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

Originally Posted by Wm.Knowles

Hello everyone. First, I would like to thank Socata 850s for posting each morning, this gives us an update on each days auction. It is very helpful.
We can see that the re-eval is still at the beginning of a process. By now most everyone knows what this means and how it effects the economy, inflation, and the resulting price of the dinar. There still seems to be two options as to what this initial process means. They (CBI) intend to take the price of the dinar up in a gradual manner and there will be no "bold adjust". Or, they will in the short term, RV the currency consistent with other countries and their financial means to support the currecny at a higher level. Of course the second option is what we all want. And, many think that this "bold adjust" "should happen". But we will have to accept which ever way the CBI intends to take us, we have no control over this issue. I for one have always found myself "wrong" when I get upset about somethig in the world that is not how I think it "should" be. Wasted emotions. Like part of the alcoholic prayer, "accept the things you cannot change". But in any case, the RV is taking shape and whichever direction they (CBI) take, what they have been doing is excactly what you would expect wheather they take it up gradually, or there is an adjustment to real market and value levels. So, what we are seeing does not PRECLUDE a real adjustment in the exchange level to previous levels. i.e. "bold adjust". What they are doing diminishes their liability and reduces the base money supply.And makes it easier for the CBI to support an RV at the higher levels. This slower process also gives the world and Iraqi people time to adjust to the idea that their currency is not at a "fixed" rate. EXACTLY what we would want them to do prior to a larger rise in the exchange rate. Regardless of the speed at which they raise they level of dinar, its becoming just a matter of time. This (time) is the only variable we might disagree on and the only options available to the CBI. The currency is/will rise and we all have made an astute investment. They need to increase the peoples purchasing power so as to allow them to purchase imported goods. Presently, they can not. If they have no purchasing power, then imported goods will not enter the country. So something has to give, the rise in the exchange rate allows more spending on foreign goods and will stimulate more goods moving into the economy to buy. Things will get cheaper for them. An intangible variable is the rise in confidence and well being within the country. One more auction this week and we'll probably see something similiar to what has happenned over the last two weeks. Thank You.

What did the post say regarding the "dinar appreciating in 2006"? Well, 2006 still has a few more days. If the man who said that is "true to his word" or knows what he was talking about, then it will happen. Everything else has simply been an exercise in getting the economy rolling in the right direction for the Iraqi people. Whether it's moving fast enough for the rest of us isn't their concern. IT'S GOING TO HAPPEN! A watched pot is slow to boil, kind of like when you were a child waiting for Christmas...isn't that funny? considering that also is just around the corner.

Report: Saudis Warn Against Iraq Exit

--------------------------------------------------------------------------------

13 December 2006 (AP Worldstream)
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Saudi Arabia has warned it could decide to provide financial support to Iraqi Sunnis if the U.S. pulls its troops out of Iraq, where sectarian violence between the minority Sunnis and majority Iraqi Shiites has threatened to tear apart the country, The New York Times reported.

Saudi Arabia is a majority Sunni country and up to now has promised U.S. officials that it would not intervene to assist Iraq's Sunni insurgency, according to the report, appearing in Wednesday's edition of The Times and citing anonymous American and Arab diplomatic sources.

But that promise might not hold if U.S. troops leave Iraq, the newspaper said. The Bush administration has repeatedly said there are no plans for the immediate pullout of U.S. troops.

The Times reported that King Abdullah of Saudi Arabia sent the warning to Vice President Dick Cheney two weeks ago during the vice president's visit to Riyadh. The message also emphasized the kingdom's displeasure with proposed talks between the U.S. government and Iran.

Iran _ a majority Shiite country _ is believed to be providing military and financial support to Shiite elements. The recently released Iraq Study Group report suggested the Bush Administration engage Iran and neighboring Syria in talks aimed at applying pressure on Iraqi Shiites to keep what some analysts are calling a civil war from spiraling into a regional conflict.

Saudi Arabia has expressed concern that once U.S. troops leave Iraq that the controlling Shiite majority could massacre the Sunni minority, believed to comprise a large faction of the deadly insurgency that has claimed thousands of Iraqi civilian and U.S. military lives.

The Times reported that Saudi Arabia's fears seemed to have been exacerbated by growing discussions in Washington aimed at accelerating the timeframe for bringing troops home.

