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Iraq an economic Study
Ms Sans Serif
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[quote:Anonymous Coward 29215748:MV8xNzI0NTM4XzM1MDM4MzgyX0M2NDI3MkNG] [quote:ReVbo™:MV8xNzI0NTM4XzM1MDM4MzAzXzc5OUNDODUx] tlar: I'm not absolutely sure but it looks to me that this article says two things. The first is a confirmation that it was the difference between the street rate and the program rate that created the massive selling of dollars. We already knew this. Whether or not Shabibi planned this or he just took advantage of this condition, it was a good thing for Iraq and it was not illegal. I've said all of this before and now this article confirms it. Personally I believe Shabibi took advantage of the situation when it came about. I believe this because he could have at anytime defended the exchange rate with 67 billion in reserves. Most countries operate under a requirement by the IMF as fractional reserves, meaning they have to have only a fraction of the money in cash in their bank to cover the money they have in the streets as loans. Generally this can be as little as 10% upto as much as 20% depending on the country and the specific bank. Iraq has their dinars covered at almost three times the value of the dinars out, just sitting in the bank, and at 67 billion in reserves they could have easily defended any exchange rate by putting a premium on the dinar. So for me, this disparity in the street rate and the program rate was never adequately defended and therefore I think Shabibi, being as intelligent as he is took advantage and bought as much dinar as anyone wanted to sell. Remember he even went beyond the auctions when he allowed the banks to sell up to $5000 dollars at a time to anyone wanting to sell their dinars which was a total reversal for him. The second thing this article seems to imply is that they are expecting that with the recent announcement of the CBI being authorized to raise the dinar, that the demand for the dinar will go up significantly while reducing the auction sales of USD, which also supports the premise that as the dinar goes down, USD sales go up. As the dinar goes up, USD sales go down. They already stirred the currency markets up by announcing they will increase the dinar. People in Iraq are starting to quickly turn their dollars back into dinar to hopefully benifit from a stronger dinar. Somebody on this site asked, "why would they announce this in advance". I think the above article shows why. If you were sitting on a bunch of Euros and you lived in Greese and you just heard an announcement that USD was about to jump in price against your Euro, what would you do? Personally I would liquidate all my holdings and put them in USD to take advantage of the expected price increase.. It's the same thing in Iraq with the one exception that the dinar is their native currency. So the bank's cause and effect is being played out just as I said yesterday. [b]IMHO they will raise the value in the next week to two weeks. Just before the end of the year. [/b] I believe the jump in terms of a return for those in Iraq smart enough to see what is happening will be significant. A return of anything 20% or more is significant. Currency dealers love this kind of helter skelter in their markets because they make money every time anyone buys or sells a currency. They will profit the most as they buy up all the dollars in Iraq at a discount after just having sold those same dollars in the last couple of months at a premium.. [/quote] if they don't raise it "in the next two weeks" will you delete this thread? lol - your really the only posting anymore. Okie says hi [/quote]
Iraq is rapidly becoming a force in world economics due to its oil reserves. What do you think the effects will be on the world economic stage. sk
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