there’s another logical problem in posing this question: even if the dinar increases in value how will we decide if it was “as a result of American policy”.
The dinar will eventually increase in value, because every war-torn country eventually stabilizes, and the economy improves.
Is there a year-end closeout sale on straw in your town? You sure are constructing quite a few men out of that material.
It may be if there were a stable, reliable, transparent sytem in place. If the guy on the onther end in Iraq just pockets the money there’s no recourse.
If not the strength of the currency, how do we measure the distance from Chaos to Victory? Or do we just take Bush’s word that he will know it when he sees it?
OK, now you’re on to somthing.
No need to just take his word for it.
This PDF docuemnt that WH released earlier this week would be a good place to start. I can’t cut and paste from it, but just go to page 12.
Those aren’t bad metrics. I’m sure I could come up with a few others, but the economic ones seem reasonable.
I quite agree that there ought to be metrics for how we’re doing in this war. The most obvious one would be the number of attacks per week, which, according to John Murtha, has steadily increased since a year ago.
But the idea of using the value of the currency as a metric is as screwy as the lame metrics that the Pentagon puts out: “Look how many cell phone subscribers there are in Iraq now! There used to be NONE! Therefore we’re winning! Lookit how many schools have been rebuilt! Lookit how many internet cafes! They even have a stock market now! Freedom is on the march!” Substituting one irrelevant metric for another doesn’t get you any closer to the truth.
They aren’t metrics at all, near as I can tell. None of them are objective, they are all nebulous goals like “Restore Iraq’s neglected infrastructure,” or “Reform Iraq’s economy” that do not define the “there” there.
I still don’t see why investing in the economy of Iraq through its currency isn’t an objective expression of your confidence in the outcome of Bush’s military adventurism.
You have to go to page 12. Be sure you are looking at the numbers at the bottom of the pages, not what “page” is shown on the scroll bar. The ecoomic metrics are (going from memory here) GDP, GDP per capita, number of business opened, unemployement rate, and maybe a few others. There’s a web site listed also that you can go to. I referenced one of the web site’s in the recent thread that **BrainGlutton **started on how the Iraq economy is doing.
John Mace, I can understand your reluctance to take up the OP’s challenge. (To take his premise to a logical extreme, you should convert YOUR ENTIRE LIFE SAVINGS into dinars.)
But how about the alternate challenge I posed in post #8?
Do you seriously think the value of currency has anything to do with how well things are going in a particular country?
Or are you simply using dinars to bash war supporters over the head with a specious “put your money where your mouth is” type of argument?
Seeing as how you’ve failed to establish any connection between rising currency values and the well-being of a country, I’m inclined to think the latter.
Anxiously awaiting your response…
Yes, if you are talking about relative value of the currency of a country on the verge of civil war, versus the currency of the same country when it is a stable democracy with a thriving capitalist system. I would be shocked if the value of the currency didn’t rise.
Are you just making this up? Do you think it is a prime macroeconomic goal of developing nations to increase the value of their currency?
I didn’t see that post, but let me think about this a bit before answering. One thing I will say, though, is the insurgents better hope the US doesn’t leave any time soon. If they think they’ll get better treatment (when captured) at the hands of their fellow Iraqis, I suspect they’ll be in for quite a surprise, Abu Ghraib notwithstanding.
I also do think we will see substantial troop drawdowns next year, and the approval rating for the war will begin to increase when that happens.
No. I think it is a likely side effect.
Tangent question:
Once the dinar strengthens again, how do you get your money back? Who do you sell them back to?
To all appearances this thread looks like an attempt to use specious reasoning, logical fallacies, and arguments from ignorance to create a strawman with which to provoke those who support the war in Iraq.
Fear Itself’s thesis appears to be that if one is optimistic about the war in Iraq, then one must be optimistic about its currency. If one is optimistic about the currency then one is obligated to put their money where their mouth is and invest in it. Here’s a cite to do it. Since the supporters haven’t or won’t, then they are hypocrites… or something.
First the basic fallacies:
-Optimism about Iraq does not have to equate with optimism concerning the NID (New Iraqi Dinar.) They are not the same. The one does not follow from the other.
-If one is optimistic about the Dinar, one is not obligated to invest in it. There are plenty of good investments that shouldn’t be made because they are not appropriate to that investor’s needs.
It also appears that Fear Itself doesn’t much about currencies, economies, markets and investing. I’m an expert.
So, in that spirit, I will be glad to enlighten you or anybody else who’s interested, and answer any and all questions concerning this issue. I will be as thoughtful and polite as you are.
With that being said, here’s why the NID is a shitty bet.
- You can’t invest in it. I know, you have a cite that says you can and will ship you NIDs if you send them money. I have no doubt they do so. Nevertheless, I say you can’t invest in the NID. Why? There is no market for NIDs. You can’t spend them or exchange them for anything outside of Iraq.
