Factors that make up the R.V. amount.

[hammy]

Most Importantly is Reserves, and the demand for them it will certainly Trump all others.

Factors Affecting Currency Value:

1. Political Conditions in the Country - This includes the stability of the government, the amount of corruption, bribery and the degree of law and order. Also includes a country's relationships with other countries and especially their relationship to US, UK, China and Russia. The form of government in the country is also a factor used to assess the value of a currency. Consider the widely varying forms of government in Saudi Arabia, China, UK, Venezuela and Thailand, just to name a few.

2. Economic Situation - This includes factors such as jobs, unemployment, work ethic, infrastructure, inflation and direction of the economy. Is it older or newer in orientation; computers and high tech, or more farming and manufacturing.

3. Perception from Outside - The perceptions and attitudes of other countries toward a country are as important as the reality of the country's actual situation. News, media, movies, newspapers, rumors and spin can create perceptions. How much is known about a country? The less that is known, generally, the lower the value of a currency.

4. Demographics - A young population may mean better prospects for the future, people who are more open to change and development and a growing size of the workforce. The overall population of a country is a factor. How much weight does this country have on the world scene.

5. National Leaders - The openness, trustworthiness and like-ability of visible leaders is a factor. This includes political leaders, sports figures, business owners and celebrities. Here are some national figures who affect their countries, either for better or for worse. Kim Jung Il, David Beckham, Nicole Kidman, Madonna, Osama bin Laden, Barack Obama and Vladimir Putin. These help form the world's perception of a country.

6. Isolation versus Openness - Continuum China is becoming more open, more transparent. This helps. Cuba is very closed and isolated. Venezuela is becoming more isolated by some of its recent actions. China's markets are becoming more open. Cuba, Kyrgyzstan, Russia and Japan, all have differing levels of openness with the outside world, which affects the value of their currency.

7. Natural Resources - The kind of and amount of exploitation of a country's natural resources certainly helps create a perception of value, or lack thereof, of a country's currency. Mining of minerals, forests, oil, fish and other resources are considered. Also the level of technology to development these resources.

8. Weather Factors such as drought, tsunamis, earthquake and floods are taken into consideration. How frequent are they and how is the country's response to them. These also affect desirability, safety and perception of a country. Is it a tourist destination?

9. War and Conflicts - With which other country is a country at war, and who is it's allies? Their military strength and technology, their willingness to go to war and for what, are important factors in assessing a country's strength, stability and the value of its currency.

10 . Education - This includes languages spoken, level of computer know-how, Internet connectedness, culture and religion. Scientists, entrepreneurs, authors and inventors are all affected by the type and quality of education in a country.

[All-In-4-RV]

Excellant post, good to know and think about. Thank you!

[Brisco]

Most Importantly is Reserves, and the demand for them it will certainly Trump all others.

Factors Affecting Currency Value: " OK keeping the value of wall paper Dinar = to wall paper *

1. Political Conditions in the Country - This includes the stability of the government, the amount of corruption, bribery and the degree of law and order. Also includes a country's relationships with other countries and especially their relationship to US, UK, China and Russia. The form of government in the country is also a factor used to assess the value of a currency. Consider the widely varying forms of government in Saudi Arabia, China, UK, Venezuela and Thailand, just to name a few. *

2. Economic Situation - This includes factors such as jobs, unemployment, work ethic, infrastructure, inflation and direction of the economy. Is it older or newer in orientation; computers and high tech, or more farming and manufacturing. *

3. Perception from Outside - The perceptions and attitudes of other countries toward a country are as important as the reality of the country's actual situation. News, media, movies, newspapers, rumors and spin can create perceptions. How much is known about a country? The less that is known, generally, the lower the value of a currency. *

4. Demographics - A young population may mean better prospects for the future, people who are more open to change and development and a growing size of the workforce. The overall population of a country is a factor. How much weight does this country have on the world scene.