Originally Posted by DayDream

It was extended until Dec 2007. Sorry no link but I found this in one of my past posts.....

United Nations S/RES/1723 (2006)
Security Council
Distr.: General
28 November 2006
06-63235 (E)
*0663235*
Resolution 1723 (2006)
Adopted by the Security Council at its 5574th meeting on
28 November 2006
The Security Council,
Welcoming the formation of a national unity government in Iraq with a detailed
political, economic and security programme and a strong national reconciliation
agenda and looking forward to the day Iraqi forces assume full responsibility for the
maintenance of security and stability in their country, thus allowing the completion of the multinational force mandate and the end of its presence in Iraq, Welcoming the progress made to date in the training and equipping of Iraqi security forces as well as in the transfer of security responsibilities to those forces in Muthanna and Dhi Qar provinces and looking forward to the continuation of that process during 2007, Recalling all of its previous relevant resolutions on Iraq, Reaffirming the independence, sovereignty, unity, and territorial integrity of Iraq, Reaffirming also the right of the Iraqi people freely to determine their own political future and control their own national resources, Welcoming the continuing work of the Government of Iraq towards a federal, democratic, pluralistic, and unified Iraq, in which there is full respect for human rights, Welcoming the vital role played by the Government of Iraq in continuing to promote national dialogue and reconciliation in pursuit of an atmosphere in which sectarianism is totally rejected, including the National Reconciliation Plan announced by Iraqi Prime Minister al-Maliki, stressing the importance of the rapid implementation of the plan, and reaffirming the willingness of the international community to work closely with the Government of Iraq to assist these reconciliation efforts, Recognizing the International Compact with Iraq, an initiative of the Government of Iraq to create a new partnership with the international community and to build a strong framework for Iraq’s continued political, security and economic transformation and integration into the regional and global economy, and
welcoming the important role that the United Nations is playing by jointly chairing the Compact with the Government of Iraq, S/RES/1723 (2006)
2 06-63235 Calling upon the international community, particularly countries in the region and Iraq’s neighbours, to support the Iraqi people in their pursuit of peace, stability, security, democracy, and prosperity, and noting that the successful implementation of this resolution will contribute to regional stability, Demanding those who use violence in an attempt to subvert the political process should lay down their arms and participate in the political process, and encouraging the Government of Iraq to continue to engage with all those who renounce violence, Reaffirming that acts of terrorism must not be allowed to disrupt Iraq’s political and economic transition, and further reaffirming the obligations of Member States under resolution 1618 (2005) of 4 August 2005 and other relevant resolutions and international conventions with respect, inter alia, to terrorist activities in and from Iraq or against its citizens, Recognizing the request conveyed in the letter of 11 November 2006 from the Prime Minister of Iraq to the President of the Council, which is annexed to this resolution, to retain the presence of the multinational force in Iraq, and affirming the common goals therein: Iraqi assumption of recruiting, training, equipping, and arming of the Iraqi Security Forces; Iraqi assumption of command and control over Iraqi forces; and the transfer of responsibility for security to the Government of Iraq, Recognizing the importance of consent of the sovereign government of Iraq for
the presence of the multinational force and of close coordination and partnership between the multinational force and that government,
Welcoming the willingness of the multinational force to continue efforts to
contribute to the maintenance of security and stability in Iraq, including
participating in the provision of humanitarian and reconstruction assistance, as described in the letter of 17 November 2006 from the United States Secretary of State to the President of the Council, which is annexed to this resolution, Recognizing the tasks and arrangements set out in letters annexed to resolution 1546 (2004) of 8 June 2004 and the cooperative implementation by the Government of Iraq and the multinational force of those arrangements, Affirming the importance for all forces promoting the maintenance of security and stability in Iraq to act in accordance with international law, including obligations under international humanitarian law, and to cooperate with the relevant international organizations, and welcoming their commitments in this regard, Recalling the establishment of the United Nations Assistance Mission for Iraq (UNAMI) on 14 August 2003, and affirming that the United Nations should continue to play a leading role in assisting the Iraqi people and government with further political and economic development, including advising and supporting the Government of Iraq, providing strong support in developing the International Compact with Iraq, contributing to coordination and delivery of reconstruction, development and humanitarian assistance, and promoting the protection of human rights, national reconciliation, as well as judicial and legal reform in order to
strengthen the rule of law in Iraq, Recognizing that international support for security and stability is essential to the well-being of the people of Iraq as well as the ability of all concerned, including S/RES/1723 (2006) 06-63235 3
the United Nations, to carry out their work on behalf of the people of Iraq, and expressing appreciation for Member State contributions in this regard under resolution 1483 (2003), resolution 1511 (2003), resolution 1546 (2004) and resolution 1637 (2005), Recognizing that the Government of Iraq will continue to have the primary role in coordinating international assistance to Iraq and reaffirming the importance of international assistance and evelopment of the Iraqi economy and the importance of coordinated donor assistance, Recognizing the significant role of the Development Fund for Iraq and the International Advisory and Monitoring Board in helping the Government of Iraq to ensure that Iraq’s resources are being used transparently and equitably for the benefit of the people of Iraq,
Stressing the responsibility of the Iraqi authorities to undertake all appropriate
steps to prevent attacks on the diplomatic personnel accredited in Iraq in accordance with the Vienna Convention on Diplomatic Relations of 1961,
Determining that the situation in Iraq continues to constitute a threat to
international peace and security, Acting under Chapter VII of the Charter of the United Nations,

