Tlar: A basket is where this is going but Iraq will not join a basket until they officially become part of the GCC somewhere on or around next year. They also will have to raise the value of the dinar significantly before they join because there are restrictions about growth of a specific currency once you go into a basket.
Baskets are meant to be a stabilizing factor and a currency in the basket that experiences run away growth or rapid decline inside that basket can upset the basket.itself.
The GCC will have its own currency not too long after it is fornmed. The dollar is slated to be part of the basket but the basket will consist mainly of member countries of the GCC.
Petro countries as a general rule are strong. Eventually the new currency will replace the perto dollar maybe as early as the end of 2015 meaning that oil sales will be based on the new GCC currency and not the dollar as they are now.
The Saudi family has been the hold out to the petro dollar being dropped so far but that too is destined to change at some point. The order of degradation of the dollar will first be countries deciding not to convert to US dollar first before they trade amongst themselves.
We have already seen the beginning of this with Russia and China and India. The next level will be countries trying to diversify their reserves away from the dollar choosing to reduce their dollar holdings where they can.
We are seeing signs of this all over as countries back off the thirst for US dollars to prop up their reserves. The third level will be getting away from the petro dollar. The world will shortly be moving back to the gold standard.
The price of gold at present is being artificially held down by the US government. There are two reasons the US government needs for gold to stay low and maybe go much lower in the short run.
Our government holds the gold of many countries at our Federal Reserve in NY for safe keeping.
Two countries have already so far have asked the US government for their gold to be returned. Germany was the first to ask. We told them flat out no, we would not release their gold to them. They would get their gold on or around Jan 1st of 2015 and not before.
Our government told Switzerland the same thing even though this gold does not belong to us. It belongs to these two countries and they are the rightful owners.
The US is attempting to hold gold because they are driving the price lower. It is what is helping to prop up the dollar at present. I am assuming by these actions by our government that something very significant is due to happen in 2015.
It may also be that when these decisions were made that our government is expecting some huge infusion to assist in propping up the dollar (aka the revaluation of the dinar).
IMO something is definitely happening by the end of this year that has never happened before.
It may well be a reset. I have always believed that a reset is most likely nonsense. I have always been a firm believer that currencies move out of evolution and necessity not by dictate from the IMF.
The IMF sets rules to play by but historically has not dictated that a player make a move. Many countries should have higher or lower values but traditionally this is left up to the country while the IMF tries to guide the process as it has been with China keeping its currency artificially low to gain and currency advantage.
The IMF mission has strictly to guide not dictate. That is the way it has been, but it may not be the way it will be. Currencies may be set by a standard body instead of left to the individual countries whims.
There is nothing to say the rules cannot be changed. It would be a more orderly market and it would assist in preventing countries from rigging the game. Just thinking out loud about a changing world and world economy that has been teetering on disaster for 7 years. tlar
Invitation to peg to a basket of currencies
6/12/2014 0:00 Spared the tremors
Baghdad - Mostafa Hashemi
called adviser banker to link the Iraqi dinar to a basket of currencies rather than confined to a dollar coin that avoids economy shocks that may occur due to the low price of the dollar globally.
said Dr. Essam Mahola told (morning) that China and Russia have expanded to cancel the dollar and the adoption of their currencies in trade exchanges between the two, including may affect the future value of the dollar is related closely vendor only of the general budget which is oil.
and signed last April, Prime Ministers Vladimir Putin and Chinese Premier Wen Jiabao, agreement allowed its provisions to their countries greater opportunities than they are by Kqutin Two economic Dharptin to raise the level of trade, Alloys Used in that their currencies the ruble and the yuan, which was considered by observers and economists as a deliver a knockout blow to the U.S. dollar,
which is a unit of global trading sole. said Mahouelle that the adoption of a basket of currencies such as the euro and the pound sterling and the other as a cover for the currency would enhances the value of the dinar, too,
stressing the need to take this step after studying the impacts and its impact on oil prices to avoid shocks that may occur in the global markets and minimize its impact on the economy of Iraq.
* What is a basket of currencies?
- The Central Bank of the selection of a group of currencies to form the basket where The basis of choice is usually the intensity of bilateral trade with these countries thereby giving a coin every state and weight in determining the rate of exchange into the basket (depends on the ratio of exports and imports with key partners to total trade: total weights = 100).,
over time, change the intensity of trade with the countries of the basket , and then change the weights of the currencies in the basket, or may change the components of the basket itself, so keep the Iraqi Central Bank on the real value of the currency as not to compromise the position of trade of the State, or to business partners.