CENTRAL BANK DELETED THREE ZEROS from the currency early NEXT YEAR (2014) to eliminate the forged currency & the new project would be ISSUED COINS up

[keepmwlknfny]

Deleting zeros is removing the 000 notes off the streets of Iraq. This process is already complete because the auctions have been doing this for a while.

You have a lot to learn buddy.....stick around.....

[Flatbush Zombies]

You have a lot to learn buddy.....stick around.....

I agree....he's clearly gotten all info from pumpers and forum facts. He may want to look at Iraqs key financials

[dontlop]

Money illusion

 

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In economics, money illusion, or Price Illusion, refers to the tendency of people to think of currency in nominal, rather than real, terms. In other words, the numerical/face value (nominal value) of money is mistaken for its purchasing power (real value). This is false, as modern fiat currencies have no intrinsic value and their real value is derived from their ability to be exchanged for goods (purchasing power) and used for payment of taxes.

The term was coined by Irving Fisher in Stabilizing the Dollar. It was popularized by John Maynard Keynes in the early twentieth century, and Irving Fisher wrote an important book on the subject, The Money Illusion, in 1928.^[1] The existence of money illusion is disputed by monetary economists who contend that people act rationally (i.e. think in real prices) with regard to their wealth.^[2]Eldar Shafir, Peter A. Diamond, and Amos Tversky (1997) have provided compelling empirical evidence for the existence of the effect and it has been shown to affect behaviour in a variety of experimental and real-world situations.^[3]

Shafir et al.^[3] also state that money illusion influences economic behaviour in three main ways:

• Price stickiness. Money illusion has been proposed as one reason why nominal prices are slow to change even where inflation has caused real prices or costs to rise.
• Contracts and laws are not indexed to inflation as frequently as one would rationally expect.
• Social discourse, in formal media and more generally, reflects some confusion about real and nominal value.

Money illusion can also influence people's perceptions of outcomes. Experiments have shown that people generally perceive an approximate 2% cut in nominal income with no change in monetary value as unfair, but see a 2% rise in nominal income where there is 4% inflation as fair, despite them being almost rational equivalents. However, this result is consistent with the 'Myopic Loss Aversion theory'.^[4] Furthermore, the money illusion means nominal changes in price can influence demand even if real prices have remained constant

 

 

 

 

Fiscal illusion

 

From Wikipedia, the free encyclopedia

(Redirected from Fiscal Illusion)

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Fiscal illusion is a public choice theory of government expenditure first developed by the Italian economist Amilcare Puviani in his 1903 book Teoria della illusione finanziaria (Theory of Financial Illusion (not yet translated into English, but translated into German in 1960 under the title Die Illusionen in der öffentlichen Finanzwirtschaft, Berlin: Dunker & Humblot, 1960)).^[1][2] Fiscal illusion suggests that when government revenues are not completely transparent or are not fully perceived by taxpayers, then the cost of government is seen to be less expensive than it actually is. Since some or all taxpayers benefit from government expenditures from these unobserved or hidden revenues, the public's appetite for government expenditures increases, thus providing politicians incentive to expand the size of government.

The "Mandrake mechanism"

Also known as the money multiplier effect, the Mandrake mechanism is a term coined by Griffin in this book. Mandrake the Magician was a comic strip character from the 1940s. He had the ability to magically create things and, when appropriate, make them disappear.^[44] Griffin's view is similar to many other gold-standard supporters' critique of the fractional-reserve banking system and the Federal Reserve in particular: that it makes money "magically" appear from nothing.

In Griffin's view, the "magical" quality of this mechanism is really just a simple mathematical limit. When banks loan money, they don't actually loan existing money. Rather, they allocate money to loan, but they are limited by how much money they can create. The law basically says that, for each dollar a bank has on hand in one of its savings accounts, it is allowed to create another 90 cents to give out as a loan. (The dollar from the savings account is still there, and can still be spent by the person who owns the savings account.) This loan is then spent, and the recipient puts it into another bank, and that bank can now loan 90 cents times 0.9 = 81 cents. This can be repeated many times (depending on the demand for loans) until it approaches its mathematical limit of 10 dollars.

For example, when the Federal Reserve holds on deposit 1 billion in marketable United States Treasury security then the banks in the banking system, public and private, and bound by U.S. financial law, are able to generate 10 billion in new debt over time.

notice it creates new debt ... not money

that debt is listed as assets

to the bank

the assets are part of the m2 money

Edited March 23, 2013 by dontlop

[dontlop]

as the debts are paid  to the bank the more money they have

as long as iraq has a trade surplus .. their wealth grows from bringing in  wealth from other countrys

Nonetheless, trade surpluses remain relatively modest due to the increase in imports as a result of the reconstruction effort. Iraq’s other exports are food, machinery and transport equipment, and raw materials. Iraq’s main imports are machinery and transport equipment, manufactured articles, fuel and animals. Iraq’s main trading partners are the United States, China, India and South Korea. . This page includes a chart with historical data for Balance of Trade in Iraq. http://www.tradingeconomics.com/iraq/balance-of-trade

but as oil production increases so will the trade surplus . especially as the  private sector developes each and every day

[ndantona]

CENTRAL BANK DELETED  ( Past Action ) THREE ZEROS from the currency early  NEXT YEAR (2014)  ( Future Occurrence )

Did it happen or is it going to happen ? I think it's just noise put out to confuse.