1. Notes that the presence of the multinational force in Iraq is at the request of the Government of Iraq and reaffirms the authorization for the multinational force as set forth in resolution 1546 (2004) and decides to extend the mandate of the multinational force as set forth in that resolution until 31 December 2007, taking into consideration the Iraqi Prime Minister’s letter dated 11 November 2006 and the United States Secretary of State’s letter dated 17 November 2006;

2. Decides further that the mandate for the multinational force shall be
reviewed at the request of the Government of Iraq or no later than 15 June 2007, and declares that it will terminate this mandate earlier if requested by the Government of Iraq;

3. Decides to extend until 31 December 2007 the arrangements established
in paragraph 20 of resolution 1483 (2003) for the depositing into the Development Fund for Iraq of proceeds from export sales of petroleum, petroleum products, and natural gas and the arrangements referred to in paragraph 12 of resolution 1483 (2003) and paragraph 24 of resolution 1546 (2004) for the monitoring of the Development Fund for Iraq by the International Advisory and Monitoring Board;

4. Decides further that the provisions in the above paragraph for the deposit
of proceeds into the Development Fund for Iraq and for the role of the International Advisory and Monitoring Board shall be reviewed at the request of the Government of Iraq or no later than 15 June 2007;

5. Requests that the Secretary-General continue to report to the Council on
UNAMI operations in Iraq on a quarterly basis;

6. Requests that the United States, on behalf of the multinational force,
continue to report to the Council on the efforts and progress of this force on a quarterly basis;

7. Decides to remain actively seized of the matter.


Cheers!
DayDream

is this bad or good

12 - 13-2006

Bush postpones speech "important" on Iraq and commends the "obligation" to the Hashemite

American President future Iraqi Vice President Tariq Al-Hashmi

Washington, Baghdad-agencies

The White House announced the postponement of the speech President George Bush intends to deliver to the Division on the situation in Iraq until January next, after days of speculations about the new president who will make in this speech.

He said White House spokesman Tony Snow summarized in the press that the speech will be postponed until January offering condolences to the fact that the president "is still need for more of the facts and determine new policies in Iraq would inform the American people it must also take decisions in coordination with the Iraqis."

The spokesman said that the new Defense Minister Robert Gates will be sworn in next Monday, pointing out that Gates intends to visit the Middle East soon, "to get an idea about what is going on in the region.

In relation to President Bush met at his office separately to each of the visiting Iraqi Vice President Tariq Al-Hashmi, former Defense Minister Donald Rumsfeld and a group of military experts.

The Hashemite regime in a joint statement after the meeting with Bush, expressed gratitude "for the unique commitment not forget President Bush's stance toward Iraq assurances on the need for continuing success in Iraq and I share the view that there is no flood of only success."

For his part, President Bush said that the Hashemite gave him an update on the terrorist violence that witnessed some of the suburbs of Baghdad ", as told by the suffering undergone by the innocent families at the hands of extremists and murderers."

