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dvforumuser
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Posts posted by dvforumuser
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These Gurus can't even do arithmetic when they are trying backpedal away from the RV. Even if Iraq could get the dinar money supply down to 1T, and some how not completely shut down the economy while doing so, that STILL does not allow a 1:1 RV. Where would the CBI get the $1T USD to back that up given their reserves are ~$60B USD? Even rounding that up to $100B USD, its still only 1/10th of what they would need. Perhaps thats viewed as better then being only 1/1000th of what they would need, but it still won't work.3-30-2012 Newshound Guru Kaperoni here are the facts: 32 trillion dinar, you can take 10 trillion off that for foreign reserves that leave 22 trillion, now we need the CBI to collect most of that to get that to about 1-4 trillion then they can RV at 1 to 1 and support it, if that does not happen, there is no solution but a LOP and then a RV and you will get little return...these goofy rates are nonsense and bad for the investment because there is nothing to factually support it. if it comes out at that rate [1 IQD to $3 USD] you made 3x your investment...we are hoping for 1000 times return.
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Your dealer is lying to you. Do you think the UST even acknowledge that an RV is coming? (which it isn't of course but that's another issue). Transactions at dinar dealers do not involve the UST (or more appropriately the Federal Reserve). Selling at the wrong rate if the currency changes is part of the risk of being a currency dealer, the feds are not going to shield anyone from that. Its just nonsense. Why would the CBI even tell the UST or the Federal Reserve ahead of time?just to let you know I talked to my dinar dealer, and he said the UST will notify them before the RV to stop selling otherwise he would be selling for the law rate while we are trading in!
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To make this work the central bank would have to use some new funds to buy back so as to not lower their reserves. But in that case they could just add the new funds to their reserves and that would allow the same percentage change to the exchange rate, so I don't think it does make sense to actually buy back.
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For a pegged currency, the exchange rate is basically the total currency divided by the reserves that back it. That is different for a company whose share price is dominated by their revenue not their cash holdings (though that does figure into the picture). So if a central bank were to spend half its reserves to buy back half its currency, that ratio does not change so the exchange rate wouldn't change either. That assumes the reserves are not replenished in some other fashion of course. If you can keep reserves the same, and still buy back your currency, than I would think that would increase the exchange rate. Whether central banks ever do such a thing, I don't know.When a public company deems there shares to be undervalued they take there cash and buy back shares to add value to the current shares outstanding. Does any one know if this is the same concept used with central banks? I know you all know where I am going with this. We have all heard rumor that the cbi is buying back dinar....i know there is no proof but if the cbi bought back 20 - 25 billion usd worth of dinar at 1166 it would add value to the dinar left outstanding. This would bring there reserves back to where they were about 2 years ago and give them more purchasing power. So does anyone know if this is a practice of the worlds central banks? Thanks.....JG
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If taking the view that the "event" is some sort of massive simultaneous realignment of the exchange rate of 100+ countries, then yes much coordination would be needed. I don't believe that line of thinking for a second as far too many people would have to be involved to keep it secret, and anything that is known only on dinar forums is basically BS. Or looked at another way I don't think there are 100 countries on the planet that get along well enough to do this sort of thing even if there was some motivation to do it all at the same time, which I also don't see.
So if its just Iraq that is going to change their rate, then I fail to see why any other country or bank or anything has to be involved at all and hence the "Europe wasn't ready" line just makes no sense to me (no slam on dman13 for passing it on, just a comment on this type of rumor). There is no global rate system or something like that. Floating rates change sec by sec and pegged rates can change anytime the associated central bank decides to do so. No one gets a warning ahead of time or needs to prepare in some way, it just happens and then that info flows through the system.
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Thanks for the links, but there are a few problems with this ideaIt may simply not be hidden from the 3-letter agencies you mentioned above, but simply put into an account that does not back the currency.
