Reserves cover 1 1/2 of the currency!!

[rockfl9]

I think I have figured this one out . I dont think the CBI people would say that in print if it wasn't true . But i think they doing a little slight-of hand.

 

The CBI's fixed exchange rate is computed on the entire M3. BUT when you look at the footnotes for M2 & M3 they include the dinar value of USD accounts!

The USD IS NOT a liability to the CBI! 

So what they are reporting is the ratio of the reserves to the Liability to cover the dinar currency .  

It works out to .00086 X 1.5  = .00129.   TRUE , But assuming  half of currency value is in dollars! I can't prove that now!

Could this be why they are so reluctant to allow dollars to leave the country!?

 

 

[Texstorm]

I like that way of thinking Rock, now how can we possibly proof your theory. Thanks

[Markinsa]

I think I have figured this one out . I dont think the CBI people would say that in print if it wasn't true . But i think they doing a little slight-of hand.

 

The CBI's fixed exchange rate is computed on the entire M3. BUT when you look at the footnotes for M2 & M3 they include the dinar value of USD accounts!

The USD IS NOT a liability to the CBI! 

So what they are reporting is the ratio of the reserves to the Liability to cover the dinar currency .  

It works out to .00086 X 1.5  = .00129.   TRUE , But assuming  half of currency value is in dollars! I can't prove that now!

Could this be why they are so reluctant to allow dollars to leave the country!?

 

On the 2013 Balance Sheet for the CBI, only 4% of the 95 Trillion Dinar in Assets was "not" Foreign Currency Investments.  In other Words, that 4% of Assets would be the only thing that would change in Value, all of the other Assets would be adjusted down if the Dinar's value changed.  IE, if the Dinar was revalued 1:1 and all of the Foreign Curriency Investments were at 1:1 Parity with each other, the new Dinar Value would be adjusted down from 95 Trillion to 3.4 Trillion Dinar.

[Boss hog 1]

I say lop it all off. I need some wall paper for the outhouse.

[BOBO1699]

Do they have the funds?

I SURE hope  and Pray!

 

                                                                    Bobo

[rockfl9]

On the 2013 Balance Sheet for the CBI, only 4% of the 95 Trillion Dinar in Assets was "not" Foreign Currency Investments.  In other Words, that 4% of Assets would be the only thing that would change in Value, all of the other Assets would be adjusted down if the Dinar's value changed.  IE, if the Dinar was revalued 1:1 and all of the Foreign Curriency Investments were at 1:1 Parity with each other, the new Dinar Value would be adjusted down from 95 Trillion to 3.4 Trillion Dinar.

CBI "assets " are the reserves. So this means the 95T dinar (aprox. 80B USD)  is mostly dollars the rest is gold. Thats HARD assets .. Doesnt  change when/if the dinar changes value.  

[Markinsa]

CBI "assets " are the reserves. So this means the 95T dinar (aprox. 80B USD)  is mostly dollars the rest is gold. Thats HARD assets .. Doesnt  change when/if the dinar changes value.  

 

Yes they do, since they are stating the value of the assets in Dinar.  If the value of the Dinar changes, the value of the assets will be restated using the new exchange rate.

[dontlop]

In the USA

Just my signiture on a loan becomes an asset for a bank

The bank just conjurs up the money and writes it into an account for me to use

My signiture saying I owe that bank that much money is an asset to the bank that the bank can use for collateralized digital banking and loan out even more money

The bank started out with nothing and my loan gave them something

Just like that

Money out of the air

Edited February 1, 2015 by dontlop

[Texstorm]

I am going to be a banker in my next life ! It's crazy how they can take thin air and make money trees !

[RVPleaseToday]

"Yes they do, since they are stating the value of the assets in Dinar.  If the value of the Dinar changes, the value of the assets will be restated using the new exchange rate."

 

The stuff in their reserves are US Dollars. I'm not sure how a dollar's value would decrease just because Iraq revalued the Dinar. If they have $70 billion in reserves now, they will have $70 billion afterwards...well, until they cash in all of the U.S. Dinar holders, then they will be trillions of dollars in debt.

[rockfl9]

Yes they do, since they are stating the value of the assets in Dinar.  If the value of the Dinar changes, the value of the assets will be restated using the new exchange rate.

The dinar in circulation is a liability NOT an asset. For some reason ,I dont know why you found the value of the reserves (assets) stated in terms of dinar. But we  know the assets of the CBI are held as dollars and gold. that value only changes with MORE dollars and gold.

[RVPleaseToday]

I think the prevailing theory among Go Rv'ers is that the Dinar is NOT a liability, but a huge asset, because the US Treasury, not Iraq, will buy all of those RV'ed Dinar from the people, and use it to buy billions of barrels of oil from Iraq over the next 50 years. Although, I'm not sure what the U.S. Government would do with oil, since it has no refineries.

[rockfl9]

Why they are limiting the size of the auctions to $75M is a puzzle!  The effect  will be reduced imports and keep more dinar in private accounts. If they cant buy things the result may be forced savings. But that also may jack up the market price.

Not a problem for the GOI they dont haveto go through the auctions. 

[RVPleaseToday]

Yeah. I know they are trying to stop all the fraud that has been going on; but, it seems to me limiting the auctions would only drive the value of the Dinar down, not up. The auctions have been one of the very few things that have worked for the GOI over the last several years. They have succeeded in keeping the Dinar relatively stable.

[rockfl9]

I think the prevailing theory among Go Rv'ers is that the Dinar is NOT a liability, but a huge asset, because the US Treasury, not Iraq, will buy all of those RV'ed Dinar from the people, and use it to buy billions of barrels of oil from Iraq over the next 50 years. Although, I'm not sure what the U.S. Government would do with oil, since it has no refineries.

