(2nd) NEW All Nighter Thread....(On A Good Prediction.)

[robinhoodof sherwoodpark]

ISX-Data.com Editorial
The Unique Situation of the Iraqi Dinar
A backgrounder on the Iraqi dinar, including details on why the Iraqi dinar is positioned for a huge rise in value.

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By: Roger Isaksson (email)
Published: 09/11/2006
this author's past articles


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The Iraq Dinar is set up in a very simple, almost crude fashion. The set up was a quick fix after the invasion, seeing that the banking sector in Iraq was about as developed as a model T. Without a modern bank system in place, the "crude and simple" was chosen as a workable interim model.

A Brief History of the Dinar
With Saddam's face plastered all over it, the old dinar had to go. The Saddam dinar also was of very low quality, and could be easily forged on a simple copy machine.

After the invasion, new bills were immediately ordered, but due to the enormous amount needed, some of the old Saddam dinars continued to be printed and circulated until the new ones arrived.

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The new dinar bills started to arrive, and they brought with them all the modern safety features one would expect. A wide spread of denominations was chosen, both to make the daily handling easier, and to cover for value variations in it's exchange. Finally, a reasonable time period was granted in order to allow the citizens of Iraq to swap the old Saddam, and "Swiss" dinar in.

The Central Bank of Iraq (CBI)
The Central Bank of Iraq (CBI) was set up as an auction system, with the CBI sitting on the newly printed currency, auctioning older outdated dinars and other foreign currencies with Iraqi banks for new dinars. Now that the currency exchange has been completed, the CBI also sends nearly half of it's daily auction of dinars to foreign banks in Kuwait, Jordan and beyond.

If you go to the CBI official website you will see the daily auction, the currency is now primarily sold in exchange for US dollars. The CBI is slowly but surely acquiring US dollars to help back the worth of the dinar. Everyday the amount of dollars in it's vaults increases.

The exact number of dinars in print, in circulation or on hold at the CBI is exactly known. By doing some very simple steps, full control is achieved through:

Limit the amount a person can bring with him if he is leaving Iraq, to a very small amount (in this case, 100,000 dinar);
Knowing the exact amount sold to banks outside of Iraq.
Once you know the amount of dinars out there, viola, you have complete control over it's fate. The CBI simply sells more or less to hold the dinar in a position exactly where they want it to be.

Given this situation, the dinar will not strictly be pegged. It has been called 'pegged' by some, but in reality you will have some small fluctuations on the dinar value, which you have likely noticed if you have followed it over time. These fluctuations are a balancing act by the CBI.

Simply put, truly pegged currencies don't move from the currency it is pegged to.

This is the basic Iraqi dinar system. Now some may already be asking, that if the Dinar is endlessly sold, wouldn't it flood the market, making them worthless? No, because you have exchanged your US dollars for your dinar, which helps to back the dinar through the above explained CBI mechanism.

Now, this is a very temporary system. Interested readers will of course note that any currency that is not free flowing is a hindrance to full economic development. This fall, new Iraq investment laws are suppose to be passed by the elected Iraqi parliament, allowing international investment companies (read: Big Oil) to invest.

At this very moment, oil company survey and geological teams are crisscrossing the desert, testing grounds, staking claims and hopefully not giving each other a black eye. Again, this is not Iraq government, US government, US Government contractors, US armed forces, etc. running around, this is oil companies. The future mega investment in Iraq which will help drive the economy forward.

A Question of Priorities
Some may ask if we shouldn't take care of the violence first. If Joe Everyman is building a house, is it relevant that his young children are fighting? The short answer is that 'Big Oil' is operating in many areas of the world where violence is the norm, not the exception.

By last June it was announced that no more printing of the dinar is necessary, meaning that we are most probably in the end part of the 'first stage', and are ready for the dinar revaluation. It would be an suicidal economically to leave the dinar in it's current low range, and let the oil companies come in 'on the cheap'. The dinar MUST have a much higher value at that time, otherwise Iraqi will be sold off for literally pennies, or dinars, on the dollar.

While the exact arrangement of the investment law is not yet settled, deals have already been made in how the oil revenue will be shared amongst the different regions and groups in Iraq. So things are moving forward.

It is not yet known if the revaluing of the dinar will be an overnight thing, with no previous announcements, or if it will be a gradual increase as necessary. It should be pointed out that the value of many oilfields in Iraq is also not fully known, because actual modern geological surveys have not been done for decades, if at all, but even with this lack of recent study, the known reserve in the ground rivals that of Saudi Arabia. It is hoped that in the next decade, Iraq will achieve the same oil output as its southern neighbor. Nobody can deny that the potential is there.

[neno]

Can you also post this in the News Thread section with a Link for all to go to if they want.. Thanks.

[snottynose]

HEY EVERYONE!!! LOOKS LIKE WE'RE GOING TO HAVE TO SPEND ANOTHER NIGHT OR TWO TOGETHER! SURE HAD A LOT OF FUN LAST NIGHT WITH ALL OF THE DINAR GANG JUST LIKE BEING ON A ROLLER COASTER RIDE weeeeeee!!!!!! I THINK I CAN HANDLE THAT AGAIN! THOUGHT WE WOULDNT HAVE TO, BUT WHAT GOOD BUNCH OF PEOPLE TO SPEND SOME TIME WITH. HEY EZCASH, HERE WE GO AGAIN!!!!!!!! LISA

Hey Sassy! I'm with you girl.It sure would be nice if that revale would happen soon.This is like a roller coaster ride and i'm proud to be a part of it!!!

sarah

[goldraker]

Please update us Rolls! What happened? Whats going tio happen?

[tiffany]

What about that article/blurb that I'm remembering about "The FIL MUST BE PASSED BY SEPTEMBER 18th"...or face penalties/fines....anybody else remember that or did I dream it?

[choochie]

I remember it Tiff, but don't know if I could find it right now. I think it is in the "Latest News thread", but just don't have the energy to go through all those pages.

[bob1940]

The way time is passing here. It could have been a dream. LOL Tiffy you know darn well this is tettering on the edge right at this moment. Tomorrow is The 18th. and the 18th is ment to be included in that statement. LOL. We will MEET and our goals will be met. Keep the faith God works in strange and Miraculous ways! ----- and Allah Is not far behind him LOL.

[snottynose]

HEY neno, Just wanted to wish your daughter happy birthday! hope she has a great one and many more to come.

sarah

[jsfletcher]

Now let's not all get to upset yet about the cbi conducting usual business for Sunday. If the FX opens at 5pm new york time.. that should be about 1am on monday for Iraq.. a new day!! so hopefully we see the dinar on the forex at 5pm and monday the cbi shows the new rate

[www.xealthy.com]

kEEP OUR CHINS UP - I HAVE TO GO SHOPPING WITH MY REGUALR MONEY NOW- HOPEFULLY TOMARROW WILL BE THE LONG NEEDED SHOPPING SPREE!!!!