He pointed out that his Hashimi of the Iraqi people, "We want your help and your government to be effective and to live up to their commitments and principles.

Bush thanked the Sunni Hashemite "being the leader of one of the pillars of the Iraqi people, you are driving many of the year, and you are committed to the government of Sunnis and Shiites, the Kurds and all Iraqi categories, which will help us to establish peace."

For his part, Allahibi Taha, a member of the Front of "compatibility" of the Sunni "al-Hayat" newspaper that carried the front-Hashimi "letter" refuting the idea of parking year behind acts of violence or to support them. It calls the American President to support the option of holding new elections under international supervision, he said : "we have tried to explain to the American president that the results of the elections held in Iraq early this year, forged the right injustices Arabs year," but he stressed that the proposals did not include a change of Prime Minister Maliki or claim to bring down his government.


Cheers!
DayDream

Originally Posted by worf

Thank you for your analysis. I do have some questions/comments as to how all of this relates one to another. Trying to keep emotions out of the mix, with all of the laws ie fil, hcl, having an internationally traded currency etc. coming into play, can they really open up their economy with a dinar rate where it is right now (or close to it)?

I mean really, if they open up their ISX to the outside world with a dinar rate in the 1300 - 1400 = 1usd range, doesn't that open themselves up for potential disaster? The big players from all of the world will join forces for a feeding frenzy on the country of Iraq. Wouldn't you if you had the money? Image one of if not the richest nations in all of the ME going for 1/10 of a cent on the dollar. Could you, would you, resist the temptation to go in and buy everything in sight realizing that they only way for it to go is up?

I guess what I am saying is, in your opinon, would you agree they really don't have much of a choice other than to r/v and r/v substantially or else risk all of the nations/large investors of the world coming in and randsacking their economy. Speak about economic shock, when their economy goes from where it is today to perhaps doubling, tripling, dare I say quadroupling practically overnight, do you really think the cbi could effectively manage this sudden influx of cash practically over night?

Granted the counter argument has been that since a loaf of bread costs 1500 dinar and a pair of shoes costs 15,000 dinars then you really can't buy up the country on the cheap. Oh, really? How much money is 15,000 dinar in usd? Pretty cheap by world standards. If Iraqis work for between 1 and 2 dollars a day, What international corp wouldn't want to come and build factories realizing they can hire some of the most educated workforce in the ME for pennies on the dollar as compared to the surrounding countries.

People are concerned about security as they should be. And as documented by the news their enemies have a lot of bullets. But in addition to fighting bullets with bullets, they will have to try and overcome a virtual tsunami of dollars pouring in from hundreds if not thousands of internationsl corps as well as other countries coming with billions and billions of dollars in hand invading their country in the quest of profit. When the flood gates are opened legally by the implentation of the pending (passed?) international laws, they really don't have much of a choice other than to r/v and r/v substantially do they?

When the international investors see that their money won't be confiscated, (when their currency is traded in the international market, listed on the forex) then in the currency markets the dinar will become "paper gold" and the cbi will be hard pressed to control the undoubtedly to come wild fluctuations due to buying and selling by the big players and multinational corps entering into Iraq if they don't r/v substantially wouldn't you think?

If they are going with their stated goals of overcoming the dollarization phenom, raising the dinar where it was before, making the dinar the currency of choice among their people, combating inflation, then they are going to have to raise it and raise it big if they were serious about acheiving their stated goals, aren't they?

Can they really afford to "dribble it out" once their international laws are in place? It is doubtful to me that so far they have had the desired effect of bringing inflation under control yet. They may have reduced it somewhat but the floodgates of international trade haven't opened yet. How do they expect to make their dinar the currency of choice vs the dollar when billions and billions of dollars flood the market place? No one will want to carry wheelbarrels of dinars to do business when they can use much fewer dollars instead.