5. National Leaders - The openness, trustworthiness and like-ability of visible leaders is a factor. This includes political leaders, sports figures, business owners and celebrities. Here are some national figures who affect their countries, either for better or for worse. Kim Jung Il, David Beckham, Nicole Kidman, Madonna, Osama bin Laden, Barack Obama and Vladimir Putin. These help form the world's perception of a country. *

6. Isolation versus Openness - Continuum China is becoming more open, more transparent. This helps. Cuba is very closed and isolated. Venezuela is becoming more isolated by some of its recent actions. China's markets are becoming more open. Cuba, Kyrgyzstan, Russia and Japan, all have differing levels of openness with the outside world, which affects the value of their currency. *

7. Natural Resources - The kind of and amount of exploitation of a country's natural resources certainly helps create a perception of value, or lack thereof, of a country's currency. Mining of minerals, forests, oil, fish and other resources are considered. Also the level of technology to development these resources.

8. Weather Factors such as drought, tsunamis, earthquake and floods are taken into consideration. How frequent are they and how is the country's response to them. These also affect desirability, safety and perception of a country. Is it a tourist destination?

9. War and Conflicts - With which other country is a country at war, and who is it's allies? Their military strength and technology, their willingness to go to war and for what, are important factors in assessing a country's strength, stability and the value of its currency.

*

10 . Education - This includes languages spoken, level of computer know-how, Internet connectedness, culture and religion. Scientists, entrepreneurs, authors and inventors are all affected by the type and quality of education in a country.

I hope these things imporve

Go RV / RI

[keepmwlknfny]

The best word to use for Iraqs situation that could sum up alot of this is......... STABILITY!!!!!!

[Gut Feelings]

Thanks Hammy... nice post! Gives us something to think about for sure. It's sort of like a report card for a country. So how does Iraq's report card look? Anyone want to give them a score?

[keepmwlknfny]

Thanks Hammy... nice post! Gives us something to think about for sure. It's sort of like a report card for a country. So how does Iraq's report card look? Anyone want to give them a score?

The banking sector and their ability to function, along with debts and MANY other financial aspects were graded towards the end of 2010 and they got a "D" .......Iraq needs alot of work before they can handle anything huge on their plate.....

[hammy]

People I talk with are very educated, very informed. Iraq has a TRUMP card that it can always play...........= OIL. Plain and simple. Don't forget that the Iraqi Dinar was valued over $3.00 USD TWENTY YEARS AGO! How stable were they then? Go look at the history. NOT to stable. Factor in TRUMP card OIL. They are so much more ahead of the game now than they were 20 years ago. They are now ............so to say........"Playing Ball" with everyone in the world..nicely I might add. Keep the faith everyone, we are so, so close I can smell it. AHHHHHHHH smells like PROFIT.

[marknet73]

Stability is a HUGE factor. A lot of things seem to be heading in the right direction but i'm wondering what rate they can realistically sustain with the large amount still in circulation. Saudi Arabia and Kuwait have much higher rates - but significantly less in circulation. I'm hoping for a nice fat RV here soon but can they afford a $3+ RV in the near future with 20+ trillion still in circulation? If they can get a handle on that I think the sky's the limit on the potential rate growth.

[keepmwlknfny]

Stability is a HUGE factor. A lot of things seem to be heading in the right direction but i'm wondering what rate they can realistically sustain with the large amount still in circulation. Saudi Arabia and Kuwait have much higher rates - but significantly less in circulation. I'm hoping for a nice fat RV here soon but can they afford a $3+ RV in the near future with 20+ trillion still in circulation? If they can get a handle on that I think the sky's the limit on the potential rate growth.

Yep.....to think they can RV anywhere near 3 dollars to start with 20+ trillion in circulation is redonkulous.......RE-DONK-U-LOUS!!!

[marknet73]

Yep.....to think they can RV anywhere near 3 dollars to start with 20+ trillion in circulation is redonkulous.......RE-DONK-U-LOUS!!!

LOL!! That's the truth! I'm wondering what we'll have to see happen this year for them to revalue at let's say upwards of 25 cents. I wish there was a way to know for sure if they really are getting the currency levels down. Why is so much still being sold if they're trying to get a handle on the number of big bills in circulation? I want to see the value go up as much as anyone. Just wondering why the currency isn't becoming more scarce and why we can all still easily buy it?

