BGG ~ I have several thoughts for today…
First, I vigorously disagree with the “anti-guru’s” on Iraq’s recent gold purchases. Of course it doesn’t point to an immediate RV – but to make this your “guru straw man” to beat up on is foolish. If Iraq is buying gold as a “financial mattress” (a buffer or hedge would be the proper terms) for their currency, then my point is – they are building the DINAR a SERIOUS MATTRESS and I would submit this DOES POINT OUT SOME SERIOUS SHIFT in monetary policy. It is obvious.
Second, if there is such a glut of Dinar and big notes as implied by some “naysayers” – then where in the heck are they?? Has anyone not thought about this in it’s simplest terms?? Private banks are screaming for liquidity – THEY NEED NOTES!! If there is so much stinking Dinar in circulation – it should be a simple matter to obtain what the market (in Iraq) needs. THIS IS NOT THE CASE.
Third, if the CBI truly intended to keep the value at 1166 – would it not be a reasonable conclusion they would regularly replace the worn and damaged currency?? This has been a source of major complaint for some time now. Ask yourself why the complaints? Simple – any normal economy has a plan in place for removal and replacement of worn and damaged currency. The US replaces significant amounts of our currency on a regular basis. This is a common practice. Not in Iraq (currently) – Why?