A prime example would be a stabilization fund:
To save you time and reference, check: http://en.wikipedia.org/wiki/Stabilization_fund
Interesting tidbit, IIRC, it is either Qatar or UAE that holds a stabilization fund that if it were to be included as foreign reserves would actually put them in the #3 spot in the globe behind Japan & China.
If you wish to view the reserve totals on a global scale, check the following link: http://en.wikipedia.org/wiki/List_of_countries_by_foreign-exchange_reserves
It must be UAE, because they have a huge SWF fund - http://www.emirates247.com/business/economy-finance/uae-has-richest-wealth-fund-2012-03-14-1.448434
SWF (Sovereign Wealth Fund)
I can't remember which M.E. oil producing country held the stabilization fund that exceeded a US value of 1 trillion, but it was not accounted for in their reserves.
Compliments to Highlander for offering the link, if we look at Turkey, lets look at an account line they have on their balance sheets:
http://www.tcmb.gov.tr/research/yillik/04ing/sectionV1.pdf
Line # 13 shows a line called re-valuation
The Turkey Central bank defines it as:
This item consists of unrealized losses arising from the revaluation of gold and
foreign exchange on both the assets and liabilities sides, pursuant to Article 61 of
the CBRT Law as amended by Law No. 4651 on April 25, 2001. The year-end
balance of this account is TL 2,032,526,096 million.
Now this affects both sides of a balance sheet, but as we have seen a lot of Iraq's debt being wiped clean - I wonder how it affects their assets side? If value is on the rise (especially gold) that helps increase liquidity of assets to back a currency.
Also, if I recall correctly, not all gold held by the CBI is considered liquid at this time. It is more of a non-liquid asset but still holds value.
1) Where would Iraq have gotten such a huge fund? Do you think Saddam was putting money away for decades and that its all been maintained? Seems pretty nonsensical to me. Since Saddam was pulled from his hole in 2003/4 we know what has been going on in Iraq and there is nothing that could have generated $600B dollars.
2) Such funds have a liability against them, that is what they are for. e.g. the Norway fund (the one that had the most info of those that I looked at) is their pension fund (e.g. social security) so in their case it can not be counted as foreign reserves since it can not be spent as would foreign reserves. It is a great example of the power of compound interest and saving (for 45 years in Norway's case) for the future, a model the US could certainly learn from.
3) Gold. Iraq currently produces more oil revenue then the entire global production of gold. So for gold production to even double their revenue stream from its present state, they would have to out produce the entire rest of the world. If you look at maps of gold discoveries, the ME is pretty much empty, and its not due to not looking. So even if gold mining becomes significant for Iraq (which is doubtful) it can not possibly double their overall revenue or wealth, let alone increase by 10x.
Basically you seem to be looking for the proverbial rabbit to pull out of the Iraqi hat, but such things are illusions.
Again thanks for the interesting links.
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Actually what their reserves are IS just what I mentioned. Bascially the ratio of reserves / (IQD expressed in their USD worth) has to be 10x larger then we think it is. So double the reserves and 5 times fewer IQD, or the other way around or about 3x more reserves and 3x fewer IQD etc. And that is just to get to an RV of 0.01 .The CBI could easily be overstating IQD, but another concept not commonly considered is what they could truly have as liquid assets to back it.
So you think the CBI is just hiding $600B USD worth of assets from the IMF, the UST, the WTO, the auditors etc. Where would they have gotten it from? And why haven't they used it already? Its not considered as its just fantasyland.Why would they desire to rush to apply liquid assets to back a currency? What if they could simply & quickly change that factor by 10?
Maybe the CBI has funds in a different account that is intended to back the currency but not at the given time. Another factor not considered.