To invest in a currency in a meaningful and reasonable way one engages in activity on the Forex markets buying options futures or options on futures. This currency is “paired” to another currency. For example, if you want to invest in Yen with dollars you might buy an options contract that gives you the right to exchange X dollars for Y yen over Z period of time. Other securities work the same way. You invest in one currency in terms of another currency.
If you buy a stack of Dinars and take physical delivery of them as your link shows, you have a stack of paper that is unpaired.
The idea of “investing” in this fashion is scarily quaint. It’s too be avoided. In order to do anything with those NIDs you must physically exchange them for the currency in which to do business. In the case of the NID, there is no place outside of the Central bank in Iraq which is willing to make a market in NID. That means you would have to take your NIDs to Iraq and physically ask the central bank to exchange them. Right now, the total value of these transactions per day being executed is only several thousand dollars.
This is not exactly a liquid market. That’s the way the Iraqi central bank wants it. The Iraqi central bank has not released the NID for trading and does not support it’s currency at the stated exchange rate any more than it has to. Not being able to trade the security is a major obstacle to meaningful investment. Forex instruments allow you liquidity and leverage. With a small amount of money you can control a large amount of foreign currency, and make large profits off of small moves in exchange rates.
The opportunity exists to do this because most investors in the Forex aren’t there to make money, they are there to hedge their foreign investments and holdings. You have the ability to make money by speculating against them.
So, you are denied leverage and liquidity in Iraqi Dinars, and they are not marketable outside of Iraq.
Iraq wants it that way, and for good reason. The purpose of their currency at this time is not for foreing consumption but as an internal medium of exchange. They cannot afford to support their currency in the international markets. They don’t want you buying the Dinar!
That website is basically appealing to patriotic and/ or greedy individuals who are none too sophisticated.
I am optimistic about Iraq but extremely pessimistic about the Dinar’s investment potential. Iraq is a battered country that needs a lot of money and investment to recover, and it’s really unlikely to be anything more than an oil based economy at it’s best.
Those capital needs strongly suggest that the Iraqi government if and when it gets around to releasing its currency will be printing an awful lot of NIDs with which to buy stuff. This spells inflation, or even hyperinflation.
Witness oil based economies like Venezuela for an example of inflation/hyperinflation.
So, it is extremely likely that in the best case wildest dreams scenario of GWB there will still be extreme inflation in Iraq. I can’t think of a reasonable scenario in which it doesn’t happen.
Remember also that the NID is Iraq’s third currency in the last 3 years or so. We had the Old Dinar, the Bremer Dinar, and now the new Iraqi Dinar. It is likely that the NID may not survive long. If it doesn’t for whatever reason, there is typically only a limited time to exchange old for new. Personally, I don’t feel like taking a trip to Baghdad to exchange my Dinars.
Also, realize that these companies selling NIDs are likely imposing their own artificial exchange rate and adding costs above and beyond the artificial exchange rate the central bank is/isn’t supporting. You’re not getting a fair exchange, and you’re buying a pig in a poke since it’s illiquid and presently unexchangeable and if and when it does become exchangeable you have the pain in the ass of getting it physically done.
That should help you understand. It really doesn’t have anything to do with politics. The NID sucks, and is designed to suck, and the investment scheme you’ve linked to is laughable and illiquid.
Okeydoke? or do I need Mr. T.?
POSSIBLE SCAM WARNING.
The link provided in the OP may be a ripoff.
In any event, it’s pointless. The old Iraqi dinar was not a floating rate currency; it was a fixed rate currency, meaning that its pre-war value meant nothing. the current Iraqi dinar is, in effect, a brand new currency; it did not exist prior to the war, and so there is no reason to believe it’s worth any more than it is now, or ever will be.
Furthermore, Iraqi dinars are not, so far as I know, traded at all. The Iraqi central bank is deliberately preventing them from being openly traded. You’d have to literally find someone to physically sell you the bank notes.
Oh, screw this currency speculation strawman. Let’s just put the money on the table.
Here’s an offer to all you Iraq pessimists: I’ll bet even money that Iraq’s GDP is higher one year from now than it is today. Any takers?
Hell, I’ll even parlay it. Even money that it’s higher on this date next year than it is today, and we’ll go double or nothing that it’s higher still the year after.
One condition: The U.S. does not ‘cut and run’ and remove more than half the troops before this date next year.
Line up, boys. All of you who are so sure this is another Vietnam, a giant debacle destined to end in tragedy, this is your chance.
We can even throw in a side bet - You donate $50 to the charity of my choice if Iraq’s economy outperforms the EU in terms of GDP growth in FY05, and I’ll do the same if it underperforms.
Any takers?
And why do you suppose that is? It sure isn’t because they fear the value would skyrocket. Given the prospects, it is to prevent them from going from having little value, to having none at all. Of course it is a lousy investment. And we all know why.
I told you why.
No. It’s because they’re not prepared to support it outside their borders. I can explain these things to you in as much detail as you like.
I do. You don’t.