50 & 100k NOTES ?

[rockfl9]

This certainly means the CBI will stay with the 1166 rate, or higher and they will need more dinar in the near future even though expecting slower growth.  Actually they will save on printing costs.

They will simply retire old 5, 10 and 25k notes and replace with fewer 50 and 100 k notes. Doesn't say the lift the zeros is dead just put off a few more years until the economy cranks up .

Without a devaluation and except as replacements the CBI will have to increase the reserves $43 usd for every one issued . The only way to get those dollars is to go to the auction , but when they do that it takes away dollars from the amount available to importers for goods to sell! That will cause shortages in the market.

 

[Texstorm]

Hello Rock ! I really don't think that it's going to happen the way you see it , but heck at some point someone has to be right. I do have a feeling that we will no shortly what their intentions are but I don't see the 25k being phased out anytime soon. As far as the economy I believe that once the door is open you will see a transformation that would rival anything from the past because everything will be available to them instantly, as far as modern machinery and computers. There is just too much money to be made for an investor for them to sit back and wait. A lot of fortunes are made when you get in on the ground floor. Just my thoughts.....Thanks

[rockfl9]

Tex:  I didn't mean the bills would be phased out.  This release means the 000 notes will be around for a while, 4-5 years. My thought was how the CBI would be able to get the extra reserves to allow them out. The only source for dollars is thru the MOFs sale of oil which is totally consumed by imports.

I do not share your optimism, re the ability of Iraqis' to adopt modern technology quickly and outside investors eagerness to jump in. In general Iraqis' are unskilled . They have had to buy the talent needed to build their infrastructure so far and have done a poor job usually due to corruption and graft.

The Kurds have been able to get other Arab states to come in , Bagdad not so much.

[Texstorm]

Okay Rock l however the U.S. Is now back over there and boom...! secutity will not be as much as a major factor as it was before. I personally think that ISIS/ISIL/DAASH and the rest of them will mostly be eradicated in a short time. All that will be needed after that is to open the doors and let investors flood in. True for the most part the Iraqis are unskilled However somebody got to be the mule. Skilled people will direct them just like it was when they built the pyramids. Iraqi labor will be cheap enough to offset the skilled people they need. Do you have any ideal how much will be made on taxes, that is where the extra reserves will come from.

[rah]

Ok, so we have a 50k note. Why?

I can't buy in to the idea that this is to reduce the number of notes. 2 25k notes for a 50k. What did they accomplish? There is still 50k dinar out there.

It sounds like it is just a larger bill, like our $50. They wouldn't print a 50k and then lop, and they wouldn't print a 50k and RV, so I think they are content with status quo for ten more years.

Or I could be confused.. :-)

[Antietam]

I think you are correct, Rah, but the production of the 50 dinar note is not a bad thing for us. When the CBI revalues against the 1166 peg, we will make money. Everything else is smoke and mirrors

[rockfl9]

Antietam ?? It is a 50,000 dinar note!  Not a 50 , that one is gone .. Rah is correct .  For sure if they follow through with the 100k note.  The MOF is in survival mode it must keep dinar flowing in the domestic market .

[Antietam]

Keystroke mistake. I meant 50,000 dinar note.

[rockfl9]

Strictly business.

Being a cash economy, The CBI must generate more dinar every year AND replace old bills that are worn.

So if the economy only grows 1% the CBI must add 800M dinar a year. Plus those that must be replaced.

SO if it cost 6 cents to print a bill of any category then the cheapest thing to do is to print as many high value notes as needed. Thus a new 50k that can replace 2-25s 5-10s etc.

Producing the 100k even looks better.

I don't see it as anything more than good banking practice.

If they increase the exchange rate to say 1300 to 1 they will need to add 20% more dinar FAST!!!

[Antietam]

I don't know about the exchange officially moving from 1166 to 1300. That would be a bad thing for iraqi confidence in their own currency. They will start hoarding US dollars. The 50,000 and 100,000 dinar bills will help facilitate banking, nothing more and nothing less. What we need is the peg to go downward, away from 1166. I'm not in favor of paying higher gas prices, but iraq's economy is 90% petroleum based and they need prices alot higher than $45 a barrel to make ends meet.

