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Dinar Rumor delete zeros currency policy of "progressive" and an adviser to Maliki sees "in vain"


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BAGHDAD / Aswat al-Iraq: Iraqi Central Bank defended its policy to withdraw cash for inflation by the deletion of zeros from the currency in front of his critics as a policy of "progressive" long-term, most critics regarded as a unit, which the Economic Adviser to the Prime Minister "in vain" would cost the budget a lot to no avail real.

This is because the appearance of the central bank adviser Muhammed Salih Al-economic policy of the central bank for withdrawing cash from the local market to "inflation suffered by the money supply, which rose from 25 billion dinars in 1980 to 23 trillion dinars, now it is important to reduce, "noting that the process of lifting the zeroes are" long-term policy adopted by the Iraqi government and the central bank, which will direct the project as soon as the development of the Iraqi economy and this may be this year or next and will probably require a longer time, depending mainly on the stability for the operation. "

He said Saleh told (Voices of Iraq) that "there is no need to rush the process at the moment but at the same time is required because the subject of reform will not change the value of the currency, but anything to make them smaller, "stressing that Iraq" During the next few years and applied to the new development plan will raise its oil production and resources will increase significantly and we therefore need a strong currency and low at the same time and easy to handle. "

On Alontkadt being sent to the Central Bank because of his announcement to change the currency, Saleh said he viewed the economic future of Iraq "in an optimistic either the failures of the present and the situation is stable, it is something that will not last forever , but the situation is constantly improving, "adding that the central ideas of" progressive ideas facing the reactionary want to go back Iraq to thirty years ago. "

Criticize the economic adviser to Prime Minister Abdel Hussein, the Iraqi Central Anbuge vision of the nature of inflation in Iraq, and regards as "a misconception of the nature of inflation in Iraq, which he considers the central result of the increased money supply, which is directly linked to the purchasing power of the currency and the ability of per capita income for goods and services", wondering If the "delete the zeros will increase the purchasing power of the citizen? Is that the zeroes are the trap, which was the increase? ".

He told (Voices of Iraq) that this action "could have come from a luxury, not economic for a country full of economic problems, her first and do not have another, go to solutions, paper and fake" and that the deletion event scheduled , it "will leave little impact onset where it will be there and they Cash will not get improved standard of living and thus begin to calculate the new rates of inflation."

To solve the problem of inflation Ferry Anbuge should come from "The fact that inflation Iraqi boat comes because of the high costs and the existence of the needs of unsaturated and structural imbalance" is passed through the "operation and investment and rebuilding of structures destroyed and production management is reflected positively on the standard of living of the individual, either to be deleted is the futility of the zeroes will cost the budget a lot and has no justification for the time being. "

And stresses businessman Jassim Al-Aradi the importance of "non-launch the process of deleting zeros from the currency only after clarifying the concept and its way through the media extensively to educate citizens about the rules and deletions to prevent exploitation by some operations on the black market because of lack of awareness, "adding that the operation" will not change the force per capita purchasing power will not affect the general situation in Iraq. "

Aradi and hit the ideals of "the Turkish experience in the deletion of zeros, which came after the country experienced economic crises, followed by a boom became looking for the strengthening of its currency, especially after the desire to enter the European Union," adding that the operation in Iraq "needs a more stable economic situation than it is now."

As for how it sees the entire process of deletion Aradi noted that it "is being gradually by injecting a certain amount of criticism is the category of dinars, equivalent to one thousand dinars to declare clearly that it will not be higher-value, or less than one thousand dinars to Atstgl to the black market because of the ignorance of citizens so "in addition to that the deletions" are within a few years to withdraw the same amount that was issued but a new currency to be changed completely, "a process "slow and gradual, not like changing the currency because we're not going to issue a new but merely Delete the zeros only."

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Iraq's got "hyperinflation", going from 25 billion to 25 trillion is inflation. It has become so bad that the PPP(purchasing power parity) or purchasing power is way out of control to say the dollar, google "Big Mac Index" for a simple explanation(Henderson, 2006). So to combat such inflation, they are planning to gradually remove zeros from currency, or if you prefer jargon, "lop", not good for us holding dinar. They don't really elaborate on whether or not they are going to revalue, except for the unfortunate devalue, done through removal of zeros. Appears they may implement a gradual increase in value as time goes by, but for now it looks like a 25k note is going to be worth about .02 USD. So, hopefully they will revalue the exchange rate to say 3 instead of its current rate so we might triple our investment, otherwise we be SOL. Although, as long as they don't print new currency or void our current dinar, we could ride the wave up, when they start pumping out 10 - 12 million barrels a day, instead of the 50,000 barrrels they currently are exporting. But i'm sure if you think happy thoughts and have a positive outlook it will actually mean that your 2,000 USD investment is about to become, wait for it, "two million dollars" (you must bring your pinky to the corner of your mouth and draw out the word million while saying of course). Just a bit of gallow humor as i deal with the dissappointment.

References: Henderson, C.(2006). Currency Strategy The Practitioner's Guide to Currency Investing, Hedging and Forecasting. West Sussex, England: John Wiley & Sons Ltd.

DISCLAIMER: my personal interpretation, in no way directed at a single individual or meant to convey opinions of any other person on this site.

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the economic adviser to Prime Minister Abdel Hussein, the Iraqi Central Anbuge vision of the nature of inflation in Iraq, and regards as "a misconception of the nature of inflation in Iraq, which he considers the central result of the increased money supply, which is directly linked to the purchasing power of the currency and the ability of per capita income for goods and services", wondering If the "delete the zeros will increase the purchasing power of the citizen? Is that the zeroes are the trap, which was the increase? ".

I'm reading it as their inflationary problems stem from too much currency and too many high denomination notes, not from the economy. JMO

Edited by rtucker1965
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another site, I don't know who he has for intel, but he said several years ago that we were a long ways off from a RV, and then several months back he said that we were months away from a RV and now he is saying it a month at a time, so I think that he has pretty good intel.

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You're absolutely correct, I say he has great intel.

another site has facts verses rumors.

another site, I don't know who he has for intel, but he said several years ago that we were a long ways off from a RV, and then several months back he said that we were months away from a RV and now he is saying it a month at a time, so I think that he has pretty good intel.
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Really? Hyperinflation? Why is this on the CBI website?

Economic indicators

Core Inflation (YOY): Dec 2009 6.11%

GDP - real growth rate 2009 est. 5.8%

GDP - official exch. rate 2009 est. $70.1B

Current inflation (which is pretty good) and historical inflation that is reflected in the difference in the amount of currency in circulation are 2 different things. Certainly they have had horrible inflation early in the last 10 years if they went from 25Billion to 23Trillion Dinars as this article (and others) have stated. That history is what results in the present deflated value of their currency and the need to do something about it (whether you believe it is a lop or an RV). IMO, I wouldn't place a lot of confidence in the supposition that the current inflation rate means there will not be a lop. That doesn't hold water in the studies on the subject. See http://dinarvets.com/forums/showthread.php?7545-Debunking-the-myths-of-the-infamous-bunny-ear-(lop)&highlight=

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