 

No Surrender No Retreat and No Compromise

 

 

This is ridiculous.  I'm gong to get to the bottom of this confusion.  I just need to charge up the flux capacitor in my DeLorean and travel to the Central Bank of Iraq in Baghdad in 2014.  Be right back.........

[sandyf]

if iraq does RD why do people think they will only be the ones with he 3 zeros on them . that's not true if they do RD they will replace all notes and they will come out all on the same day. and they will also introduce new coins to go along with it

 

Exactly, it would be a complete brand new currency, the IQD will have been superseded.

I just have a hard time buying into this RD stuff. It is my opinion ( as well as the opinion of several others on this site ) that if that were the plan, they could have easily done this a long time ago.

RSS

 

This is a very valid point. The big problem is that they have extreme difficulty reaching agreement on anything that it could get dragged out. 

One thing is almost certain, there will be no RD this year, and very unlikely they could be ready for next year.

[bdwilliams]

so, what? Are we gonna have to wait for another year now??

[Osmosis]

But....but....but Frankie and Delta and OC and Randy and Kap and Bond Lady and even Adam said it wouldn't RD!!

[uncirculd]

so, what? Are we gonna have to wait for another year now??

nope

[Rockymtnhi]

If an RV is to occur they need to have a relatively small money supply(not trillions) in order to afford it.   That remains the mystery.  Hope we see the final result this year.

[RVPleaseToday]

RV or RD? Who knows. But the bottom line for Iraq is...how much debt do they want right now?

 

A 1:1 RV right now put's them at least $30 trillion in debt.

An RD is neutral. No debt. But, nobody gets rich, either.

 

Tough decision for a small country.

[staunch]

RV or RD? Who knows. But the bottom line for Iraq is...how much debt do they want right now?

 

A 1:1 RV right now put's them at least $30 trillion in debt.

An RD is neutral. No debt. But, nobody gets rich, either.

 

Tough decision for a small country.

So why even RD?.........so the bean counters have an easier time of it?

[sandyf]

So why even RD?.........so the bean counters have an easier time of it?

 

Good question, ask them.

 

 

Turkey 1st Jan 2005

Romania 1st July 2005

Ghana 1st July 2007

Azerbaijan 1st Jan 2006

Turkmenistan 1st Jan 2009

Belarus 1st Jan 2000

Mozambique 1st July 2006

Venezuela 1st Jan 2008

Zambia. 1^st Jan 2013

[boomer113189]

it amazes me how so many people know nothing about Redenomination. they have been very successful in a lot of other countries that have done it. yet alot of people say RD is very bad an it will make the economy even worse. if that was the case why have so many other currency undergone it. ask yourself that ?

[ALBUNDY]

rsskelton:  "  if that were the plan, they could have easily done this a long time ago" , exactly. Who knows. May be they have hidden plans by putting out conflicting stories to confuse speculators.

 

[Flatbush Zombies]

it amazes me how so many people know nothing about Redenomination. they have been very successful in a lot of other countries that have done it. yet alot of people say RD is very bad an it will make the economy even worse. if that was the case why have so many other currency undergone it. ask yourself that ?

Exactly! Those who say that an RD would be worse are following dinar forum facts made up by gurus to keep the sheep in check. With the amount Iraq has in circulation there's no way they could afford to RV. The only way for then to get their dinar on par with the dollar is to change rare from 1166:1 to 1000:1 then RD. once that's done then the dinar can grow in value because they took care of the money supply issues. It's common sense economics. Pay out trillions of dollars to dinar "investors" or RD and come out with a new currency for a few hundred million in costs for new dinar printing....hmmm

There's an upside if Iraq does rd and that is once you exchsnge your old dinar for new you can sit in it and possibly double or triple your money in the future. But there's no way Iraq can RV with 30 Trillion outside banks and with a GDP of 115 billion it seems out of reach.

Remember, the CBI is liable for all dinar

rsskelton:  "  if that were the plan, they could have easily done this a long time ago" , exactly. Who knows. May be they have hidden plans by putting out conflicting stories to confuse speculators.

 

They are not putting out conflicting stories...they just came out with an article saying they are waiting for STABILITY before they implement their RD. Plus it's not uncommon for countries to talk about an RD years in advance. It's been done before.

