RVs Throughout History

[SWFloridaGuy]

5-30-13 SWFloridaGuy: Response to Mike from the DR forum. 

 

Mike: "German currency revalued in 1948 10 for 1 post WWII. A bit more than 40%." (Inferring that this was the largest RV in history).

 

My response: Thanks for your interest in this topic but sir you are incorrect. An appreciation event is when the nominal effective exchange rate is revalued by at least 10% or more relative to the average level two years before.

This is usually judged over two years which captures not only one-time step revaluations, but also a number of smaller appreciation steps that happen within a short time window. 

 

The nominal appreciation must lead to sustained real appreciation. The real effective exchange rate must remain stronger by 10% (or more) on average for three years relative to the beginning of the appreciation process. 

 

You may notice two different rates.  The reason for this is the first group consists of appreciation events that occurred without an active policy decision to alter the parity on part of the authorities in the concerned country.

Typically, such cases relate to the appreciation of the anchor currency in a peg against key trading partners leading to nominal and real appreciation.

But if it's proof you're looking for:

 

Germany 1968/1970: 10.70%. - 12.90% Under the Bretton Woods system, the rate of the DM was amended in October 1969. The DM was revalued.

 

Romania 1980/1982 47.50% - 35.40%.  At the beginning of the 1980s, several step appreciations of the commercial exchange rate were taken.
 
Thanks for the response though and it was a pleasure speaking with you. 

Edited May 30, 2013 by SWFloridaGuy

[jmw2]

Where did you find the numbers on the Romanian Leu?...it was a disaster in the 80's and redenominated in 2005

 

The New Romanian Leu

On July 1, 2005, Romania introduced its new redenominated currency, the new leu (code: RON), which is valued at 10,000 old lei (code: ROL). The process, which is known as redenomination, started in March 2005 when Romania started dual-currency display and all prices had to be displayed in both the old leu and the new leu.  Starting from 1 July 2005, the first notes and coins of the new leu became legal tender, and the new leu became the official currency of Romania.

 

 

in the 80's if was fixed by the communist government:

 

Between 1970 and 1989, the official exchange rate was fixed by the government through law. This exchange rate was used by the government to calculate the value of foreign trade, but foreign currency was not available to be bought and sold by private individuals. Owning or attempting to buy or sell foreign currency was a criminal offence, punishable with a prison sentence that could go up to 10 years (depending on the amount of foreign currency found under one's possession). International trade was therefore considered as part of another economic circuit than domestic trade, and given greater priority. This inflexibility and the existence of surplus money due to constant economic decline in the 1980s, mixed with the need for more foreign currency and the refusal of the Ceauşescu regime to accept inflation as a phenomenon in order to attain convertibility, led to one of the greatest supply side crises in Romanian history, culminating with the introduction of partial food rationing in 1980 and full rationing for all basic foods in 1986/87. This was a major factor in growing discontent with Ceauşescu, and contributed in part to the fall of the Communist regime in 1989.

[dontlop]

NICOSIA, CYPRUSNICOSIA, Cyprus (AP) _ Iraq, underscoring its control over Kuwait, has declared Kuwait's currency invalid and set a deadline for all who hold it to exchange it for Iraqi money, the government said Monday.

 

Iraq will reimburse those who possess Kuwaiti dinars with Iraqi dinars on a 1-for-1 basis, the government said. Those who hold Kuwaiti dinars have until Oct. 6 to exchange it for Iraqi currency, said the announcement, carried by state Iraqi News Agency.

 

After that date, Kuwaiti dinars will be considered worthless, the Baghdad government said.

 

Iraq has methodically dismantled Kuwaiti institutions following its Aug. 2 invasion and annexation of Kuwait. Iraqi authorities have officially disbanded Kuwait's government, military and national airline, and call Kuwait Iraq's 19th province.

 

The currency measure was taken ''to facilitate transactions throughout Iraq and ending duality in the monetary dealing,'' the government said.

 

Before Iraqi President Saddam Hussein ordered his army into Kuwait, one Iraqi dinar was worth $3.22 and one Kuwaiti dinar traded at $3.45 at official rates.

 

But the Kuwaiti currency was convertible on international markets while the Iraq dinar was not. The Iraqi currency remains inconvertible.

 

The decision was also expected to eliminate the black market for the Kuwaiti dinar. Although the Iraqi dinar's official value remains the same, its value to buy goods or foreign currency on the black market was about one-tenth the official rate. Iraq punishes currency smugglers with death.