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After much talk previous to the Arab Summit about how no way can Iraq host it with the Dinar at its current value, or Iraq would use this meeting to accomplish all sorts of things. Listening to the news it seem that
1) the Summit was about Syria and that's about all
2) due to the Syria focus (Al-Assad's ruling class are Shiite's, the uprising is composed of mostly Sunni's) Sunni dominated states (Saudia Arabia, Qatar among them) did not attend (so only 10 of 22 states sent anyone)
3) Iraq, as was already mentioned, spent $500M USD to pay for this one day of 10 delegations. They seem to have hoped this would help change their image and show them as a place to do business. But, the fact that this sort of expenditure was needed might have demonstrated just the opposite.
I wasn't expecting any miracles and none occurred. So I don't think the Summit was a disaster or anything but, it was pretty much just more of the same old thing as far as I can tell. Thoughts?
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I of course think you are wrong, but won't push that. But, I did want to correct a couple of thingsI really don't think the removal of 000's is what is being displayed. It seems as though the 'removal' is actually recouping all of the larger notes that have three zeroes in them OR the removal of the three zeroes from their current rate.
It wouldn't be a 25k note being worth 25 dinar, but a 25K IQD note being worth a 25 NEW-dinar note. An RD (whether you think it will happen or not) issues a new currency (maybe they'll call it the NID) with its own symbol, its own exchange rate, and new notes and coins.I don't think that it would be in Iraq's best interest to say that all 25k notes are now worth 25 dinar as that would cause a drastic shift in the way they do business
Since a 25k dinar would under an RD be worth exactly the same as a 25 NEW-dinar bill, and there would be 1000x fewer new-dianrs then IQD, their economic power would be unchanged.let alone reducing the economic power.
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What is there to debate? A stock now selling for 1 IQD will after the RD sell for 1 new-dinar fil. Its value is unchanged. Note everywhere in the article where it says "penny" that should be "fil" as there is no such thing as an Iraqi penny as in 1/100th of a dinar, that would be 10 fils. The ISX is not only full of "penny stocks" but if sub-penny stocks. That will be made (perhaps painfully) clear after an RD and its all expressed in terms of the new-dinar. I would expect a number of reverse-splits during the 1 or 2 year coexistence period.
They have 50s, 100s, and 250s in IQD, not the new-dinar that the RD will introduce. Its a new currency. An IQD 50 will be worth 50 new-dinar fils. Likewise an IQD 250 will be worth 1/4 of a new-dinar or 250 new-dinar fils. So they need a new 50, 100, and 250 to be worth 50,000 IQD, 100,000 IQD and 250,000 IQD respectively. Not sure why the 50 and 100 would not be enough, but in a cash centric economy perhaps a 250 also makes sense.This--->And managed agency / Baghdadiya News / get the documents that confirm that the central bank ended a plan replacement and set a date early next year to start trading dinar new will start to delete three zeros from it, the process of printing new categories are 50, 100 and 250 dinars, and last category is equal to quarter of a million current currency and this will be the highest category to facilitate the transactions large in addition to the categories currently in circulation after Trchigaha a five dinars and class ten and twenty-five dinars, and these categories of paper, while the metal is 50, 100, 250 and 500 fils in addition to the BD one, which will be metal, too.
Makes no sense to me at all! They already have 50,100, and 250 and the last category is equal to quarter of a million which would be 250,000.
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Of course its not considered, as it isn't done. BMW doesn't accept dollars for their cars either (I'm not talking about individuals but the entity that actually buys them from BMW in germany, that might not even be the dealers). Oil is the one exception to the rule that you pay in the currency of manufacture when buying direct from the manufacturer.If the IQD becomes liquid - than GE, BMW, etc. may be accepting of IQD as a form of payment. (Another example of a variable factor not considered)...
Why would that change at the present time? What is there that Iraq can sell to the world (i.e. and hence get dinars for)? Oil is all they are exporting and it is bought in dollars and Iraq desperately needs those dollars.
Oh come on, you're' saying on average an Iraqi citizen doesn't even have 25k dianrs, $21 dollars worth in their entire savings? Even someone living hand to mouth is likely to have that if you catch them after they get paid but before they go to the store.Multiplying by 30M - not everyone has IQD, not everyone will wildly spend, and some may put it into banks. Consider those that spend as quickly as they receive cash will not really benefit. Those who simply only use USD will not benefit.
