Dinar News Central [Bank] advisor to Maliki sees the

[Enorrste]

I hope that I have been able to

[Enorrste]

Assuming that I have been able to get the gist of this article, let me make a few comments as to the import of it for our understanding.

First we need to see that what is being presented here is an open dialogue regarding the stated purpose of the CBI to remove the large denominated notes from the Iraqi economy. The argument has two sides, the CBI which is defending the program and critics who are questioning the timing and efficacy of the program.

Saleh is the major proponent of the program as we have seen from the beginning, and he is standing firm in his statement which is consistent with previous statements. He is also firm in clarifying that this plan of the CBI will go through, even if it takes a little longer than originally scheduled.

In particular we see here that Saleh has stated that the process will reduce the money supply of Iraq from 23 trillion dinars back to 25 billion dinars. This is extremely important because it proves that they know what they are doing and that Iraq will be able to afford the revaluation of the dinar at a level of $1 or more.

Paragraph three is particularly important to understand. I am reproducing it here for ease of access:

Saleh told (Voices of Iraq) that "there is no need to rush the process at the moment but at the same time it is required because the subject of reform will not change the value of the currency, except to make the bills smaller." He stressed that Iraq "During the next few years, according to the new development plan, will raise its oil production, and resources will increase significantly.” He added, “and we therefore need a strong currency and low [denomintated notes] at the same time, [thereby making them] easy to handle. "

I have underlined what I believe are the two key elements in this paragraph. They need to be taken together as a part of this unified thought of Saleh. If taken separately we could easily get confused. In the first part he says that the reform will “not change the value of the currency” and that it will lead to smaller bills replacing the large ones only. On the surface this sounds exactly like a lopping, However, from the last underlined portion we see that this is not the case, since he concludes by saying that Iraq needs a “strong currency” with low denominated notes. We can now understand that the meaning of the first part is that the “current” value of a 25,000 dinar note and the “new” value of a 25 dinar will not change the value of the currency. In other words, they are both worth about $25. This means that the exchange rate must grow by 1000 times for this to happen, since the article makes clear that they are not “substituting” a new currency for an old one as has been done in Bolivia, Turkey, Venezuela, and elsewhere. Now we can understand the meaning of the phrase “strong currency” at the end of the paragraph.

Again, being consistent with all of the previous articles from the CBI, the meaning is clear.

Now the remainder of the article deals with the views of the critics of the plan. The players are not easily identified. We have “the economic advisor to the Prime Minister Abdel Hussein.” He is the one who feels he plan is too progressive and “in vain”. He is most likely Abdul Hussain, a member of the Prime Ministry Council under Prime Minister Maliki. Therefore the article would have been more clear in stating it this way: "the economic advisor to the Prime Minister Maliki, whose name is Abdel Hussein."

We also have Ferry Anbuge who apparently works within the CBI. His statement is mainly that he does not see any benefit to the people in the CBI plan. Further, he says that inflation is caused by inequities in economic growth and questions how removing the large notes will resolve that issue.

Finally a businessman named Al-Aradi is also included in the interview. While he was not opposed to the idea he wanted to stress that educating the people about how it will work is paramount to having it work properly and to also avoid any black marketing schemes that might arise.

To summarize: Saleh defends the CBI position on the upcoming “action plan” against his critics, further clarifying that the plan will involve a raising of the value of the IQD to a “strong currency” while at the same time, over a possibly longer period, removing the large denominated notes from circulation, thereby bringing the money supply back in line with what it was in 1980, and also thereby shoring up the new stronger currency. This clearly means that there will be an RV and that the redenomination is what make take a “longer period of time”.

Steve

[k98nights]

Thank you for your intelligent review

[NotReallyTex]

"This clearly means that there will be an RV and that the redenomination is what make take a “longer period of time”.

So your saying more than likely an RV will happen soon?

[steveh12]

Yea Thanks!

AKA Steveh12

[Deacon B]

Thank you Steve... I found the 1st translation confusing (which for me is easy to accomplish), but you shed alot of clarity for me. I am getting more axious for the RV. Is it going to happen this weekend??:rolleyes: Looking forward to your reply Bruce

[Latishall]

i hope you are right. A lot of ups and downs today!

[therentman]

Thanks for taking what has to be a great amount of your personal time, to research and present these views.

[ronscarpa]

Assuming that I have been able to get the gist of this article, let me make a few comments as to the import of it for our understanding.-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

To summarize: Saleh defends the CBI position on the upcoming “action plan” against his critics, further clarifying that the plan will involve a raising of the value of the IQD to a “strong currency” while at the same time, over a possibly longer period, removing the large denominated notes from circulation, thereby bringing the money supply back in line with what it was in 1980, and also thereby shoring up the new stronger currency. This clearly means that there will be an RV and that the redenomination is what make take a “longer period of time”.

Steve

Steve,

Thank yolu so much for your efforts and lucid analysis. Be blessed brother - we all appreciate you and your posts.

RON

[blulightning]

Thanks for the information. I hope it RV soon.

[RVat3]

Ditto -- We all appreciate his hard work and intelligence.

[jackdavis1364]

Nobody does it like Enorrste! Thanks!

[mpmartin]

Thanks for the report.

[Bruce Blackburn]

Thank you.

[tigergorzow]

Steve, We truly appreciate your expertise concerning the latest information on the RV logic vice the LOP. Patience will answer all of our questions in the near future..--)))

[THJ]

However, from the last underlined portion we see that this is not the case, since he concludes by saying that Iraq needs a

[Enorrste]

After I posted this I was afraid that it might be misunderstood. Here is a better way to understand what I was writing. Let's say that the RV is going to happen tonight. Today the 25,000 dinar note is worth $25. Tomorrow, after the RV, the 25 dinar note will be worth $25. Therefore there is no change in value between the 25,000 dinar note today and the 25 dinar note tomorrow.

What I then went on to say is that the only way this can happen is to have the RV tonight at 1000 times today's value.

Now what I did NOT say, since I was only talking about the "sameness in value' issue, is that the 25,000 dinar note TOMORROW after the RV will be worth $25,000. Had I added that I would have been straying from the point of "sameness in value" that was in the article.

So, the RV will increase the value of the dinar, creating a strong currency, according to Saleh. In doing so the old 25,000 dinar notes will also get "strong" and, after the RV will be worth a lot MORE than the new 25 dinar note, 1,000 times more.

It is important to notice that the context is not placed on the old notes but instead is placed on the buying capacity of the new 25 dinar note. It does not change from the old 25,000 dinar note. Saleh's point is that the people will not lose buying power. As it turns out, should the RV be anything over 1,000 to 1, then the new 25 dinar note will actually have MORE buying power than the old 25,000 note. Based on Zubaidi's statement that the RV would be "one dollar, or more than", I suspect that the RV will be over a dollar, and therefore that the local people will see an immediate increase in the buying power of the new 25 dinar note over the old 25,000 note.

Steve

[kamm]

Thanks again Steve. You are a blessing to us all.

[Unitedrich]

Ennorste (Steve),

That is absolutely the best narrative I have read on this board. Great job and Thanks!

[column1]

I love you work. Thank you for sharing your brilliance with us. I

[tootygal]

Thanks Steve for all you do in your research and analysis of each article that you read, and then present it to us, to make it more easily to understand.

You have to be a "Genius" !!!! Thanks so much.

[successphil1]

sometimes I feel it i so confusing

[successphil1]

wowow great info

[Matt]

Steve, Great post. Thanks for all the hard work you have put into this!!! You're my hero!!

[column1]

Thank you, and..... you must have more.........soon :>)