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

Originally Posted by www.xealthy.com

Can someone bring me up to speed with the previous news from this weekend I believe.

1) I read that they are considering Releasing Saddam Hussien to calm the Sunnis in Parliment and get them to cooperate in the training of Millitary personal.

2) Religious Leader/Politician Sadhr, was he killed this weekend or not, and if so what were or are the implications to this info.

Thank all of you who provide informational posts!

Both items are rumors with no base of fact. The world would be outraged if Saddam was released...he will be hanged before the end of the 1st quarter of 2007. Sadhr is alive and well.

Originally Posted by Precocious

Thank you for your cordial reply. Most certainly there is more here than meets the eye, and I among the many here are still hopeful, But you don't need to be an expert to see the disparagy in the numbers and I want to be a realist.

How can a country that produces $94 Billion in products a year, have $14 Trillion dollars of buying power? It would take over 100 years for them to produce $14 trillion dollars worth of goods.

In a nutshell, and I only have as reference the IMF (which now holds 2/3 of the worlds gold reserves) and the BIS as well as the Federal Reserve to make a
couple of points here, as observed by Milton Friedman (my fav economist--not direct quotes here, but just what he said):

Central banks are dangerous because they control inflation and deflation, not always with our best interests in mind.
The Fed as it is known uses a fractional banking system that is debt-instrument driven (federal reserve notes are debt instruments)
Fort Knox has been robbed of its gold, and the US treasury has refused (even though required by law) to audit the gold, if any is even left which at one point was 70% of the worlds reserves held right at Fort Knox
The fed actually caused major fluctuations in the US economy by currency shortages, and not a stock market crash, as many were led to believe;
A stock market crash means that wealth has changed hands, not that wealth has disappeared...
Currency can be printed at will by the central banks without anything to back it. Ergo, more currency in circulation does not have to be backed by anything, which we are thinking at this point Iraq has oil to back its currency. But who is backing Iraq? The Fed? IMF? World Bank? All?

Prove me wrong here, there's alot more to the fractional banking system than meets the eye. Excellent references are: The Creature From Jekyll Island, by Edward Griffin; Tragedy and Hope by Carroll Quigley (the plates on this book were destroyed because of its alarming content). The truth is, currency can be printed out of thin air by the central banks. It is no longer backed by anything of substance in the USA except the confidence of stability via backbone of the working people of America, and that is going down the drain. There is no gold! Discuss?

December 9, 2006

BAGHDAD, Dec. 8 — Iraqi officials are near agreement on a national oil law that would give the central government the power to distribute current and future oil revenues to the provinces or regions, based on their population, Iraqi and American officials say.

Skip to next paragraph
The Reach of War
Go to Complete Coverage » If enacted, the measure, drafted by a committee of politicians and ministers, could help resolve a highly divisive issue that has consistently blocked efforts to reconcile the country’s feuding ethnic and sectarian factions. Sunni Arabs, who lead the insurgency, have opposed the idea of regional autonomy for fear that they would be deprived of a fair share of the country’s oil wealth, which is concentrated in the Shiite south and Kurdish north.

The Iraq Study Group report stressed that an oil law guaranteeing an equitable distribution of revenues was crucial to the process of national reconciliation, and thus to ending the war.

Without such a law, it would also be impossible for Iraq to attract the foreign investment it desperately needs to bolster its oil industry.

Officials cautioned that this was only a draft agreement, and that it could still be undermined by the ethnic and sectarian squabbling that has jeopardized other political talks. The Iraqi Constitution, for example, was stalled for weeks over small wording conflicts, and its measures are often meaningless in the chaos and violence in Iraq today.

But a deal on the oil law could be reached within days, according to officials involved in the drafting. It would then go to the cabinet and Parliament for approval.
The major remaining stumbling block, officials said, concerns the issuing of contracts for developing future oil fields. The Kurds are insisting that the regions reserve final approval over such contracts, fearing that if that power were given to a Shiite-dominated central government, it could ignore proposed contracts in the Kurdish north while permitting them in the Shiite south, American and Iraqi officials said.

The national oil law lies at the heart of debates about the future of Iraq, particularly the issue of a strong central government versus robust regional governments. The oil question has also inflamed ethnic and sectarian tensions. Sunni Arabs, who preside over areas of the country that apparently have little or no oil, are adamant about the equitable distribution of oil revenues by the central government.

On the drafting committee, Sunni Arabs have allied with the Shiites against the Kurds, who have sought to maintain as much regional control as possible over the oil industry in their autonomous northern enclave. Iraqi Kurdistan has enjoyed de facto independence since 1991, when the American military established a no-flight zone above the mountainous region to prevent raids by Saddam Hussein.

