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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (399618)	4/27/2003 5:40:03 AM
From: LindyBill	Read Replies (1) \| Respond to of 769667

Sound Money! Thats what Iraq needs, Raymond. And nothing is sounder than the Dollar. A Wirtschaftswunder for Iraq The German model for economic reform. Sunday, April 27, 2003 12:01 a.m. We don't suppose many Iraqis have heard of Ludwig Erhard, but the late German economist may hold the key to the successful reconstruction of their country. The cigar-chomping Erhard was a national hero in Germany, where his free-market policies laid the basis for that nation's postwar economic miracle. In the early 1990s, his how-to book, "Prosperity for All," found new readers in former Communist countries eager for their own Wirtschaftswunder in the wake of the Cold War. We bring this up because none of the grand plans for rebuilding Iraq will work without a growing economy rooted in private property rights and a stable currency. Iraq hasn't had either for decades since nearly everything was controlled by the Baath Party. A U.S. Treasury team is working on a reform for Iraq, and it could do a lot worse than follow the Erhard model. The U.S. is already airlifting greenbacks to replace, at least for now, the discredited "Saddam" dinar. The money will be used to pay the Iraqi police, oil workers and civil servants needed to run the country--at wages set by the Americans in consultation with local officials. The longer-term decision on what currency the new Iraq should adopt will be left to Iraqis, the U.S. says, but for now the dollar is the de facto currency. There's a good case to be made for keeping the dollar permanently (just ask Ecuador, El Salvador, Panama or East Timor, which have stabilized their economies by dollarizing). But if Iraqis decide it's more politic to introduce a currency of their own, it would be instructive to look at what is arguably history's most successful currency reform--the creation of the Deutsche mark and elimination of the Reichsmark in 1948. As instituted by the U.S. occupation forces and implemented by Erhard, some 500 tons of Deutsche marks were printed in the U.S. and secretly shipped to Germany. All Reichsmark accounts were fixed at 1 to 1 for the first 60 marks (40 immediately and 20 more within 60 days). Beyond that, the exchange rate was one Deutsche mark for 10 Reichsmarks, and for very large amounts 0.65 Deutsche mark for 10 Reichsmarks. A 1-to-1 ratio was maintained for wages, rents and pensions. The currency reform took place on Sunday, June 20, and West Germans formed long queues to exchange their old marks for new ones. The next day Erhard did something even more radical: He abolished most rationing regulations and canceled price controls. The effect was immediate: Prices stabilized, goods appeared on the shelves, and hyperinflation stopped. The German economic miracle was born. As retired General Jay Garner moves into one of Saddam's palaces in Baghdad, it's worth noting that General Lucius Clay, military governor of the U.S.-occupied zone, initially was furious at Erhard's reforms. When Clay told Erhard that all his advisers thought the economist had made a "terrible mistake," Erhard is said to have replied, "Herr General, pay no attention to them. My own advisers tell me the same thing." Along with a currency decision, Iraq must also decide whether to have a central bank or, as it did from 1932-47, a currency board. Under a currency board, the local currency is linked to a stable currency such as the dollar. The advantage--especially for a developing country--is that, unlike a central bank, the currency board doesn't have the option of printing more money, thereby adjusting the exchange rate. The exchange rate is fixed. Johns Hopkins economist Steve Hanke, the world's expert on the subject, favors a currency board for Iraq--though he says no one except the Pentagon has called even to inquire about the prospect. Central banks don't work in countries prone to corruption and without a strong rule of law, he says, and unlike Erhard's Germany, Iraq "has no tradition of the rule of law." Postwar Bosnia and Montenegro both have stable currencies today, thanks to currency boards linked to the euro. The Iraqis who hid the $600 million that U.S. troops discovered this week in Saddam's palaces in Baghdad understood the value of a stable currency. (There's a reason no one stashed dinars.) The Kurds in northern Iraq understand this too. They've long been using a pre-Saddam dinar nicknamed the "Swiss" dinar, after Switzerland's reputation for financial honesty. Sound money isn't the only reform Iraq needs, but without it nothing else is possible.

To: Raymond Duray who wrote (399618)	4/27/2003 8:57:04 AM
From: Tadsamillionaire	Respond to of 769667

'We'll pay all expenses to gain the knowledge from bin Laden and convey a message back' (Filed: 27/04/2003) Document 1, dated February 19, 1998 Marked "Top Secret and Urgent" in the margin and signed by "MDA", thought to be the codename for the director of one of the intelligence sections within the Mukhabarat. "The envoy is a trusted confidant and known by them. According to the above mediation we request official permission to call Khartoum station to facilitate the travel arrangements for the above-mentioned person to Iraq. And that our body carry all the travel and hotel expenses inside Iraq to gain the knowledge of the message from bin Laden and to convey to his envoy an oral message from us to bin Laden, the Saudi opposition leader, about the future of our relationship with him, and to achieve a direct meeting with him." At the foot of the page, after the signature, the director recommends bringing the envoy to Iraq because "we may find in this envoy a way to maintain contacts with bin Laden". The deputy director general gives a signature of approval. Document 2, dated February 23, 1998 Addressed to codename "M4/7", marked "Information M4 D1/3/4" and given the number 375 by the Mukhabarat bureaucracy. "The permission of Mr Deputy Director of Intelligence has been gained on 21 February for this operation, to secure a reservation for one of the intelligence services guest's for one week in one of the first class hotels [the Al Mansour Melia hotel in Baghdad]". Signed by "M.D. 1/3", next to which is written February 22. In the margin it is written that this has been done in co-ordination with the chief of the Saudi section and that they write to extend the period of host for one more week. A note at the bottom of the page says "The envoy H arrived 5th March". Another note mentions "room 414" next to the name, Mohammed F. Mohammed Ahmed. Document 3, dated March 24, 1998 Written by hand and labelled number 736 and marked "Secret" in the margin. This paper has been given the code number M 4/7/2 and is addressed to codename "2/D1/3". "Your information numbered D1/3/4/375 dated 23rd February 1998, we enclose herewith the bill to host a guest in Mansour Melia Hotel. Please let it be known and get the official permission to spend the amount and return the permission back with our regards. Include the name of bills of the hotel." Signed by another official with the codename M.M. 4/7 At the foot of this document there is another note, dated April 13, that says that after 21 days: "We have been informed by Saudi section chief [of the Iraqi Intelligence Service, the Mukhabarat] that we get permission to send the amount and the permission is sent to directorate accountant." telegraph.co.uk