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

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The first political : Alsabri: The convening of the national forces in a timely manner

Baghdad -Sabah
Rahman said Alsabri member of the Preparatory Committee for the political forces and parties that the Conference will be held next Saturday. He said : Alsabri there is insistence by all the parties to be held on this date. And the parties participating in the Conference Alsabri explained in a press statement that all

Political forces and parties to participate in the political process will participate in the conference as well as the participation of the forces and political figures from outside the political process, pointing to a body mandated by the Supreme Committee of dialogue and national reconciliation to travel to more than one country and held meetings with several parties and opposition political figures expressed willingness to participate in the Conference.

He added, a member of the preparatory committee for the conference that the body had visited a number of Arab capitals Kalkahrh, Oman and Abu Dhabi, was invited to the representative of the Arab League and the Organization of the United Nations representative to attend the Conference.

He continued Alsabri that invitations were extended also to all who wish to participate in the conference who believes in the principles of national Kenbez dictatorship, violence, terrorism and national unity of the faith and of the peaceful and democratic power, pointing out that there is no veto on any party only tarnished their hands the blood of the oppressed Iraqi people.

what about a number plate auction on ebay! Some should register the number plate 'DINAR'

Originally Posted by DLMCFX

Will the PEG be to a basket of Gold-Oil & €??? thats the quest;-)

It is funny you ask this question as I was doing some research on this today. Here is what I found.

A Crude Peg for the Iraqi Dinar


Frankel, Jeffrey. "A Crude Peg for the Iraqi Dinar." Financial Times (13 June 2003).

Belfer Center for Science and International Affairs.


Rebuilding Iraq involves many difficult problems. It may seem that the question of the exchange rate should be one of the easier ones to solve. The choice of currency regime - particularly what to anchor the currency to -is perhaps the most widely studied topic in international monetary economics. Yet this question too turns out to be difficult; none of the traditional solutions will quite fit.

Given instability in the region and the absence of credible institutions, the Iraqi dinar requires an anchor of considerable credibility. Some have proposed a rigid peg to the dollar, as through a currency board. But this idea has significant drawbacks. That it would mean giving up the ability to set monetary policy independently is not such a big cost, as few governments have been able to use such discretionary policy well anyway. But there are other serious disadvantages.

One big drawback of a fixed exchange rate is that it means giving up the automatic depreciation that a floating currency would experience at times when the world market for the country's exports were weak. In the case of Iraq, the most important export is of course oil. Large fluctuations in the world price of oil have wrought havoc on the economies of other big oil-producing debtor nations such as Indonesia and Venezuela, often entailing a serious currency crisis before a change in the terms of trade is accommodated.

A second big drawback of fixing the dinar to the dollar would be the introduction of gratuitous volatility when the dollar fluctuates against other leading currencies. Argentina's currency board collapsed two years ago, not just because the straitjacket was so rigid but also because the rigid link was to a currency, the dollar, that had appreciated strongly against the euro and other trading partner currencies during the second half of the 1990s. That meant Argentine exports suffered a huge loss in competitiveness at a time when world market conditions were already weak.

Finally, imposing the dollar on Iraq could also feed widespread fears of US imperialism. The politics would get even trickier if, as in Argentina, the arrangement hit a crisis - for example, as a consequence of an increase in US interest rates.

An alternative would be to peg the dinar to the euro. But this idea has big drawbacks as well. The euro has been appreciating against the dollar and might continue to do so as a result of ever-widening US trade deficits. A peg to the euro would thus risk a future loss of competitiveness against non-euro trading partners. The problem is that, as Iraq's trade returns to normal, its trading partners will be so dispersed geographically that a peg to either currency alone - the dollar or the euro - would introduce unwanted volatility with respect to the other. Like other countries with geographically diverse trading partners, Iraq may thus be headed for a basket peg, with equal weight given to the dollar and euro.

But a basket peg does not solve the problem that, in the event of large future declines in the world price of oil, the currency of an oil exporter must be able to depreciate in order to accommodate the adverse shift in the terms of trade and help stabilise export earnings. Fortunately a proposal designed for small commodity-exporters, which I have called "peg the export price", addresses precisely this issue.

The proposal is for a country to peg its currency to the export commodity. It could be implemented as follows. The central bank would set the daily price of dinars in terms of dollars in direct proportion to the daily price of a barrel of oil in terms of dollars. The result would be to stabilise the price of oil in domestic terms. This approach combines the best features of both fixed and floating exchange rates. Like fixed exchange rates, it constitutes a transparent nominal anchor and also helps promote integration into world markets. And yet, at the same time, it retains a crucial advantage claimed by floating exchange rates: automatic accommodation of fluctuations in world markets for the export commodity. In short, it offers the best of both worlds.

