Zig’s Place Chat and News Wednesday Evening 9-13-23
Zig’s Place Chat and News Wednesday Evening 9-13-23
NORV Article: The most important reasons for currency floating - the benefits and harms of currency floating
What is meant by currency float?
NORV Benefits of floating currency
There are several benefits to currency flotation, the most prominent of which are:
Is floating currency harmful?
Floating a currency is not necessarily completely harmful or beneficial, but rather depends on the economic and political conditions in the country in question.
What are the types of currency flotation?
There are two main types of currency floats:
1. Free floating currency
The exchange rate of a currency is determined entirely by supply and demand in global markets without interference from the government or central bank.
2. Managed currency float
This type of float allows the government or central bank to intervene in setting the exchange rate of the currency and limit market volatility.
This type of float is usually used when the government has difficulty controlling inflation or in cases of financial crises.
What are the economic effects of floating the currency?
If the currency is floated well, it may have a positive impact on the economy, but if it is floated ineffectively, it may lead to negative repercussions on the local economy.
Can floating the currency affect local prices of basic commodities?
NORV Yes, floating a currency can affect local commodity prices.
If the value of the currency rises, imported goods will become cheaper, while exported goods will become more expensive.
Conversely, if the value of the currency declines, imported goods will become more expensive, while exported goods will become cheaper.
Therefore, floating the currency can affect the local prices of basic commodities, such as: food, fuel, clothing, and other basic products.
Which countries follow a floating currency policy?
Many countries around the world follow a floating currency policy, and among these countries are:
1. United States The US dollar is considered one of the most free-floating currencies in the world, and its value declines according to supply and demand factors for the currency.
2. European Union Floating the currency is implemented in all EU member states, leaving the value of the euro to market factors.
3. Japan Japan uses a managed float policy for the Japanese yen, where the central bank intervenes in the market to adjust supply and demand for the currency.
4. Canada Canada uses a free-floating Canadian dollar policy.
5. Australia Australia uses a free-floating policy for the Australian dollar.
6. China China uses a managed float policy for the Chinese yuan, where the central bank intervenes in the market to adjust supply and demand for the currency.
7. India India uses a managed float policy for the Indian Rupee, where the central bank intervenes in the market to adjust supply and demand for the currency.
8. Britain Britain uses a free-floating policy for its pound sterling.
9- Russia Russia uses a managed float policy for the Russian ruble, where the central bank intervenes in the market to adjust supply and demand for the currency.
There are many other countries that follow a policy of free or managed floating of their local currencies, and the monetary policies of each country differ based on its needs and economic conditions.
Dinar Recaps Note: Only snips from article above are here so please follow LINK to read from the original in full detail thank you
NORV HI Chattels! good read there I got another good one to read...
Chattels I see and very “current”, but “timeless”.
NORV Iraqi economy, dollar, Iraqi dinar, Iraq crises
8/8/2023 Iraqi economic experts agree that the US President’s protection of Iraqi oil revenue funds in the two accounts opened in the US Federal Bank for the benefit of Iraq is a type of protection required for creditors, individual and collective legal persons. Such an agreement between experts raised questions about the reality of the authority of the US Federal Reserve and the Treasury. American influence on generating the dollar crisis and the depreciation of the Iraqi dinar against it.
These experts, professors of economics, such as Dr. Mazhar Muhammad Saleh, Dr. Mahmoud Dagher, and Dr. Nabil Al-Marsoumi... agree that this reality is the product of an Iraqi-American agreement... but Dr. Turhan Al-Mufti settled the controversy that Iraq does not have an electronic banking management system that deals with digital transfers... so he resorted to... To deposit oil revenue money with the US Federal Reserve in special accounts that are later transferred as paper currency, arriving periodically to Iraq via US military aviation... for the Central Bank to resell it through the currency sale window and convert it into Iraqi dinars.
