SWFloridaGuy - Musing on Iraq's currency situation
SWFloridaGuy - I realize that there are many who believe that this is out of Iraq's hands and that they have nothing to do with their own currency at this point. I respect this view (I'd prefer it was the case actually) but the ones postulating this theory have done so since December 2010. This causes me to take issue with it and has forced me to do independent research. I realized quite some time ago that this is really a work in progress and not benevolent to our individual needs no matter how much declare that it is "done". I respect those that who see it differently then myself. This is after all, highly speculative.
I believe this will always be in Iraq's hands (in part) because any large currency appreciation event depends upon stability and faith that a country can maintain long-term stability. Stability will always be a concern to anyone who may be "pulling the strings" or influencing the CBI one way or another. This consideration is absolutely vital to ensure the success of any economic reforms. If you look at every single revaluation in the last 30 years this was the determining factor that central banks used to formulate the timing of the implementation phase of a nation’s policy agenda. That is something that I would be more than happy to prove by laying out countless documents/pdfs and case studies (not Iraqi articles) if anyone is interested.
So if the date and rate is of any interest, then you should be attentive of the political and economic scene inside the country you've invested in. That's not to say that I think you should start believing Iraqi articles. I haven't trusted an Iraqi news report in months but there are certain progress reports, case studies, Iraq historians and economic scholars who we can all learn from. Blowing this off as "smoke" and just saying that it's a global reset (video game analogy), does not explain which currencies will be adjusted, in which direction, and how this will solve the global economic crisis.
Obviously, if so many currencies are revalued then none of them would be and this affinity would be exactly what governments would go out of their way to avoid. This theory, the way it has been presented up to this point, has zero feasibility in the real world. It's a poor solution for the economic crisis and one that's only found in dinar chat rooms or Nesara blogs. If someone wishes to poke some holes in my reasoning please lay out your scenario rather than just say that I am ignorant, mistaken, that you're under a gag order and that I am now banned from your chat room.
I'm more than willing to listen and discuss the issues but please be detailed in your explanation. Please list which currencies will be adjusted and in which direction. I've seen the number of currencies set to be revalued listed by many an intel provider but never once have I seen details given. I would assume that if you know the exact number then you also know which ones specifically are set for acclimation into this new financial system and in which direction. It's also possible that no one has properly presented this theory and I look forward to hearing what the many well-informed, intelligent researchers will produce.
Something that I do think is applicable to our situation is confidence that an economy is strong and faith that strength will continue. This is often overlooked but I believe that history has proven that this is a common element that all former revaluations share. Let's say that international pressure forced the CBI to revalue their currency, there is still no way that they can maintain that growth without stability. The GOI/CBI's credibility is something that will always have to be taken into consideration.
Iraq will always be a very volatile country in an unstable region but there are some major developments that we should consider. Maliki could be removed but I highly doubt that this is going to be the case. Having said that, his decision to antagonize opponents, confront the Kurds, intimidate Iraqiyya leaders and insult Sadr has left him vulnerable. Right now he lacks parliamentary and political backing and the path that he has chosen could very well have violent consequences.
We saw the passage of the election law amendments and many are claiming that this and the federal supreme court bill are contentious issues. The April elections will be very interesting but this may reach a boiling point long before then. Maliki opposed the budget and pushed for the introduction of the new infrastructure bill but soon they will turn their focus back to the annual budget discussions. Iraq’s 2013 budget amounts to $118 billion (Ministry of Finance numbers), making it Iraq’s highest ever and unless they devote a serious contemplative effort to address this, they will begin to struggle under the burden of a large amount of newly acquired debt.
These next few days should be very interesting and we'll just have to wait and see which direction the GOI decides to take this. Maliki wants to consolidate support for upcoming elections but unfortunately (thanks in part to him) they have a very weak central government and a high level of corruption. Despite all that I still think that the CBI could move forward as they see fit. I'm not sure if it would be wise but we see the GOI/CBI receiving international pressure demanding political/economic ameliorate.
I do think that Iraq presents a unique situation and has come along at a very opportune time as we see the global monetary system struggling and it's possible that the Central Banks could use the IQD as an adjustment tool or stimulus during this global financial crisis (this part is purely speculation on my part and I have no evidence to back it up).
I've been reading up on Iraq's plans for economic integration and how they are currently the premier emerging market, not only in the Middle East, but the world. Iraq has positioned itself to make a significant impact on the oil and energy industry. They will become the most advanced nation in the Arab world, it's just a matter of time according to top economic analysts and political risk agencies. I'm looking forward to this coming period and hoping it brings some much needed political/economic stability and reform.
The global economy is suffering and is once again forced to turn to the world's central banks for salvage. I don't think that Iraq alone has the power to revive global economic growth but I do believe that they present a unique opportunity that could possibly aide in the recovery process. As usual, the timing is any one's guess but we do see many reasons to be encouraged and I believe in the rationale that says it would benefit the CBI to make their move in the relatively short-term as long as they also set policies in place that would ensure even greater long-term prosperity.
These are just my opinions, which may or may not be correct.