Edited February 1, 2011 by marknet73

[Froto]

Yep.....to think they can RV anywhere near 3 dollars to start with 20+ trillion in circulation is redonkulous.......RE-DONK-U-LOUS!!!

Let's see? 20+trillion in circulation, RV at just 1 penny, = on the hook for 200+ Billion$$$. hmmmm they don't have nearly that much? They could always give away all the money they get for oil for quite a few years to pay for the cash-in.

LOL!! That's the truth! I'm wondering what we'll have to see happen this year for them to revalue at let's say upwards of 25 cents. Just wondering why the currency isn't becoming more scarce and why we can all still easily buy it?

Your asking the right questions. at RV= 25 cents, Iraq would be obligated to back up over 5 Trillion dollars worth. if only 1% was cashed in, that would be over 50 Billion $$$. they would have to give away all of their reserves to cover that. Go figure.

[BANE]

But if they have pulled in 80% of the larger bills and have already destroyed them as some gurus claim then they CAN RV at 3 dollars!

[keepmwlknfny]

But if they have pulled in 80% of the larger bills and have already destroyed them as some gurus claim then they CAN RV at 3 dollars!

Well think about what you just said..... "as some gurus claim" Should answer your own question........what the CBI did was remove 70% of the excess liquidity.....thats not removing physical dinar from circulation.....

[havasumom]

thanks for your imput blue hat kid your a genious

[keepmwlknfny]

thanks for your imput blue hat kid your a genious

......almost.......

[havasumom]

well stay in school

[keepmwlknfny]

well stay in school

peoples assumptions are always the funniest to hear!!! how clueless.....

[havasumom]

make sure you get all A'S..

[hammy]

Well the last few posts were a waste. Keep em walkin funny, no matter what they R.V. at they can't cover it. Not right now. Even if it R.V.s at $0.10 cents. So what you are saying is they can't R.V. as long as we have some of their currency locked away in a closet somewhere? World contracts and demand for their Oil = Demand for their Currency. You are not one of those Idiots who thinks that it will come out at pennies on the USD are you? Did you read the Iraqi Constitution? Do you know what the IMF has to say about a country raising its currency value? Or the World Bank? I suggest you read a couple statutes and articles from some of these institutions. Or at least read this "Crib note" short version.

What Is an Exchange Rate?

An exchange rate is the rate at which one currency can be exchanged for another. In other words, it is the value of another country's currency compared to that of your own. If you are traveling to another country, you need to "buy" the local currency. Just like the price of any asset, the exchange rate is the price at which you can buy that currency. If you are traveling to Egypt, for example, and the exchange rate for U.S. dollars 1:5.5 Egyptian pounds, this means that for every U.S. dollar, you can buy five and a half Egyptian pounds. Theoretically, identical assets should sell at the same price in different countries, because the exchange rate must maintain the inherent value of one currency against the other.

Fixed Exchange Rates

There are two ways the price of a currency can be determined against another. A fixed, or pegged, rate is a rate the government (central bank) sets and maintains as the official exchange rate. A set price will be determined against a major world currency (usually the U.S. dollar, but also other major currencies such as the euro, the yen or a basket of currencies). In order to maintain the local exchange rate, the central bank buys and sells its own currency on the foreign exchange market in return for the currency to which it is pegged. (To learn more, read What Are Central Banks? and Get To Know The Major Central Banks.)

If, for example, it is determined that the value of a single unit of local currency is equal to US$3, the central bank will have to ensure that it can supply the market with those dollars. In order to maintain the rate, the central bank must keep a high level of foreign reserves. This is a reserved amount of foreign currency held by the central bank that it can use to release (or absorb) extra funds into (or out of) the market. This ensures an appropriate money supply, appropriate fluctuations in the market (inflation/deflation), and ultimately, the exchange rate. The central bank can also adjust the official exchange rate when necessary.

Floating Exchange Rates

Unlike the fixed rate, a floating exchange rate is determined by the private market through supply and demand. A floating rate is often termed "self-correcting", as any differences in supply and demand will automatically be corrected in the market. Take a look at this simplified model: if demand for a currency is low, its value will decrease, thus making imported goods more expensive and stimulating demand for local goods and services. This in turn will generate more jobs, causing an auto-correction in the market. A floating exchange rate is constantly changing.

