I'm gonna post this again, just because I'm not sure where I put it before and Steve's comments don't really make sense without some context. This goes to something a lot of folks are very familiar with around here. Open monetary policy. It's the same thing our Fed, and many other central banks do to control the value of their currencies...buying and selling bonds. So, it looks like economic reform is how they get there, and open monetary policy is how they do it. Getting clearer.


Financial representative: on the Central Bank on monetary policy open

|On 2013-08-20 | Writer Anthony David


Baghdad/Hamad Daham

The parliamentary Finance Committee stressed that "the primary cause of high dollar to Iraqi dinar lies in the political set by the Central Bank since the monetary policy pursued by the Central Bank with businesses and banks that deal with the Bank".

The Committee Member said Faleh Sari for daily "Alalam" that "the Central Bank told the House Finance Committee will follow the new theme mechanism will make a significant contribution in raising the value of Iraqi dinars before next June and will be the mechanism to raise the value of the Iraqi dinar against the US dollar."

He said in effect that "on the Central Bank to reduce the size of the companies that deal with money raised in the auction, which will lead to the reduction of the value of the dollar and rely on open monetary policy without complicated procedures and controls and opening wider the hopes of State banks. The banknote market has seen obvious variation in the exchange rate of the US dollar against the Iraqi dinar.



[link to www.microsofttranslator.com]
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Enorrste:
KAP called me today, 3 times (!), to get me to chime in here. So here goes.
When I first read this short article I was somewhat disappointed because I felt that it might be dealing with the ages-long problem of the falling value of the dinar against the dollar. You all might recall that I picked one of the previous articles apart and said that it didn't refer to an RV or even a free float, but instead only of CONTROL of the currency rate.

Then I decided to follow KAP's totally prescient advice (that's a compliment!) and follow up with some research from the IMF. Here is what I found, thanks to KAP:

"By buying or selling bonds, bills, and other financial instruments in the open market, a central bank can expand or contract the amount of reserves in the banking system and can ultimately influence the country's money supply. When the central bank sells such instruments it absorbs money from the system. Conversely, when it buys it injects money into the system. This method of trading in the market to control the money supply is called open market operations."

This is directly from the IMF. Now we have the CBI stating that they will move to "open market operations." They are, clearly, referring to the very quote above in terms of meaning. What does that mean for us? Here comes the good news, folks.

You all may recall that I had a debate with Din************.com in which they said, unequivocally, that it would be impossible for Iraq to reduce the money supply. Well, guess what? The IMF has shown conclusively that "open market operations" clearly will allow the CBI to reduce the money supply. All they have to do is sell bonds!

Now, it gets better, because we know from many months ago that the CBI stated that their plan was to reduce the money supply, right? But we have always thought that the only way they could do that was to buy back the large denoms, right? NOW we see that the means to buy back the large denoms is to sell bonds. People will buy bonds with large denominated dinars. The CBI will destroy them. Therefore there will be no "coersion" as the Douchbags thought. It will be, quite simply, OPEN MARKET OPERATIONS! Duh!

They will be able to reduce the money supply by creating "debt" out of thin air, namely through selling bonds. The US has been doing this for over a generation. Iraq HAS NO DEBT, so their is very little risk for them in doing this, right?

The bottom line is that the CBI is announcing that they are about to follow the IMF "open market operations" program to a "T."

What does that mean? It means that they will begin to reduce the money supply! And what does that mean? It means that the VALUE of the remaining money will RISE. And what is the goal? Clearly stated, it is to get the dinar up in value BEFORE next June.

Now, you have to start somewhere before you get to BEFORE June, right? I think this article is saying that they are about to start. That means "free float." Sorry, Douchebags, but you lose and we win!