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edwarda

Tradable currency

40 posts in this topic

I was searching the internet looking to find out exactly what makes an internationally trade-able currency and was lead right back to this forum. Here is a quote from Networth from March 3rd 2011 asking the same thing, "When I ask why people think the dinar must RV, one of the common answers I hear is "Iraq must have a tradeable currency". I don't know if people know what they mean when they say that. Or maybe I don't understand what they are saying but, in my opinon, the dinar is already a tradeable currency. I own dinar. To acquire those dinar, I had to trade dollars. Presumably, nearly everyone in this forum owns dinar. In some cases, people in this forum have disposed of their dinar. Obviously, in a basic sense, the dinar is a tradeable currency because we have already traded with it! We had very little trouble acquiring or disposing of our dinar. We found very eager sellers and very willing buyers. So I don't know what people mean when they say the dinar is not currently tradeable. Obviously, grocery stores and malls won't accept our dinar as payment for items we may want to buy from them. But they wouldn't accept euro or yen either. I wouldn't expect the currency of another country, any country, to be tradeable for goods and services in the US. If we traveled to Iraq, I'm sure we would have no trouble exchanging our dinar for goods and services offered there.

Perhaps they are talking about contracts and international transactions in Iraq not being denominated in dinar. That may be true but I don't believe that means a currency is not tradeable. Most international transactions are denominated in US dollars because the dollar is considered the world's reserve currency. If India buys wheat from Argentina, the transaction is denominated in US dollars. Yet the rupee is considered a "tradeable currency". So if a contract in Iraq is denominated in US dollars, I don't understand why that means the dinar is not tradeable. The vast majority of international contracts are priced in dollars already.

If anyone knows what is meant when someone refers to the Iraqi dinar is not being "tradeable" I would appreciate an explanation. I, for one, happen to believe it is NOT a reason for the dinar to revalue. If the dinar is to revalue, as many believe, it will have nothing to do with making the dinar a tradeable currency. In my opinion, the dinar is perfectly acceptable and tradeable as it is. You should strike it from your list of reasons why the dinar must revalue."

The reason for re-posting is after reading the responses I felt no one gave a complete explanation of what Iraq needs to do. I was told Iraq has been removed from the terrorism list and are now on the watch list (OFAC list). I know there is limit that can be taken out of the country. So, is it just removing the limit or is there more? Aside from the value what keeps it from being trade-able? If you feel like you can explain it well and have a link to an article I can read I will be happy to read it. I just want to understand more about what is and is not a international currency and I think it is more than the value which I and everyone else on this forum would like to be more. For those willing to help me understand I do understand they are selling currency somewhere hence the CBI daily sales to keep money flowing which if they do not want large amounts taken out the country who are they selling to? Only banks in Iraq? I also understand oil is purchased using USD which they want to move away from. Since they are trying to be the largest producer of oil I don't see that happening.

I know a lot to digest but if you fell you have some knowledge to share please do.

Thanks
Edward
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The thing that makes me leary of this whole thing is the fact that anyone can still buy as much uncirculated 25k notes as they can afford,so are they still printing them just to con us out of our dollars.The only hype for the rv comes from these few internet sites that the pumpers constantly bombard with their lies.Sure it seems logical that they would rv but maybe they are making a fortune without it.I'm vested in dinar and pray for it everyday as i'm to the desperate point believing this would happen before now but something just doesn't seem right.
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I must admit that I too am beginning to wonder why if they are supposedly trying to reign in all of the larger denoms they keep printing more.
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I am not even sure that they need a tradeable currency to enter the WTO. Here is a reply to a email I sent them. I removed non important info.

From
Sent: 29 March 2011 17:50
To: Enquiries, WTO
Subject: Re: admission


My name is Ken and I was wanting to know if a country needs a international tradeable currency to be a member of the WTO? As in Forex.


Hello,
Thank you for your recent enquiry.

We suggest that you look up Article XV of the GATT 1994: http://www.wto.org/english/docs_e/legal_e/gatt47_01_e.htm

We hope this is helpful.

WTO Enquiries


From:
Sent: 29 March 2011 17:50
To: Enquiries, WTO
Subject: Re: admission

What I got out of reading the article was that a country can also trade goods (as in oil) and does not nessisarily need a tradeable currency. So I have to wonder if they really need to RV anytime soon.
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[quote name='rettif1' date='11 July 2011 - 04:12 PM' timestamp='1310418753' post='568648']
I am not even sure that they need a tradeable currency to enter the WTO. Here is a reply to a email I sent them. I removed non important info.

From
Sent: 29 March 2011 17:50
To: Enquiries, WTO
Subject: Re: admission


My name is Ken and I was wanting to know if a country needs a international tradeable currency to be a member of the WTO? As in Forex.