Gen. George W. Casey Jr., the senior American commander here, and Zalmay Khalilzad, the American ambassador, have urged Iraqi politicians to put the oil law at the top of their agendas, saying it must be passed before the year’s end.The drafting committee is made up of ministers and politicians from the main Shiite, Sunni Arab and Kurdish blocs in government. They began talks months ago, but the pace picked up recently, said an American official tracking the negotiations, who spoke on condition of anonymity because he did not want to give the appearance of Western interference in sovereign Iraqi matters.

At the start of the talks, the Kurds fought to ensure that regional governments have the power to collect and distribute revenues from future fields, Iraqi and American officials said. They also proposed that revenues be shared among the regions based on both population and crimes committed against the people under Mr. Hussein’s rule. That would have given the Kurds and Shiites a share of the oil wealth larger than the proportions of their populations.

But the Kurds dropped those demands, said Barham Salih, a deputy prime minister who is a Kurd and the chairman of the committee.

“Revenue sharing is an accepted principle by all the constituent elements of the Iraqi government, including the Kurds, and that is the unifying element that we’re all hoping for in the oil law,” Mr. Salih said in an interview.

The American official said the Kurds were willing to make concessions because a national oil law could attract more foreign oil companies to exploration and development in Kurdistan. A large foreign oil company would have more confidence in signing a contract with the Kurds if it were to operate under the law of a sovereign country rather than just the law of an autonomous region.

[url]http://www.nytimes.com/2006/12/09/w...=rssnyt&emc=rss[/u


posted by Copper on another forum I won't mention.

Originally Posted by Precocious

Short Facts:

US Currency $3,300,000,000,000 3.3 Trillion
US GDP $12,000,000,000,000 12 Trillion (US)

Ratio = 1/4 liquid cash vs. GDP


Iraq Currency 14,000,000,000,000 14 Trillion
Iraq GDP $94,000,000,000 94 Billion (US)

1/4 of 94 Billion (US) = 23.5 Billion US
23.5 Billion Divided by 14 Trillion Dinar = 0.001672

This number reflects double the current exchange rate of the Dinar verses the Dollar. It is undervalued be seemingly by about 100% not 100,000%.

Buying power MUST equate to production power!!!

One other question on about how much currency is actually in circulation. As the dinar gets used, just like the dollar, it gets worn out. If Iraq is not printing any more and as it wears out, the amount would decrease. What is the expected life span on the dinar in circulation? And since Iraq is cash based and the U.S. isn't I would think that the dinar would wear out faster.

Now the first question is here:

THE LIFESPAN OF MONEY

The average life of a dollar bill is eighteen months. Five dollar bills last about fifteen months, with twenties remaining in circulation for two years. Ten dollar bills have about the same lifespan as singles do, and the larger denomination bills can last up to eight years.
Money FACTS

So now with this in mind and this currency has been in circulation for what 3 years (correct me on this if need). We could almost make an educated guess with this information. So in my belief there is not that much dinar in circulation as a few think. So I'm still in belief that we still can look for the 1.48 reval or higher. My thought is higher but hey I'm an optimistic type of individual and like to dream.

In conclussion just be patient and we will eventually find out.

Iraq central bank buys up currency to fight inflation
By THOMAS WAGNER
December 08 2006

BAGHDAD (AP) - Iraq's dinar currency has risen to a nearly two-year high against the U.S. dollar, as the nation's central bank tries to fend off skyrocketing inflation by buying up the currency with dollars at its daily auctions.

Most of the money the Iraqi government earns is in U.S. dollars because oil exports are the main source of its income, and the bank has about US$14 billion in foreign assets, said Mudher Qassim, the Central Bank of Iraq's director of statistics.

On Thursday, the last day of the work week in Baghdad, the central bank led the way at its daily currency auction, which saw 25 million U.S. dollars sold by about a dozen banks, the central bank said. Even larger amounts of dollars were sold during 10 of the auctions in November.

"Our goal is to reduce inflation, which is now running at about 50 per cent, by improving the dinar and thereby making imported goods cheaper," Qassim said in a telephone interview, adding that more than 80 per cent of all Iraq's tradable goods are imported, he said.

In a report in August, the International Monetary Fund also said inflation was escalating in Iraq. The 12-month rate of inflation ended 2005 at 31.7 per cent, but inflation then accelerated, with 12-month inflation reaching 58 per cent in May 2006, the report said.