In summing up, I hope my instincts are correct in some of the above, Hopefully the cbi realizes the potential mentioned above and decides to get off the pot and r/v their currency at a decent rate (.30+ is a decent place to start IMO) and then control the rise from there to the Saddam rate and above or at least to where it was before. Isn't it time for the artificial "program rate" to come off and allow the dinar to appreciate to where it rightfully belongs? If Iraq does indeed desire to become a real country, then it needs it's own real currency that actually has some value to it based on their net worth not some pathetically low artifical rate imposed on them by the world banking system. IMO

Thank you for taking the time to read the above rant,

worf

Well, this is an excellent post. I think the best arguement that anticipates the effects of NOT having an RV. I can tell you have been thinking about this for a while and this wasn't a shoot-from-the-hip response. The passing/enactment of the FIL/HCL is as important as you say it is. I have stated before that after having seen Kuwait, those in the ME do have the money to do everything you say. If the ISX stays at this level, then they can go in and buy everything on the market.e already know that many in the ME have also bought the dinar, esp. in Kuwait. And the CBI seems to have been positioning themselves well for somewthing like this to happen. We have said many times, the currency has been/is too cheap for too long, and an RV does answer many of their problems. I do appreciate your post, and no, I don't thinnk you were ranting. The FIL/HCL is just as important and the effects as far reaching as you say. Thank You.

Originally Posted by PAn8tv

Sorry if already posted

Raising the value of the dinar against the dollar by the Central Bank, welcomed by economists

--------------------------------------------------------------------------------

12 December 2006 (Iraq Directory)

Many specialized economists in finance and monetary considered raising the rate of the dinar against the dollar sale by the Iraqi Central Bank an important step to control the volume of inflation.

They emphasized the importance of raising the interest rate up to 12% to curb inflation, which would lead, in the short term, to stabilize the price prevailing in the Iraqi market.

A depression and confusion in the stocks of selling and purchasing the dollar in most of the banking stores in Baghdad may accompany this procedure. Thus, it is necessary to follow up this dangerous turn in the Iraqi capital market. In press statements, a number of those concerned emphasized the importance of this remarkable step towards reducing inflation, raising the value of Iraqi dinar and reducing prices of goods and services.

The minister of planning, Ali Ghalib Baban, said that the Central Bank's decision, which came after extensive study, aimed at encouraging capital owners as well as the citizens in general on saving.

On his part, Governor of the Central Bank, Sinan Shabibi said that: "The aim of the Central Bank currently is limited in the fight against inflation, which reached about 76% and reduce its heightening, through the provision of better conditions for economic development, improving the performance of the banking sector and providing stability in it".

Shabibi said that among the reasons of inflation is the increase in cash circulation, which made it necessary to follow a new monetary policy, aimed at improving the dollar's exchange rate towards reducing its price several points in the auction, organized by the Central Bank every day to sell the dollar, to withdraw currency from circulation.

Director General of Researches at the Iraqi Central Bank, Dr. Madhhar Mohamed Salih, said: the Iraqi Central Bank is responsible, according to the law No. 56 of 2004, for dealing with inflation and reduce its levels. This principle forms the main objective adopted by the monetary policy in performing its duties. Accordingly, the Central Bank must set the priorities of its policies; meaning, the monetary policy to fight inflationary activities using the tools available.

He pointed out that monetary policy faces intermediate variables or objectives that show the relationship between the impact of these variables to reduce the general level of prices and the containing inflation. Among these variables are the stabilizing interest rates "the long-termed" and the stabilizing or real exchange rate. It is noted that these variables can not be controlled directly, unless they are targeted by similar variables which are considered as signals or informative means used to influence stability in the cash market. Among these signals is what is known as the interest rate of the Iraqi Central Bank; it is an indicator price which is considered as a compass influencing the behavior of interest rates and determining what the Central Bank lends to banks, and what banks deposit in the Central Bank.

Whatever the sources of inflation were, it is, in the end, considered to be a monetary phenomenon. Accordingly, the priorities of stability are necessary to build and stimulate the economy.

Thus, inflation is the main reason of speeding up money circulation and spending them, leading to less demand for cash and more demand for goods and services. In order to maintain the cohesion of demand and maximize cash levels in order not to turn into strong spending on goods and services, all the Central Bank had to do is to use its tools in raising the interest rate to stimulate the interest rate structure and maintain the coherence of savings and maximize their purchasing power which will help monetary policy to deal with the high levels of liquidity and contain it within the cash or " banking" market, without becoming a cash bloc drifted towards commodity and services. In light of what have previously been mentioned, several questions arise: Can the Central Bank procedure curb inflation and control the volume of cash? What is the use of raising the level of interest against the high prices?

