The Iraqi Dinar between the illusion of zeros and the game of economy

[trooper]

I don't know if this has every been posted.. If ti has sorry..

The Iraqi Dinar between the illusion of zeros and the game of economy

A lot have been said lately on the phenomenon of amending Iraqi Dinar. The word “Amendment” implies several aspects including improvement first. When this procedure was first stated by one of senior officials directly concerned with this subject, it was merely a general statement.

Later, this suggestion turned out to be the removal of three zeros from right side of the figure; thus ( 5.000.000) five million I.D. will be ( 5.000 ) five thousand I.D. many saw great good in this procedure but it is necessary to explain it scientifically.

The value of the currency affects many aspects which are linked to the National Economy like its strength and how much resource it has. It also, reflects the firmness of association when range and size of deficit to GDP represent how much that deficit is taking from size of GDP of a country; in other words, this ratio represent the size of the ( corrosion ) taking place in the GDP because of this shortfalls in the balances. Hence the economic imbalance which affects the structure of economy resulting this contradictory combination that finally leads to economic problems reflected on the economic process in this country affecting all joints of life and it is revealed even move the ordinary individual because it is directly attached to his average level of living.

Thus the existence of the deficit in the balance requires to filled by the state, and then there is the increasing demand for the foreign exchange to fill that deficit, that demand grows whenever the deficit does, and the size of the financial obligations of a certain country grows too, especially when these obligations means the increase in its foreign debts.

The high demand for the foreign exchange leads to the rise of the prices of the foreign currency which is subjected to the mechanism of the supply and demand and the requirements of the international or local market. This will lead to the devaluation of the local currency of that country and will be reflected on the living situation. In other words, the ratio of inflation in the economy which is obvious to the observer is actually in the increasing zeros added to the currency. This shows clearly in the Iraqi economy and the economies of such countries like Turkey, Italy, Iran, Israel and others.

Another important point is that the currency is issued and its value is determined according to a law issued by the state through the mechanisms and the institutes in charge of the financial policy in that state. So it is certainly not a viewpoint of a certain person nor just on opinion of this matter.

To recall some experience, Turkey, which has suffered from severe inflation after accepting the World Bank and the International Monetary Fund concerning the economic reform programs? , which led to progress in economic performance, but the price of this performance was paid by the middle class in society. This economical progress did not prevent the existence of a high inflation ratio that seemed to be obvious to the ordinary none-specialized observant to economy, like when you learn that the price of a loaf of bread is one million Turkish liras. It was then, the value of the currency was improved by removing zeros, and the price of the loaf became one thousand Turkish liras. But this was not done by re-constructing the Currency Law, nor by its Gold and Cash re-evaluation. It was by an internal procedure aiming at absorbing the fear, despair and frustration caused by the high ratio of inflation and so, the zeros were removed without a real change in the true value of the currency which represent the true value of the individual income; meaning, the amount of goods and services an individual could get. Thus, the removal of the zeros was no more than a ( monetary illusion ). So it is not a fundamental but rather a formal change that affects the mentality of those who deals with the currency more it affects the size of the economic transactions.

A reporter of one of the Arabic newspapers asked me about the impact of this decision, if applied in Iraq? My answer was that it would not exceed the ( monetary illusion ) and there would not be any real changed in the true value of the currency nor any re-evaluation to it, because such actions would require a re-construction of the whole Iraqi economy and the re-arrangement of the Iraqi economic papers affecting its bound with the Paris Club and its obligation to the conditions of the World Bank and the International Monetary Fund. This will not happen ; what will happen is an attempt to absorb the anxiety and frustration on the Iraqi currency dealer. We can not change the value of the Iraqi currency into a better state of value and pricing as long as there are still unpaid external debts and until we find the best way to deal with these debts.

Some dealers in the currency markets in the neighboring countries feared from the Iraqi Government taking such actions. This fear would have been normal during the reign of the fallen regime because of the unavailable freedom for the circulation of foreign exchange, the existence of the central market and the dictatorial philosophy then. But now, the freedom to deal with and circulate foreign exchange is available in Iraq because of the economical openness and the circulation of currency became free in and outside Iraq; but it is also subjected to the factor of supply and demand. There is also, the political stability which greatly affects directing the rates of the supply and demand and its management in and outside Iraq.

Any observer can sense this more clearly in the money markets in neighboring countries.

Finally, we have a long way to go on the way of the economic reform and reconstruction in order to improve the price of the Iraqi Dinar and its raise its value or as some would like to call it ( when the Iraqi Dinar gets its health back ). This is not impossible and tomorrow is not too far.

http://www.iraqdirectory.com/DisplayNews.aspx?id=2045

[vrnorth]

This is dated ..9/10/2006

So that put's us at???? TODAY :lol: :lol:

[PD46]

This is dated ..9/10/2006

So that put's us at???? TODAY :lol: :lol:

Bingo!

[Markinsa]

I don't know if this has every been posted.. If ti has sorry..

This is the second or third time I've seen you say this, please go to this link it will help you know for sure.

http://dinarvets.com...eman-can-do-it/

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The Iraqi Dinar between the illusion of zeros and the game of economy

The Iraqi Dinar between the illusion of zeros and the game of economyAl-Sabah -

[9/10/2006]

Plus this article is from 2006.

[Dalite]

Someone had a tremendous amount of insight, and a very good understanding of how money works, as well as economics.

This is the best opinion piece I have seen.

Even in 2006, it was fairly universally understood that ReDenomination was the first choice in preparing the Iraqi economy for the future.

[ashtray]

this story as well as a few others seem to be saying , if you invest in the iraqi dinar you wont be getting any return...wonder why they would do that ?

thats the kind of article that would drive its own citizens to the dollar... heck the govt doesnt even want the dinar .. they tell us they only want 27 billion dinars in circulation with a 90 billion dollar govt budget , not to mention the private sector , and what will be used internationally ......

sounds like a shakedown to me

why would the cbi be interested in deverting attention away from their currency?

in 2005 we were told it would be bad if everyone bought up all the dinar it would make it worthless ,, im seeing a pattern of dont buy the dinar storys that dont add up or come true ,, the truth ,,when it comes out im thinking will be far different from what we are reading.

go rv