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

Originally Posted by Adster

They don't have to r/v before 1 October. But they will not get anymore funding from outsiders to help them out. Therefore in theory they need to start having a dinar with more of a worth than 1476 to the dollar. It's all about buying power. They need to be able to import goods at a rate a lot less than it currently is. Imagine importing a tv that's value is say $1000, well they will need 1476000 dinars to buy it! R/v at 1:1 and they'll only need 1000 dinars. What a great way to kickstart the economy and import at a good rate and vice versa if they don't r/v. Their country will be bought up at a fraction of its real value.

Remember, the current rate is an artificial rate, that's all.......

yeah, what he said! lol

oh, and remember they submit their budget on oct. 1. wonder what the budget looks like? hmmm....

Originally Posted by Adster

They don't have to r/v before 1 October. But they will not get anymore funding from outsiders to help them out. Therefore in theory they need to start having a dinar with more of a worth than 1476 to the dollar. It's all about buying power. They need to be able to import goods at a rate a lot less than it currently is. Imagine importing a tv that's value is say $1000, well they will need 1476000 dinars to buy it! R/v at 1:1 and they'll only need 1000 dinars. What a great way to kickstart the economy and import at a good rate and vice versa if they don't r/v. Their country will be bought up at a fraction of its real value.

Remember, the current rate is an artificial rate, that's all.......

Adster, this is my take on the situation...maybe over simplified, but then consider the source!

[Quote:]
Originally Posted by Dinar Duchess
Susie, why does the revalue have to take place by 12.00am 1 October. Can you tell me more on this point. So pleased you are still posting[/QUOTE]


Bear with me, this is parsed from everything I've been reading the last few days....the way I understand it:

US stops funding and any money not already spent (or at least earmarked) by the end of the month will be lost (a just like gov't budgets here...use it or loose it).

At this point (0001, 1 Oct) Iraq is standing on their own two feet. No more free money from us. Holy cow what're they gonna do??? Depending who you talk to the FIL has been passed, just needs to be announced and enacted. GREAT! When they (according to speculation) announce the enactment of the FIL we have the equivelent of the Oklahoma land rush. REALLY GREAT--BUT WAIT-- how can can Iraq sell itself to foreign investors for .0007$ (that's something like 7/1000 of a PENNY!)--that wont' do the Iraqi people any good...so...that's where the Reval comes in. Iraq revals their currency to reflect the TRUE VALUE of their country/resources/currency, and everyone lives happily ever after. The Iraqi's get more buying power, loads of foreign investments, the investors get a really good deal on almost virgin territory, and WE...well, we get to go to Laughlin, and, if you're like me and my sweet hubby, to Fiji, Australia, Hong Kong, Singapore, Europe....

THAT'S my take on it. And this is all supposed to come down by sunday 30 sept. SGS, in my opinion, has a really good grip on what's going on, so you might want to check out her posts...Watch the conversion sites, the forum sites...light a candle, sacrifice a chicken...be patient and keep a tight grip on your sense of humor--you're going to need it!!!

Cheers, T/O OSW

26 September 2006 (Al-Sharq al-Awsat)

An official source in the Iraqi Ministry of Finance confirmed that Iraqi Central Bank will possibly approve the application of international standards concerning the sufficiency of capitals, according to the resolutions of the second conference held in Bazil.

The source added in a statement during the economic session, about the role of banks in the economic reformation process, held in the Ministry of Industry and Metals that Iraqi Central Bank is working fast to take an active role in the economic stability process in the country. The Bank is trying to dispense with some of mechanisms that were prevailing during the time of the ex-regime, especially lending governmental institutions. Therefore, there are serious studies about the possibility of starting and developing a governmental exchange market that will provide all institutions with cash fluidity as fast as possible. In addition, this will enable individuals and capital owners to find new types of guaranteed local investments and limit their running away outside the country.

The same source declared that Iraqi Central Bank is fully independent. It is exhorting great efforts to achieve a stable financial policy that will enhance Iraqi economy and rebuild it through several constructive steps.

The most important step among them is replacing the national currency. Old Iraqi currency was replaced on the 14 of January, 2004 through substituting 4 trillions of old Iraqi dinars by a new currency. The step had many advantages which greatly regained trust in Iraqi dinar and improved the exchange rate. The late approval to grant licenses to foreign banks is another important step to build an active and competitive banking sector in Iraq. In addition to holding a daily auction of foreign exchange for Iraqi Central Bank. The main purposes of this auction are to reduce extreme changes in the exchange rate which may happen suddenly.