Economists stressed the importance that the Central Bank will continue this approach to curb inflation, which now threatens the stability of the entire situation in Iraq, including security, social and economic situations.

The observers speculate that the rise in the value of the Iraqi dinar against the dollar would reduce inflation and revive the economic situation of Iraqi families, who has suffered greatly because of the high rate of inflation, which is the cause of deteriorating the level of savings as well. Thus, the Central Bank had to take this action, which many observers consider it a step towards a comprehensive reform of Iraqi economy.

Maybe we will be better off in the U.S. to just hang on the our dinar. If this trend continues the dinar may be worth more than the dollar whether it RV's or not.

THE NEW WORLD DISORDER
Analysts: Dollar collapse
would result in 'amero'
Think deep recession likely
regardless of Fed's actions
Posted: December 13, 2006
1:00 a.m. Eastern

By Jerome R. Corsi
© 2006 WorldNetDaily.com

Two analysts who have reconstructed money supply data after the Fed stopped publishing it argue a coming dollar collapse will set the stage for creating the amero as a North American currency to replace the dollar.

The reconstructed M3 data – the broadest measure of money – published on econometrician Gary Kuever's website, NowAndFutures.com, shows M3 increased at a rate of 11 percent in May, compared to 9 percent when the Federal Reserve quit publishing M3 data earlier this year.

Asked why the Fed decided to stop publishing M3 data, Kuever told WND, "The Fed probably wants to hide how much liquidity is being pumped into the market, and I expect the trend to keep pumping liquidity into the market will continue, especially since the economy is slowing down."

(Story continues below)

Why is this important?

"The trend line in my M3-plus-debt chart is staggering," Kuever said. "There has been a straight, long-term trend line of M3-plus-credit increasing since 2000. Long-term, we are creating inflation and the dollar has lost almost 98 percent of its value in the past 100 years."

Kuever, a retired investor, is concerned that with growing budget and trade deficits "the dollar could collapse."

"Especially if the Fed cannot increase rates, because we have already entered a recession," he said.

Analyst Gary Kuever's chart shows M3-plus-credit, short term, from May 2000 to September 2006

Bob Chapman, who issued a reconstructed M3 estimate to the 100,000 subscribers to his newsletter, "The International Forecaster", agrees.

"The world is awash in money and credit," Chapman told WND. "My numbers show M3 increasing at about a 10-percent rate right now."

Chapman believes the U.S. economy entered a recession in February. In his newsletter of Dec. 9 he predicted the Fed would hold interest rates at 5.25 percent.

"The Fed is in a very tough spot here," Chapman wrote, "If they raise rates, the real estate market will collapse, and if they lower rates, the dollar will collapse."

Meeting yesterday, the Federal Reserve Open Market Committee voted, as Chapman had predicted, to hold the overnight lending rates between banks steady at 5.25 percent. This was the fourth straight meeting the Fed had voted not to change rates. In its rate announcement, the Fed affirmed the economy had slowed.

Almost immediately after the announcement of the Fed's decision, the dollar weakened to a new 20-month low against the euro, with currency markets reportedly pricing in the expectation the Fed will be forced to lower rates next year to bolster the economy. Following the announcement by the Fed, the U.S. Dollar Index, or USDX, also dropped, with the dollar going below 83.

A dollar collapse is imminent, Chapman declared.

"Technicians studying the USDX think there is a support level for the dollar at 75, but I don't think so."

How low could the dollar go?

"If the dollar breaks through 78.33 on the USDX," Chapman answered, "my guess is the dollar will go through a 35-percent correction, which would put it at 55."

"The key in how low the dollar goes is the interest rates," Chapman told WND. "In January, the Fed is going to have to make a decision which way to go. If Fed rates go up, the dollar will hold in the 78.33 range, but the stock market and the economy will tank. If next year the Fed lowers rates to keep the economy from crashing, the bottom will fall out of the dollar, and I see it going as low as 55. Once the dollar hits bottom, it will take the stock market and the economy right with it anyway. The Fed is in a box they can't get out of."