Fears delete the zeros of the Iraqi currency

2/23/2013 4:03:00 PM 2/23/2013 4:03:00 PM

Agreed politicians and economists Iraqis that the process of deleting three zeros from the Iraqi currency current risk because of conditions of the country and the lack of security and stability and the spread of corruption, where Iraq is seeking to reform the system of currency management and ease of use and reducing the number of banknotes of four billion to one billion and 800 million paper, from by deleting three zeros and the issuance of a coin . .

 

The decision of the Finance Committee in the House of Representatives MP Ahmed electrodes of the island that Multi deletion of zeros from the local currency is still under study within the economic issues, not pending until now because of crises many experienced by the country, as well as problems that accompany the adoption of the financial budget for the current year

 

He pointed out that this process is not possible at the present time because it will lead to a problem in the Iraqi economy . .

The electrodes that the Finance Committee inquired from the Iraqi Central Bank on its preparations to change the currency without getting fraud where, and expressed its readiness to this process, but the problems that have occurred in the country in addition to the crisis the central bank, which led to changes in leadership, stopped this process . .

 

He pointed out that Iraq can not be doing the process now, and added, "We need to stabilize the general situation of the country, in order to prevent any attempt to exploit this procedure by corrupt ". ".

For its part, the MP said the Finance Committee Najiba Najib of the island that this project was in the time of former central bank governor Sinan al-Shabibi, has been studied by the parliament well, resulting in the latter to address the Council of Ministers to support this project, and there was a negotiation and dialogue with A number of international companies on the deletion of zeros, indicating that this process is a good step and help to support the country's monetary policy . .

She added that this issue has no echoes currently in parliamentary community and senior in Iraq because of the dismissal former central bank governor and refer the matter to the Integrity Commission, explained that the project will succeed if given the government and the House of Representatives and all institutions supported because it will prevent fraud and removes fear if the procedures sound . .

She explained that Iraq needs to restructure its currency, as there is no class more than 25 thousand dinars, as well as coins, which confirms that the current currency does not fit with the Iraqi state revenues, which have significant financial budgets . .

Najiba confirmed that there is a lack for money on the market, and that change would have a currency with economic feasibility to take all legal precautions and necessary legislative and government, while making the timeframe up to one year to change the citizens their money, in addition to the increase in bank branches . .

He says economic expert pilot Hashemi The process of removing zeros is a necessary step and task comes within the country's need to process administrative reform of the currency contributes to reduce transaction costs and trading cash in the economic process, and reduce the size of the money supply in the country and help facilitate the calculations and reduce the inflating numbers, if applied correctly and appropriate Baltoukitat . .

 

He also added in his speech to the island revealed that the issuance of the small groups will facilitate pricing policy accounts, but the replacement will not affect the currency to tackle inflation significantly . .

He cited countries that have applied this process such as Sudan, which delete zeros from its currency in 2007, and Turkey, which deleted six zeros from its currency in 2005, and omitted Zimbabwe in Africa ten zeros from its currency in 2008, and Bolivia deleted three zeros from its currency in 2008, and deleted all from Romania Iran and three zeros from its currency in 2005 and 2011, but did not improve the value of the currency in these countries significantly and inflation index remained conservative on the rise . .

He pointed to two important matters in the application process of removing zeros are: first choice timely which the Iraqi economy in a state of stability, and the second is to create the economic environment is considered to apply the deletion process, and this needs to be procedures and financial decisions and banking taken financial authority in the country . .

 

Hashimi concluded his speech by saying that the implementation of the resolution at this time is appropriate and is considered a significant risk to the unstable security situation and the country's economic

[ALBUNDY]

Flatbush Zombies: " Plus it's not uncommon for countries to talk about an RD years in advance " , why? to scare away the speculators and make them give up and sell off their dinars, so in the meantime, the CBI can change their decisions quietly and suddenly ( BOOM!! ) to RV instead of RD. who knows. CBI & GOI are unpredictable when come to making decisions ( they like to DELAY DELAY all the time ). How many times have we heard about Iraqi officials always " DELAY " in the meeting when come to making decisions? I hope I was wrong.

 

[sandyf]

There's an upside if Iraq does rd and that is once you exchsnge your old dinar for new you can sit in it and possibly double or triple your money in the future. But there's no way Iraq can RV with 30 Trillion outside banks and with a GDP of 115 billion it seems out of reach.

 

 

You are making the assumption that you would be able to exchange old for new.

[dontlop]

makes ya wonder how much of that m1  money that sits outside the banks are actually dolars  but converted  into dinars in the cbi statements at the program rate 1166.. i guess if they keep track of the money supply they would be keeping track of the dollars in circulation too. for some reason those numbers arent listed .. or maybe they are  but converted  at 1166 for book keeping and accounting purposes ..