Hello,
Thank you for your recent enquiry.

We suggest that you look up Article XV of the GATT 1994: http://www.wto.org/english/docs_e/legal_e/gatt47_01_e.htm

We hope this is helpful.

WTO Enquiries


From:
Sent: 29 March 2011 17:50
To: Enquiries, WTO
Subject: Re: admission

What I got out of reading the article was that a country can also trade goods (as in oil) and does not nessisarily need a tradeable currency. So I have to wonder if they really need to RV anytime soon.
[/quote]


Isn't this article also the argument that is made for the rates people quote when they say the IQD needs to come in close to $1 because anything significantly more or less woule be seen as disruptive? I thought I had heard that somewhere.
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[quote name='FRUSTRATED' date='11 July 2011 - 04:10 PM' timestamp='1310418613' post='568645']
The thing that makes me leary of this whole thing is the fact that anyone can still buy as much uncirculated 25k notes as they can afford,so are they still printing them just to con us out of our dollars.The only hype for the rv comes from these few internet sites that the pumpers constantly bombard with their lies.Sure it seems logical that they would rv but maybe they are making a fortune without it.I'm vested in dinar and pray for it everyday as i'm to the desperate point believing this would happen before now but something just doesn't seem right.
[/quote]
The reason that they can still buy is because iraq already knows the amount of iraq dinar that is outside it's borders.No more dinar is coming out of iraq.
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i agree with the original poster. whether or not iraq needs a recognized currency to join the wto, i believe they can join with the current currency still valued at 1170 to the usd.their currency is not worthless, it does have a worth and that is 1170 to the dollar. there are many countries that have undervalued currency and they are doing just fine. look at the vietnamese dong, i paid 60$$ usd for one million dong. plus why should they revalue just yet? the cbi is auctioning their currency and what are they getting for it? american dollars. i read in a chat some time ago that they dont need to or they wont revalue if the speculators keep buying dinar, because they are making money by selling their currency.
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[quote name='acceb75' date='11 July 2011 - 03:18 PM' timestamp='1310419138' post='568656']
Isn't this article also the argument that is made for the rates people quote when they say the IQD needs to come in close to $1 because anything significantly more or less woule be seen as disruptive? I thought I had heard that somewhere.
[/quote]
I,m not sure. But why couldn't they just trade oil for the things they need and then when they become more stable as a country RV? I wish it would happen tomorrow but I'm just thinking it might be awhile.
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[quote name='dmoney' date='11 July 2011 - 03:21 PM' timestamp='1310419307' post='568659']
The reason that they can still buy is because iraq already knows the amount of iraq dinar that is outside it's borders.No more dinar is coming out of iraq.
[/quote]

if no more dinar is coming out of iraq than why can i still buy it? i know the currency dealers have a big reserve of dinar they are sitting on but when they sell it all, they have to get more. and when they do need more, it will still come from iraq. people have been stating that iraq has sealed its borders and no dinar is allowed outside the country and they have been saying that for years. its all a lie.
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[quote name='weneedrv' date='11 July 2011 - 04:27 PM' timestamp='1310419642' post='568668']
i agree with the original poster. whether or not iraq needs a recognized currency to join the wto, i believe they can join with the current currency still valued at 1170 to the usd.their currency is not worthless, it does have a worth and that is 1170 to the dollar. there are many countries that have undervalued currency and they are doing just fine. look at the vietnamese dong, i paid 60$$ usd for one million dong. plus why should they revalue just yet? the cbi is auctioning their currency and what are they getting for it? american dollars. i read in a chat some time ago that they dont need to or they wont revalue if the speculators keep buying dinar, because they are making money by selling their currency.
[/quote]

This is a very good point. I always wondered why the auction numbers keep going up even though in theory it would seem they are supposed to be going down. :blink:
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[quote name='weneedrv' date='11 July 2011 - 03:27 PM' timestamp='1310419642' post='568668']
i agree with the original poster. whether or not iraq needs a recognized currency to join the wto, i believe they can join with the current currency still valued at 1170 to the usd.their currency is not worthless, it does have a worth and that is 1170 to the dollar. there are many countries that have undervalued currency and they are doing just fine. look at the vietnamese dong, i paid 60$$ usd for one million dong. plus why should they revalue just yet? the cbi is auctioning their currency and what are they getting for it? american dollars. i read in a chat some time ago that they dont need to or they wont revalue if the speculators keep buying dinar, because they are making money by selling their currency.
[/quote]
Although I still think it might be awhile before a RV. I do have to wonder why they would be ready to put out smaller denoms and keep it at 1170.
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[quote name='acceb75' date='11 July 2011 - 04:11 PM' timestamp='1310418708' post='568647']
I must admit that I too am beginning to wonder why if they are supposedly trying to reign in all of the larger denoms they keep printing more.
[/quote]

That is because they aren't reigning in the larger denoms....it is a dinar site myth.