As WND reported earlier this week, in an unusual move, the Bush administration is sending virtually the entire economic "A-team" to visit China for a "strategic economic dialogue" in Beijing Thursday and Friday. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are leading the delegation, along with five other cabinet-level officials, including Secretary of Commerce Carlos Gutierrez. Also in the delegation will be Labor Secretary Elaine Chao, Health and Human Services Secretary Mike Leavitt, Energy Secretary Sam Bodman, and U.S. Trade Representative Susan Schwab.

But Chapman doubts the trip will help the Fed to engineer a slow dollar slide.

"The Chinese are going to do what the Chinese want to do, not what we want them to do," he said. "I believe the Chinese are going to send Treasury Secretary Paulson and Fed Chairman Bernanke home packing, with little or nothing to show for the trip."

How severe will the coming dollar collapse be?

"People in the U.S. are going to be hit hard," Chapman warned. "In the severe recession we are entering now, Bush will argue that we have to form a North American Union to compete with the Euro."

"Creating the amero," Chapman explained, "will be presented to the American public as the administration's solution for dollar recovery. In the process of creating the amero, the Bush administration just abandons the dollar."

WorldNetDaily: Analysts: Dollar collapse would result in 'amero'

Originally Posted by iswtnot

is this bad or good

Old news, we've been aware of this for sometime.


Al

Originally Posted by Offshore-Wealth.com

Agreed,

We all really know deep down inside this is not a war that can be won with weapons, but it can be won on economics, and a few generals have known this far longer than they were willing to say. What we are seeing now is those who understand the above are speaking their mind. Just as so many former military generals criticized Rumsfeld, more will come out and now admit we are not going to win this war in Iraq with military might.

I am too a traditional supply and demand type, and it is for this reason I enjoy your logical posts on the current CBI accomplishments. But once again, as we have seen, Iraqi's are whacki's when we compare to the western thinking, so we have to take this into account. Generally when we raise interest rates, it takes six months or so to have any impact on economy, but in Iraq, interest rates were raised three times, and it started longer than six months back. The results, there was none.

When you look at most Iraqi people, they have no savings, and if they do, it is not in any bank, so the interest rate increases do little to impact inflation, but what is strange is how the CBI didn't see this issue more clearly. Heck, it seems so obvious with the majority in Iraq at a sub poor level with not enough money for essentials.

As to supply and demand, yes, you are right, inflation in Iraq is directly tied to this factor. Refined oil, as in gas and heating is in short supply, and it has to come from neighbors. And as I see it, this is the key difference in Iraq which is so unusual and the main reason why we cannot accurately compare it with other economies. Rasing the value of dinar to .31 is the most logical jump start for it would solve most of the current economic issues facing the poor at the moment. Since it will take time to increase internal refined fuel shortages, this would give the poor the ability to purchase the most basic needs at less cost since it is all coming from neighboring countries at the moment.

Once this revalue is restored to former level, and with the FIL and now HCL in place, unemployment issues are resolved as billions start to flow into Iraq for rebuilding oil infrastructure which has been totally neglected by Saddam's regime. We see this already happening in Kurdistan, so the model is set to guide Baghdad into the future. It is all about money in Iraq, and although nothing will totally stop the violence, the only chance there is to make it livable for the majority is to revalue and give the economy the shot in the arm that is needed. Sure is fun to discuss all these issues, and especially with the analysts like yourself Wm. (g)

Happy Holiday Season to all, Mike

Excellent Post! I especially like the part about the Kurds setting the model. Just like the post from WORF, these posts are really the best and rationale discussions in favor of an RV to at least the pre-war levels. Both are concerned about the effects of the passing of the FIL/HCL. Based on both posts, these give an excellent reason why they need to RV. As I said before, the CBI has been positioning itself in a predictable manner for just that. I understand what the gradualist are saying, either way times are exciting. Like everyone else who has been in this investment, I didn't buy dinar in Iraq with the idea that it was only going to appreciate a couple of percent a month. And, as stated earlier, the ME is so wealthy, just the Kuwaitis can buy the ISX should they want to. We know that they have bought huge amounts of dinar. Thank you.

With all the great debating going on about the path the revaluation of the dinar is going take, this article gives us insight into this; especially in the first paragraph.


