ken....Any comments about success in Iraq?
The Executive Board of the International Monetary Fund issued the following statement in September 2008:
betoniraq.com
“To keep inflation under control, the Central Bank of Iraq will tighten its monetary policy stance, notably by increasing the pace of appreciation of the dinar and by keeping its policy interest rate positive in real terms”.
We'd invite you to read the entire IMF press release here.
Could the dinar really outperform the dollar?
Oct 15th, 2008 marked the 5th anniversary of the introduction of the new Iraqi dinar. Five years later, we're looking at a currency that the IMF has deemed grossly undervalued. In the course of those 5 years, Iraq's economy has grown consistently, seemingly unabated. Even during the "pre-surge" period, just some in Congress were proclaiming the efforts in Iraq to have been "lost", the economy continued to grow. New business continued to open their doors by the thousands, month after month. The output of oil was reaching pre-war levels, which have since been surpassed.
All the while, the value of the Iraqi dinar has continued to rise.
On this side of the world, things are now a bit different. As disturbing as it may be, trillions of new US dollars are well on their way to being printed. With a troubling sense of whimsicality, they might soon be tossed into the open market. If this has raised doubts in you, regarding the position of the dollar for the immediate future, you are most certainly not alone. Especially disconcerting, is that so few seem willing to face up to the seemingly clear consequences. Who needs a degree in economics to understand that a huge influx of a currency invariably dilutes its value? Does dilution ever strengthen anything?
Will today's $1,000 be worth that much 6-12 months from now?
We are not pleased to point out the potential troubles of the dollar. It's our money too, and we're proud of the Greenback as anyone could be. That said, what do you see when you look at our trillions in debt, struggling economy, wildly fluctuating Dow, and seemingly endless bailouts? It's difficult see the immediate future of our own dollar as looking particularly bright.
Iraq - Big resources, tiny debt.
Meanwhile, Iraq's national debt is miniscule by most any nation's standards. They have untold tons of gold in their national reserves. Naturally, their oil and natural gas reserves are vast, and only beginning to be tapped to their full potential. As our own government seems unwilling to open up drilling and exploration here in the good old USA, the specter of unstable oil prices looms quite large. The country that's got its own, and supplies the world, should be doing quite well in the coming months and years.
Perhaps it's time to put a few dinars away for a rainy day.
If the dollar is currently overvalued, and the Iraqi dinar is currently undervalued, one doesn't wait for equilibrium. One seizes the moment, and pounces on the opportunity. During this Christmas season, as you ponder your gift giving plans, give some thought to the months ahead. The new iPod will become obsolete. The new 42" flat panel TV will start looking too small.
But the Iraqi dinars in the closet might prove better than money in the bank. |
