I agree adster we agree to disagree.
I dont believe there has been any country that has backed their currency with a commodity before.
That is a very dangerous move to pull.
For instance if yogi was right and the shales did manage to get through congress etc then the price of oil would drop significantly devestating the iraqi economy.
How can you claim to have a stable currency and then back it with an unstable commodity?
Im also preeeetty sure iraq does not have the 7 or so trillion dollars required to back 14 trillion dinars at 0.40.
Yes i knew about the "significant rise in 2006" but how significant is significant?
For a currency trader it could well be 1000-1.
Bearing in mind that the dollar vs euro changes in a very small range.
What will happen with rising prices and less subsidies is wages will increase to compensate for the increased costs.
That wont be good for inflation however.
If it goes lower i expect them to zero lop and reprint the currency.
Thats also a mighty big if there adster. Once it is at 0.40 i wouldnt be so sure the banks would buy it up as there would be an initial huge huge huge sell off of almost everyones dinars (you know both of us would) which would cause a drop in price(we will pretend they have the reserves to do this in the first place).
Because everyone is selling the exchange rate will go down. The banks surely know this and would not buy in untill it had dropped. If I can work this out them im sure the financially trained hedgefund managers can too.
Why would they buy into a falling market?
Based on this new analysis do you still have reason to believe that it could occur?
Respectfully yours,
Loops.