I was hoping that you could study the history of the New Israeli Shekel that was introduced on January 1st, 1986 and break down the differences with the Dinar currency. I would love to hear your opinion about this.
Some similarities:
The OLD Shekel was 1500 to 1 US Dollar
The NEW Shekel was 1 NEW Shekel to 1 US Dollar with the new coins
They made new coins
They released or started the exchange process on Jan. 1st, 1986
Sounds similar, right?
I have avoided asking on a call or bringing up in chat, because I don't want to start a "LOP" argument. And just for the record, I am a VERY STRONG BELIEVER in an Iraqi Dinar currency increase. But would like your take on it, please!
"The old shekel was short-lived due to the high rates of inflation in Israel at the time..."
The main difference between the old shekel and the IQD is...a LOP scenario is generally in play where there are circumstances of high inflation.
This is not at all the case with Iraq. In fact, in spite of the security situation - there are still outside countries and companies literally clamoring to do business with them.
Turkey being the most recent (as of yesterday).
"...The Israeli lira, followed by the old shekel, experienced frequent devaluations against the US dollar and other foreign currencies starting in the early 1960s and accelerating from the mid-1970s. This trend culminated in the old shekel suffering from hyperinflation in the early 1980s..."
Further - this is basically the opposite of the scenario with the IQD. From 2003 until now - shaky economy or no, the IQD has continued to APPRECIATE being raised from 4000:1 - to 1166:1 at last count. For nearly 10 years the IQD has gone in the opposite direction of the old shekel - UP.
On another interesting side note -
Also from Wikipedia - "In the future, the exploitation of recently discovered natural gas reserves off the Israeli coastline that is expected to begin in the mid-2010s decade and onwards may serve to further strengthen the Israeli currency."
Hmmmmmm - so natural resources do have an impact on currency values after all??
Thank you for your reply and for taking the time to give me your insight and observation. Those are all truthful and valid points, and I agree...that's why I'm invested, too! I just needed to bounce the idea around with a respected researcher like yourself, because in the almost two years I've held dinar, I haven't heard the comparison.
Actually what Wikipedia said was, the natural gas resources MAY increase the value of the currency in the future IF said resources are first Exploited.
It does not say that it will or does effect the value for certain and it clearly doesn't elude to it happening simply because the natural gas was discovered or documented. It says it must first be exploited, i.e. mined, pumped, refined, manufactured, marketed/sold before there can be a POSSIBILITY that it MAY effect the currencies value.
So no, the mere presence of unexploited natural resources does not effect a currencies value simply due to it's existence. It isn't saying that at all.
Originally Posted by BGG
Meliahlore,
From the Wikipedia links...
"The old shekel was short-lived due to the high rates of inflation in Israel at the time..."
The main difference between the old shekel and the IQD is...a LOP scenario is generally in play where there are circumstances of high inflation.
This is not at all the case with Iraq. In fact, in spite of the security situation - there are still outside countries and companies literally clamoring to do business with them.
Turkey being the most recent (as of yesterday).
"...The Israeli lira, followed by the old shekel, experienced frequent devaluations against the US dollar and other foreign currencies starting in the early 1960s and accelerating from the mid-1970s. This trend culminated in the old shekel suffering from hyperinflation in the early 1980s..."
Further - this is basically the opposite of the scenario with the IQD. From 2003 until now - shaky economy or no, the IQD has continued to APPRECIATE being raised from 4000:1 - to 1166:1 at last count. For nearly 10 years the IQD has gone in the opposite direction of the old shekel - UP.
On another interesting side note -
Also from Wikipedia - "In the future, the exploitation of recently discovered natural gas reserves off the Israeli coastline that is expected to begin in the mid-2010s decade and onwards may serve to further strengthen the Israeli currency."
Hmmmmmm - so natural resources do have an impact on currency values after all??
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I just needed to bounce the idea around with a respected researcher like yourself, because in the almost two years I've held dinar, I haven't heard the comparison.
Originally Posted by BGG
