tiffany, you are in the wrong thread again!! :smile:
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tiffany, you are in the wrong thread again!! :smile:
Seriously!!Quote:
Originally Posted by tiffany
Hey All
Since we already had a blast from the past ealier. Lets take anothe blast from the past and learn from it. Shall we?
This comes from a report to Congress....
Iraq's Economy: Past, Present, Future
Jonathan E. Sanford
Coordinator Foreign Affairs, Defense, and Trade Division
June 3, 2003
http://www.iraqieconomy.org/home/cur...y%20issues.pdf
Five other steps may be needed to establish an effective monetary regime.
First is renegotiation of the large external debts incurred by the Hussein regime. (See the discussion of debt below.)
Second, Iraq may need a central bank which is able to operate somewhat independently from the country’s fiscal authorities and cannot be compelled (as was the case during the former regime) to automatically finance
government budget deficits.
Third, Iraq may need to clearly define the goals of its monetary policy. Some countries, like Canada, set numerical inflation targets for
their central bank to meet; others, like the United States, have looser, multiple goals.
Fourth, the Iraqi monetary authorities may need adequate foreign reserves to stabilize their operations – particularly if the exchange rate is fixed – and to build confidence in the currency.
Finally, Iraq may need a sound banking system, both because the economy will need adequate banking services and because it will provide
the monetary authorities with effective means for controlling the money supply and managing monetary policy.
(seems to me that Iraq has all five of these steps in place!)
Oil and Monetary Policy
Because Iraq’s economy has been stifled for so
long by geopolitical events, it is difficult to envision how it will look in the future.
The one certainty is that oil will play a dominant role in the economy for the
foreseeable future. This has important ramifications for Iraq’s monetary system. On the one hand, pegging the Iraqi currency to the dollar would be useful since the international oil market is conducted using the U.S. dollar and many of Iraq’s neighbors in the Gulf, like Saudi Arabia, have pegged their exchange rate to the dollar.
Ok I found this article while searching a little. And to be honest I just dont understand it. But this guy claims to be an Iraqi financial expert. I dont think this has been posted before. Similar arguments have been posted. But I dont think this particular article has. Maybe Mike, or Adster or someone more knowledgeable than me can decifer what exactly it is saying..... because I hope it is not saying what I think it is saying......:redface:
Can somebody help here?!?!?! :help:
Repercussions of the Iraqi Dinar/US Dollar Parity
http://edinarfinancial.net/news/?que...ny=2006&nn=333
July 13, 2006
"Successive Iraqi governments have adopted the slogan of 'Improving the Iraqi dinar exchange rate', as if they were promising Iraqis the key to 'Ali Baba's Cave'. This slogan was the 'promise' given by the governments of Dr. Iyad Allawi and Ibrahim Jaafari, among the priorities of their economic agendas. Today, Nouri al-Malki's government is doing the same thing. Saddam Hussein and his son, Odai, had also previously made such promises.
According to the statements of Bayan Jabr Al-Zubeidi, the Iraqi Minister of Finance on June 26, 2006, to 'Al-Sabah' newspaper, published in Baghdad, the government intends to remove three zeroes of the dinar to make it equivalent to the dollar. Thus, we may conclude that the planned process will be nothing but currency exchange, which neither revaluates nor devaluates the dinar.
It is estimated that the ratio of replacement will be 1500 of the current dinar for one new dinar. Accordingly, if an employee currently earns 150 thousand dinars, he will be paid 100 new dinars (unless the salary brackets are changed). This will be equivalent to 100 dollars. Thus, the exchange rate of one dinar is equal to one dollar. For example, the current price of one kilo of mutton, which is 8000 dinars, will accordingly be around 5.33 new dinars.
(is he referring to the new dinars we currently have above???)
The monthly salary of 150 thousand dinars currently buys 18.75 kilograms of mutton in Baghdad. When the dollar exchange rate is equal to the dinar, according to the new process, the monthly salary of 100 new dinars (equivalent to 150 thousand of the current dinar) will also buy 18.75 kilograms of mutton. This means that the salary will have the same purchasing power of the current salary of 150 thousand dinars.
