Gurus

1.We find out they still plan to do the project to delete the zeros.

 

2.They did in fact plan to do it before now but it was postponed again.

Timing of the article proves they did have it planned for January.

They are telling us why – I quote from the article – “but security events and the control of the state regulation on five provinces led to delay”.

So we are not waiting for the economy to grow and the private sector to take over to raise the rate.

3. I want to point out that in 2003 we were told that the cash volume in the markets to be issued for the money supply was 170 Trillion.

So we can now see once again they are maintaining well below the 2/3 (about 57 trillion) dinars withdrawal of the planned current cash volume, as part of the “project to delete the zeros”.

So we can see they still have room to issue more currency, if needed to fulfil cash volume.

But this is one tool they are keeping inflation down.

“The most important elements of the value of the currency based on four pillars, of the basic and is like a square building, which is based on four pillars or pillars of leverage, represented by:

1.Monetary policies;

2.Financial policies;

3.Development policy, in addition

4.Political skills, ie political stability, social and security and administrative capabilities in the management of the country and the employment policies and wealth material and human “.

Remember a reinstatement is not a float within the current sole de’facto peg to the US dollar.

It is the going international with their currency and thus letting the markets drive the rate on float.

They have plans to re-peg to a basket of 5 currencies as US Dollar, EURO, British Pound, Yuan, Yen.

To do this they need to come out with a new rate.

They will not just roll over the 1190 program rate and then let it float as this would not qualify for the basket rate then.

In this regard re-pegging is what is going to raise the rate initially(justify it) and then the FLOAT will drive it accordingly up afterwards as the market of supply and demand dictates.

It will then settle down to a nominal rate for long-term market sustainability.