The Bank, also, legislated a new law that gives it: complete legal independence, clear authorization to work on achieving stable prices and active monitoring authorities. It started utilizing the open market processes through selling and buying the treasury transfers in order to control economic fluidity and stabilize the exchange flow. The Bank approved a new law concerning commercial banks and this is a main step towards establishing a financial system works according to the criteria. Iraqi law of commercial banks will enhance the Iraqi trade and release the interest rates.

The complete and full release of interest rates on local financial devices (goods, deposits and exchange) is already operative. The bank considers this procedure as an important step towards the emergence of an efficient contemporary financial sector enables loan borrowers to make up their own decisions in stead of being chained by the instructions issued by Iraqi Central Bank.

The bank is now applying several projects. The most important of which is: the reframing and re-qualifying of governmental banks, applying a serious monitoring system and developing the local one, creating a complete united statistical work that covers all main sectors and finally starting a governmental exchange market.


Translated by IRAQdirectory.com Team

There aren't too many chickens to sacrifice here in Orange County. How 'bout a real estate agent/mortgage broker instead? Or a mid-level manager? We've got WAY too many of those around here!

Seriously though, all deadlines can be extended (referring to the funding deadline of 30 Sep), but the budget approved by Congress which is less than that asked for by the military commanders (msn news yesterday; I'll have to search for the link) sends a message to Iraq that the pockets aren't endlessly deep. Hope they get it!

[Side note: May Congress burn in hell for the 2.2 percent payraise to military personnel!]

Thank you for your reply

So if I understand this correct

The reval must be done before they release the FIL????

The FIL must be done before october 1st??? or else they will not receive any money from other countries (donations and so on????)))

Originally Posted by Adster

They don't have to r/v before 1 October. But they will not get anymore funding from outsiders to help them out. Therefore in theory they need to start having a dinar with more of a worth than 1476 to the dollar. It's all about buying power. They need to be able to import goods at a rate a lot less than it currently is. Imagine importing a tv that's value is say $1000, well they will need 1476000 dinars to buy it! R/v at 1:1 and they'll only need 1000 dinars. What a great way to kickstart the economy and import at a good rate and vice versa if they don't r/v. Their country will be bought up at a fraction of its real value.

Remember, the current rate is an artificial rate, that's all.......

Don't know if anyone saw this but Chaka posted it yesterday on iif.




"The signing of the compact is not the same as the rv signing

The compact is the all encompassing agreement with all international countries intending to aid in reconstruction /recovery of Iraq

These are 2 separate and independant events-- using the compact as indicator is inaccurate

The foreign law ratification and implementation is what u need to be watching"

inveshttp://www.investorsiraq.com/realists-rendezvous/23409-iraq-compact.html#post233064tment
___________
_______

Originally Posted by opps50

Thank you for your reply

So if I understand this correct

The reval must be done before they release the FIL????

The FIL must be done before october 1st??? or else they will not receive any money from other countries (donations and so on????)))

Welcome. Yes, the r/v has to be done before the FIL is enacted and opened to the world......

Nope, it doesn't have to be. The deadline for funding may be extended but it's unlikely. The US are making a point by saying 'no more, time to sort your own shiite out financially".

It's highly probable the FIL and r/v will be annouced at the same time, thought this for a few months.

Originally Posted by zipper

Seriously though, all deadlines can be extended (referring to the funding deadline of 30 Sep), but the budget approved by Congress which is less than that asked for by the military commanders (msn news yesterday; I'll have to search for the link) sends a message to Iraq that the pockets aren't endlessly deep. Hope they get it!

[Side note: May Congress burn in hell for the 2.2 percent payraise to military personnel!]

My thanks was for your side note. 2.2 % is an absolute disgrace. With all the sacrifices the military member himself goes through and his entire family has to endure. It is a most UNDER-paid profession. The military has not had much in the way gratitude or raises since the Reagan years.

Kozmar

Posted this in Rumors also- SGS here it is -what I asked about at other place
By Juliana Gittler, Stars and Stripes
Mideast edition, Friday, October 15, 2004



Juliana Gittler / S&S
Staff Sgt. Matthew Gadbois, a Vermont National Guardsman with the 1st Battalion, 86th Field Artillery at Camp Victory, Baghdad, shows off his investment in Iraqi dinars.

