Thread: Iraq/Dinar News. before Febuary 2nd 2006

Originally Posted by neno

Just look at this Link, Stack is to big to load.
http://www.ssb9.net/users/38179/stacks_of_dinar.jpg

Notice there are no 25k's

Please forgive me for my ignorance, but is there a problem with the 25000.00 note?

Originally Posted by chadm

for some reason i feel like there going to hit us with a left hook when we dont expect it, just a gut feeling ,hope im wrong

Going to? LOL, they already have...by doing absolutely nothing for months and months!!

Proposed economic aid to Iraq dependent on security
By KEVIN G. HALL
McClatchy Newspapers

WASHINGTON - President Bush's plan for salvaging the war in Iraq acknowledges failure so far in efforts to reconstruct the country's moribund economy. His proposed fixes depend largely on achieving security and stability there.


Bush pledged on Wednesday night another $1.2 billion in economic aid, announced the appointment of a reconstruction coordinator and promised to channel economic aid quickly to areas that Iraqi and U.S. troops cleared and secured.


He said the Iraqi government would spend $10 billion on a jobs program, and he supported creating an "International Compact for Iraq" to forgive the country's debt and encourage foreign assistance.


Iraq's economic picture isn't pretty. Unemployment is estimated to range from 20 to 60 percent. Inflation in November, the last estimate available, was running at 51.9 percent on a year-over-year basis.


"Nobody knows for sure what is the rate of unemployment. I suspect it's pretty high, like 40 percent or higher," said Nimrod Raphaeli, an Iraqi-born economist at the Middle East Media Research Institute in Washington. "There is really no evidence of resurgence of economic life in Iraq."


The Bush administration is trying to create jobs in the hope that that might ease one factor that's driving young Iraqi men into insurgency.


U.S. military officials said this week that they wanted to steer 25 percent, or about $1 billion, of the government contracting now done in Iraq to support Iraqi factories and companies. Pentagon officials won't identify the factories for fear that insurgents will target them and their employees, underscoring how security challenges hamper efforts at economic revival.


Still, fueled by high oil prices and construction, Iraq's roughly $30 billion economy grew 4 percent last year, according to unofficial estimates from the World Bank, the International Monetary Fund and other global institutions.


But gauging the country's economy remains a guessing game. Years of dictatorship and isolation from the global economy mean that Iraq's economy and institutions must be rebuilt from scratch.


"A lot of the systems have collapsed, and they need to build a better system," said Kathryn Funk, the World Bank's lead country officer for Iraq. "It's a matter of rebuilding a relationship, and rebuilding their knowledge on how to deal with financial institutions."




International organizations, including the World Bank and IMF, removed most of their personnel from Iraq after the deadly August 2003 bombing of Baghdad's U.N. headquarters and a spate of beheadings of foreigners.


Regaining security is key.


"It's a very difficult situation in Iraq because of the security situation. It does hinder the implementation of the investment program - the inability of officials simply to get to work and carry out their instructions," said a top IMF official who's involved in creating standby loans for the Iraqi government.


The official, demanding anonymity because of an IMF security policy that protects the identities of its officials who are working with Iraq, said insurgents clearly were hurting oil production.




Oil accounts for as much as 70 percent of the country's economy and more than 90 percent of its foreign-exchange earnings. Insurgent attacks on oil installations and rampant corruption rob Iraq of financial resources that could be used to develop the economy.




"We are obviously disappointed that the security situation has not improved," the high-ranking IMF official said.



Before the war started in March 2003, Iraq produced more than 2.5 million barrels of oil per day. Last year, it averaged 2 million barrels per day, about the same as 2005.


Four years after the U.S.-led invasion, Iraq still lacks the metering equipment that would provide firm production data. There's ample evidence that large volumes of oil are being smuggled into neighboring Iran, where they're purchased on the black market and sold on the global market for a higher return.



An audit of oil revenues by global accountant Ernst & Young, made public in November, found discrepancies of $940 million and $1 billion in the two six-month audit periods from July 2005 through June 2006. The audit also noted that there were no efforts to reconcile the differences between U.S. and Iraqi accounting. Proceeds from Iraqi oil exports are deposited with the Federal Reserve Bank of New York, which sends the money back to Iraq for administration by the Finance Ministry and central bank.


"We can't send our accounting staff into Iraq," said Calvin A. Mitchell III, a spokesman for the Fed's New York branch, who thinks that Iraqi banking officials will address the matter eventually. "Our books are reconciled according to the records we have. How they reconcile their books, and whether they are reconciled, we can't speak to."




Despite such daunting problems, some experts salute Bush's new economic plans.


