Re: Request for Understanding
Quote:
Originally Posted by
Wm.Knowles
Hello everyone. A good post and indicator that the removal of the currency is having an impact. Inflation is too much money chasing too few goods and by reducing the base money supply one would expect inflation to cool. A classic intervention right out of the textbook. IMHO the effects of the removal are just starting to take place. We should see more in terms of a reduction in inflationary pressures. With GNP expected to be above 15% for 2007, this also aborbs inflationary pressures and should combine with the redution of the money supply and accelerate the reduction of inflation. Its all good for us. Have a good day!
Hi Wm!
Don't know if you'll see this in order to respond, but...
I have always viewed the recent auctions of the CBI as "swapping" US dollars for NIQD. Then, the CBI stashes the NIQD into the safe so they won't have any effect when the value increases, other than the positive effect for the country as a whole, or at least the CBI, in that it helps back the currency that is still in circulation- playing the role of "reserve" value, along with the gold and other foreign currencies CBI has stashed away that are used to "back" the value of NIQD left in circulation. I always felt that, because one is able to use the US dollar fairly closely in the same capacity as the dinar, it was the perfect scenario for permitting the big, fat Bold Adjustment we've been waiting for! However, after thinking about your post(s), if I am correct in my assumption, there would basicly always be the same amount of currency value chasing after the available goods in the economy; the difference being as time goes by more of that currency becomes US dollars and less, IQD. As I look at that assumption- if it were correct, there would be no real change or impact on inflation and things would continue in the dire condition that has been reported, until the impact of the Bold Adjustment / Revaluation.
I would be very gratefull if you could take the time to respond to this post. And I want to take this opportunity to thank you as well as the hundreds of other posters for the experience to broaden my understanding of this wild adventure I flung myself into!
I remain your attentive & admiring student,
K. Allen Orr :bow:
Blessings On YOU!