[rockfl9]

The 100K note is only worth $84, hardly the price of a good suit.. The 50 &100K notes will put more cash in circulation at a lower cost to the CBI. It is NOT just for bank transactions. Its for commerce.

To lower the peg requires more reserves WHERE will it come from?????/

They need oil at $60+ to meet the budget. No one  sees that price for at least 2 more years.

I agree moving the rate to 1300+ would be bad politically BUT what else can the CBI do?  Remember all that gold the CBI bought years ago for the reserves, WELL it is worth LESS today!  Come December they have to balance the books the loss will show up then.  

[Antietam]

Who has a balanced national budget anymore? The IMF will continue to prop up the CBI because nobody wants a defaulted iraq. Iraq's ace in the hole is oil. Lots of it. The world isn't going off the petroleum standard no matter how much the obummer and his far left weenies want it. Ain't happening in my lifetime, so that gives iraq an edge. I just would like to see expansion of their economy and a revalue in their currency, sometime in the next five years, so I can make some money off this ferris wheel.

[Texstorm]

I just got to say something because you are terribly off base ! The IMF does not prop up the CBI........if anything it has been The USA .....look at the auctions , it's good old USA money that's running Iraq. The CBI has done a great job at handling the onslaught of terrorism and Fraud to be at a certain exchange rate that they are.. .... In your game plan of 5 or 6 years if we are both still alive and we " make money" you can say I told you so ! Other than that you couldn't count beans if I laid them one by one across the table ! Your calculator needs a new battery !

[Antietam]

There you go again, tex. Attacking me personally. You are always calling for me to be banned. There is absolutely nothing in my above post to make you jump me personally. You are always preaching the love of Jesus, but the Lord was quick to point out that His love should always shine through in His true followers. You need some cleaning up,my brother.

[Texstorm]

You know it's kind of funny ,but didn't you say that Jesus was not a part of this investment in so many words and now you call upon him.....

[Antietam]

Tex, I rely on the Lord everyday, but when I decide to go get a burger, I don't ask God which fast food place to go to. Some decisions are made using my free will common sense. Other decisions I put before the Lord. Generally, I don't put money decisions before God because God does not require that I make money to bless my family. I think Jesus would prefer His followers to be of reasonable means anyway. Far less trouble with spiritual corruption. But I do believe that we are known by our words and deeds. If I go around spouting God's name and calling for His blessings, then I need to be very careful that my words and deeds do not discredit our Lord, because non-believers are watching. And they are looking for my hypocrisy. I have my opinion on this investment, and you have yours. We can have a civil debate about our differences without entering into the personal attacks. Let's just agree to keep it civil between us. I'm sure the Mods will agree with that assessment on our part. Both of us come from rough backgrounds, before God straightened us out. Sometimes the "old way of doing things" comes out before the Holy Spirit can stop us. For those failures on my part, I apologize to you, and all members of DV.

[Texstorm]

I'll accept that Antietam, my apologies to you as well. We will just leave it at that. 

[SocalDinar]

Why is it so hard for some to understand that the $50 K notes are for everyday use by the people of Iraq? Its not for transactions between banks.

They have very little electronic banking and they need a larger note than a bill worth about $21.00

These larger notes will make the currency last longer.

 

Also means no Lop anytime soon

[SocalDinar]

The new 50 K notes are selling on ebay   2 for $96.00

 

http://www.ebay.com/itm/A-LOT-Of-2-50-000-IRAQI-Dinar-Bank-Notes-NEW-2015-UNC-2-X-50000-100K-100-000-/331734724259?hash=item4d3cee2ea3:g:oNoAAOSwiwVWTRwk

[EverCurious452]

Why is it so hard for some to understand that the $50 K notes are for everyday use by the people of Iraq? Its not for transactions between banks.

They have very little electronic banking and they need a larger note than a bill worth about $21.00

These larger notes will make the currency last longer.

 

Also means no Lop anytime soon

Agreed. Also there is no issue around getting extra USD to back them as issuing new bills does not impact the size of the money supply, just how many notes are in it.  The note count, in the country or in your pocket, is a logistical issue, not a financial one.

[SocalDinar]

Exactly. A dinar is a dinar is a dinar. I can not see why the specific denomination means anything. WE do not know if they will remove smaller denoms of equal value. CBI still shows the M-1 as of September  at 65 Trillion dinars