Everyone agrees that the crux of the crisis is the US sanctions on Iran, Syria, or other individuals or entities, as the US Treasury Department refuses to transfer the dollar currency it issues as a sovereign currency to any party on which sanctions are imposed.
The other matter is that the US Treasury and the US Federal Reserve are applying money laundering standards to the dollar currency in all parts of the world, including Iraq. There is greater stringency due to the presence of clear violations in transferring the dollar currency to such parties without official American approval.
In addition to this, the role of the United Nations Agency to Combat Drugs and Organized Crime, as well as the World Bank and the International Monetary Fund, in putting forward
NORV First: Direct solutions begin by determining the volume of imports from neighboring Iraqi countries according to the rule of importance, both horizontally and vertically. For example, the priority of importing medicines and medical equipment in exchange for a complete ban on all luxury goods and finding a balance for the type of goods between them, both horizontally and vertically. The value of financial transfers can be determined at the minimum possible level. For every type of commodity... this will be done through a direct agreement of the leaders of the parties opposing the government in the State Administration Alliance coalition... controlling all border crossings and imposing strict penalties on violators.
Second: Opening the doors to rapid investment by transferring commercial services from neighboring countries to free zones that control border trade, prevent smuggling, and regulate taxes and quality of goods on both sides of the border... by dealing through the currencies of each country against the currency of the other country within a reasonable ceiling that confronts the possibilities of speculation in the Iraqi dinar. Or through commercial barter, including barter for oil and its derivatives, especially those surplus to the needs of the Iraqi market, such as black oil...or minerals such as phosphate and sulfur, for example, but not limited to...and excluding dealing in dollars through these free trade border areas.
Third: Immediately establishing nucleus departments for electronic banking management and linking them to guarantor banks regionally and internationally, thus establishing the emergence of branches of government and private banks capable of accessing international platforms for banking transactions, all the way to listing financial transactions for the sale of Iraqi oil on these Iraqi platforms that are managed by several banks under the supervision of the bank. Iraqi Central Bank.
NORV Fourth: Canceling the currency auction platform and returning to assigning these multiple banking departments as alternative platforms for electronic dealing... and issuing bank transfer bonds for import and export in accordance with applicable legal principles... and organizing an Iraqi national education campaign on this subject in exchange for activating the enforcement of the maximum penalties for any violations of these procedures. In Iraq's obligations before international agreements.
Fifth: Serious consideration of floating the Iraqi currency in favor of deleting 3 zeros and considering one Iraqi dinar equal to one US dollar denominated in gold and a multilateral basket of international currencies in the balance of the Central Bank of Iraq after fulfilling all requirements to cancel American protection for revenues from the sale of oil.
This is the tip of the iceberg of what could happen if the requirements of political will are met in the state administration alliance... or the continued cries of the hungry people due to the generation of dollar crises and the decline in the value of the Iraqi dinar... and the exploitation of crises by economic fronts for this or that party... in application of the saying ( The prayer is behind Ali Atm and the performance is with Muawiyah Adsam)...and it remains to say that God has affairs in His creation!!!
https://annabaa.org/arabic/authorsarticles/35914
NORV Both good reads They will float. when? when they have passed the laws, created the conditions for investment and they begin to diversify their economy. Until that day, the dinar will remain weak!
Chattels I do not k ow rmthat I have see Iraq - Murdis relations so unstable since the “independence
NORV :Floating:
Chattels Kurdish relations since the “independence movement” some years ago.
NORV They got a 3 year window with the tripartite budget, let's see if they can accomplish anything.
Chattels Nothing else to do but wait.
NORV Sheila should read what I posted, may learn something.
NORV Chattels nope
NORV wait and watch them
Chattels preferred narratives these days with the Dinar and in American politics is irrepressible.
Chattels People.are going to believe what they want to believe. Reason plays no role anymore.
NORV Chattels yes, but I feel better warning them lol
Chattels Add the element of desperation and voila, you have a Dinar chat room.😊
Chattels Understood. There are people of conscience and integrity left, but they are not popular.