To fix the dinar simply to oil alone may be too radical a proposal. While it would facilitate the recovery and expansion of the oil sector, it might at the same time discourage production of other internationally tradeable goods by shifting the entire burden of price uncertainty on to them. My proposal for Iraq, therefore, is to add oil to the basket of currencies to which the dinar is pegged. For simplicity, give equal weight to all three units. Or, what is almost equivalent, define the value of the dinar as one-third of a dollar plus one-third of a euro, plus one-hundredth of a barrel of oil.

Unlike other proposals for nominal anchors, this is one that Iraq could live with even if there are big swings in world exchange rates or oil prices in the future. The country faces enough challenges without worrying about the risks of a future currency crash.

Reprinted with permission of Financial Times.

Belfer Center - Publication - A Crude Peg for the Iraqi Dinar

Dinar-Excited

Originally Posted by Dinar-Excited

My proposal for Iraq, therefore, is to add oil to the basket of currencies to which the dinar is pegged. For simplicity, give equal weight to all three units. Or, what is almost equivalent, define the value of the dinar as one-third of a dollar plus one-third of a euro, plus one-hundredth of a barrel of oil.[/COLOR]

EUR = 1.32 USD/3 = 0.44 USD

USD= 1.00 USD/3 = 0.33 USD

Oil(barrel) = 61.00 USD/100 = 0.61 USD

0.44 + 0.33 + 0.61= $1.38

works for me!!!

Originally Posted by lndmn_01

EUR = 1.32 USD/3 = 0.44 USD

USD= 1.00 USD/3 = 0.33 USD

Oil(barrel) = 61.00 USD/100 = 0.61 USD

0.44 + 0.33 + 0.61= $1.38

works for me!!!

Were these numbers drawn from your own opinions and thoughts or from articals?

Originally Posted by PaulieThaGreat

Were these numbers drawn from your own opinions and thoughts or from articals?

It's at the end of DE's post above

Originally Posted by lndmn_01

It's at the end of DE's post above

Sorry, I didnt completely read it.....

Originally Posted by artin
HI WORF,

Kan you please explein to me how kan i buy a iraq dinar?

Thanks

Originally Posted by shotgunsusie

COULD SOMEONE WHO LIVES IN THE NETHERLANDS HELP THIS INVESTOR PLEASE????

I don't live in the Netherlands but I can help. Artin, you can buy the Iraqi Dinar on Ebay. See, pretty simple!!!

Originally Posted by Elfwizard

This side of it is basically hidden from us. So all these numbers people are throwing out of dinar being pulled from circulation are basically Guesses. That could be way OFF, from pulling no dinar, to a fraction of what is being said. I feel that dinar in circulation to reserves is the key, and I dont think a country can back there currency with Futures, otherwise we could back the US dollar with pork bellies!

The pulling of Dinar out of circulation is another of what I call "Dinar Media Myths" run amok. The Dinar Media is of course the mutliple Forums that discuss IQD across the internet. When you repeat something over and over and over again, people who want quick success latch onto it and magnify the problem. The real key is reserves. If the Iraqis do have some magical "Swiss Gold" to back the IQD we can have a $1 re-val with no zero lop. Or if the HCL allows the currency to be backed with oil futures we could again have $1 or higher re-val with no zero lop. The magic gold we do not have confirmed by the CBI thus we can't add it into the formula. Basing currency on oil futures is a huge gamble and gives the terrorists a way to bring down the Iraqi Democracy. They could mass an attack on the oil wells and refineries and destroy the Iraqi currency. Thus I don't really see the HCL with CBI/MOF/IMF/Oil Ministry allowing that. (But I won't say it absolutely 110% won't happen either.) Thus the vehicle the CBI has to increase the currency exchange rate is by increasing foreign (USD) reserves. Taking IQD out of circulation only reduces M1. But M2 still remains at 15 to 17 Trillion. M2 will decrease in a very gradual manner. Removing IQD from circulation has very little to do with Iraq's currency exchange rate other than giving the Iraqi Central bank more "product" to sell to money suppliers, exchangers, dealers bringing in more reserves.

Originally Posted by MunnyBaggs

I don't live in the Netherlands but I can help. Artin, you can buy the Iraqi Dinar on Ebay. See, pretty simple!!!

I am a big Ebay Dinar fan. If you need any help or any info on good sellers just pm me.