LovesBudgies: “The Fund shall provide technical assistance to the Iraqi authorities for the implementation of policies related to foreign currency and the removal of restrictions on him.”
Kap, does “removal of restrictions” mean going to float, market supply and demand?
So the IMF is ready to take them by the hand, give them a push and some training wheels and get them going with the float?
‘Cause that sounds really promising. Help them get over their reluctance, whether it is coming from fear, or from corrupt political influence or both.
Enorrste: LovesBudgies, KAP called me and asked me to comment on your question.
I think you are right on in your assessment. Policies related to foreign currency and the removal of restrictions on foreign currencies means moving to a floating dinar.
At present there are essentially no policies related to foreign currencies because the dinar is not tradable with foreign currencies. Thus until now they have had no need for policies related to them.
However, with the movement to a float and international recognition of the dinar those policies will have to be put in place. More to the point, the IMF is saying that when they do move into the world market with the dinar they do not want any restrictions placed on conversions from one currency to another. In other words, they are calling for a free float. Therefore I agree with your assessment completely
Enorrste: In order to understand what is happening with the dinar it is important to see it historically as a process and not as an event. What we are seeing happen has been publicly exposed just last week by the entry of the IMF directly into the affairs of Iraq. They signed an “agreement” to let the IMF basically handle things from here on out.
The very next day the announcement of the introduction of the large 50000 dinars notes came out, with a picture of the note itself on the CBI website. Bottom line: IMF is running the show and the money is already printed.
[…the IMF getting involved to the extent they are now, is very good news then.] Not just good news: great news! The IMF is in favor of floating the dinar, not just for Iraq but for the world!
Enorrste: So, how many…think that tomorrow, or someday, the dinar will go from 1166 to 1 to, say, $3.50? [more and more i am of the opinion that it will get there in short order but not all at once.] …you have hit the nail with your head!
I agree 100%. I really don’t think that most investors in the dinar know just how powerful a process (not an event) they have entered into. I also believe that once the float begins about 90% of the investors will cash in well before that process has fulfilled God’s plan.
[so then how could the IQD have a past rate of $3.22…which it did?] …under the Saddam regime the rate was artificial but never recognized internationally.
Enorrste [What do you expect out of your (example) 1 million IQD…You paid let say…$1100 usd for it…are you expecting to make $400 usd profit over time…?] Much more than that.
With reserves that are greater relative to their money supply than any country in the world Iraq is poised to become a powerhouse internationally. The ultimate value will be determine by the market itself.
The CBI is very clear on this. Their goal, however, was specifically stated back in 2007: $3.33. That number was the value before Saddam came into power, and they are a very proud people who want it to be returned. My own view is that this may be conservative, given their reserves.