Lest we forget!

[TrinityeXchange]

hello my dv brothers and sisters.  please post some of your most highly rated articles regarding iraq.  the intent of this thread is to combat the human inclination of short term memory disease.  sometimes we can get so caught up in the day to day tracking of iraq events that we forget most important cogs of our speculation.  and so without further ado, here is one of my favorites.

 

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(full interview)

Hugh Tant III

It is terrific to be with you. I would like to thank you for the opportunity to address your questions this evening. I am talking to you from the ICE (Iraqi Currency Exchange) project room in one of Saddam's palaces. We like to call it the ICE box. Around the walls are various colorful pictures of the old currency (featuring Saddam) and the new currency (without Saddam). In addition to the currency posters around the room, there are various maps and charts that help us map the delivery of the Iraqi currency throughout the country.

 

Raul, from Boston, MA writes: 

Mr. Tant, How does your office determine the correct rate of exchange for the new Iraqi currency, that for all intents and purposes, is virtually worthless in the world's markets?

 

Thank you.

 

Hugh Tant III

The Central Bank of Iraq conducts a 'foreign exchange auction' process about 3 times per week to help ensure the new currency is stable. This process helps determine the exchange rate.

 

At the moment, due to Iraqi exchange controls, the currency is not exchanged outside Iraq. This is likely to change in the future as Iraq continues to be welcomed back into the international financial community.

 

As oil exports increase and more funds are invested in Iraqi goods and services from outside the country [ah! foreign investment will drive up the iqd's value], it is expected that the new Iraqi Dinar will appreciate in value over the long-term. 

 

Mark, from Santa Fe writes: 

How is the Iraqi money backed? Do they have a gold standard? Is the old Dinar worth anything now? Are most transactions still in American dollars?

 

Hugh Tant III

The Iraqi money is backed by foreign exchange, treasury notes and precious metals such as gold. Iraq does not maintain a gold standard. During the conversion period, the old Dinar still has value.

 

However, on January 15, the old Dinar will be worthless as a median of exchange. Dinar is the currency of choice in Iraq. Nearly all transactions are conducted in Dinar.

[ronscarpa]

...Thanks 4 the reminder...(+1) 

[TrinityeXchange]

Link

On April 29, Jay Garner, the retired lieutenant general who headed the reconstruction effort in Iraq at the time, reported to Washington that the payments had lifted the mood of people in Baghdad during those first few confusing days. Even more important, a collapse of the financial system was avoided.

This success paved the way for the second stage of the plan. In only a few months, 27 planeloads (in Boeing 747 jumbo jets) of new Iraqi currency were flown into Iraq from seven printing plants around the world. Armed convoys delivered the currency to 240 sites around the country. From there, it was distributed to 25 million Iraqis in exchange for their old dinars, which were then dyed, collected into trucks, shipped to incinerators, and burned or simply buried.

The new currency proved very popular. It provided a sound underpinning for the financial system and remains strong, appreciating against the dollar even in the past few months. Hence, the second part of the currency plan was also a success.

The story of the currency plan is one of several that involved large sums of cash. For example, just before the war, Saddam stole $1 billion from the Iraqi central bank. American soldiers found that money in his palaces and shipped it to a base in Kuwait, where the U.S. Army’s 336th Finance Command kept it safe. To avoid any appearance of wrongdoing, American soldiers in Kuwait wore pocketless shorts and T-shirts whenever they counted the money.

Later, U.S. forces used the found cash to build schools and hospitals, and to repair roads and bridges. General David Petraeus has described these projects as more successful than the broader reconstruction effort.

But that wasn’t the only source of dollars. Because the new Iraqi dinar was so popular, the central bank bought billions of U.S. dollars to keep the dinar from appreciating too much. As a result, billions in cash accumulated in the vaults of the central bank. Later, with American help, the Iraqi central bank deposited these billions at the New York Federal Reserve Bank, where they could earn interest.

Finally, when Iraq started to earn dollars selling oil, the United States transferred the cash revenue to the Finance Ministry, where it was used to finance government operations, including salaries and reconstruction. Many of these transfers occurred in 2004, long after the financial stabilization operation had concluded. Iraqi Finance Ministry officials had already demonstrated that they were serious about keeping the controls they had in place. The 360 tons mentioned by Henry Waxman includes these transfers as well as the 237.3 tons shipped in 2003 during the stabilization.

One of the most successful and carefully planned operations of the war has been held up for criticism and even ridicule. As these facts show, praise rather than ridicule is appropriate: praise for the brave experts in the U.S. Treasury who went to Iraq in April 2003 and established a working Finance Ministry and central bank, praise for the Iraqis in the Finance Ministry who carefully preserved payment records in the face of looting, praise for the American soldiers in the 336th Finance Command who safeguarded the found money, and, yes, even praise for planning and follow-through back in the United States. 

Read more: http://dinarvets.com/forums/index.php?/topic/129576-dollars-for-dinars-greatest-article-ive-ever-read/#ixzz3lSYxglmh

Edited September 11, 2015 by TrinityeXchange

[MyLadiesDaddy]

So what did they buy those,"BILLIONS",of dollars with?

Guess that answers a huge dinar question.

[TrinityeXchange]

So what did they buy those,"BILLIONS",of dollars with?

Guess that answers a huge dinar question.

amen bro.  and if we stay diligent and dig enough, the Lord will reward our efforts.  we have fact that the more dinar were printed to keep it from appreciating.

 

Rand Corp - Occupying Iraq History of the CPA (ref pg 201-202):

 

The CPA was faced with difficult trade-offs among the policy

options available to maintain liquidity. Announcing a limit on withdrawals

from Iraqi banks might send a signal to account holders that

their money was not safe and thereby trigger the very run the CPA

was hoping to avert. Placing a moratorium on withdrawals by Iraq’s

state-owned enterprises (SOEs) would protect the roughly 1.28 trillion

dinars held in public accounts, but would also deny many SOEs access

to working capital. Printing more dinars would risk increased inflation,

and the only printing plates available were those with Saddam’s

image—and the CPA was emphasizing de-Ba’athification and the end

of the old regime.

 

In the end, the CPA took several steps to maintain liquidity. In

early June, it decided to resume printing Saddam dinars. Only two

denominations of the Saddam dinar had circulated widely in Iraq: the

250-dinar note (worth about 17 cents) and a 10,000-dinar note (worth

about $6.50). Fears that the 10,000-dinar note could be widely counterfeited,

along with its impracticality for everyday transactions, caused

it to be traded at a 10–30 percent discount relative to the smaller

note.  From June 9 to June 23, the Central Bank of Iraq printed 33

million 250-dinar notes, yet demand continued to rise. Some 750 million

dinars in 250-dinar notes were produced each day until August 27,

when the Central Bank of Iraq decided to halt its production because

demand finally tapered off.  

 

A moratorium on withdrawals by state companies was also enacted, while

private businesses were allowed access to their accounts. (This moratorium

was later made permanent in a controversial decision discussed below.) 

Edited September 11, 2015 by TrinityeXchange