 

In the first days of the invasion, the Kuwaiti dinar fell from $3.45 to about one-fifth its value before international currency exchanges suspended trading of the Kuwaiti currency.

 

''No banks will accept to quote or trade either Iraqi or Kuwaiti dinars,'' a Banque Francaise du Commerce Exterieur official said Monday. That would be forbidden under the freeze on Kuwaiti and Iraqi assets adopted by France and the other European Community countries, the Paris-based official said in an interview.

 

He said even if there were no economic embargo, no one would trade the Kuwaiti dinar because there is no longer any central bank to guarantee its value. Anyone with Kuwaiti dinars outside the country would effectively be holding useless paper, the banker said.

 

There are exceptions in extremely limited circumstances. Kuwaitis stranded in London can go to the National Bank of Kuwait or United Bank of Kuwait and get British pounds for their dinars if they have dinar accounts there and can prove that they are in desperate need of funds, according to a financial source in Bahrain.

 

The Banque Misr, or Bank of Egypt, in Cairo has not been instructed to stop accepting the Kuwaiti dinar, an official of the bank's foreign exchange department said. The currency was quoted in Monday's fixtures as usual, though at $2.86.

 

When the crisis erupted, the Egyptian-Saudi Finance Bank allowed Kuwaitis to exchange 500 dinars at the old rate for two days. Any other funds had to be exchanged at the reduced rate.

 

The practice appeared part of the exile aid program run by the Kuwaiti government, itself in exile in Saudi Arabia, the financial source in Bahrain said.

 

Certain local banks may have been given a guarantee by Kuwaiti embassies allowing them to exchange dinars to needy Kuwaiti citizens, the source said.

 

But it would be impossible for the Kuwaiti government-in-exile to honor all dinars, because Iraq could then try to convert the huge stocks of Kuwaiti cash its soldiers plundered during the invasion, the source noted.

 

The fall of Kuwait made instant paupers out of tens of thousands of people with assets in Kuwait or Kuwaiti currency.

 

H. Zahreddin, a wealthy Lebanese businessman doing business in Kuwait, flew home to Lebanon the day before Iraq overran Kuwait to throw a lavish wedding party for his daughter at a plush Beirut hotel.

 

''I went to bed a millionaire and woke up in debt,'' Zahreddin said later. ''The hotel refused to accept my Kuwaiti dinar check to settle the bill.''

 

http://www.apnewsarchive.com/1990/Kuwait-s-Currency-Declared-Invalid-by-Iraq-With-AM-Gulf-Rdp-Bjt/id-978b923d961916791ee3c34fce20be34

http://www.apnewsarchive.com/NewsArchive/MainPage.aspx#?&num=10&start=0&SearchText=Kuwait's Currency Declared Invalid by Iraq With AM-Gulf Rdp, Bjt&Display=

Edited May 31, 2013 by dontlop

[dontlop]

Banks Reopen; Thousands Line Up For New Money JOHN POMFRET , Associated Press

Mar. 24, 1991 12:47 PM ET

KUWAIT CITY (AP) _ Banks reopened Sunday for the first time since Iraqi troops shut them down in December, and thousands of cash-poor Kuwaitis snapped up the emirate's new currency by the bundle.

 

In a move aimed at putting the world's richest per capita economy back on its feet, the Central Bank of Kuwait announced that the newly issued dinar would trade at $3.48.

 

That was almost exactly the same rate as on Aug. 1, 1990, the day before Iraqi tanks rolled into Kuwait and the seven-month ocupation began. The Iraqis susequently put the Kuwaiti dinar on a par with the Iraqi dinar, reducing the value of Kuwait's currency by more than 90 percent, and then outlawed the currency.

 

One of the few banks to hold American dollars reported a run Sunday on greenbacks.

 

Markets in several areas of the city also opened their doors, some for the first time since Kuwait was liberated by allied troops on Feb. 27.

 

Hot items were food and especially chocolate, which many Kuwaitis feel is worth its weight in gold.

 

The giant Sultan Center supermarket was doing a fast business in turnips, potatoes, grapefruits and squash. Bubble bath and facial mud packs, favorites of Kuwaiti women, also were bestsellers.

 

More than 50 banks throughout the city opened their doors for the first time since Iraqi forces closed them.

 

Officials said thousands of customers withdrew money, but there was no way to estimate how much business had been done.