 

 so if their is 10 billion dollars floating around iraq   that would mean 11.6 trillion of those dinars in the mi money supply would be actually representing  the dollars  outside the banks ..hmm .. 10  billion is a really conservative  number .. it could be as much as 25 billion and representing  28 trillion dinars on the books .

 

can anyone point out  where iraq has the dollars  in the m2 listed anywhere ?

 

heres the 2011  cbi statements on every single penny and asset .. why is everything listed in millions of dinars .. ?

 

even foriegn assets  are listed in millions of dinars .. not one single mention of a single dollar any where.

http://www.cbi.iq/documents/Annual_2011f.pdf

Money Issued: is the money issued by the Central Bank of Iraq consists for

circulation except for cash in the central bank vaults.

 

Monetary Base (M0): represents money issued for circulation (except for

cash in the central bank vaults) plus commercial banks deposits in Iraqi

Dinar with the Central Bank.

 

Money Supply (M1): represents money outside banks plus current deposits

in national and foreign currency for economic sectors (except for central

government sector) with commercial banks.  >>>>>>>>>>>>>>>>>>>>>>> foriegn  deposits are listed but they are listed in millions of dinars

 

Money Supply (M2): represents (M1) plus other deposits economic sectors

(except for central government sector) with commercial banks.

 

http://www.cbi.iq/documents/Annual_2011f.pdf

Currency outside banks: Represent money issued for circulation (except for

cash in the central bank vaults) minus cash asset in commercial banks vaults.

Deposits: includes all kind of deposits economic sectors with commercial

banks.

 

Cash Insurance: includes all outstanding cash insurance extended bycustomers such as cash insurance on L/Cs and issued letters of guarantees or

any other cash insurance.

Foreign Assets (Net): includes foreign assets with the banking system minus

foreign liabilities on the banking system represented in the Central Bank and

banks operating in Iraq.

Domestic Assets (Net): represents net total debts on the government and

debts on the private sector and other sectors with the net of other items.

Cash Credit Facilities: includes all outstanding balances for all types of cash

credit facilities and direct finance operations (current debit, discounted

commercial papers, loans & advances, and any other facilities) submitted by

commercial banks to all economic sectors.

Pledged Credit Facilities: includes all outstanding balances for all types of

pledged credit facilities (L/Cs and letters of guarantees) submitted by

commercial banks to all economic sectors.

[keepmwlknfny]

Dontlop......

As you pointed out, the listing for currency outside of.banks is what the central bank has issued for circulation. That would be in dinar only seeing as how they do not issue the USD......

That number is still over 30 trillion and climbing.....

[sandstorm]

Dontlop....the usd is coverted into dinar. meaning for the cbi to ever have dollars...it exchanged equivalent dinar to ever get it. So if the cbi has usd....it gave dinar out. thats why counting the dollar is irrelevent. the amount of dinar is either added or subtracted by the buying and selling of the dollar, in aconstant equivalent fashion

Edited March 26, 2013 by sandstorm

[sandstorm]

Example...oil is sold in dollars or called petrodollars. the mof and iraq say for example 3million barrels per day at 100/ barrell= $300 million usd per day. the mof sells and the cbi buys those dollars...and the mof is given dinar. see where the usd came from in the first place. so the cbi sells those dollars at auction for dinar or other foreign currency. but the auctions only run 100-150 millon per day. so 300 billion dinar is given to mof......but only 150 billion dinar is brought back. here we see an example of how or possibly why the currency in circulation has always increased through the years. Are they coverting all oil dollars to dinar? Idn...but we have seen foreign reserves increase....probably more dollars...but idn for sure. But in this scenario.....the dinar volume increases.....and the foreign reserves can increase as well as follow the pattern at auction of 100-150 mil/day. just food for thought

[Darin]

it amazes me how so many people know nothing about Redenomination. they have been very successful in a lot of other countries that have done it. yet alot of people say RD is very bad an it will make the economy even worse. if that was the case why have so many other currency undergone it. ask yourself that ?

 

And some have been unsuccessful, requiring the process to be done more than once.

And some have lasted a very short-time prior to reverting back to their prevoius currency.

And some countries function just fine with a higher rate of exchange.

 

In my opinion, a R/D will not help the fight against dollarization as the USD will remain high in demand (especially with sanctioned neighboring countries).

[RVPleaseToday]

"makes ya wonder how much of that m1  money that sits outside the banks are actually dolars  but converted  into dinars in the cbi statements at the program rate 1166."

 

This is nonsensical.

[Flatbush Zombies]

"makes ya wonder how much of that m1  money that sits outside the banks are actually dolars  but converted  into dinars in the cbi statements at the program rate 1166."[/size]

 

This is nonsensical.[/size]

The majority of his posts are nonsensical. There should be no debate in Iraqs financials..they're not cooking the books either.