If you are just looking at the CBI balance sheet, reserves (USD + Gold ) are assets offset by dinar(liabilities) in circulation'.

 

RIGHT. The UST is not in the oil business! Has no need for dinar. Hope you have followed the news, the US has so much oil we are considering SELLing some.

WRONG. The CBI is the only place to exchange dinar for dollars and at present that happens only in IRAQ BY Iraqi's.

[rockfl9]

Yes they do, since they are stating the value of the assets in Dinar.  If the value of the Dinar changes, the value of the assets will be restated using the new exchange rate.

I now see what you were thinking and for pure accounting purposes It would be true for a snapshot in time. But regardless of what the CBI says a dinar is worth , a dollar is a dollar and an ounce of gold is an ounce of gold.  

[dontlop]

"Yes they do, since they are stating the value of the assets in Dinar.  If the value of the Dinar changes, the value of the assets will be restated using the new exchange rate."

 

The stuff in their reserves are US Dollars. I'm not sure how a dollar's value would decrease just because Iraq revalued the Dinar. If they have $70 billion in reserves now, they will have $70 billion afterwards...well, until they cash in all of the U.S. Dinar holders, then they will be trillions of dollars in debt.

They don't buy the dinar at auction with the reserves they buy it with new money from the mof from oil sales

So the reserves stay the same and they take 75 million new dollars a day and buy dinar and add those dinar to their assets until they are respent

Central Banking System

Money supply

In the SparkNote on money and interest rates we learned about the money supply. Initially we defined the money supply as the total amount of currency held by the public. While this definition is correct, it is incomplete. In the previous section, we learned that through a fractional reserve banking system, the money supply increases. Thus, the money supply is better defined as the total amount of currency plus deposits held by the public. All available money, either in terms of currency or demand deposits, is thus accounted for.

I just read that , what's that mean

It's wierd cause the cbi has only issued 40 trillion dinar and they show 40 trillion outside of banks

But they show 80 trillion m2 which includes deposits

So are the deposits in foriegn currency , euros and dollars ?

Because they only issued 40 trillion is that just the cash they issued ?

And may of issued more dinar but it's not cash its electronic

They do categorize foriegn currency deposits seperatly on the cbi web site so they may have a. Additional amount of dinar issued but it's electronic

[Markinsa]

I now see what you were thinking and for pure accounting purposes It would be true for a snapshot in time. But regardless of what the CBI says a dinar is worth , a dollar is a dollar and an ounce of gold is an ounce of gold.  

 

For accounting purposes, you have two Financial Statements, the Income Statement, and the Balance Sheet.  Simply put, the income statement measures income and expenses over a period of time.  The Balance Sheet, measures Assets, Liabilities and Owners Equity on a specific date.  

 

For this conversation we are talking about the Balance Sheet.  The accounting Formula is : Assets = Liabilities + Owners Equity.  You are correct in saying that the Reserves are on the Asset side and the Currency Issued is a Liability (On the Liabilities Side).  Normally, Balance sheets are presented in the currency of the Entity's home country, in this case Iraq, using Dinars.  

 

Any assets that are held in foreign countries, and valued in a foreign country's currency, are restated in the currency of the Entity's home country.  Any gains or losses due to currency valuations are recognized on the Income Statement, which increases or decreases the entity's revenue for the period being reported on.

 

I'm an accountant, but I don't normally work with preparing financial statements, but the above is taught in most introduction to accounting courses.

 

-

[dontlop]

I think the prevailing theory among Go Rv'ers is that the Dinar is NOT a liability, but a huge asset, because the US Treasury, not Iraq, will buy all of those RV'ed Dinar from the people, and use it to buy billions of barrels of oil from Iraq over the next 50 years. Although, I'm not sure what the U.S. Government would do with oil, since it has no refineries.

Once the treasury or the federal reserve has a foriegn currency it never has to spend it

It can just write it into their assets

[dontlop]

It would do the same thing as gold woukd do in their assets if ya never sold the gold

It just sits there forever and ever collecting dust

And if iraq ever gets out of line

The U.S. govt could flood the market with dinar and add a few counterfit to it like they did to saddam

And destroy their economy with currency and sanctions

Kinda like a ace in the hole

And the U.S. govt buys oil for its strategic oil reserves

Edited February 2, 2015 by dontlop

[dontlop]

If the usa can use assets to digitally finance ten times their assets

So they just print up how ever many dollars worth of dinar there is in the USA

Shoves it into their assets and borrows ten times that thru digital banking that we never will pay back

See how we do it

[dontlop]

So what if the USA has a plan for iraq to rv at 10 cents and we all run and sell our dinar to the fed

Then next year the next phase kicks in and iraq raises its value again to 20 cents

Then the fed just got all that dinar for nothing and it's worth 10 cents more than they paid

Then iraq buys it back at twenty cents then in a couple years raises it up to 50 cents that would mean iraq got their dinar back for free and it's worth 10 cents more

No body will care

All those govts that bought dinar off its citizens all made money

No one will Persue anything

They will just say thank you

Speculating is fun

It's free

.

Then they just let it ride while they pump 10 million barrels a day into the system

Edited February 2, 2015 by dontlop

[dontlop]

As long as those dinar are sitting in the fed there is no reason for iraq to worry they are just being held out of circulation

It's just part of the deal

In my speculatory dream

The fed makes 100% gain on its investment

Iraq gets a new swimming pool in every neighborhood

[dontlop]

Best running back in the nfl and their on the one yard line to win the super bowl and they throw a pass into the crowd and its intercepted

Get a rope

Who called a pass ?

[rockfl9]

Right . stupid call . Will go down in history.

The FED has NO dinar . And I dont think any other bank does . It is only dinarians.