This is one man's opinion of course but one that is well articulated. He brings up some interesting points. I did ask him where he derived his information from. He said he was restricted from talking about it but said it would suffice to say that he had a "front row seat to the entire affair." FWIW
Why "slow grow" and "lop" are not options for Iraq
There are those who continue to feel as though the 'slow grow' and/or 'lop' options are still very much a possibility for the CBI to consider for the Iraqi Dinar. Here are some reasons why neither of these options will work or will not be done:
*Iraq is awash with oil, and we learned a long time ago from Jed Clampett that those who are awash with oil are soon to be awash with money. As soon as the oil begins to flow in large quantities, there will be no need of a lop.
*A lop will only hurt Iraq, not help it. The US, Britain, Australia, Russia, China, all the Middle Eastern countries, Japan, etc. all hold vast amounts of the NID. All of these countries have either invested heavily in bringing Iraq to the point they are now, or are huge creditors to Iraq. A lop would be a hard slap in the face of each of these nations. If that were to happen, each nation would either slap Iraq with bills for the money and time they have invested in Iraq or they would revoke their agreement to forgive Iraq its massive dept still owed from the Sadam era. I believe it is safe to say, the reason these countries are willing to forgive Iraq and/or help Iraq at this point is because they hold much Dinar and they know very well it will be worth much in the near future.
* A lop would mean a reprint of currency. At a time when the GOI is struggling to make its currency a fully convertible and respected currency around the world, a lop and subsequent reprint and redistribution of a new currency would instantly destroy any progress made in that direction, and would assure that the currency of Iraq, (who, don't forget, is soon to be a world player in the planet's most valuable commodity, OIL!) would be worthless and unstable.
* The citizens of Iraq have been told to get and hold Dinar because it is going to be worth much soon. If you think there is unrest in the country now, wait to see what will happen if the government cuts the expected values of the citizens money by 1000%
* The GOI will not lop because Turkey did. They will want to have the ability to say to their hated neighbors.. Our currency is stronger than yours has ever been, We RVed, ha! ha!... you lopped!
Now, what about slow grow.
*Here is a country filled with people who have never had a pee pot they could call their own. Every dime of wealth has been stolen from them for decades and the majority of them live in squalor. The people of Iraq are not stupid and they understand now that since Saddam is gone, the country's natural resources, or the fruits thereof now belong to them. There is simply no way the average Iraqi Joe is going to sit back and wait one minute longer than he knows he has to for things to change. Right now, things are looking much better to the people of Iraq. Soon, they will expect and demand action to change their lives. Slow grow will not do that, the Dinar has to undergo a quick transformation and end up being 'on par' with the US dollar, the currency iraqis have been using for the last five years.
* There will be new elections coming up in Iraq. If this current administration does not significantly increase the living standards of the Iraqis, they are going to be out of work very soon. I look for a reval of the Dinar at least a half year before elections, which, I think, are next November.. Someone may have more info on this.
*If "slow grow" is the method the Iraqis are endeared to, why has the rate virtually stopped growing the past two months. If we have slow grow, then we should see weekly changes in the exchange rate, not bi monthly changes.
*Iraqis are a proud people. They are so because their Pride and individual self worth are the only things they could legitimately call their own for most of their adult lives. There is no way the CBI will not RV in one fail swoop, because that is what Kuwait did, and they are never going to give Kuwait, a nation that most Iraqis loathe, the bragging rights that they were able to issue an instantaneous RV while Iraq could only manage "slow grow."
*Iraq is awash with oil, and we learned a long time ago from Jed Clampett that those who are awash with oil are soon to be awash with money. As soon as the oil begins to flow in large quantities, there will be no need of a lop.
*A lop will only hurt Iraq, not help it. The US, Britain, Australia, Russia, China, all the Middle Eastern countries, Japan, etc. all hold vast amounts of the NID. All of these countries have either invested heavily in bringing Iraq to the point they are now, or are huge creditors to Iraq. A lop would be a hard slap in the face of each of these nations. If that were to happen, each nation would either slap Iraq with bills for the money and time they have invested in Iraq or they would revoke their agreement to forgive Iraq its massive dept still owed from the Sadam era. I believe it is safe to say, the reason these countries are willing to forgive Iraq and/or help Iraq at this point is because they hold much Dinar and they know very well it will be worth much in the near future.
* A lop would mean a reprint of currency. At a time when the GOI is struggling to make its currency a fully convertible and respected currency around the world, a lop and subsequent reprint and redistribution of a new currency would instantly destroy any progress made in that direction, and would assure that the currency of Iraq, (who, don't forget, is soon to be a world player in the planet's most valuable commodity, OIL!) would be worthless and unstable.
* The citizens of Iraq have been told to get and hold Dinar because it is going to be worth much soon. If you think there is unrest in the country now, wait to see what will happen if the government cuts the expected values of the citizens money by 1000%
* The GOI will not lop because Turkey did. They will want to have the ability to say to their hated neighbors.. Our currency is stronger than yours has ever been, We RVed, ha! ha!... you lopped!
Now, what about slow grow.
*Here is a country filled with people who have never had a pee pot they could call their own. Every dime of wealth has been stolen from them for decades and the majority of them live in squalor. The people of Iraq are not stupid and they understand now that since Saddam is gone, the country's natural resources, or the fruits thereof now belong to them. There is simply no way the average Iraqi Joe is going to sit back and wait one minute longer than he knows he has to for things to change. Right now, things are looking much better to the people of Iraq. Soon, they will expect and demand action to change their lives. Slow grow will not do that, the Dinar has to undergo a quick transformation and end up being 'on par' with the US dollar, the currency iraqis have been using for the last five years.
* There will be new elections coming up in Iraq. If this current administration does not significantly increase the living standards of the Iraqis, they are going to be out of work very soon. I look for a reval of the Dinar at least a half year before elections, which, I think, are next November.. Someone may have more info on this.
*If "slow grow" is the method the Iraqis are endeared to, why has the rate virtually stopped growing the past two months. If we have slow grow, then we should see weekly changes in the exchange rate, not bi monthly changes.
*Iraqis are a proud people. They are so because their Pride and individual self worth are the only things they could legitimately call their own for most of their adult lives. There is no way the CBI will not RV in one fail swoop, because that is what Kuwait did, and they are never going to give Kuwait, a nation that most Iraqis loathe, the bragging rights that they were able to issue an instantaneous RV while Iraq could only manage "slow grow."