Iraq's Central Bank also is trying to fight inflation by raising interest rates. In November it raised its key policy rate to 16 per cent from 12 per cent. Wednesday's report from the bipartisan U.S. Iraq Study Group said that by the end of 2006, the bank will raise rates to 20 per cent and appreciate the dinar by 10 per cent.

The Central Bank's fight against inflation could prove to be an uphill battle, however, since many observers believe the leading contributor to inflation is the high cost of security involved in distributing goods throughout the country.

On Thursday, the dinar was trading at the central bank's auction price of 1,424 against the U.S. dollar, according to the bank's website, its strongest price since March 23, 2004, when it was at 1,420.

Between Nov. 29 and Thursday, the Iraqi currency traded widely at a market price between 1,410 to 1,442 to the dollar, the best market price the dinar had seen Jan. 26, 2005, when it traded at 1,405.

"The dinar has steadily increased against the dollar because of the central bank's efforts to stabilize the currency and control inflation," said Hussein al-Uzri, president of the state-owned Trade Bank of Iraq.


"Iraqi consumers get oil and food that is government subsidized, so the rise in the dinar won't have an immediate effect on them and the economy. It will take some time. But as Iraqis realize the value of the dinar is rising, they will stop immediately exchanging their currency into dollars," he told The Associated Press.

just thought today needed this reminder

As the freezing of gold the Iraqi topic the secretariat in Switzerland, whose value amounts to hundreds of billions of dollars, and here like to note the fact that that gold is to cover the the value of the Iraqi currency the circulated, and for the also serves as a reminder that the most if not all States in the world have the gold reserve insured person in Switzerland to cover the their currencies tradeables, for that when been frozen gold the Iraqi landed the value of the Iraqi currency in circulation and the become what is known in Iraq that time as "dinar the Swiss" something that was circulated in northern Iraq in the Autonomous Region "Kurdistan", and "the Iraqi dinar", which was circulated in the rest of the Iraq, because the former had print runs in Switzerland versus the value of gold the insured there, and the second started the Iraqi government has been printed in Iraq.

Translated version of http://al-moharer.net/moh198/fouad198a.htm

mountaingirl

December 9, 2006

BAGHDAD, Dec. 8 — Iraqi officials are near agreement on a national oil law that would give the central government the power to distribute current and future oil revenues to the provinces or regions, based on their population, Iraqi and American officials say.


The Reach of War

If enacted, the measure, drafted by a committee of politicians and ministers, could help resolve a highly divisive issue that has consistently blocked efforts to reconcile the country’s feuding ethnic and sectarian factions. Sunni Arabs, who lead the insurgency, have opposed the idea of regional autonomy for fear that they would be deprived of a fair share of the country’s oil wealth, which is concentrated in the Shiite south and Kurdish north.

The Iraq Study Group report stressed that an oil law guaranteeing an equitable distribution of revenues was crucial to the process of national reconciliation, and thus to ending the war.

Without such a law, it would also be impossible for Iraq to attract the foreign investment it desperately needs to bolster its oil industry.
Officials cautioned that this was only a draft agreement, and that it could still be undermined by the ethnic and sectarian squabbling that has jeopardized other political talks. The Iraqi Constitution, for example, was stalled for weeks over small wording conflicts, and its measures are often meaningless in the chaos and violence in Iraq today.

But a deal on the oil law could be reached within days, according to officials involved in the drafting. It would then go to the cabinet and Parliament for approval.
The major remaining stumbling block, officials said, concerns the issuing of contracts for developing future oil fields. The Kurds are insisting that the regions reserve final approval over such contracts, fearing that if that power were given to a Shiite-dominated central government, it could ignore proposed contracts in the Kurdish north while permitting them in the Shiite south, American and Iraqi officials said.

The national oil law lies at the heart of debates about the future of Iraq, particularly the issue of a strong central government versus robust regional governments. The oil question has also inflamed ethnic and sectarian tensions. Sunni Arabs, who preside over areas of the country that apparently have little or no oil, are adamant about the equitable distribution of oil revenues by the central government.

On the drafting committee, Sunni Arabs have allied with the Shiites against the Kurds, who have sought to maintain as much regional control as possible over the oil industry in their autonomous northern enclave. Iraqi Kurdistan has enjoyed de facto independence since 1991, when the American military established a no-flight zone above the mountainous region to prevent raids by Saddam Hussein.

