As it stands today, Iraq has, for arguments sake, somewhere between 40 and 60 trillion dinars on M0.
At 1184-1, that’s roughly $40 to $50 billion dollars of currency.
At 1184-1, that’s 100% coverage with Iraq’s current reserves.
However if you raise the value of the dinar to, let’s say, a dime, now you have that same $40-$50 billion in reserves covering $6 trillion dollars.
That’s not enough.
1184 and a slow rise up.
How long that takes is anyone’s guess, but, in my opinion, it won’t happen quickly.
I mean, how could it?
The money supply is the problem, when Iraq moves to Article VIII they’ll still have the same 40-60 trillion out.
The first thing we need to know is, what’s M0 money supply?
The definition varies slightly, but it boils down to how much money is available in an economy, or, currency in circulation and demand deposits.
This is the grease for any economy, it’s what you and I have in our wallets and checking accounts.
So, where do we get these figures? I got them from the Central Bank of Iraq…
This tells me that Iraq has slightly more than 60 trillion dinars in circulation.