 

''It's been busy, very busy,'' said Nasser Malek, assistant general manager of Al Ahli Bank. ''Money makes the world go round.''

 

During the occupation, Iraqi forces looted more than $2 billion in gold and cash from Kuwait's seven commercial banks and the Central Bank.

 

The commercial banks' combined prewar assets approached $30 billion - substantial holdings considering Kuwait had about 2 million people before the invasion.

 

The Central Bank announced last week that banks would honor all accounts up to Aug. 1, 1990. Any addition or subtractions since then will be wiped off the books.

 

The regulations limit customers to a monthly withdrawal of 4,000 dinars, roughly $13,000.

 

A line of about 500 people snaked outside the central branch of Gulf Bank on Sunday to get some of the new cash, printed in the United States. A generator outside provided power.

 

Mohammed Saleh al-Saleh, a 38-year-old bank employee, was the first one in line when the doors opened at 10 a.m. He'd been waiting three hours.

 

''I'm withdrawing 1,000 dinars, then I'm getting out of Kuwait,'' he said. ''I've got to go to Saudi and buy a generator.''

 

Many Kuwaitis are angry at the government's inability so far to return life to normal by restoring essential services such as water and electricity.

 

Government officials and businessmen said the new dinar-dollar exchange rate would help stabilize Kuwait's wrecked economy.

 

Shopkeepers, whose goods are mostly imported, will use the rate to set prices.

 

''Now the economy will start rolling again,'' said Hisham Easa Sultan, general manager of Gulf Bank.

 

He said using an exchange rate similar to the one before the invasion would help bring down soaring inflation. He was concerned, however, that the relatively strong dinar would encourage many people to cash in their Kuwaiti currency and thereby cause it to crash.

 

At the Al Ahli Bank, Malek said his bank had sold ''thousands'' of dollars, one of the only banks to do so. The cash came from vaults that defied Iraqi safecrackers during the occupation, he said.

 

''Many people are interested in buying dollars - many, many,'' he said, standing in the brass- and gold-plated lobby of his company's swank headquarters.

 

In the Palestinian neighborhood of Hawally, candles lighted the counters of the Al Ahli branch and accountants tapped out sums on battery-powered calculators.

 

A 51-year-old Palestinian teacher said he was waiting in line to withdraw 200 dinars to buy food.

 

Palestinians in several neighborhoods have complained that the government has focused on distributing food in Kuwaiti neighborhoods, leaving the Palestinians little but table scraps.

 

''I'll wait a while and then maybe I will leave,'' said the teacher, who spoke on conditiion of anonymity.

 

Many Palestinians in Kuwait say they are being mistreated by Kuwaiti authorities, who suspect them of collaborating with Saddam Hussein's occupying forces

http://www.apnewsarchive.com/1991/Banks-Reopen-Thousands-Line-Up-For-New-Money/id-77b4f0fa716dfda68928f21061a9b274?SearchText=Kuwait%20DINAR%201990;Display_

[dontlop]

The Central Bank announced last week that banks would honor all accounts up to Aug. 1, 1990. Any addition or subtractions since then will be wiped off the books.

Read more: http://dinarvets.com/forums/index.php?/topic/150084-rvs-throughout-history/#ixzz2UvPo6awq

 

 

[jmw2]

That was almost exactly the same rate as on Aug. 1, 1990, the day before Iraqi tanks rolled into Kuwait and the seven-month ocupation began. The Iraqis susequently put the Kuwaiti dinar on a par with the Iraqi dinar, reducing the value of Kuwait's currency by more than 90 percent, and then outlawed the currency.

Read more: http://dinarvets.com/forums/index.php?/topic/150084-rvs-throughout-history/#ixzz2UxwnV0Gr

It says the Iraqis changed the value....he official rate didn't change

[dontlop]

That was almost exactly the same rate as on Aug. 1, 1990, the day before Iraqi tanks rolled into Kuwait and the seven-month ocupation began. The Iraqis susequently put the Kuwaiti dinar on a par with the Iraqi dinar, reducing the value of Kuwait's currency by more than 90 percent, and then outlawed the currency.