In reality, no currency is wholly fixed or floating. In a fixed regime, market pressures can also influence changes in the exchange rate. Sometimes, when a local currency does reflect its true value against its pegged currency, a "black market", which is more reflective of actual supply and demand, may develop. A central bank will often then be forced to revalue or devalue the official rate so that the rate is in line with the unofficial one, thereby halting the activity of the black market.

In a floating regime, the central bank may also intervene when it is necessary to ensure stability and to avoid inflation; however, it is less often that the central bank of a floating regime will interfere.

The World Once Pegged

Between 1870 and 1914, there was a global fixed exchange rate. Currencies were linked to gold, meaning that the value of a local currency was fixed at a set exchange rate to gold ounces. This was known as the gold standard. This allowed for unrestricted capital mobility as well as global stability in currencies and trade; however, with the start of World War I, the gold standard was abandoned. (For more on the gold standard, see The Gold Standard Revisited.)

At the end of World War II, the conference at Bretton Woods, an effort to generate global economic stability and increase global trade, established the basic rules and regulations governing international exchange. As such, an international monetary system, embodied in the International Monetary Fund (IMF), was established to promote foreign trade and to maintain the monetary stability of countries and therefore that of the global economy. (For further reading on the IMF, see What Is The International Monetary Fund?)

It was agreed that currencies would once again be fixed, or pegged, but this time to the U.S. dollar, which in turn was pegged to gold at US$35 per ounce. What this meant was that the value of a currency was directly linked with the value of the U.S. dollar. So, if you needed to buy Japanese yen, the value of the yen would be expressed in U.S. dollars, whose value in turn was determined in the value of gold. If a country needed to readjust the value of its currency, it could approach the IMF to adjust the pegged value of its currency. The peg was maintained until 1971, when the U.S. dollar could no longer hold the value of the pegged rate of US$35 per ounce of gold.

From then on, major governments adopted a floating system, and all attempts to move back to a global peg were eventually abandoned in 1985. Since then, no major economies have gone back to a peg, and the use of gold as a peg has been completely abandoned.

Why Peg?

The reasons to peg a currency are linked to stability. Especially in today's developing nations, a country may decide to peg its currency to create a stable atmosphere for foreign investment. With a peg, the investor will always know what his or her investment's value is, and therefore will not have to worry about daily fluctuations. A pegged currency can also help to lower inflation rates and generate demand, which results from greater confidence in the stability of the currency.

Fixed regimes, however, can often lead to severe financial crises since a peg is difficult to maintain in the long run. This was seen in the Mexican (1995), Asian (1997) and Russian (1997) financial crises: an attempt to maintain a high value of the local currency to the peg resulted in the currencies eventually becoming overvalued. This meant that the governments could no longer meet the demands to convert the local currency into the foreign currency at the pegged rate. With speculation and panic, investors scrambled to get their money out and convert it into foreign currency before the local currency was devalued against the peg; foreign reserve supplies eventually became depleted. In Mexico's case, the government was forced to devalue the peso by 30%. In Thailand, the government eventually had to allow the currency to float, and by the end of 1997, the Thai bhat had lost 50% of its as the market's demand and supply readjusted the value of the local currency. (For more insight, see What Causes A Currency Crisis?)

Countries with pegs are often associated with having unsophisticated capital markets and weak regulating institutions. The peg is therefore there to help create stability in such an environment. It takes a stronger system as well as a mature market to maintain a float. When a country is forced to devalue its currency, it is also required to proceed with some form of economic reform, like implementing greater transparency, in an effort to strengthen its financial institutions.

Some governments may choose to have a "floating," or "crawling" peg, whereby the government reassesses the value of the peg periodically and then changes the peg rate accordingly. Usually this causes devaluation, but it is controlled to avoid market panic. This method is often used in the transition from a peg to a floating regime, and it allows the government to "save face" by not being forced to devalue in an uncontrollable crisis.

Conclusion

Although the peg has worked in creating global trade and monetary stability, it was used only at a time when all the major economies were a part of it. And while a floating regime is not without its flaws, it has proved to be a more efficient means of determining the long-term value of a currency and creating equilibrium in the international market.