"I think they are very good ideas," said Michael O'Hanlon, an Iraq expert and usually a critic of Bush's policy at the Brookings Institution, a center-left research center. "We don't have the luxury of getting the security environment right first. ... You've got to try on multiple fronts. ... I think all this makes good sense."


Previous economic initiatives for Iraq failed in part because the Bush administration wanted private enterprise, not government, to create the badly needed jobs, O'Hanlon said.

McClatchy Washington Bureau | 01/11/2007 | Proposed economic aid to Iraq dependent on security

I understand why the value of the Dinar went down after the first gulf war. I am probably being simplistic, but if it was backed by oil before and everyone knows of the oil deposits and size, why does it seem to be so difficult to revalue the dinar = to either the dollar or the Euro?

Am I correct in understanding that the RV comes from the Central Bank of Iraq or does it come from others?

Just trying to catch up to you guys on this.

Thanks
JD

The Iraq December consumer price index (CPI) inflation was 11.3%; making 2006 inflation 64.8%, a relative increase from the 51.7% year-on-year rate in November.

The US government estimate of Iraq’s core inflation figure (which excludes fuel, transport, and rent) was 3.0% in December and 32.5% 2006. The International Monetary Fund (IMF) core inflation figure (which excludes fuel, transport, but includes rent, and which the IMF uses to judge the efficacy of exchange rate appreciation) was 3.2% in December and 31.9% in 2006. The sharp rise in December was driven largely by a 37.6% rise in fuel prices, while other CPI components rose less than 5% or fell slightly.

http://www.state.gov/documents/organization/79483.pdf

Originally Posted by Cdn Scrooge

In My opinion I think you did just fine. I believe that yes, SOME
of the dinar puchased in the recent large auctions are going back out to cover government expenditures but I do not believe all of it is. If that was the case then why weren't the past auctions this high? If the government needs 100 million USD or so worth of dinars each day now then why didn't they need that much before. Besides which, there have been numerous news articles wherein it was stated by the CBI that "removal of the currency" thus reducing the money supply was part of the plan to battle inflation.

In a while I hope Mr. Knowles comes back on here and tells us if we passed his test. ( LOL )

More spending happening now due to reconstruction plus all the salary increases that have been made.

No matter how you look at it if the CBI was actually "removing" dinar then they would be leaving Iraq without a local currency while at the same time "flooding" the economy with the currency used to make these dinar purchases, USD, Euro, etc.

Originally Posted by Gloribee

Fuzz, guess Im not explaining myself very well. NO LOP a reval, with a major increase in value of the dinar. Thats what Im trying to say.

Gloribee

PS Thxs DD, was having a heck of a time.

Okay, thanks, hope you're right Gloribee.

Fingers crossed that we all get that life changing reval, and hopefully soon.

Originally Posted by Hillbilly Deluxe

Please forgive me for my ignorance, but is there a problem with the 25000.00 note?

The Only Problem I see with the 25k notes is they are Worth far more than the others denoms.

Originally Posted by neno

The Only Problem I see with the 25k notes is they are Worth far more than the others denoms.

damn....and I have so many of them....guess I'll give them away if they are going to be a problem...LOL

Originally Posted by Inscrutable

More spending happening now due to reconstruction plus all the salary increases that have been made.

No matter how you look at it if the CBI was actually "removing" dinar then they would be leaving Iraq without a local currency while at the same time "flooding" the economy with the currency used to make these dinar purchases, USD, Euro, etc.

I would like to expand on my first reply....

As far as I know, the CBI is not funding the rebuilding projects. As a matter of fact I recall reading an article stating that Millions if not Billions of reconstruction USD were going unspent due to inadequacies within the Iraqi Government.

The salaries have gone up, but modestly.

To paint a true picture of whether or not there is an actual "removal" of Dinar in progress, one would have to look at a couple different pieces of data.

One- How much dinar has been taken in by the CBI since October 2006?
Two- How much Dinar has been spent (by the CBI) during the same time frame?


And perhaps better yet would be to look at the entire year of 2006 for the net gain/loss of Dinar.

As far as accumulating USD, that is precisely what I feel the CBI is trying to do with the "drying up" of the dinar in circulation. They are simply holding onto the excess USD they receive from the sale of oil (which can only be paid for in USD) to build up their reserves. Data for this amount is also available.

If someone could compile these figures and present them to the group, that would help shed more light on the subject.

I will also note that the CBI has been showing their hand this whole time, but cannot "pull the trigger" until the HCL and FIL are in place and that's when the real fun begins. The ball is in the GOI's court.

Thank you.