Raising interest rates in a cash economy, as said earlier is a dog and pony show, has very little effect. Increasing the value of the dinar leads to increase purchasing power. This is what is going to favorable impact the economy just like in this article.
Iraq:



Army Engineers Improving Electricity in Iraq


By Mohammed Aliwi
AN NASIRIYAH, Iraq -- The huge consumption of electricity as a result of the large quantity of electrical goods the [COLOR="Red"][U][B]Iraqi people are buying with their increasing prosperity,](Get those imports a flowing) combined with the sabotage of power lines, have contributed to Iraq’s challenge of keeping up with electrical demands. Despite those obstacles, the U.S. Army Corps of Engineers (USACE) has made significant progress in improving electrical production and distributing power equitably throughout the country.

USACE engineers oversee the building, refurbishing and upgrading of the electrical power systems, including generation, transmission and distribution countrywide according to Lt. Col. Anthony G. Reed, resident engineer for the Karbala and North Babil resident offices of the Gulf Region South District (GSR).

“The Babil province has awarded 24 electrical distribution networks and several substation projects in 2006. Ten of these projects have been completed and 14 are still under construction,” he said. Reed believes that every project helps improve the flow of electricity to Iraqis to some degree.

Most projects focus on distributing electricity from one town to another, and to the outlying neighborhoods. Some of these neighborhoods have never had electricity before he said.

“Due to the fact that the projects are focused on distribution, they really don’t reduce the number of blackouts created by power generation source failures. However, the electrical feeders do help people get electricity when they have the power coming to them,” he explained.

An Iraqi electrical engineer with the Babil Residence Office, requesting anonymity, said their new projects included “two 132,000 volt overhead lines and three 33,000v overhead lines.”

“We supervised three 33,000 and 11,000 volt substations in Babil, four electrical distribution networks in Al-Mahweel and Al-Imam districts, and four electrical distribution networks which were installed in Al-Iskanderia area north of Babil,” the Iraqi said.

“All the projects GRS executes are to improve the distribution networks in the residential neighborhoods and businesses. It also improves the ability of the transmission feeders to handle the transmitted power between the 132kv substations,” he said.

The Iraqi electrical engineer explained that electrical transmission lines were a target for sabotage by terrorists in the Hilla, Karbella and Najaf areas. “When such sabotage happens, it causes a shutdown for all substations that are connected to the 132kv line,” he said.

Maj. Kevin J. Stoll, the Babil resident engineer, blamed sabotage for contributing to power outages in areas of the country.

“Combined with the antiquated system that existed under the previous regime, sabotage keeps power from reaching homes for an extended amount of time. When one central grid transmission tower falls, it knocks out power to the entire grid,” Stoll said.

“It then takes time to repair or replace that tower and any others that are affected, and even more time to re-energize the system (sometimes 48-72 hours) before finally getting power to the consumers.” Stoll believes consumer demand for electricity has hindered the supply of reliable power.

“Because of the freedom to purchase the ‘luxury’ items that were not as readily available in the past–such as air conditioners, heaters, refrigerators and microwaves– extra demands have been placed on power grids at an incredible rate over the past three and a half years. Sometimes the power demand exceeds the amount generated, causing brown- and black-outs,” he said.

Greg F. Fillers, GRS chief of programs and project management, said that the Corps is responsible for reporting progress on projects.

“The electrical projects are assigned to us to monitor during construction. We have a total of 160 electrical projects for the nine southern governorates worth about $964 million that GRS is responsible for,” he said. “In Thi-Qar province that total is 17 projects worth $149 million.”

The biggest improvements for the city of An Nasiriyah are the upgrades to several substations and construction of additional new substations.

“The new substations prevent problems with overloads to the electrical network which causes equipment to fail and power outages without warning,” Fillers said. “The Corps recently provided An Nasiriyah with 50 new transformers to replace the outdated ones which were the main cause for the outages and the rationing across the city.”

He explained the old transformers could not handle the amount or load of high voltage electricity flowing through to feed the damage from all of the electrical devices this past summer, and this caused continuous blackouts during the summer.

New transformers were ordered and installed to convert the electricity to usable levels at the consumer end.

“Most of the new construction substations are in other towns around Thi-Qar, which takes a load off of the existing substations in Nasiriyah and prevents damage,” Fillers said.




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Posted on Wednesday, December 13 @ 03:48:29 PST by admin