[quote name='weneedrv' date='11 July 2011 - 04:27 PM' timestamp='1310419642' post='568668']
i agree with the original poster. whether or not iraq needs a recognized currency to join the wto, i believe they can join with the current currency still valued at 1170 to the usd.their currency is not worthless, it does have a worth and that is 1170 to the dollar. there are many countries that have undervalued currency and they are doing just fine. look at the vietnamese dong, i paid 60$ usd for one million dong. plus why should they revalue just yet? the cbi is auctioning their currency and what are they getting for it? american dollars. i read in a chat some time ago that they dont need to or they wont revalue if the speculators keep buying dinar, because they are making money by selling their currency.
[/quote]

Correct....they don't need a higher valued currency to join WTO....as you mentioned...just look at some of the other countries that are members...they don't have recognizable currencies either....
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[quote name='jmw' date='11 July 2011 - 04:05 PM' timestamp='1310421914' post='568721']
That is because they aren't reigning in the larger denoms....it is a dinar site myth
[/quote]
If it is a myth then is it also a myth about the smaller bills? Why would they be ready to introduce them if they are still printing the larger denoms or not reigning them in?
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Thanks everyone for adding to this post. Below is a section of the OFAC list about Iraq. The block parties are countries like Cuba or Iran. So it seems to me if Iraq wanted to internationize their currency there is nothing holding them back.

V. FINANCIAL TRANSACTIONS
Unless a transaction involves a party blocked under OFAC’s authorities, financial transactions with Iraq are allowed, including the opening of correspondent accounts for Iraqi financial institutions.

http://www.treasury.gov/resource-center/sanctions/Programs/Documents/iraq.pdf

Edward
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Do the other tradable currencies have the resources to back their currency like Iraq ? Iraq is a very very wealthy country
Kuwait is their neighbor and they have oil and their dinar value is 3+ to the dollar.....how can you have worthless money and a gold mine of resources?
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[quote name='SLUM DAME' date='11 July 2011 - 05:53 PM' timestamp='1310424787' post='568793']
Do the other tradable currencies have the resources to back their currency like Iraq ? Iraq is a very very wealthy country
Kuwait is their neighbor and they have oil and their dinar value is 3+ to the dollar.....how can you have worthless money and a gold mine of resources?
[/quote]


This is basically the thing I don't understand. How can two countries that border each other who are supposedly working towards an agreement to share shipping ports have currencies that are so disparate in value?
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If you remember from earlier posts and news articles ALL the Iraqi currency was printed in 2004. The smaller demons just now are being ready for introduction. If you see them the RV/RI is here.
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[quote name='SLUM DAME' date='11 July 2011 - 05:53 PM' timestamp='1310424787' post='568793']
Do the other tradable currencies have the resources to back their currency like Iraq ? Iraq is a very very wealthy country
Kuwait is their neighbor and they have oil and their dinar value is 3+ to the dollar.....how can you have worthless money and a gold mine of resources?
[/quote]

it is due to their money supply...Iraq has a M2 of 59 trillion dinar...Kuwait has a M2 of 28 billion dinar....Iraq's GDP isn't high enough and they don't have enough oil production to overcome a money supply that large....the value is always in relation to the amount in circulation.

[quote name='rettif1' date='11 July 2011 - 05:43 PM' timestamp='1310424184' post='568778']
If it is a myth then is it also a myth about the smaller bills? Why would they be ready to introduce them if they are still printing the larger denoms or not reigning them in?
[/quote]

depends...lower denoms could be for a Re-denomination...which would lower the M2.
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[quote name='mkelly' date='11 July 2011 - 07:15 PM' timestamp='1310426146' post='568820']
If you remember from earlier posts and news articles ALL the Iraqi currency was printed in 2004. The smaller demons just now are being ready for introduction. If you see them the RV/RI is here.
[/quote]
Those notes are not compliant with Article 140 of the Iraqi Constitution.

They would add unnecessary complexity to the monetary system if introduced.

Not saying they won't be used, but they do not contain the Kurdish language, which is a part of satisfying Article 140 and the Erbil Agreement.
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Classic tradable and internationally recognized and exchangeable Currencies ( that one can exchange in most parts at least of the modern civilized world)
USD-CAD-AUD-EUR-CHF-JPY-.GBP...
When the IQD gets that Status, then it becomes an internationally tradable exchangeable worldwide recognized currency. JMVHO.
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OP when people say a tradeable currency they mean that the currency is listed and traded on Forex. A tradeable currency is not needed to be a member of the WTO.

