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rockfl9

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About rockfl9

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  1. EC, I guessed you might be engineer . I am retired EE. John Stossel is entertaining speaker but I think he often distorts the facts just to be entertaining.. Sea level rise and climate change are a fact .. I live in costal Florida and experience the effect at high tide at least 4 times a year. ( street flooding generally, ) During King tides. I prefer to avoid Politics and Religion on DV , now will add Global warming and sea level rise. For decades the doomsayers have predicted one life ending crisis or another , but somehow we have "engineered " a way out.
  2. These graphs come off of a spreadsheet program. It should be obvious that the clerk entered the values in the wrong columns . Should be corrected next entry. The are only human. Nice try!
  3. The ONLY source for dollars into Iraq is thru oil revenue. The GOI restricts the that may be consumed with the amounts tendered in the auctions. Those dollars are converted to dinar currently at 1190:1 primarily to cover internal expenses mostly salaries . Now if the CBI were to increase the rate to something less then the MOF would have to put in more dollars to receive the same amount of dinar or it could not meet the payroll . The last estimate i saw said the current payroll was 60% of oil revenues. So if the cbi were to simply halve the rate to 600:1 (less than 2/10 of a cent ) the GOI would be INSOLVENT within a month. I wonder why people cant see that..
  4. AHA, but for all currencies there ARE TWO (at least) rates . An internal rate set by the central bank AND a second rate determined by the DEMAND in the international market. There could also exist a third rate but it's existence is complicated so I wont try to explain here . The internal rate is set by the central bank to meet the needs of the local government . It could be pegged to some benchmark OR set by FIAT or just plain FLOAT in response to the internal market. It is the rate that sets the price level IN THE LOCAL MARKET. IT can be any rate that sets the granularity for the local currency . In many cases it may not even make sense in reference to other nation's currency (example the British pound sterling ) . THe Internal rate is set as legal tender in the native economy. That is all it is! The International rate is set by the law of supply and demand in competition with all the other currencies ( That is it's FAIR VALUE in real time). What is it's worth against other currencies in what it can buy. People INVEST in a currency with the expectation that it's FUTURE WORTH will increase in the international market NOT what the internal rate sets it to be. So the CBI/MOF could change the rate to anything that suits their purpose but unless there is an actual improvement in value the international rate remains constant. A good example is the USD . In the US the dollar is considered a static value for all transactions. But in the international currency market the value of the dollar varies . Since the dollar is considered a benchmark in the currency market that variation shows up as a change in other currencies ( the value of the dollar falls and the other currency rises.)
  5. Getting back to IQD. WHY is there no one who can answer the question.? What if Iraq DOES somehow try to increase the exchange rate. BUT there is NO ONE willing to buy at that price !! Then there is no way for you to exchange your dinar at that price. Will the dealers offer to buy at anywhere near that price ? GET REAL!! The dealers are in business today because they make a profit by buying LOW and selling HIGH ... AND they have plenty of inventory to get rid of first , if they could. So If there ever is a rate increase just enjoy the paper profit in that shoe box.
  6. Have a think ,people. A caretaker government till a new election puts EVERYTHING in LIMBO. NO RV , NO HCL NO Change. Back to Jan1,2019 . Since they have chosen the option not to Dissolve Parliament they may continue to debate the budget but possibly have to delay passage. This is NOT good . As far as new ministers the protesters present a dilemma . They want people who have no previous party affiliations . Yet they want ones with qualifications . My thoughts are IF they had enough experience to be appointed they most likely had a party affiliation.
  7. The Iraqi constitution is a hodge-podge of conflicting laws. Maybe the resignation must be approved by parlament, maybe not. Forming a caretaker government and what powers it has is a question. Usually a caretaker cannot add or remove anything . Even the new budget would be in limbo .. Here in the US the house would enact a continuing resolution which allows the caretaker limited powers and anything else must be handled thru congress. Fortunately the party with a majority can get most things done. Iraq does not have a 2 party system so there is no established majority.
  8. The total purchasing power in USD is provided by the 75-80 Billion dollars in oil revenues per year . Iraq cannot create dollars . The money that churns thru Iraq internally can have any value they choose but when it comes to buying thing from the international market ALL of Iraq only has that $75Bn to spend . Then consider that the MOF gets the first cut taking probably $20 Bn off the top to pay the GOIs bills that leaves only $55 Bn to be spread across the country for dollar purchases.
  9. OK let's try this. At this time the GOI/CBI DOES NOT OFFICIALLY buy or sell IQD outside of Iraq ! (How the dealers get clean new dinar is one form of the corruption we keep reading about , that is some Iraqi(s) are violating the regulations and trading IQD for dollars .) . So one step in the RV process would be for the GOI to make the IQD legitimately tradeable worldwide. Next the CBI would have to buy and sell thru some FX dealer. A FX dealer would not get involved unless it could at least put IQD back into the CBI at least as a last resort. NOW , the CBI will have to support an RV by buying and selling IQD at some value higher than the current rate. The risk to the CBI is that buys might exceed sells resulting in depleting the reserves. I dont think the MOF would allow that. Trading would be suspended , the dealers would get stuck with a loss.
