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Still work to be done...2018


2fast4u2c
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Newshound Guru Kaperoni   "The CBI has also requested the technical assistance of the IMF Legal and Monetary and Capital Markets Department to analyze the reasons behind the rise of the exchange rate spread...in the last Article IV dated last month, the CBI had requested the UST and the IMF to help them get in compliance...that gives me hope they can get in compliance... and once they do, they will accept Article VIII, which will open the banking system to the world, allowing international investment, etc.  So if that occurs, we may see such an effect by end of year.  I do believe it is well documented that the world wants to come to Iraq and invest.  If, Iraq could ever set the stage, by that meaning pass the laws, get the banking system in order, they have the potential for billions of dollars in private investment.  So hang in there. 

 

Newshound Guru Kaperoni    Article quote:   "staff encouraged the authorities to consider creating the conditions which would make possible a move to a more flexible exchange rate policy. "   Thats a float people!  ...both the IMF and CBI have stated in so many words that it will rise gradually. That is most logical and fits in with the concept of countering inflationary pressure created by an influx of investment.  I think once the CBI starts to float the dinar, they could raise the value to 1 to $1 or about within 6 months to a year. 

 

Newshound Guru Kaperoni   Quote:   "Such flexibility could allow a predictable and gradual appreciation of the nominal exchange rate, triggered by strong oil revenues and the Balassa-Samuelson effect,"  Now keep in mind this was all moving forward under Shabibi...when he had the dinar stable and in compliance...and the Market Rate/Street Rate spread under 2%.   Since then, monetary policy has been in disorder and such statements have not been made.  But I expect when and if the CBI can get in compliance we will see them start the process.

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1 hour ago, 2fast4u2c said:

"Such flexibility could allow a predictable and gradual appreciation of the nominal exchange rate, triggered by strong oil revenues and the Balassa-Samuelson effect," 

 

Kap needs to move on and stop quoting from 2013 article IV consultations. Those statements were made when Iraq was having a strong oil revenues. But not anymore. The price of oil has plunged since then.

 

In the most recent article 4 consultations, the IMF directors has concluded that " Directors considered that the peg to the U.S. dollar, which provides a key anchor to the economy, remains appropriate. "

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3 hours ago, Gypsygirl11 said:

And you have to burst our bubble smarty pants....JK....your always right. I don't like that recent article though!

 

Haha....but that recent article will set us up for an RV :).

I always believe they will drop the current program rate, enter the market with a real value and then MANAGE the dinar on a 'predictable' appreciations or depreciations from then on, according to the supply & demand.

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35 minutes ago, zul said:

 

Haha....but that recent article will set us up for an RV :).

I always believe they will drop the current program rate, enter the market with a real value and then MANAGE the dinar on a 'predictable' appreciations or depreciations from then on, according to the supply & demand.

I hope your right.  I understood it as they wanted to keep their currency pegged to the dollar as is now.

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This Just In From The Phat Bloated Float Goateroni ...

 

 

 

9-8-2017   Newshound Guru Kaperoni  1. The CBI can never revalue for the simple reason there is over 40 trillion dinar in circulation (over 3 times the worlds money supply) which would instantly bankrupt the country

2. floating the dinar is the replacement for the daily currency auctions in which the CBI profits. If they were to revalue, they would be short changing themselves on the commissions they can make as the dinar appreciates, and

3. nobody would "buy" it up.  You cannot buy what does not exist.

A float is just like any other country who floats and you can see in those models, nobody is buying up those currencies beyond the international financial environment. 

The CBI does expect and want it's currency to traded through the global financial system as well as the markets.

Though there has been comments published in the past about a 1 to $1 rate, it was never stated it would occur overnight.

In fact, it simply cant.

 

 

9-8-2017   Newshound Guru Kaperoni  And finally...some claim that Iraq needs to get rid of the dollar in Iraq.

That will never happen. 

Countries like Iraq sell oil for dollar and store dollars as reserves.

They will always have dollars. 

What they need to do is reduce the spread before the Official Rate of the dinar and the Market Rate of the dinar within 2% (about 1200 to $1) to meet compliance.

In doing so, this will allow them to accept Article VIII of the IMF, and reduce what is termed.."multiple currency practice" which is a reference to pricing of goods at two different rates within the same country as the result of the countries currency exceeding the allowed spread. 

It has nothing to do with the dollar. The dollar will always be in Iraq. 

They hope is that once the dinar is worth more, or has a value that exceeds the dollar, citizens would desire it over the dollar. 

In doing so, the dollar would of course be less prevalent. 

But that is not a requirement or condition set forth by the IMF.

 

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17 hours ago, DinarThug said:

The CBI can never revalue for the simple reason there is over 40 trillion dinar in circulation (over 3 times the worlds money supply) which would instantly bankrupt the country

 

Kap has a point there....

40 trillion Iraqi dinar?  Over 3 times total money supply in the world?

Ok....let's forget that iraq has been reducing their notes count for sometimes now, thru auctions, not replacing damaged currencies, selling of local bonds, selling gold coins and most recently the introduction of e-dinar....

Let's us instead, play with some numbers, as food for thought.

 

Total US total debt: USD 67 trillion, how many times world's total money supply is that?
How about the total of future derivatives in the world. A whopping 1.2 quadrillion USD. What??

The value of All the Government Bonds (Debt) in the World - USD 58 trillion.
USD 116 trillion  is the value of all stock and corporate bonds in the world.


But how much is the global financial assets? - stocks, bonds, and all of the various securities in between you can invest in.

* Deutsche Bank's Sanjeev Sanyal estimates the value of the whole market to be about $294 trillion (2014).

 

Sooooo in theory, at least, the total losses could add up to more money than there is in the entire world, hundreds times over.

 

Are we doomed?

 

Where did they get all the money to buy those bonds, those future market, those stocks in the first place? - which is a few hundred times over the total money supply in the world!

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15 hours ago, alreis said:

Anybody remember how many ton of gold Iraq bought?

 

https://tradingeconomics.com/iraq/gold-reserves

 

Iraq Gold Reserves Notes

Gold Reserves are country’s gold assets held or controlled by the central bank. This page provides - Iraq Gold Reserves - actual values, historical data, forecast, chart, statistics, economic calendar and news. Iraq Gold Reserves - actual data, historical chart and calendar of releases - was last updated on September of 2017.

 

  Actual  Previous  Highest  Lowest Dates Unit  Frequency  
  89.82    89.82         89.82 0.00 2000 - 2017   Tonnes   Quarterly
Edited by King Bean
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