Not unless the CBI has been under reporting its reserves by a factor of 10 (that they really have $600B dollars) to back it and that seems extremely unlikely to say the least!What if it came out at $0.01, would that be to far-fetched to perceive possible? Many of the current notes may still simply be usable in the market. A 25,000 would simply be worth nearly $250 instead of $25
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Its not that suppliers would not be most happy to sell, its that the CBi would not have the foreign currency to exchange to allow the purchase. GE wants Dollars for its turbine generators, BMW wants Euros for its cars. If spendable savings goes up by 100x let alone 1000x that will vastly outstrip the CBIs foreign reserves even if only a fraction of it is spent.Oh, how would you know if demand would outstrip supply? In a given moment of any actual R/V, yes... But in a short-time I am sure supply could accommodate the new demand. For a country that is relying on imports, one would imagine it to be possible.
At 10x or 100x or 1000x it doesn't have to be "loads". A person holding even a single 25k note that goes from being worth $21 to $2,100 or $21,000 is certainly going to want to spend a big chunk of that to improve their life. Multiple that times 30M and you see the problem.Everyone thinks that all citizens are sitting on loads of dinar. Some are quite poor, some use only USD, and some are stuck with ration cards. I am sure many spend as quickly as they receive any form of currency.
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Well that makes me feel better as I got sucked in by spectacular cleavage and a homemade meatloaf dinner..
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That is exactly how I, and others, got into it as well. A trusted friend says .... and later we find they drank the Koolaid. oops. I should have known better but got sucked into the fantasy like so many others. I agree its amazing the credibility some give to anonymous gurus in the first place, let alone after they have been wrong over and over and ... . Its just a fact of human nature that dreams of wealth can generate brain chemistry that makes you feel good and do stupid things.May I ask one other question that is a little off topic? And please forgive me if this has been answered in previous posts. Why are all of the gurus anonymous? I purchased my dinars because I trusted the person who told me about it, and I was told I had to "do it now, or it would be too late." But this is something that has always sort of bothered me. Why the anonymity, and what qualifies them to be giving opinions and advice on an investment of this magnitude? I couldn't imagine anyone going to a doctor or hiring a lawyer that would not provide their name and/or credentials.
I hope no one thinks I'm trying to get anything started here, that's not my intent. I ask in all sincerity. Being new to this, it's something that's been on my mind a lot, and I think it to be a valid question. I'm sure there is a reasonable explanation, I would just like to know what it is.
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Countries that execute an RD ALWAYS have two currencies worth different amounts at the same time.Seems they are talking about the new dinar?: A country cannot have 2 currencies worth different amounts, all the articles about the co-existence of both for a span of time and the de-dollarization say's it all
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This is just my opinion, but to me it makes sense either way. I do NOT think a $1.17 rate would work simply because the math is too complicated - if they RV, it is going to be a MADHOUSE and the easier it is to figure the conversions the better it will be for all involved, especially the "common Iraqi" on the street there.
Think about it. At a 1:1 rate, the math is simple. 25,000 IQD = 25,000 USD. Any monkey can do that math.
At .10:1, 25,000 IQD = 2500 USD. Again, anyone can do that math - just take off a zero.
A rate like this keeps things simple and easy, which is VERY important as the Iraqi people transition into a new era, returning from this temporary poverty back to their former wealth.
Any other rate would require everyone to carry a calculator, would cause confusion, and that would cause problems, and we ALL know that the last thing Iraq needs during this time is more confusion or problems.
It would be quite rare for any pair of currencies in the world to be an even multiple like this (except of course for RD cases between the old and new currency) and it doesn't seem to be a problem. Iraq has had a 1170 (now 1166) rate for years without incurring a calculator-crisis, so this argument seems pretty weak to me.