Read more: http://dinarvets.com/forums/index.php?/topic/150084-rvs-throughout-history/#ixzz2UxwnV0Gr

It says the Iraqis changed the value....he official rate didn't change

IF YOU READ IT ...THERE WAS NO OFFICIAL RATE GUARENTEED BY THE CENTRAL BANK  .. there was a guarenteed official rate before hand .. the new rate  was slightly less than the old rate  .. the official rate is the rate guarenteed by the central bank ..look it up .. .. the guarenteed official rate of the kuwait dinar was zero.....  you got to know what an official rate  definition is

 

the international exchange rate was one fifth in the first article before it was shut down .. it was trading at around 70 cents .. the second article  says it  lost 90 % of its value  before it was reinstated at its new rate .. you couldnt give that money away   no one wanted it so it was shut down by the govt of kuwait  at around 70 cents on the international  exchange.or 1/5th the original rate ..when everyone was dumping the kuwaiti dinar in 1990 .. they had no buyers .. end of story ..

no one would trade the Kuwaiti dinar because there is no longer any central bank to guarantee its value.

Read more: http://dinarvets.com/forums/index.php?/topic/150084-rvs-throughout-history/#ixzz2UyAyaTrT

Edited June 1, 2013 by dontlop

[dontlop]

completely different circumstances than iraq and the iraqi dinar ..

 

i honestly figured the dinar would of been reinstated long ago .. but the process of  a new govt  being seated  and  a new constitution .. a whole new set of laws regulations and banking laws .. has this thing stringing along for quite some time now .... we still may have a couple more years here  before  we see anything .. if we see anything at all /

Edited June 1, 2013 by dontlop

[fib1618]

completely different circumstances than iraq and the iraqi dinar ..

i honestly figured the dinar would of been reinstated long ago .. but the process of a new govt being seated and a new constitution .. a whole new set of laws regulations and banking laws .. has this thing stringing along for quite some time now .... we still may have a couple more years here before we see anything .. if we see anything at all /[/

I think they're waiting till their m2 reaches 100 Trillion before they rv. Just a hunch.

[dontlop]

it could be .. they said they were planning around 110 billion dollars in the reserves  by jan 2014 ..

 

the imf says they should stick to their plans of  backing the dinar with the dollar and backing the oil with the dfi fund ..

 

i did like the one article that says at least one recomendation was to use oil in the ground to back their   dinar instead of gold and the dollar ..

 

thats what id like to see  .. some kind of monetization of the oil  in the ground . at least a portion of it .. ..to back the dinar ..like maybe 30% of the oil and gas  revenues .. to service  external debts of the dinar ...internal  dinar debt  only needs backed by goods and services  like the rest of the fiat currencys .. 

 

they need to completely re do ..their exhange regime and monetary policy if anything  isgoing to happen  as far as a rv .. i dont see a hundred trillion dinars getting rvd .. most everyone thinks  the same .. i dont  think anyone thinks a hundred trillion  dinars would amount to anything  besides a 1000 to one  pegged exchange rate

one penny maybe .. at a value of one trillion dollars ..up to maybe 2.5 cents  or 2.5 trillion dollars .. dollars for dinar  at 100 trillion .. lol

[rockfl9]

it could be .. they said they were planning around 110 billion dollars in the reserves  by jan 2014 ..

 

they need to completely re do ..their exhange regime and monetary policy if anything  isgoing to happen  as far as a rv .. i dont see a hundred trillion dinars getting rvd .. most everyone thinks  the same .. i dont  think anyone thinks a hundred trillion  dinars would amount to anything  besides a 1000 to one  pegged exchange rate

one penny maybe .. at a value of one trillion dollars ..up to maybe 2.5 cents  or 2.5 trillion dollars .. dollars for dinar  at 100 trillion .. lol

Dontlop? If they could find the 35Bn to grow the reserves, why wouldn't they just pay off Kuwait to get them out of Ch VII?

Also pay off IMF loan... The reason is they don't have ANY spare dollars. AND wont have this year.

[dontlop]

you have to ask them .. its there story ..

we all were in agreement that would of been quite alot for them to accomplish by next year ...

[dontlop]

CBI Expects 9% Growth, Reserves of $105-$110bn

Posted on 15 January 2013. Tags: Central Bank, gdp, Growth

 

By John Lee.

The Acting Central Bank Governor, Abdul-Basit Turki, has told Reuters that Iraq’s economy should grow 9 percent this year, as it increases its oil production.

He also predicted international currency reserves of between $105 billion and $110 billion by the end of this year.

Central Bank predictions for last year were for growth of around 10 percent, and reserves at the end of December of around $70 billion.

