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Wednesday, February 22, 2017

ENORRSTE UPDATE, 22 FEB

Article: “Raise the price of the Iraqi dinar to the fore again”   Quotes:  “Some Iraqi economist calls for the government to lift the Iraqi dinar exchange rate against the dollar until the rising purchasing power and increasing confidence it represents the sovereignty of Iraq…”   “…Since more than four years and officials in Iraq are talking about a project monetary reform in which to raise the Iraqi currency exchange rate against the dollar so that the new dinar equals 1.2 dinars…”  “The government is expected to return to the project itself after the end of military operations.”    This is one of the most positive articles I have read in a long time.  The author clearly states that it is not possible to “RV” in the traditional sense and explains why.
Instead, KAP discovered years ago and we have elaborated on many times, a floating currency is the only thing that will work in the real world.  But more importantly, this guy is convinced that a value of somewhere around $1.20 per dinar is economically feasible and desirable.  Furthermore, he implies that this has been in the government’s plan book for over 4 years, as KAP has already explained for the last 4 years!  In other words, he is confirming…the correct view of the situation while at the same time specifically denying that an RV would work.  Finally, as KAP noted, we see that, at least from this writer’s point of view, the only thing now holding up the implementation of the float is the ISIS situation.  It is anyone’s guess what will be necessary to convince the government to move forward, but it is possible that recovery of Mosul might be sufficient.  Only time will tell.

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