WHY the current IQD will never go INTERNATIONAL!!

[rockfl9]

In the past starting about 2008 there have been occasional articles suggesting that large amounts of dinar were stolen .. There were rumors of laxed security and accountability when initially distributed ...Then there was  the dinar the GIs shipped home ... Also  corruption in the customs allowed early dealers to simply ship it in luggage as dirty laundry .. Later there is the dinar that ISIS collected that may still be in their posession  . The CBI knows  it is missing but doesnt know how much .   IF the dinar became freely traded this ghost dinar could swamp the iraqi economy.

I believe this was the motive for Dr Shabibi's RD plan.   A well managed exchange that would make the present IQD  worthless.  

My 2 cents 

[Laid Back]

- We haven't see a new currency swift code... Still IQD 

- lnflation is only 2%

- Oil prices are improving

- The dinar we hold is still valid 

 

The main reason for LOP or RD is hyperinflation that's not the case in Iraq 

 

Dinar in circulation is 48 trillion IQD /1182 = $40.6 billion dollars

CBI foreign currency reserve $49 billion dollars + 89 Tons of gold

 

The CBI can cover all the money in circulation 1.6 times

 

Go RV

Go $1:1

 

 

[rockfl9]

LB.  The hyperinflation was caused by the Sadam dinar,  when the exchange was made at 1:1 it came along.

The 2Q17  CBI balance sheet  had 37T in circulation and only 45 Bn in reserves. That is down from the  $70 Bn end of 2015. If you found a later report please post it.

The dollar value of the gold reserves is included in the reserve total, it is not an addition to.

When then say "in circulation " they really mean issued from the banks... they really cant be sure it is in "circulation"   .. But i am sure they have good reason to believe  some of it is missing.

The IQD you hold may be "valid" ,  but in the outside world it doesnt buy anything.

[Laid Back]

You are talking about the past, the Saddam Hussein dinar is no valid today...... Out of circulation 

The dinar we hold is valid 50k, 25k, 10k, 5k, 1k, 500, 250 in circulation 

The CBI have been reducing the note count for years.... They have a liquidity problem

Iraq Inflation 2%......No reason to LOP orRD

 

Venezuela hyperinflation 440,000%...... They are planning to LOP or RD soon

https://www.bloomberg.com/news/articles/2018-01-18/venezuelan-hyperinflation-explodes-soaring-over-440-000-percent

 

I know a currency dealer who sales Venezuelan Bolivares, if you are interested.

 

Go CBI

Go new monetary policy 

Go $1:1

 

 

[ChuckFinley]

13 hours ago, Laid Back said:

You are talking about the past, the Saddam Hussein dinar is no valid today...... Out of circulation 

The dinar we hold is valid 50k, 25k, 10k, 5k, 1k, 500, 250 in circulation 

The CBI have been reducing the note count for years.... They have a liquidity problem

Iraq Inflation 2%......No reason to LOP orRD

 

Venezuela hyperinflation 440,000%...... They are planning to LOP or RD soon

https://www.bloomberg.com/news/articles/2018-01-18/venezuelan-hyperinflation-explodes-soaring-over-440-000-percent

 

I know a currency dealer who sales Venezuelan Bolivares, if you are interested.

 

Go CBI

Go new monetary policy 

Go $1:1

 

 

LB going to have to    that. 

[rockfl9]

During the years before the invasion Sadam simply issued trillions of dinar  with no backing to support it,  highly inflated.   When the  CPA released the IQD at 1:1   the number of dinar in circulation remained the same... The CPA chose 1:1 to assure that all of the sadam notes would be turned in.   The new CBI did start with $100M in reserves  but that had to cover 8 trillion dinar. So some of the inflationary effects were reduced.  I will agree that they have little need to RD at this time , they cant afford to.

The  2Q17  balance sheet showed they spent $3.5M to print more currency and the amount in circulation increased 2T dinar ..  Hardly proof that they have been reducing note count.

They well may have a liquidity problem  that they may be trying to resolve by using plastic to pay employees to avoid having to print more money .

PS.  I think the 100 dinar note still exists, worth 8.6 cents it is a burden to keep on printing it. 

[ChuckFinley]

Looks like the Red Baron has taken a liken to us. LOL  

[Laid Back]

On February 24, 2018 at 3:30 AM, ChuckFinley said:

LB going to have to    that. 

Thanks my friend CF 

10 hours ago, ChuckFinley said:

Looks like the Red Baron has taken a liken to us. LOL  

You're right my friend..... For some people truth hurts

[rockfl9]

One of the objectives of a central bank is to provide enough local currency to support internal commerce. Printing currency is an expense but necessary. The ideal  amount is to have just enough and not too much and of all the right classes.  But it seems that when a shortage loomed and they printed more a lot seemed to just disappear. Where it is would be a problem to the CBI if it decided to increase the value of the dinar .   Even if the Dinar would not go international and the missing dinar was the "chunky money" they have talked about it would certainly come out of hiding and Iraqis would start buying things at a greater rate. This would run up prices causing inflation.  The CBI/MOF couldnt stop it!  Of course WE know where the missing dinar is.  But the CBI doesnt know how much. The solution is RD the currency and start over.

P.S. What could be causing the rumored IQD shortage in the US?   Closing the Kurdish airports to international flights. Hmmmm.

Edited February 27, 2018 by rockfl9

[EverCurious452]

On 2/22/2018 at 9:03 AM, Laid Back said:

- We haven't see a new currency swift code... Still IQD 

- lnflation is only 2%

- Oil prices are improving

- The dinar we hold is still valid 

 

The main reason for LOP or RD is hyperinflation that's not the case in Iraq 

Not quite correct.  The main reason for a LOP or RD is PAST hyperinflation, and that certain is the case for Iraq.  i.e. the reason they have huge denominations in their currency is Sadam's massive printing that caused the currency to inflate by more than 100,000%.  Whether Iraq WILL actually execute an RD or LOP is anyone's guess of course.   Doing so in a war torn county is a problem, but stranding some of the old currency (e.g. that ISIS stole) is also a potential advantage.  Still who knows.  All I'm saying is your argument about why an RD or LOP is done, is not quite correct.  Its about fixing the effects of past hyperinflation once you get that under control not stoping inflation in the present (which Iraq has already done as you point out).

[rockfl9]

EC452....You got it!  The CPA could have solved the large denomination problem with the new dinar in 2003 . There was a thought to exchange at 1000:1 then but fearing Iraqis would hold on to the Sadams instead resulted in the 1:1 exchange.

The low inflation however is the result of the food and fuel subsidies which is a big part of the budget  The  IMF would like them eliminated but then core inflation would be 6-8% seriously affecting the poor, and pensioners.

THe missing dinar is my point .. If they simply RV the current dinar it would be a windfall for any stolen or smuggled dinar.  It would certainly be returned to normal circulation defeating the MOF/CBI efforts to control spending.

[ChuckFinley]

On 2/25/2018 at 11:55 AM, Laid Back said:

Thanks my friend CF 

You're right my friend..... For some people truth hurts

So true my friend. Enjoy your weekend .