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No, I have no idea what you are talking about. Randalln has made multiple claims in the past that he has personally witnessed events showing that the RV has occurred, not that someone told him that they heard that something was up. Those two are very different sorts of information. I have never done anything like that.You and I have both know of your own previous BS/bogus claims.
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I was no trying to say that their was an imbalance between GDP & M1. I was simply trying to create the visual of how much IQD would be in Iraqi citizen hands if it were to be equally distributed while factoring in IQD that is outside of the country, IQD held by speculators, IQD within the Iraq stored in banks, and also IQD held in reserves by the CBI.
Ok, but when you said
There is only a "gap" that needs to be filled if you are comparing GDP per person to M1 per person, so isn't that just what you were dong? Maybe I didn't understand what your were saying here.How much USD value is that per person?$537.5 (roughly 625k, or 625 lopped)
What is their GDP per person? Obviously higher than that, right?
Seems a gap is necessary to fill there. This is where the demand for USD comes in to fill the void.
The bottom line here for me is that the Iraqi economy is working, even the IMF is estimating 12% growth this year and inflate is 5% or so. That is all pretty good for a war torn country. So the supply of dinars and dollars are working to lubricate the economy, trade is happening, the market is functioning. The RD puts the new-dinar on par with the dollar so maybe at that point the dollar portion of the money supply will start to convert to new-dinars. But you don't encourage that by increasing the value of the dinar by even 10x (to just under a penny). Note that doing so would put M1 about 3x larger than GDP, which would be a disaster. The price of everything would go up as demand wildly outstripped supply and with the CBI not being able to come close to meeting the foreign currency needs of importers (even ignoring the exchange demands of speculators). And that is only going to 0.01 (or just under).
I'm new to this investment and to the site, but I came across a scenario that I think explains this whole RV thing.
According to numbers I've seen from 2009, the "average hourly pay" for an Iraqi citizen is roughly US $2.10 per hour. That currently equates to ~2,500 Iraqi dinar, per hour. So let's take an average, early 20's Iraqi boy that gets a job, say "moving rocks". He goes out and puts in a hard 10 hour day worth of work. At the end of the day his supervisor approaches and hands him his fresh, crisp 25,000 dinar note.
The boy takes his note and heads for the convenience store. He proceeds to fill his car up with gas, grab a coke, a bag of chips and a candy bar, basically blowing his entire days pay. He goes home and goes to sleep happy. The next day the boy gets up, goes to work, and again earns his 25,000 dinar. However, his car is full of gas and his belly is still full of sugar, so he takes this 25,000 dinar note home and puts it in a little tiny box under his bed.
Now, day 3 begins and low-and-behold, this is the day that this magical "RV" happens. This is the day that an Iraqi dinar transforms from being worth a fraction of a US dollar to being worth 3 US dollars. The Iraqi boys wakes up, sees the morning news, grabs his 25,000 dinar note from under his bed, and proceeds to go down to the local Mercedes dealership where he buys himself a brand new $75,000 SLK 500.
Wait.........what???????????????????
This sounds pretty absurd, but it sounds like this is what the pro RV'ers are saying will happen. Correct me if I'm wrong.
Yes, it is absurd yet that is what the go-RVers are claiming will happen (well some only to 0.10 instead of 3.00 but the same principle applies).
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How so? If you are going to make an accusation don't you think you should at least explain yourself?Like callin the kettle black would'nt ya say? At least his is posted in the "rumor" section and does'nt hide behind the meaning of his words.
Note that I replied to a comment about how reliable and what a "no BS" sort of guy Randallan is, not on Randalln's post. I merely looked for past claims and found them to be pretty bogus. Claiming you hear a rumor, or making a prediction etc is not expected to be correct. But its another thing entirely to say you have personal direct information about the present (like claiming he called his bank and was told yes he can cash in, or as someone else posted that he knows someone else has cashed in). Those were clearly just made up. So in fact he IS a pretty much full of BS sort of guy.