Hence, the proposed or planned process is simply an illusion, just like changing daylight saving time. It is all the same, whether the clock was moved an hour ahead or the formal working hours were increased. Thus, the proposed process of equating the US and Iraqi exchange rate should not be celebrated. Many third world countries, like Turkey in the 1980s, applied this policy.
It is well known that the Iraqi dinar is a local, not a global, currency. It will remain the same both in the foreseeable and distant future. The country's import capacity, the consumption levels, and the welfare of the Iraqi individual, all depend on the circumstances of oil exports and the policies and methods of handling them. It is also known that about 99% of foreign exchange revenues in Iraq are petro-dollar revenues, since oil prices are paid in dollars and have nothing to do with dinars.
If the Iraqi economy and currency were like the Japanese economy and currency, for example, the foreign exchange rate would have a significance that would render it a source of a serious commercial intensification. This happened between the US and Japan, and later between the US and Germany, throughout the 1970s and the first half of the 1980s. The Japanese yen went down against the US dollar, becoming a protective measure for the Japanese industry. The move hindered the flow of American products to the Japanese market, weakening their competitiveness. It facilitated the flow of Japanese products to the American market and strengthened the competitiveness of Japanese companies in that market.
The exchange rate against the dollar in the 1970s and the first half of the 1980s was 230-250 yen. However, the continued pressures of US President Ronald Reagan on Japan and Germany in the annual conferences of the Big Seven (it did not yet include Russia), and in other conferences, led Japan to almost double the value of the yen through monitory procedures. The value of the yen was raised from the level of 230-250 yen against the dollar to the level of 120-110 yen from the second half of the 1990s.
In brief, the value of the dinar against the dollar differs in several aspects from its value against global currencies. This is just a formal issue of no use, and that is not to be celebrated."
I dont get it. Why is it "not to be celebrated"???
The average Iraqi on the street who lives paycheck to paycheck with no savings will see no difference as the relationship between prices and goods/services will be kept the same. Only those fortunate enough to hold excess dinars in savings (such as wealthy Iraqis) or outside holders of dinars (like those of us) will benefit. So, in general, the average Iraqi will have no cause to celebrate at first after the r/v. The average Iraqi on the street will eventually benefit from the overall improvement in the economy due to foreign investments and the sharing of oil revenues with all of the Iraqi people (as promised by the Minister of Oil recently), but not immediately like those of us holding dinars. Now if the writer of that article was referring to a zero lop...well then we will not be celebrating either as far as becoming instant millionaires, LOL.Quote:
Originally Posted by Pippyman
actually a hi erval would almost certainly result in price decreases on many if not all consumer products, since most are imported or subject to transportation costs at very least and the price of refined gas would certainly drop.
Hi,
Pippyman, this article and its subject the "lop" has been discussed more times in the past than I care to remember and has been dismissed, if you trawl back through the pages you will see. Just for your information we all think it means taking three zeros of the exchange rate and not three zeros of the notes. Can you imagine taking three zeros of 25,000 to make it 25 when there are already 25 dinar notes in existance.
Well danny51, You nailed it. This is what it is, and all about.Quote:
Originally Posted by danny51
Yo'Bro, everything is cool in the thread. Tiffany has the energy for us all. It is good when a newbie poster hits the thread. It helps to see how well educated everyone has become. Not to mention dont touch my dinars. hehe Has anyone heard anything else leading up to the meetings this week?
IC it as oppritunity to be able to exchange for more and also give others time to get in. Remember it will get crazier as we get closer. Just becareful in your finaces. I for one if it doesn't peg soon then I have a window of oppritunity to really do some damage to safedinar. I want 10 million so bad. I just figured it was going to peg with all the rumors before I get my other Investments returns. If it doesn't then I will get that 10 mill. I see this as good as done. But just dont know when.