Originally, there was 5 trillion dinar printed. Due to the sanctions imposed against Iraq, Shabibi started the auctions to raise foreign reserves to support the country and to manage inflation in the country. He has been congratulated on being able to do what he has done for Iraq. The internet played a major role in this. Because of the internet many more people were able to be informed of this investment. Sales of the IQD have made it necessary to print more and more IQD to keep up with demand. The IQD in circulation has ballooned to near 30 trillion. The fact that you are holding IQD maybe the reason why they are now planning a re-denomination for next year when the new currency with the Kurdish and Arabic languages, as required by their Constitution, is printed and comes into use.

Will the IQD revalue? Yes, of course it will. It has many times before and it will many times again in the future. When will it RV? No one knows and nobody will know till it happens. But rest assured it will RV again. The CBI has released articles stating they want their currency to return to the value it was prior to the war ($3.22) and be comparable to other countries in the region.

jmw states that they are not reigning in the 000 notes and that it is a dinar site myth. The fact is we have no idea rather or not they are taking the 000 notes out of circulation from the citizens. The reason we have no idea is because all of their currency is listed as in circulation. All of the IQD that is currently in the vaults of the CBI and the banks is currency listed as in circulation. This includes all the lower denom notes that were printed back in 2003. There is no way for us to know exactly how much is in the citizens hands, speculators hands or reserve banks/central banks vaults of other countries. The citizens of Iraq use the US Dollar for most daily purchases, while larger purchases, the 000 note IQD are used by those who are wealthy enough to have them. With unemployment of 25% in Iraq and the average wage of $2300-$2500 per year how do folks assume Iraqi's have many of the 000 notes to begin with? Here's a link to info on Iraqi's income annually: http://en.aswataliraq.info/Default1.aspx?page=article_page&id=142092&l=1 This is no myth folks, the majority of Iraqi's are dirt poor.

weneedrv the borders are sealed for citizens as far as taking IQD out of the country. There have been reports of late that military members and contractors have also been added to those that are unable to remove IQD. It has also been reported lately that mailing the IQD out has been stopped as well, as all mail goes thru Kuwait and they are confiscating mail containing notes. I have not been able to verify this fact however.

rettif1 they can't just trade oil for things they need due to those pesky sanctions. All crude must be sold and the proceeds funneled through the DFI. Kuwait must get their 5% of this revenue.
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To me tradeable means they would be traded on FOREX and they are not yet. To my knowledge they are only listed as a exotic and before they can bark with the big dogs they have a lot of work to do. They have come a long way but there is still much to do and they need a track record before they are trusted enough to be a world player. I still think history will show that we made a wise investment but it could be a while before that chapter is written. :rolleyes: Bluto ~~~~~~~~~~~~~~~
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speculatorsRIDE , Good points. But once the sanctions are fully lifted could they not trade goverments thier oil for construction projects and wait to RV when they are a little more stable? They could give a country oil and the country would then compensate whoever won the contract.
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[quote name='speculatorsRIDE' date='11 July 2011 - 06:34 PM' timestamp='1310427297' post='568849']

Will the IQD revalue? Yes, of course it will. It has many times before and it will many times again in the future. When will it RV? No one knows and nobody will know till it happens. But rest assured it will RV again. The CBI has released articles stating they want their currency to return to the value it was prior to the war ($3.22) and be comparable to other countries in the region.

jmw states that they are not reigning in the 000 notes and that it is a dinar site myth. The fact is we have no idea rather or not they are taking the 000 notes out of circulation from the citizens. The reason we have no idea is because all of their currency is listed as in circulation. All of the IQD that is currently in the vaults of the CBI and the banks is currency listed as in circulation. This includes all the lower denom notes that were printed back in 2003. There is no way for us to know exactly how much is in the citizens hands, speculators hands or reserve banks/central banks vaults of other countries. The citizens of Iraq use the US Dollar for most daily purchases, while larger purchases, the 000 note IQD are used by those who are wealthy enough to have them. With unemployment of 25% in Iraq and the average wage of $2300-$2500 per year how do folks assume Iraqi's have many of the 000 notes to begin with? Here's a link to info on Iraqi's income annually: [url="http://en.aswataliraq.info/Default1.aspx?page=article_page&id=142092&l=1"]http://en.aswatalira...e&id=142092&l=1[/url] This is no myth folks, the majority of Iraqi's are dirt poor.

[/quote]

When has the IQD revalued?...I assume you are talking about minor adjustments in it's value....

As far as the 000 notes being taken out of circulation...we do have proof that it is not happening...their money supply is not being reduced and since the value is only equal to $25 they have to use these notes for almost all purchases...I would agree with you that the majority of the country is very poor but that has little to do with the removal of 000 notes....surely you aren't proposing that they are replacing these with 50 dinar notes??? They couldn't function....the only value in removing the 000 notes would be to reduce the money supply...which is easy to verify and it isn't coming down.
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