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 IQD CHAT, 19 MAY

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phoenix27
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PostSubject: IQD CHAT, 19 MAY   Sat May 19, 2018 7:13 pm

Kaperoni    What is the Balassa-Samuelson effect?

Kaperoni    When you search Wikipedia, you get an explanation for this as…”Balassa–Samuelson (BS) hypothesis implies that countries with rapidly expanding economies should tend to have more rapidly appreciating exchange rates.” In other words, the IMF themselves are acknowledging (by saying Balassa–Samuelson effect in this Article IVdocument) the dinar will rise rapidly.

Further research on Balassa-Samuelson effect brings us this…

‘“In 1964, academics Bela Balassa, a Hungarian economist, and Paul Samuelson, a Nobel-Laureate economist, independently observed that countries with higher levels of productivity growth experienced rapidly rising real wages and so appreciating real exchange rates.   
Academic studies since have suggested the picture is not as simple as Mr Balassa and Mr Samuelson first thought and that many other factors can also influence the model. However, many long term investors in emerging market currencies, for example, have been able to benefit from the appreciation of those currencies which is arguably due to the Balassa-Samuelson effect.”

Kaperoni    The key here is the last sentence… “many long term investors in emerging market currencies, for example, have been able to benefit from the appreciation of those currencies which is arguably due to the Balassa-Samuelson effect.”

In other words, this reference to the “Balassa-Samuelson effect” hypothesis which in essence is described as “a rapidly expanding economy creates a rapidly appreciating exchange rate” will give us an opportunity to benefit from that appreciation.

That can only mean free float. The word “rapid” only make sense in a free float. It also means the IMF knows and endorses the plan. It also means that the dinar we hold is legitimate and was sold with an intended purpose.

Zig  Kaperoni: Back for more??.....lol

Kaperoni    apparrently Tebow and Spectra know more than the IMF does. lmbo

Kaperoni   “14. The de facto fixed exchange rate has served Iraq well. The authorities agreed that a stable nominal exchange rate provides a valuable anchor for inflation expectations in an uncertain environment, and intend to continue implementing this policy for the foreseeable future. In the medium term, staff encouraged the authorities to consider creating the conditions which would make possible a move to a more flexible exchange rate policy.

Such flexibility could allow a predictable and gradual appreciation of the nominal exchange rate, triggered by strong oil revenues and the Balassa-Samuelson effect, to accommodate a possible real exchange rate appreciation while keeping domestic inflation low.”

Kaperoni    Such flexibility could allow a predictable and gradual appreciation of the nominal exchange rate, triggered by strong oil revenues and the Balassa-Samuelson effect, to accommodate a possible real exchange rate appreciation while keeping domestic inflation low.”

Kaperoni    Such flexibility could allow a predictable and gradual appreciation of the nominal exchange rate, triggered by strong oil revenues and the Balassa-Samuelson effect, to accommodate a possible real exchange rate appreciation while keeping domestic inflation low.”

NickNak    Kaperoni The IQD is not a stock you do know that right?

Kaperoni    oh but they will have an answer lol

Dave    So 999 fils for that coke instead of 1000....call that gradual rise in the value?

Zig    Kap loves this chat room!!.... :yes:

Kaperoni    what is ur question Dave?
Kaperoni    currencies float all over the world Dave

NickNak    Zig Ya it is free no fee LOL

Kaperoni    do they raise the price of a coke daily?

Dave     art 8 ...Lds out....999 fils for that coke?

Kaperoni     Iraq must float    that is the only option

Dave    instead of 1000....
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Sam I Am
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PostSubject: Re: IQD CHAT, 19 MAY   Sun May 20, 2018 7:20 am

The Balassa-Samuelson effect applies to free floating currencies, so Kap is right about that much. Where he gets derailed is in thinking that the IQD will ever be a free floating currency. It won't be until they have a diverse economy like the economies of the West - manufacturing, agriculture, technology ... etc. As long as they have an economy with 90% of its revenues from oil you can count on the dinar remaining fairly stable from its status as a pegged currency.

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ReapAndSow73
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PostSubject: Re: IQD CHAT, 19 MAY   Sun May 20, 2018 7:32 am

Uh...if IQD depegged they'd spiral into the abyss...it's kinda why they have the peg there, for stabilization...not sure why people like Kap have such a hard time understanding that Iraq is in an atrocious inflation state, and they can't stabilize on their own.  Oil is no gonna solve there problem - remember when oil was $140+ ppb in 2008?  Iraq is single-threaded, politically unstable, in massive debt...free float won't help, spike in currency value certainly won't help...
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Allenj
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PostSubject: Re: IQD CHAT, 19 MAY   Sun May 20, 2018 12:41 pm

[quote="Sam I Am"]The Balassa-Samuelson effect applies to free floating currencies, so Kap is right about that much.  Where he gets derailed is in thinking that the IQD will ever be a free floating currency.  It won't be until they have a diverse economy like the economies of the West - manufacturing, agriculture, technology ... etc.  As long as they have an economy with 90% of its revenues from oil you can count on the dinar remaining fairly stable from its status as a pegged currency.  [/quote]

Kep has always been like that and yes i agree i tried to tell that a-hole long time ago. Now according too my understand they will have to achieve A-8 from the IMF (mid to late June) then it is up too Iraq (CBI, according to Iraqi law) and that will not happen (raise the rate) all you have do is look at Iraq's history after Saddam it has always been about the Iraqi government and the cbi not the citizens of Iraq even under Saddam
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