Post From Peoples Dinar By Dinarista in response to CountryGal & Pose’s Post:
Reading this was way too much work!!! (I suffer from Cuban Catholic work ethic <_< ). But there is a lot of good stuff here and I appreciate all the effort that went into this post. :) What I highlighted above is what I feel is the Dr. J slam dunk.
(For ease of reading Highlighted lines are added to this post below and are in italic)
The way for Iraq to move from third world to first world status in the minimum amount of time is with a strong currency.
Iraq will not emulate China's mercantilistic economic policy with a weak currency. Basically almost all their exports are comprised of oil, and it is not priced in dinars.
What Iraq needs is purchasing power!
Read More Link On Right
Article (65): Be set up legislative council called (the Federation Council) comprising representatives of the regions and governorates that are not organized in a region, and regulates the composition, membership conditions, and terms of reference, and everything related to it, the law enacted by a majority of two-thirds of the members of the House of Representatives.
A LAW ON THE VOCATIONAL TRAINING..
THE LAW FOR MUNICIPALITIES THE LAW ON THE JOINT COMMITTEE WITH KUWAIT.
THE LANGUAGE LAW.. Article -18 - This law shall be published in the official gazette and implemented after ninety (90) days from the date of publication.
. "Iraq will exercise full sovereignty over its wealth and his money early next June,and this is a great victory for the Iraqi economy, but it requires intensive broader efforts administrative and financial followed,"
NCREASE IN INTEREST RATES AND SHOULD MAKE THE DOMESTIC BONDS MORE ATTRACTIVE TO BUY.
THIS WILL MAKE DOMESTIC CURRENCY MORE ATTRACTIVE AND FOREIGN CURRENCY LESS ATTRACTIVE. SO THE HIGHER INTEREST RATE WILL MAKE EXPORTING DECREASE AND IMPORTING TO INCREASE ... BUYNG POWER INCREASES
Below is what I posted a while back as it relates to this....
Once again, thank you for your efforts. D
These are just my personal opinions on the IQD investment/speculation. It was my train of thought when I purchased IQD and remains so today. I have no intel and I'm sure as heck not a guru. And I don't have a crystal ball either. So here it is.....
What constitutes the basics of a modern early 21st century country (economically speaking)? First and foremost...modern infrastructure (as in power generation, transportation systems, water/wastewater treatment plants, advanced telecommunications, and adequate housing for the general populace).
For various reasons, Iraq today lacks all of these. And although a country can enter into "joint ventures" with companies that offer engineering/construction/management services for these, for the most part they have to be bought.
To buy them the country either has to have purchasing power to do so, or it has to borrow to pay for them.
Immediately to the south of Iraq sit Saudi Arabia and the rest of the six Gulf Cooperation Council countries, including Kuwait.
The GCC countries are all wealthy, modern countries with strong currencies. They became wealthy because particularly Saudi Arabia and Kuwait sit on an incredible amount of oil/gas reserves, estimated today to be worth around $65 trillion, even after decades of extraction of these natural resources.
However, it took Saudi Arabia approximately seven decades to get to where it is today.
Now fast-forward to the age of instant communication and today's Iraq.
Iraq's proven hydrocarbon reserves are estimated to be about half of Saudi Arabia's. However, Iraq is vastly unexplored and the proven reserves are expected to double after the results of on-going exploration are made available.
That would obviously put Iraq in Saudi Arabia's league as far as proven reserves.
But the problem is that oil/natural gas production is also increasing in other parts of the world, so the oil/gas exporting nations will have to manage their production rates to maintain prices at a certain level depending on the supply/demand situation.
Iraq is presently exempt from OPEC production ceilings, but they are actually being proactive already and cutting back on production to help maintain market prices above a certain level and to increase the lifetime of its oil fields.....
Incidentally, OPEC is reported to want to keep prices at a minimum of $100 per barrel.
So.. Iraq cannot simply go increasing peak oil production willy-nilly without these considerations.
Thus, their revenues from oil exports will be limited by supply/demand considerations.
Iraq also appears to be looking to divesify its economy and avoid borrowing....
So, under the present situation Iraq finds itself in a quandary. It is very asset wealthy, but relatively revenue poor. The Iraqi government and also the populace (due to the greatly increased access to the internet and instant communications) are fully aware that their southern neighbors have it a lot better than they do.
Are they going to be willing to wait 30-50 years to get even close to their standard of living? I rather doubt it.
But in order to develop and modernize at a pace that will get them there in say, 15-20 years, they will need to import an incredible amount of goods and services. And in order to do so, they will need purchasing power.
Their oil revenue will be limited for the reasons stated above, and they don't want to borrow.
So....the only other way they can accelerate their development, modernization, and diversification of their economy is to somehow "unlock" their underground wealth.
They essentially have to bring future revenue flows to the present via a revaluation of their currency and back (collaterize) it with their underground natural resources.
It is really a form of credit, as they are in a sense mortgaging their future, but that's what paper money is all about. wink.gif
And please realize that the foreign currency and gold reserves held by their central bank is a drop in the bucket compared to their real wealth, which is underground.
I believe the recent purchases of gold by the CBI are related to the Basil accords, as Muecke pointed out.
Regardless, the central bank reserves are about $70 billion compared to their natural resource wealth which is in the tens of trillions.
Anyway, this is my train of thought. I welcome your comments or....better yet....fire away!