[hammy]

Sorry last post was kind of a long read. This site is fun to run around on. http://www.imf.org/external/np/fin/tad/exfin2.aspx?memberKey1=460&date1key=2011-02-02

[marknet73]

Your asking the right questions. at RV= 25 cents, Iraq would be obligated to back up over 5 Trillion dollars worth. if only 1% was cashed in, that would be over 50 Billion $$$. they would have to give away all of their reserves to cover that. Go figure.

I see exactly what your sayin. Doesn't Iraq back up their currency 100% in reserves? Their currency value is very low now but at least it's strong because of the reserve backing. I'm not an economist but it seems like drastically increasing the value would put a huge strain on their reserves and put them way far in debt. I really want to see the value shoot up because I know I can sure use the money! But like that last post said, maybe they can float their currency instead of pegging to the US dollar. Maybe then it can reach its potential based on market conditions and of course their tremendous amount of natural resources can be taken into account as well. The biggest concern for me is the huge amount still in circulation. if they're really gonna RV at $3+ soon then why are banks and so many other people and businesses still selling at 1170 and why is it still so easy to buy at such a cheap price?

[keepmwlknfny]

Well the last few posts were a waste. Keep em walkin funny, no matter what they R.V. at they can't cover it. Not right now. Even if it R.V.s at $0.10 cents. So what you are saying is they can't R.V. as long as we have some of their currency locked away in a closet somewhere? World contracts and demand for their Oil = Demand for their Currency. You are not one of those Idiots who thinks that it will come out at pennies on the USD are you?

What Im saying is that we will not see any huge jump in the value of the currency until they reduce the money supply they have......even the most widely used currency in the world doesnt have a money supply that big....its a fraction of Iraqs 27 trillion......doesnt matter if its going to be fixed, pegged, floating....none of that matters right now or will matter if they dont reduce the cash in circulation because the value simply will not go up drastically.....it could come out very low and eventually rise while getting in bigger bills from the citizens in country since 90% is over there.......but its implausible to think you can get even a dollar rate with so much cash out there.....

[marknet73]

Keep is right on this. Saudi Arabia's rate is around .27 and Kuwait's is over $3 but they have a whole lot less in circulation than Iraq. I'd sure like to think that they've removed over 80% from circulation already but like alot of other stuff its just speculation really. I'd like to see some signs that they're getting the levels down but it seems like if they were then the big bills would become much more scarce to buy. I'm wondering what rate they can afford if the currency levels stay near 27 trillion. I'd love to be convinced that they can afford $1+ but what rate would be best for them to give their currency more buying power but still not break the bank?

Edited February 1, 2011 by marknet73

[hammy]

When we start to see articles like this one it tells me Iraq is aware of things that need to take place or at least appear to be taking place for the value of their currency to be raised.

Notice line 10 in the first post about education.

http://www.burathanews.com/news_article_115866.html

University of Kufa, progressing in the classification of the best universities in the world

04/02/2011

President of University of Kufa, on Thursday, on the progress of his university in the world rankings (Webometrics) Spanish to the best universities in the world to be the first by an Iraqi university is making progress in the classification after the center reached 6097 of between 12 000 universities worldwide.

Abdul Razzaq al-Essa said "the university has also become ranked 77 among Arab universities and thus surpassed the large number of Arab Universities, which have a long tradition in the academic sphere and cut off many years compared with the age of the University of Kufa, which does not exceed 24 years."

He explained that the "University of Kufa, ranked 6097 of between 12 000 universities worldwide, despite the existence of competition between the various universities in the world and this result may be the University of Kufa and made within six months on the 5903 world class after it was ranked 11 152."

He said that "The achievement was made thanks to the efforts of all teachers, faculty and staff and soldiers of the fourth power in the Department of Information and Public Relations." Demanding "associate the need to maintain the results and mattresses developed obtained by the university."

According to the President of the University Coffee Abdul Razzaq Al-Essa, the University of Kufa was Rkizatha basic scientific institution is the academic institution was known Hozoip forum posting and was founded in 1957 as well as the Faculty of Islamic Jurisprudence and adopted far the most important college in the university.