Gen. George W. Casey Jr., the senior American commander here, and Zalmay Khalilzad, the American ambassador, have urged Iraqi politicians to put the oil law at the top of their agendas, saying it must be passed before the year’s end.The drafting committee is made up of ministers and politicians from the main Shiite, Sunni Arab and Kurdish blocs in government. They began talks months ago, but the pace picked up recently, said an American official tracking the negotiations, who spoke on condition of anonymity because he did not want to give the appearance of Western interference in sovereign Iraqi matters.

At the start of the talks, the Kurds fought to ensure that regional governments have the power to collect and distribute revenues from future fields, Iraqi and American officials said. They also proposed that revenues be shared among the regions based on both population and crimes committed against the people under Mr. Hussein’s rule. That would have given the Kurds and Shiites a share of the oil wealth larger than the proportions of their populations.

But the Kurds dropped those demands, said Barham Salih, a deputy prime minister who is a Kurd and the chairman of the committee.
“Revenue sharing is an accepted principle by all the constituent elements of the Iraqi government, including the Kurds, and that is the unifying element that we’re all hoping for in the oil law,” Mr. Salih said in an interview.

The American official said the Kurds were willing to make concessions because a national oil law could attract more foreign oil companies to exploration and development in Kurdistan. A large foreign oil company would have more confidence in signing a contract with the Kurds if it were to operate under the law of a sovereign country rather than just the law of an autonomous region.
http://www.nytimes.com/2006/12/09/w...=rssnyt&emc=rss

This is the best thing I have seen all day.

Thank you

it must be passed before the year’s end


Now the 10 million dollar question.......

WHY must it be passed before years end??

Does it have to do with the budget??

Handouts??

Oil Contracts??

WHY???

I know what I hope that means!!

Hi Everyone,

I just posted this on AD but I wanted to share this on RC as well these are some of my opinions. I know that there are two ways of looking at this the gradual increase and RV pegged. I think it will be RV'd and pegged.

Here is why Iraq is a very rare opportunity this is unlike any other. It is sitting on huge natural resources which we all know and they are also the doorway to terrorists that needs to be closed tightly for the security of the World.

I understand your point with the gradual increase and there are two ways of looking at it and who really knows who's right. But this is a forum to throw ideas around.

The pros to a gradual increase is that they do not shock the economy and make it unstable. But the other way of looking at it is they need a shock to get an economy.

If they pass the Laws with out an RV they open the golden gates for the World to come in at a ridicules rate that is clearly undervalued by a very large margin. There money can RV at a high rate because it is really worth a high rate not the undervalued amount that the IMF have kept them at for 3 years. So in response to you saying it will not happen over night I will agree as it has been happening for 3 YEARS!!!!! Not just over night BAM you have an RV. They have been putting there ducks in a row for quite sometime now and since November we have seen them getting ready for an RV. I know some like MunnyBaggs will tell you this is the gradual RV and that is his opinion and he is entitled to it. But in my opinion this is not and RV it is fluctuation as they get ready for an RV. Right now they are trying to decrease the exchange rate shock by taking as much Dinar out of circulation as possible. An RV in my opinion is when it is fully convertible on the FOREX and you can exchange it anywhere you like. Which enacting these Laws FIL and HCL and article 8 will do. It has taken time they have passed the FIL a while back but have not enacted it yet. I believe we will see a package deal with the Laws passed and enacted. I think they are keeping it as quite as possible not to stir up to much speculation and violence.

Also we have to consider the amount of debt relief they have received they are nearly debt free and sitting on huge resources. Also being back by most of the World.

Also another thing to consider that history repeats it's self and Kuwait RV'd and pegged so it can happen.

The reason again I think it will peg instead of floating gradually is Iraq is so volatile right now and they need to make there currency and economy as stable as possible. By pegging they will create stability and growth as investors will be way more confident to enter the Country. Floating is used rarely and by Country's that need to entice investors Iraq dose not have to entice investors they just need to instill confidence and pegging would achieve this in my honest opinion.

I have considered your opinions and others that have your same opinion and they just do not add up for me as my opinion dose not add up for you. But it is good to have different opinions so we look at it from all angels. So thank you for sharing and hopefully we find out what the big plan for Iraq is soon ever way. The good news is that we all know this will happen it is just exactly when is the question and how much.

Dinar-Excited

Originally Posted by Dinar-Excited

Hi Everyone,

I just posted this on AD but I wanted to share this on RC as well these are some of my opinions. I know that there are two ways of looking at this the gradual increase and RV pegged. I think it will be RV'd and pegged.

Here is why Iraq is a very rare opportunity this is unlike any other. It is sitting on huge natural resources which we all know and they are also the doorway to terrorists that needs to be closed tightly for the security of the World.