Chattels ”Voices crying in the wilderness.” Keep the faith.
NORV Of course I'm not popular, but I know the truth. :HaHaHa: gotta run, have a good night!
Sah NORV So if a country is on a managed float it has usually been up or down 3 percent a day. If they loose more than 3 percent for the day they start only 3 percent lower the next and not more or visa versa for if the currency goes up more than 3 percent a day the next day it is only 3 percent higher. Has a managed float always been at 3 percent daily or can that be changed to a different percent.
Chattels Looking for discernible progress in Iraqi politics is like watching paint dry.
Sah I was shocked to learn that after 2003 that Kurdistan supplied arms to ISIS and help them get a foot in the country. Kurds were shocked when ISIS turned on them. Barzani is just plain evil,
Chattels If true, it is another good reason for the US not to involve themselves in a region more corrupt than our own politics.
Chattels I doubt that thee are many people on the planet more used and discarded
Sah The US is still paying most of the military salaries for Kurdistan.
Chattels than the Kurds.
Sah If the Kurdistan military gets out of hand the US will with draw their salaries. Probably why they backed off so fast from Kirkuk.
Chattels Self determination is a notion almost laughable. The powerful trot ot out for their own purposes. It is an ideal to be embraced only when it suits the purposes of the powerful.
Chattels Shameful really.
Sah Barzani has a large ego to satisfy. He has to prove himself superior to his people, and then walks all over them. He wants the poor to stay poor and bow down to the elite.
Chattels But liberty comes at a price that few are able and willing to pay. All the more reason that we zealously houses our own freedoms purchased at so great a price over generations.
Chattels * guard our own
Sah There is no liberty in Iraq for Kurdistan. They are like a large province that is part of Iraq. The own no mineral or gas or oil rights on their land.
Chattels What is and what should be are not always the same.
Sah Iraq controls the whole country and the CBI controls all the banks including Kurdistan. All is under one Iraq. It is the tribes that need to all get along. Each one wants to show superiority over the others.
Sheila @NORV - Who are you to say I need to learn something? LOL
NORV sheila because you live in dinar fantasy-land!
Sheila NORV LOL -- you are back for the personal attacks. Go ahead, get it off your chest.
NORV not happening!
Sah NORV You left and did not answer my question!
NORV sheila not personal attack, just educating!
Sheila greatest wealth transfer in history... now go ahead, jump
NORV Sah ok me look
Sah thanks
NORV Sah tribes?
Sah NORV So if a country is on a managed float it has usually been up or down 3 percent a day. If they loose more than 3 percent for the day they start only 3 percent lower the next and not more or visa versa for if the currency goes up more than 3 percent a day the next day it is only 3 percent higher. Has a managed float always been at 3 percent daily or can that be changed to a different percent.
NORV Sah floats vary depend on the criteria, if they free float, it could go up or down significantly, managed floats may be built with specific criteria. If managed the CBI will control the pace.
Sah NORV How come for the last decade that the managed float have all been at 3 percent that I have been researching.
NORV Sah If the central bank ends the auctions, they will float and manage it more than likely by the buying and selling of the dinar. They control how much, the pace etc. There are many articles on how this is accomplished. Remember, the CBI makes money on the currency auction, they will also do so when they float by the sale of dinar.
NORV sheila i already posted it above long articles
Sah I thought he IMF controlled the managed float of 3 percent and that they at least have to do it for five days when the do it before the country can cancel out if they want to stop.
Sah I guess I will have to research this more.
NORV When they do decide to exit the peg, they will have a plan. This article is pretty good to learn...
NORV https://www.imf.org/external/pubs/ft/issues/issues38/ei38.pdf
Sah NORV Thanks for the direction to go. I will read it tonight.
Sah NORV 19 pages and looks interesting and there is two pages of the economic series that I may find a few interesting reads. Thanks!
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