I found this on another forum. I hope know one minds, It really is a good read.:ro_emote::ro_emote:
Justifying a Higher PEG!! Get ready
I pulled this out of a older thread and it still makes alot of sense. I thought it would help some of the neysayers who think that their is no way Iraq could peg high. This might help draw conclusion on how they can peg their currency with the help of the international community. This is from paynes1 The Marshall Plan
The Marshall Proposal of Assistance to Europe, July 10, 1947; European Recovery Program; Secretary of the Treasury, Alphabetical File; John Snyder Papers.
Pg 9 last pargraph.
"The most important being the establishment of
REALISTIC RATES OF EXCHANGE among the European countries. Experience has shown that when a countrys RATES OF EXCHANGE are widley out of line with realitive purchasing power - the flow of goods is impeded."
How will they be able to justify a higher peg to make thier rates of exchange in line with other countries to the International Monetary Fund.
The Justification.
Icarus posted this awhile back
http://dsbb.imf.org/vgn/images/pdfs/opguide.pdf
Low and behold we have a 77 page manual called International Reserves Foriegn Currency and Liquidity on page 62 apendix v we have the start of a template that Countries can submit exchange rate fundamentals on if you look at pg 65 under futures you notice a place where
oil can be sold as a future.
http://www.imf.org/external/np/sta/i...eng/curmar.htm
This is the same format as the template. It has it all Sdrs, Futures, gold, Derivitives Etc. Morocco does not list oil as part of its exchange rate in the futures section. However, Morocco has a Exchange rate of
http://finance.yahoo.com/currency/co...submit=Convert around 11 cents per us dollar, and thier Holding of currency within fund as of July 31, 2006 is
http://www.imf.org/external/np/tre/t...ition_flag=YES
Tunisia has a template too, and it has includes the balance of payments, gold , securites, and it is the same as Moroco because it does not list Oil as a
Future.
http://www.imf.org/external/np/sta/i...eng/curtun.htm
and there exchange rate is
http://finance.yahoo.com/currency/co...submit=Convert 75 cents to US dollar. and there holding of the within the the fund as of July 31. 2006 is
http://www.imf.org/external/np/tre/t...ition_flag=YES
What do get when you go to a major Oil Producing country and look at thier stats.
http://dsbb.imf.org/Applications/web...t/?strcode=KWT You will see no template at all huh, makes you go hmmm.
Kuwait enjoys a high exchange rate with the US.
http://finance.yahoo.com/currency/co...submit=Convert
It does not make sense that a country such as kuwait should have such a high exchange rate unless it is do to with oil.
Morocco has 517,756 362 in Imf fund holdings with 11 cent exchage rate.
Tunisia has 266,274, 397 in Imf fun holdings with 75 cent exchange rate
Iraq has
http://www.imf.org/external/np/tre/t...ition_flag=YES
1,314,472,991 in Imf holdings. with a .00068 exchange rate. A tad bit undervalued exchange rate for a country that might have more reserves than Saudi Arabi and and between $1.00 and $1.50 extraction cost per barrell of oil.( Sporters Article)
Here is sporters article its a good read.
Oil in Iraq: the heart of the Crisis - Global Policy Forum - UN Security Council
This came form a prior thread.
http://www.investorsiraq.com/iraqi-g...light=peak+oil
The whole key to this is template of the Imf. They can use the foward contracts or futures options on the template to boost thier reserves position. We also know that Electonic Stabilization fund has been used stabilize the currency crisis in Mexico for oil payments an even Brazil has received some benefit from the ESF.
The Electronic stabilization fund also allows for alot of different types ways of intervention.
1. Purchase or sale of Foreign currency
2. Acquistion or use of special drawing rights.
3. Loans or Credit to other central banks such as the case with Mexico.
4.Wharehousing
The treasury seems to have more than enough money in the Esf to stablize Iraqs economy by helping defend its exchange rate.
http://www.treas.gov/offices/interna...ent_082006.pdf
Notice I said defend the exchange rate instead of backing it.
We have also learned that secratary of the United Staes has broad powers in being able to turn dollars into Sdrs.
By the way
Sdrs are part of the International Monetary that allows the easier exchange rates between countries. Some Countries have thier currency pegged to the Sdr. I think I remember Jordan being one of them.
The "Secretary of Treasury" [Governor-IMF] issues an international letter of credit called a "Special Drawing Rights Certificate" to the Federal Reserve Banks "in such form and in such denomination as he may determine". The SDR is deposited in the Federal Reserve Banks which in turn credits the account of the Exchange Stabilization Fund (ESF) with Federal Reserve Notes in an amount equal to the value of the SDR certificate. SDR's became the "collateral security for Federal Reserve Notes". The "Secretary of Treasury" [Governor-IMF] issues an international letter of credit called a "Special Drawing Rights Certificate" to the Federal Reserve Banks "in such form and in such denomination as he may determine". The SDR is deposited in the Federal Reserve Banks which in turn credits the account of the Exchange Stabilization Fund (ESF) with Federal Reserve Notes in an amount equal to the value of the SDR certificate. SDR's became the "collateral security for Federal Reserve Notes..........................................
link The Truth About Money
We have also proved that it was this adminstrations objective to go go to war with Iraq prior to Bush taking office. Why would they go to such great lengths to go to war with Iraq unless it was about oil.
If this is truly the case then the United States will back thier currency to have access to cheaper oil so we the Us will remain a super power and have a friendly mideast country to do business with that has the second largest reserve of oil in the world.
The International Community has also bought into the International Compact because it could possibly mean cheaper oil because Iraqs true potential as a Oil producing nation never has been tested and the the only thing that Goverments in the International Community care about is keeping thier own goverments running along nicely. They can only do this thru cheap oil.
I dont know when or what day but I smell money in the air.
Anybody else got any Ideas?
for everyone I copy this from another thread
Why would it not be feasible for them to peg their dollar to the US, euro,or Basket and peg BIG!!!! Get ready