I understand your point with the gradual increase and there are two ways of looking at it and who really knows who's right. But this is a forum to throw ideas around.

The pros to a gradual increase is that they do not shock the economy and make it unstable. But the other way of looking at it is they need a shock to get an economy.

If they pass the Laws with out an RV they open the golden gates for the World to come in at a ridicules rate that is clearly undervalued by a very large margin. There money can RV at a high rate because it is really worth a high rate not the undervalued amount that the IMF have kept them at for 3 years. So in response to you saying it will not happen over night I will agree as it has been happening for 3 YEARS!!!!! Not just over night BAM you have an RV. They have been putting there ducks in a row for quite sometime now and since November we have seen them getting ready for an RV. I know some like MunnyBaggs will tell you this is the gradual RV and that is his opinion and he is entitled to it. But in my opinion this is not and RV it is fluctuation as they get ready for an RV. Right now they are trying to decrease the exchange rate shock by taking as much Dinar out of circulation as possible. An RV in my opinion is when it is fully convertible on the FOREX and you can exchange it anywhere you like. Which enacting these Laws FIL and HCL and article 8 will do. It has taken time they have passed the FIL a while back but have not enacted it yet. I believe we will see a package deal with the Laws passed and enacted. I think they are keeping it as quite as possible not to stir up to much speculation and violence.

Also we have to consider the amount of debt relief they have received they are nearly debt free and sitting on huge resources. Also being back by most of the World.

Also another thing to consider that history repeats it's self and Kuwait RV'd and pegged so it can happen.

The reason again I think it will peg instead of floating gradually is Iraq is so volatile right now and they need to make there currency and economy as stable as possible. By pegging they will create stability and growth as investors will be way more confident to enter the Country. Floating is used rarely and by Country's that need to entice investors Iraq dose not have to entice investors they just need to instill confidence and pegging would achieve this in my honest opinion.

I have considered your opinions and others that have your same opinion and they just do not add up for me as my opinion dose not add up for you. But it is good to have different opinions so we look at it from all angels. So thank you for sharing and hopefully we find out what the big plan for Iraq is soon ever way. The good news is that we all know this will happen it is just exactly when is the question and how much.
Dinar-Excited

I like the way you laid this out - I agree with you! This is a unique situation, and the entire world is wanting this to work out, because we are so dependent upon oil - until other energy sources are developed and made readily available. Iraq is a blank canvaas for laying out a long-term plan of current and future engery useage, with built-in safety devices to reduce pollutants from the ground up based on all the latest technology. Because of its vast wealth, Iraq could also use this wealth as a springboard to become a proving ground for development of alternative energy sources so that, as natural supplies dwindle, safer, cleaner forms will become available. This isn't so very far off - 50-60 years, maybe.

I too believe the RV has to be set high enough to make an impact, say at $1.71, and possibly as high as $2.34. If this higher RV causes the boat to rock some, it will only serve to make more goods and services available, because those who want to sell to the Iraqis will know they have the capacity to buy: this is the opposite of 'too many dollars/dinars chasing too few goods' and, after a short period of adjustment (mental/emotional adjustment being right up there - sort of the opposite of "sticker shock") the economy will settle right back down. With the higher RV, of say $2.34, there could be some "bobble" time, when the value slips back a bit, surges forward, slips back (Bob Newhart's stand up routine of bus driver training school 'accelerator-brake, accelerator-brake' bit) but, again, it will then smooth out and climb steadily over a longer period until it reaches the much-anticipated $3+. By this time, those countries who pledged to hold dinars for 5 years, will enjoy a nice return in exchange for oil at a previously-agreed upon price, not less than the then current market value of the dinar.

OK! This is my fantasy world, as long as everyone else has his/hers. Don't wallop me for being so excited: I'll be happy if it opens at a buck to begin with. My rationale is, a lot like yours, if the initial RV is low, it will appear as a blip or a minor bump in the road. If it opens in the medium range, it makes an impact, helps to confirm the world's opinion that their investments were warranted, especially debt-forgiveness and promises of new industry and development, and leaves a lot of "wiggle" room (woot! kitty wiggle! farm jig!) for gradual increase. If it RV's really high....WELL! People have to have something to believe in and I have faith in an omnicient Creator God who has imbued us all with the freedom to believe that....it'll be time for giving thanks, having a margarita and a party! Here's to all our troops, past, present, future - bless 'em, preserve 'em, bring 'em home - here's to the Iraqi people who need a break real bad. And...here's to us here at RolClub: who's like us? Damn few! G'night!