>What’s in a dinar?

Iraq’s currency once held sway 
in world markets. According to a Library of Congress report, the Iraqi dinar was once worth as much as $3.39 during the 1970s and remained at nearly that level until the Iran-Iraq war during the ’80s.

Sanctions following the Gulf War caused the currency to plunge, according to the Central Bank of Iraq.

After Iraq fell in 2003, the currency, which once included Saddam Hussein’s picture, was changed. On Oct. 15, 2003, the Coalition Provisional Authority, 
then in charge, launched a new dinar.

Currently $1 buys 1,460 Iraqi dinars.



BAGHDAD — In drawers and footlockers, servicemembers in Iraq are banking on the future by hoarding millions of Iraq’s year- old currency, the dinar.

Many suspect the dinar’s precipitous drop in the past decade could mean a huge rebound ahead. Each dinar was once worth a few dollars; they’re now worth a fraction of a penny apiece.

If post-war Kuwait is any example, they might be right: A Kuwaiti dinar was valued at a about a dime after the war. Each now brings in $3.40.

Still, that’s a big gamble, financial experts say. And Iraq is no Kuwait — a small, politically stable country with massive oil reserves.

Insurgents, a nascent government and extreme poverty still plague Iraq.

“If only the country turns around,” said one investor, Staff Sgt. Matthew Gadbois, a Vermont National Guardsman with the 1st Battalion, 86th Field Artillery at Camp Victory, Baghdad.

“That’s the gamble,” adds another, Sgt. Richard Couture, from the same unit.

The two, and most soldiers they know, have picked up a few hundred thousand dinars — equivalent to a couple hundred dollars. They know others who have bought considerably more.

If the value jumps just a bit — from 1/16th of a penny to 1/8th of a penny for example, investors double their money. If it jumps to a few cents, they can start paying off mortgages, the goal for Gadbois.

He learned of the scheme from a fellow soldier who, he adds, likes to gamble.

“I was skeptical at first,” Gadbois says. “But it’s like playing the stock market. If it takes off, great.”

Iraq has a few attributes that make it attractive. The most obvious is oil, and the fact that it could blossom into a functional country.

Still the government could overspend and weaken the economy despite its oil. And there’s always inflation to dampen the already low value.

“While that is a nice idea, soldiers probably shouldn’t be currency speculators,” said Michael A. Goldstein, associate professor of finance at Babson College in Massachusetts in an e-mailed statement. “All sorts of things could happen, especially inflation in dinars. This is likely a sucker bet — if the major investment banks aren’t speculating, neither should your average GI.”

He points to the example in Eastern Europe after the Cold War. Gains in currency value were eroded by inflation as the country developed.

“One of the easiest ways to finance government expenditures is just to print more money and spend it. When the government prints more money, it causes inflation,” he says.

It might also be difficult or expensive to off-load the dinars down the road. The few banks that buy foreign currency in the States charge fees for doing so, he says.

Many soldiers recognize the gamble and are prepared to wait years to see what happens.

“It’s not really a big investment,” says Capt. Scott Moreland, currently serving with the 1st Battalion, 185th Armor Regiment of the California National Guard in Camp Scania, Iraq. “Most of us have thrown a few hundred bucks at it to see what happens. Your odds are better than they are in Vegas.”

He adds that Department of Defense savings programs are probably a better bet.

Military investors should note that U.S. customs laws require them to declare if they bring home more than the equivalent of $10,000 in any currency.

And post offices in theater forbid mailing currency home. But there is no Department of Defense regulation to stop them, according to military officials.

The get-rich-quick idea isn’t limited to those serving in Iraq.

On the auction Web site eBay, dinars sell for marginally more than the going rate. A recent sale collected $75 for 100,000 dinars. Under the current exchange rate, that amount should cost about $68.

Scores of vendors online have been set up just to sell dinars. In one case, a million dinars, worth about $685, was on sale for $895.

One of these sites sums up the efforts in its name: BetOnIraq.com.

Its Web site adds a caveat: “We sell genuine currency that, in our opinion, stands a good chance of appreciating in value. We can offer no guarantees of a return on investment.”

Goldstein adds that as a gamble the idea isn’t crazy, but it’s certainly not a wise investment.

“Short answer — don’t do this with more money than you usually bet in one evening’s poker game.”




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