  10. It boils down to this. IF the dinar were to increase in value there would have to be a BUYER that thinks the value would go even higher before making an offer to purchase. A bank would not touch your dinar unless it knew there was such an offer on the books. Iraqs financial status has been made more unstable due to lower oil revenues over the last 8 years and is not likely to get better. Oil revenues will remain flat. The GURUs keep spinning the line that an RV will solve that problem . That is WRONG. Iraq Converts dollars to dinar at a current rate of 1$ to 1200 dinar and spends it all. HOW would they survive if the rate suddenly became 1$ to 10 ( 10 cents ) . That leaves them with 100 times LESS dinar to spend! The GURU logic is that it would be a more valuable dinar and all wages and prices would adjust . That would NOT happen overnight ... In the mean time the GOI/CBI would go broke. Bottom line is that it would not happen. No one would buy the currency of a failed country. The IQD would really become TP.
  11. Hi Caz Just thinking out loud. Hoping Diarias will join in. Someone must know where ALL those dollars are going to come from ???? Even the great Caz doesnt know or he would certainly wow us with his great experience in FX. Come on Caz, dont be shy LOL .
  12. FOREX is only a reporting service for the Foreign Exchange ( FX) market made up of most of the international dealers . These dealers DO NOT expect to make money by buying and holding a currency . They buy and sell to customers who may expect to profit by holding ( like Dinarians ) They collect a fee for the service much like the dinar dealers mark-up. The IQD does not show up on FOREX because There is no primary dealer . Primary dealers in any one currency will have an account to exchange the currency with the central bank that issues the currency. The CBI does not allow Iqd in or out of Iraq , that is their monitary policy. Could that change , possibly but not likely in the near term. Could the CBI LOP and not change the policy . Most likely. THINK . Would the CBI pay out for old dinar only to have to destroy it !!!! NO ! That would be ridiculous . They would exchange in country long enough to use up existing IQD and begin using the new valued at . $0.86 +/-. But until they develop viable trade in something other than oil there is noneed to allow any dinar out of the country. P.S. I know in the past dinarins thought they were really helping Iraq by "investing " in IQD . In reality they actually only made a lot of their currency unproductive , increasing CBIs costs of operation.
  13. Most of the "ruling" class in iraq were (un)educated during the Sadam regime . Which means they were only allowed to know what Sadam wanted them to know. The government provided the employment then and although low paying most everyone had some form of work. Keeping them from causing trouble. Now we have the new "free" IraqI who still expects the government to provide a job. A problem is that the current pay scale for workers is too high , the pay for even the lowest federal worker is 450,000 Iqd per month plus extra allowances for wives and children. Any attempt to lower salaries would be political suicide. There are 10 million unemployed today and growing.. It is mind boggling to think of what kind of private sector businesses could rapidly absorb so many. Especially when most are unskilled in any modern production.
  14. The basic rule for countries wishing to attract investment and increase exports IS TO KEEP THE EXCHANGE RATE LOW>>>>>>China and India have been doing that for years. Investors entering a country usually with hard currency want to get as much local currency in exchange as possible., NOT LESS. I am sure that CBI/MOF and any real economists in Iraq know that. They also need laws that are conducive to investment. I am not sure the politicians know that. China and India are mostly socialistic and were able to rubber-stamp investment deals to get things rolling initially and as we see now were able to use low wage workers and attractive investment environments to bring in investors with the know-how to kick start industries. Set aside OIL , what do we know Iraq has to offer. A skilled, highly motivated working class., NO. Abundant useful raw materials . NO,. Ample water and electrical power. NO. I cannot see any international corporation interested in taking such a gamble. Another requirement for foreign investment is low local interest rates. If a company enters a country it usually only wants to invest the startup costs , it expects to borrow locally the major part of the total costs particularly where land and/or buildings are the major investments. Note that the international oil companies operating in Iraq do not own anything there , they drill the wells and pipelines but they bill Iraq for all the material in the ground. Iraq needs to develop industry to reduce dependence on imports and produce some kind of profitable export. Iraq is expecting someone else to come in and do it for them. and they dont expect to pay for it !!!
  15. I dont know how the HCL is involved with a rate change . I have not seen any details with the latest draft law. But the last one back in 2010 had several flaws. First it only offered $2 / bbl to the producing provinces and they expected $5. Second , it required all flaring be eliminated in 4 years. This would require scrubbers and processors and the associated piping at every oil field. Very expensive.and reduces output. Third, ALL present and future oil fields were to come under direct control of the National Oil Company. The Kurds would NEVER agree to that. Finally and most important the current oil management like their jobs just the way they are,
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