The two pocket picture. Think of Iraq’s money as two pockets. Pocket one is dollars from oil. Pocket two is dinar used to pay salaries. The exchange rate is the door between those two pockets. The CBI sets what $1.00 is worth in dinar. If they print more dinars, [dinar] pocket two get bigger on paper [but each dinar is worth less dollars]. The door does not change…A rate adjustment changes the door. If the dinar is reset stronger, each oil dollar that comes in and creates more dinars [maintaining the value]…A new rate only works if both pockets are being fixed at the same time…Militia Man