(Source: Reuters)

Dontlop? If they could find the 35Bn to grow the reserves, why wouldn't they just pay off Kuwait to get them out of Ch VII?
Also pay off IMF loan... The reason is they don't have ANY spare dollars. AND wont have this year.

imf loans are  what a billion and a half ? ,, the imf loans are scheduled to be payed  like all countrys pay .. 3 to 5 years after the loans are given .. and are to be paid in  i think 9 quartly payments .. .. so every 3 months some day iraq will be paying back the imf around a hundred million dollars each installment ..

Edited June 1, 2013 by dontlop

[jmw2]

it could be .. they said they were planning around 110 billion dollars in the reserves  by jan 2014 ..

 

the imf says they should stick to their plans of  backing the dinar with the dollar and backing the oil with the dfi fund ..

 

i did like the one article that says at least one recomendation was to use oil in the ground to back their   dinar instead of gold and the dollar ..

 

thats what id like to see  .. some kind of monetization of the oil  in the ground . at least a portion of it .. ..to back the dinar ..like maybe 30% of the oil and gas  revenues .. to service  external debts of the dinar ...internal  dinar debt  only needs backed by goods and services  like the rest of the fiat currencys .. 

 

they need to completely re do ..their exhange regime and monetary policy if anything  isgoing to happen  as far as a rv .. i dont see a hundred trillion dinars getting rvd .. most everyone thinks  the same .. i dont  think anyone thinks a hundred trillion  dinars would amount to anything  besides a 1000 to one  pegged exchange rate

one penny maybe .. at a value of one trillion dollars ..up to maybe 2.5 cents  or 2.5 trillion dollars .. dollars for dinar  at 100 trillion .. lol

The DFI fund has basically all been spent...and, in simple terms they are backing the dinar with oil...it's where they get the dollars to back it...they just can't back it with what's in the ground.

[jmw2]

completely different circumstances than iraq and the iraqi dinar ..

 

i honestly figured the dinar would of been reinstated long ago .. but the process of  a new govt  being seated  and  a new constitution .. a whole new set of laws regulations and banking laws .. has this thing stringing along for quite some time now .... we still may have a couple more years here  before  we see anything .. if we see anything at all /

Very much agree

[4aprofit]

NOTE: WE KNOW THAT THE U.S. HAS BEEN PUMPING BILLIONS OF USD INTO IRAQ...EVEN TO OPERATE ON...THIS CNBC VIDEO SHOWS WHERE APPX. 40 BILLION IN USD WAS MOVED IN USD TO IRAQ...BUT WHAT GET'S REALLY INTERESTING IS AT APPX. 19 1/2 MINUTES INTO THE FILM, IT SHOWS THAT IRAQ'S DFI FUND HAS NOT WENT DOWN FROM ALL OF THIS, BUT ACTUALLY GONE BACK UP TO 60 BILLION...DUE TO OIL REVENUES FROM IRAQ...EVEN AS THESE ORIGINAL FUNDS WERE SUPPOSEDLY INITIALLY DEPLETED...WHO REALLY KNOWS WHATS GOING ON...AS THEY EVEN MENTION SOME OF THIS MONEY WENT MISSING....LIKE APPX. 11-12 BILLION IN USD FROM THE FIRST 40 BILLION THAT WAS ALLOTTED TO IRAQ....AND IN THIS VIDEO IT STATES THAT THE US IS STILL SENDING IT BY THE BILLIONS TO IRAQ...(AND THE U.S. IS SUPPOSED TO BE BROKE)..DO WE EVEN KNOW ACTUALLY HOW MUCH THERE EVER WAS THAT EXISTED IN THE DFI, OR ACTUALLY HOW MUCH THAT ACTUALLY HAS BEEN STOLEN, OR HOW MUCH IS, OR WILL END UP BEING SENT TO IRAQ...AND/OR IS IT ALL JUST DFI MONIES???...INTERESTING INFO!!!....

 

AND THE LATEST REPORTS DEPICT THAT THE US MAY HAVE SPENT CLOSER TO 6 TRILLION ON THE IRAQI WAR...WITH ALL THIS BEING SAID AND SHOWN...WOULD IT NOT SEEM MORE LOGICAL TO ASSUME THAT THE US WILL REAP SOMETHING BACK IN RETURN?...AN RV?..WHO KNOWS?...BUT WHAT ELSE WILL REPAY ALL OF THIS?..SOMEONE TELL US...AS I'VE YET TO GET EVEN A GOOD STORY OR LIE TO DATE...AS PER ANYTHING ELSE THAT WILL WORK!