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M1 is never equal to GDP, (or M1/person is never equal to GDP/person). The US M1 value is only a couple of trillion. So Iraq's is very high already, perhaps due to it being a cash centric economy. But claiming something is wrong if M1 is not equal to GDP is just incorrect economics.That leaves 20 trillion (Billion upon a LOP) that may be in citizens hands.
The U.S. value of that is 17.2 Billion
How much USD value is that per person?
$537.5 (roughly 625k, or 625 lopped)
What is their GDP per person? Obviously higher than that, right?
Seems a gap is necessary to fill there. This is where the demand for USD comes in to fill the void.
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Randalln is a no B/S kinda guy. He doesn't post rumers lightly and his inside source is for real.....
Thanks Randalln
I searched for some of Randalln's old posts and the RV seems to have occurred last May!! how did we miss it?
I just called my bank in Kuwait they told me that if i can get it to them i can exchange it at 1.255 to the dollar and that this has been going on for weeks now so what the hell is happening on this site
So his super secret source doesn't seem to reliable to me.
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But the foreign currency is not going to suddenly go away. If it is traded in over time it will be replaced by new-dinars. So appreciation is not needed.If you subtract the foreign currency factor from within the market, I don't think the IQD would at the moment make up for that gap. Appreciation would be necessary to fill the void.
I sure ope so too.So your saying they shipped $12B and some how managed to lose & not account for 3/4s of it? That seems to be a stretch.
Right, which is not a problem for them, unless they raise the exchange rate so that those dinars will quickly come back at a loss to the CBI.Ya, if the CBI can create that demand theyll be selling more IQD not USD.
None of this points out any problem with an RD.
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It has been widely reported some time ago that Obama uses a Sectera Edge, made by General Dynamics ($3,500) that meets NSAs encryption requirements for secure voice and documents (what level of security is not discussed, but its very unlikely to be the highest I'd say, but enough to let him chat with folks). He also travels with a whole boat load of communications equipment to keep in touch with the rest of the government no matter what. The heads of state that will be at the Arab summit are likely not as well equipped, but land lines and encrypted sat phones etc will provide plenty of serves for the brief time they are in Iraq.I've been working in Iraq for almost a decade, and security is what I do. I would fire any of my people that discussed anything classified over a cell. Also cell phones make excellent detonators. If a bomb were planted in the building, it could be set off from anywhere in the world. Shutting down cell towers is a smart move and I would have done it before the summit ever started. If you are curious, you can check my profile on LinkedIn. If you have car trouble, you consult with a mechanic. If you have health problems, you consult with a doctor. If you have security issues, the same goes; you consult with an expert in the field.
http://www.linkedin.com/in/jtchambers
Roadrunner
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I said "over the years". I don't know how fast USD will be converted to NIDs, but I don't see that it matters as far as the argument that an RD does not provide "enough dinars".Your making the assumption those using USD will just roll over & convert upon a RD. I don't see that happening, not if they remain status quo in their monetary policies..
Remember, post invasion they were flood with USD on purpose to prop up their economy.
I think the number is about $12B (and some reports say maybe as much as $8B can not be accounted for at present) and was used to pay government salaries and programs.
Ok, but if there is a big demand for NID, then the demand for dollars will go down. I'm sure the CBI will be happy to sell NID for dollars. So how is any of this a big problem?They're used to preferring use of USD over IQD because most of the other countries, neighboring regions, etc didnt want their IQD because in previous years it was hyper inflated. For example, why would an Iraqi businessman want a Iranian currency or Syrian currency with their own issues & value of currency dropping. Now look at those regions and how they're also seeking out the USD. Stability is a preference while ease of convertibility is another big factor. The IQD has proven to be stable, but not easily converted. Imagine if the IQD became trade-able and how the neighboring regions like Syria or Iran would largely increase the demand of IQD to use.
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Kaperoni lop scenario???????
in LOPster tank
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