Turkey, etc. have their currencies in the .20 -.30 range so in r/ving to that amount at least to start, then that should knock out much of the black market and should keep most comodities meant for Iraqis in Iraq.

If they only raised the value to 1366 ID = 1 usd, then they aren't addressing the black market, their comodities continue to be smuggled out of country for profit, supplies dry up, demand stays the same or increases which causes shortages, which cause prices to go up, which causes inflation to continue etc., etc., etc. IMO
worf

absolutely true

I was gauging an RV leap point but I think anything shy of the regional price level misses the mark of steming the black market so I'm in at the buck an a half range.

Originally Posted by hightide3016

I agree with you, but what really burns me up is that alot of them wouldn't even show up for work, and the ones that do show up get nothing done! They think they deserve a 60% increase in pay???? Most people would have been fired long ago!

If nothing else,….. they have learned from our government, its that Shiite (democrats), Sunni (republicans) and Kurds (independents) are always fighting amongst themselves and blaming each other for the shape the government is in... and steal, I mean appropriate funds for themselves and their pet projects…….and the heck with the wants and needs of the 80% of the people who put them in office...and i might add, under the fear of death…….

I would like to answer the question presented by Kiko.

I know it is difficult but do you have an opion to what level the Dinar must rise to curb the inflation and increase the purchasing power, I think this is not possible with 1:1000?

Ther relationship between an RV and inflation is an indirect one. The CBI was willing to sell as much dinar as anyone wanted for a long time at a rate around 1475. From the very begginning, the dinar was considered by many to be undervalued. This had a positive effect by placing the dinar in the economy and increasing their currency reserves. Now they are removing dinar from the economy as a method of reducing the base money supply that will over time reduce inflation. It will not be immediate, but it will lower inflation if we continue to think of inflation as too much money chasing to few goods. If the dinar becomes more expensive, (higher exchange rate) then the CBI will place fewer dinar into the economy when it resumes the auction. One would almost predict that they WILL NOT resume the auction at these low levels and "undo" the removal of currency by going back to "business as usual". returning to an auction where dinar is freely sold at such a cheap level will only continue to place an abundance of dinar back into the economy and the end result of this would be a continuation of the inflationary spiral. So, once this removal of dinar, which has accomplished in a dramatic, if not in a panic mode is completed, the exchange rate of the dinar has to be increased or they are simply back where they started. The only way that the CBI can avoid a return to a policy of placing large amounts of dinar back into the economy is to make it more expensive i.e. RV. Lets see how the auctions in the next couple of days plays out. Thank You.

With the recent article about salary increases I thought I would re-visit this article of November 13th about salary increases/inflation. Hope its useful in light of the current discussion.

Will increasing salaries reduces inflation pressures?

13 November 2006 (Iraq Directory)

The Iraqi economy is suffering, currently, from the aggravation of inflation pressures which are negatively reflected on Iraqi citizens through lower purchasing power due to high prices, which means lower amount of goods and services that can be obtained by the same amount of income at different periods consecutive. For example, if a citizen can get certain goods and services with his income in 2005, he will find himself unable to get the same set of goods and services in 2006 with the same income as a result of higher prices. This will compel citizens to demand increasing their salaries and wages, especially government salaries since government employees can not increase their salaries by themselves, according to the law, unlike the private sector which can face higher prices by increasing the prices of goods and services it provides.

However, will raising salaries treat the increase in prices? Some countries did apply this measure, but can Iraq do it? Although Iraq is an oil country and the price of crude oil has risen in international markets, which means increasing the financial resources of the State and thus enabling it to increase the salaries of employees, but this can only be done according to certain conditions which may not be available in the Iraqi economy, at least in the recent time. The conditions required to apply this measure are as follows:

1 - The private workers must be more, at least the double, than the public sector workers who work in economy. If we look at the Iraqi economy, we find that the number of workers in the public sector has doubled in the last two years; first because of the weakness of the private sector in providing jobs opportunities and second because of the high salaries of government employees which attracted more citizens to apply for such employment or return to it, and this led to inflation in the number of public sector workers and hence low productivity.

2 - the annual inflation rate must be moderate and not more than 10%; thus, the required increase in salaries will be limited and can be provided by the Ministry of Finance, but when the inflation rate is very high, the number of public sector employees increasing and in the number of retirees is increasing too, as the case in Iraq, it will be difficult for Ministry of Finance to afford the large sums of money required to increase the salaries so that to be equivalent to the high rates of prices.

3- the State must have the ability to provide the increase in salaries through local revenue sources such as increasing taxes, increasing the revenue of public institutions through raising the prices of goods and services they provide to citizens or through reducing public expenditure and convert it to salaries so that they do not lead to the increase in the salary increase the supply of money and then aggregate demand and thus higher prices again. In Iraqi economy, we find that salaries and bonuses pensions constitute a considerable amount of public spending and if we add the amounts of government support of fuel, the ration card, water, electricity and health, it would make a significant proportion of public expenditure. On the other hand, we find that local revenue is still weak; whether tax revenues, because of the security situation and the weakness of private activity which represents the tax base, or the revenue of some public institutions that provide goods and services, which need to be supported by the Ministry of Finance to pay the salaries of its employees.

From here we find that the increase in employees' salaries would lead to an improvement in the standard of their living in the short term but will increase inflationary pressures in the medium term, as happened after the increases in salaries in 2003 and 2004.

Cheers!
DayDream

Hoelz : Iraq facing critical times

(Voice of Iraq) - 11-21-2006
This issue was sent to a friend

On arrival at Basra. Hoelz : Iraq facing critical times


Basra / long
He said British Minister of State for Foreign Affairs, Kim Willis, who is visiting Basra now : Iraq is making progress, although it is facing critical times.
Hoelz said in a statement : "These are critical times in Iraq. The Iraqi government did not begin until only five months ago and faces formidable challenges in building a new political future and the new institutions needed for governance. "

He added that the electricity supply and unemployment figured prominently in the agenda of the politicians Basra, we have made significant progress in helping to address those challenges through the Ministry of Foreign Affairs and the Department for International Development programs and the efforts of our armed forces, but there remains much to be done. I am keen to hear from local leaders how they see the way forward. "