 

 

http://www.another site.com/1/post/2012/02/cnbc-video-the-baghdad-job-iraqs-missing-billions.html

[JJ7]

Can't find your caps lock key, or trying to emulate your favorite gurus?

How much did we get paid back for the Vietnam war? Korea?

[4aprofit]

THE ENTIRE WORLD DID'NT MOVE INTO VIETNAM AND KOREA IMMEADIATELY AFTER THE WAR...AND EVEN THOUGH THOSE 2 COUNTRIES ARE BOOMING...BUT IT PALES IN COMPARISON TO THE TRILLIONS THAT HAVE BEEN PUT IN PLACE IN IRAQ!

 

LIKE I SAID...EXPLAIN WHAT IS GOING ON INSTEAD OF BASHING...ANYONE THAT CAN BASH SHOULD GIVE REASONING TO ALL OF THIS FIRST...

 

IMO..IT'S CALLED "FOLLOW THE MONEY"..IRAQ HAS MORT WEALTH THAN ANYWHERE ELSE..IMO...

[dontlop]

The DFI fund has basically all been spent...and, in simple terms they are backing the dinar with oil...it's where they get the dollars to back it...they just can't back it with what's in the ground.

id say the dfi fund has just what they say it has in it ..around 18 billion dollars ..the cbi reserves has around 75 billion //

they are 2 different accounts ..

 

imf reported in may >>

 

Directors agreed that a stable exchange rate, supported by a high level of international reserves, provides a valuable anchor in an uncertain environment. They agreed that the two tier architecture of prudent management of CBI reserves and use of the Development Fund for Iraq (DFI) as a de facto oil stabilization fund is appropriate. They urged the authorities to continue to rely on the DFI to help stabilize government spending and ensure oil revenue transparency.

 

International reserves of the Central Bank of Iraq (CBI) rose from $61 billion at end-2011 to $70 billion at end-2012, and fiscal reserves held at the Development Fund for Iraq (DFI) have increased from $16.5 billion to $18 billion.

 

 

notice they say two tier  system .. the dfi fund will maintain any difference between the budget price of 90 dollars a barrel used in the nations budget .. and anything   less than that for market fluctuations .. so if oil goes to 80 dollars a barrel ...ten dollars a barrel will be taken from the dfi fund to make up the differance to support the budget .. and theres another fund set up under the dfi for 5% of oil revenues to pay kuwaiti  war debt .

 

http://www.imf.org/external/np/sec/pn/2013/pn1358.htm

4profit >>> the united states did not anticipate the long drawn out war .. they lost financially big time ..

 

they were bound by the geneva convention to stay .. colon powel said before the war .. if you break it you own it ..

 

it wasnt an investment to go into iraq

 

under geneva convention ..if you take out a countrys govt and military ..you are obligated to stay till they can maintain  their own national security .. it was a blessing to be finally able to leave without facing war  crimes .. you cant invade a country ,, slap a badge on someone say your incharge and leave .. if another country invaded after that and killed a couple million people who do you think would be blamed .. the world community would of moved in and the costs would be on us .. they would still be rebuilding on our dime .. replacing every blade of grass .. we would of been obligated to pay multi trillions more in costs and law suits .. it would be the dollar with all the zeros on it if we didnt stay  and meet our geneva convention obligations

Can't find your caps lock key, or trying to emulate your favorite gurus?

How much did we get paid back for the Vietnam war? Korea?

we usually  buy everything here at home  that is used to rebuild those countrys ..and ship it over there .. iraq didnt have any where to buy things .. it was imported..our economy grew because of that war ..it always does ..

 

i think we only  spent around 50 billion on actually rebuilding in iraq . the rest was military costs .. which is a loss

Edited June 1, 2013 by dontlop

[dontlop]

im thinking again .. sorry .. the two tier  architecture is meaning of gold and currency reserves

[rockfl9]

Nope!  An official rate for trade and a  market rate for in-country commerce... Initially a good plan .

The official rate serves as guarantee of prices for imports/exports. The market rate under normal conditions was to be managed by the CBI to control inflation, much like our FED...  The dollars the US put into Iraq before the new dinars were released were supposed to be taken up in time AND the new dinars were not intended to leave the country!  Both turned out to be bad assumptions. It would have been better if the CPA had left the Sadam dinar in place until the new dinar were available then to call in both the Sadam  and USD.   So much distrust of the government that the dollar remains the currency of choice and  the CBI has no control over the dollar.