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

Originally Posted by Wm.Knowles

Ref: Two Questions

I wold like to respond to two questions that have been asked.

The first question is how long do I think the CBI can continue the trend of removing dinar from circulation. Very dificult to make that judgement. If it is true that they have 4.5 Trillion in circulation, and they are approaching removing a Trillion dinar within the last week or so, I would expect this process to be about done. They have been successful in removing the dinar at a lower rate. Can you imagine trying to remove that amount of dinar and what it would cost should they have had an R/V at .31 USD to the dinar? The cost would have been tragic. How much longer can this go on? Expect them to continue to remove dinar until they reach their target, which we can only sit on the sidelines and watch. But the "trend is our friend". So we'll see what happens this week. As I have said before this week is going to be very interesting.

The second question was, "What if they remove too much"? This is when things really get interesting should they (CBI) misjudge and remove too much dinar. This would be similiar to a very profitable stock company who has few outstanding shares of stock. The price of the outstanding stock becomes very expensive. So you could expect basic supply and demand to take over and elevate the price of the dinar to atmospheric levels. (I can hear the screams of joy from here and the encouragement for the CBI to do to good of a job). Everyone have a good day.

If you are correct in saying that the CBI has removed one trillion dinar from
circulation in just about one week, leaving approximately 3.5 trillion outstanding, what's to prevent their taking another 3 trillion out of circulation
in the next month, thereby leaving just 500 billion in circulation?

Having stable, limited amounts of currency outstanding was part of the secret to the Kuwaiti dinar upsurge after the Gulf War. Why can't this process lead to a similar result in Iraq?

Just incase the CBI press statement is speaking from both sides of the mouth this is worth a read.


A Draft Law for Dollarizing Iraq47
The Iraqi Dollarization Law
1. The Central Bank of Iraq shall cease to
issue dinars. It shall withdraw from
circulation all currency issued by the
Central Bank of Iraq and convert it
into euros thirty days after the
announcement of this law. The procedures
for determining the conversion
rate are contained in a separate law
that accompanies this law. The Central
Bank of Iraq shall preferably accomplish
the bulk of this task within 30
days after the rate for conversion of
dinars into euros is determined.
Dinars currently accepted for redemption
into euros shall continue to be
accepted by the Central Bank of Iraq
or the government for one year after
this law enters into force. After one
year, all dinar notes in circulation may
be demonetized by a decree of the
President of Iraq.

http://www.jhu.edu/~iaesbe/hankepub_files/Iraq.pdf

I wonder how much the figures of total dinar printed, and in curculation are tweaked because of the small denom factor, and having to keep it so secret??? Seems that factor alone would justify them lying about those figures.

Originally Posted by kiko

You can also find it here. Same article.

Central Bank to adopt new policy to end inflations' rates | Iraq Updates

Ok well here the 2 half sentences are put together into 1 long run on sentence that doesn't neccessarily make sense- still think something was misssing between the 2 half sentences as previously posted.

They even have yesterdays press release on the CBI site! Somethings definetly happening, just don't know what. By the way H2O, not trying to be smart, I just have a hard time explaining things at times because my brain moves faster than my fingers.

Originally Posted by Mike5200

Ok well here the 2 half sentences are put together into 1 long run on sentence that doesn't neccessarily make sense- still think something was misssing between the 2 half sentences as previously posted.

That could very well be, but I have noticed that the arabic to english translaton often creates rather long run on sentences that often blend a number of ideas together making the reader wonder where one idea ends and the next begins.

Originally Posted by Inscrutable

Just incase the CBI press statement is speaking from both sides of the mouth this is worth a read.


A Draft Law for Dollarizing Iraq47
The Iraqi Dollarization Law
1. The Central Bank of Iraq shall cease to
issue dinars. It shall withdraw from
circulation all currency issued by the
Central Bank of Iraq and convert it
into euros thirty days after the
announcement of this law. The procedures
for determining the conversion
rate are contained in a separate law
that accompanies this law. The Central
Bank of Iraq shall preferably accomplish
the bulk of this task within 30
days after the rate for conversion of
dinars into euros is determined.
Dinars currently accepted for redemption
into euros shall continue to be
accepted by the Central Bank of Iraq
or the government for one year after
this law enters into force. After one
year, all dinar notes in circulation may
be demonetized by a decree of the
President of Iraq.

http://www.jhu.edu/~iaesbe/hankepub_files/Iraq.pdf

This makes absolutely no sense. Why would they go to the trouble of reissuing this VERY expensive DE LA RUE currency with the intention of converting to Euros only a few years later and then to transfer to the GCC unified currency a year or two following that.

I put no interest into this article. IMHO this is just someone elses opinion.

So will we will have 1 year to exchange for euros?

Originally Posted by Elfwizard

Iraq has WAY MORE than 4.5 trillion dinar in circulation, I have seen numbers all the way up to 19 trillion. I will do some digging and find you a TRUE number but 4.5 trillion aint it!

The figures I presented were from the IMF or CBI website, I can't remember, that's what I was hopeing someone could find.

Originally Posted by Inscrutable

Just incase the CBI press statement is speaking from both sides of the mouth this is worth a read.


A Draft Law for Dollarizing Iraq47
The Iraqi Dollarization Law
1. The Central Bank of Iraq shall cease to
issue dinars. It shall withdraw from
circulation all currency issued by the
Central Bank of Iraq and convert it
into euros thirty days after the
announcement of this law. The procedures
for determining the conversion
rate are contained in a separate law
that accompanies this law. The Central
Bank of Iraq shall preferably accomplish
the bulk of this task within 30
days after the rate for conversion of
dinars into euros is determined.
Dinars currently accepted for redemption
into euros shall continue to be
accepted by the Central Bank of Iraq
or the government for one year after
this law enters into force. After one
year, all dinar notes in circulation may
be demonetized by a decree of the
President of Iraq.



http://www.jhu.edu/~iaesbe/hankepub_files/Iraq.pdf

I think this is a pretty old article

it's header reads

Monetary options for post iraq war
09/22/03