Kaperoni says - they're talking about a lop it's clear as day..

Sam I Am wrote:I've read those IMF documents that Kap links to.  They're not talking about a free float.  They're talking about making periodic adjustments to the exchange rate, and since it would serve no purpose to raise the value they must be talking about lowering the value.  If you have a link that you believe supports a different view I'll gladly take a look at it.

Sam I Am wrote:I'm naive?  LOL  I'm not the one holding onto IQD expecting an unprecedented and impossible revaluation (or appreciation via a free float, which will never happen with the IQD because Iraq has a petroleum based economy) to make me million$.  I've read about the BS Effect, and it has nothing to do with any substantial increase in the dinar's value.  I learned about currency valuation from a recognized expert - John Jagerson.  I didn't study at the Kaperoni School of Economics.  Emerging economies like Iraq's are much more likely to have a currency that loses value than one that gains value.  When the IMF talks about a more flexible exchange rate they're not talking about going to a free float so the IQD can take off like a rocket.  They're saying the managed float that they're using now could be relaxed a bit, which would likely lead to a declining valuation.

Muskie wrote:I'm not going to comment on what Kap is talking about regarding a lop but Sam you need to understand what you read before you make such statements go back and read what the IMF is stating and you'll see they are not talking about devaluing the currency

Muskie wrote:
You must be living in another world if you don't realize what Iraq is trying to do. They're clearly trying to build a market economy to diversify away from oil or at least substantially reduce dependence on it. If you really read what the Balassa-Samuelson Effect is then you would understand it has everything to do with the rapid growth of the economy and as a result, the rapid appreciation of the currency.

You must be living in another world if you don't realize what Iraq is trying to do. They're clearly trying to build a market economy to diversify away from oil or at least substantially reduce dependence on it. If you really read what the Balassa-Samuelson Effect is then you would understand it has everything to do with the rapid growth of the economy and as a result, the rapid appreciation of the currency. You're either stubborn or naive or both for not seeing what's happening. I'm not expecting anything this year and maybe not even next.   It could take many more years in my mind, but you obviously don't understand what you read or are to set in your lop ways to understanding what's happening in Iraq. I don't think referencing a guru gives you any more credibility in fact it makes it less. I do my own studying and I read documentation and understand. I don't need a guru to explain anything to me.  I think the team at the IMF probably knows a little more than your part-time economist Jagerson.

Muskie wrote:it's pretty clear that you don't know what you're talking about. And I choose to take the team from the IMF and what they have to say over your gibberish. Your consultant friend I'm sure has little experience or no experience with the Middle East so he doesn't add much credibility. First and foremost how fast a currency appreciates is directly related to several factors there for a blanket statement of 1% or 2% per year is rediculous because if a country's economy explodes like Dubai did, the CBI would have no choice but to allow the currency to appreciate at a much greater rate to counter inflation and increase in prices throughout the country. My advice is to read the documents pertaining to the Balassa -Samuelson Effect so that you understand what you're talking about.