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rockfl9

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About rockfl9

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  1. 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.
  2. 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 .
  3. 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.
  4. 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.
  5. 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 !!!
  6. 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,
  7. Here is complete text submitted by Yota on Sept 28. Economy News - Baghdad Ali Mohsen Ismail, chairman of the Council for Combating Money Laundering and Terrorism Financing, has issued a series of decisions concerning the controls on the declaration of funds when they are brought in and taken out across the Iraqi border. Among the new decisions, customs authorities may be allowed to search people and inspect their luggage to verify the authenticity of the information. As for the amounts allowed in or out of the territory of the Republic of Iraq, amounts below (10) thousand US dollars or the equivalent of other currencies are allowed to enter without authorization. Amounts exceeding (10) thousand US dollars to (20) thousand US Dollars are required to be declared with the need to show supporting the purpose of the introduction or removal of these amounts. It is required that the process of inserting and removing funds through financial institutions exclusively if the amount exceeds (20) thousand US dollars. One of the decisions stipulates that "the entry and exit of amounts exceeding (1,000,000) (one million Iraqi dinars) is prohibited even if they have been declared, and the amount is withheld and legal proceedings are taken." Earlier rulings limited Iraqis to caring 10,000 Iqd out of the country. Not sure what the penalty was then. now for 1 mil it looks like they are subject to arrest !
  8. One of the decisions stipulates that "the entry and exit of amounts exceeding (1,000,000) (one million Iraqi dinars) is prohibited even if they have been declared, and the amount is withheld and legal proceedings are taken." Hmmmmmmm! This looks like a Million OR more Iqd is NOT allowed to cross the border ( would include airports) at all. AND sounds like it would be subject to confiscation and prosecution !!!!!! Soo you cant even take your IQD back to Iraq if you wanted to !!! Is this preparation for an RD ?
  9. The last 2 budget deficits were covered by Borrowing dollars from the CBI reserves !!! Yes they did. The CBI is sitting on $40B of GOI IOUs ... There is not enough dollars in the CBI to cover next years deficit. BUT they do not want incur any more outside debt . The interest rate would be very high if they tried. The default risk would be high. Predictions for oil revenues in 2020 are not good and the estimate of $56 per barrel still depends on being able to sell as much as the have been , But that also is questionable. It will be a make or break year.
  10. As part of the IMF SBA agreement the CBI/MOF are reviewed regularly and by its own rules is audited annually , There is no second set of books as a few(?) dinarians spout. The IMF is a credible organization and would not report inaccurate information . There ARE 40 Trillion IQD in CIRCULATION TODAY. None has been collected and destroyed to reduce that amount! It is true that some is outside of Iraq (DUH ). The IQD is a PEGGED currency and the CBI is holding the peg at .00086 USD (or equivalent ) in hard reserves. Since Iraq's base income is in Petrodollars that rate is used to establish a budget. THERE is NO plan to arbitrarily change the value of the IQD as many are counting on .. To increase the value requires a increase in the banks reserves or the CBI will FAIL. The GOI cannot allow that to happen. There is speculation that the world financial community will begin to allow ASSET BASED exchange rates. Highly unlikely as the future value of any such assets is difficult to predict even into the next year. AS for other natural resources the bicracky irackes might have ??? WE certainly would have read about them by now - THERE aren't any.
  11. I still have some hope for the book CAZ. BUT like the IQD it is hungup going nowhere at present . I have read that "things are moving" . But I dont see it. Of course it may only mean that we are really THERE. At least for another YEAR.
  12. In order for the IQD to show up on FOREX at $.10 someone ( A REAL PERSON would have to pony up $100,000 ).. I don't know WHO would do that ? WHO would be crazy enough to give up $100K of the worlds safest currency to buy a million IQD probably the riskiest currency !
  13. IF you look at the summary spreadsheet attached to the report you would see that Iraq is in trouble. The IMF team has been telling them to cut spending . That means shrink the government cut subsidies and entitlements .. But any of those moves threatens the status quo. Akin to stepping on the third rail. While there is a projected increase in GDP it comes at the expense of increased national debt USD 115 Bn in '19 to 167 Bn in 2024. It would be worse except that they cover parts of the deficits by raiding the CBI reserves. At the same time the CBI increases total IQD by 5% each year, Although the numbers after 2019 are projections , the IMF team have been pretty good with them so far. concern should be that if they are correct Iraq will be a basket-case after 2024. They will again be asking for debt relief .
  14. One point on the IMF Arti IV . I am sure that The MOF gets a look at the report before it is released and can ask for some changes. It would not serve any purpose to point out specific failures of the government. It would always tend eto report things as areas for improvement even if there was some actual foul ups. So the reason for delay may simply be the need for a little wordsmithing.
  15. ALL of Iraq has just ONE MAJOR source of income - Oil/Gas Revenue PERIOD... Today at $65 per bbl the TOTAL is about $75-80 Bn per YEAR . IEA estimates that the price wont change much next year UNLESS the voluntary controls are violated which will only lower the price . SO no matter what value they might change the dinar to , the entire budget of the country is tied to the price of oil. Oil in the GROUND cannot put bread on the Iraqi's table. There are no schemes that can change that. THERE is NO magical solution. The GOI has in the past solved the general unemployment problem by adding more government workers and the last two IMF Art iV reports have pointed that out as a problem. Iraq is facing one big problem IT gets more people every year. IT cannot hire and pay them all. It will soon hit the wall. If it were not for government subsidies there would be major poverty and civil unrest today BUT those problems may not be far off. They talk of reducing the dependence on oil BUT they are looking for outside investment to do that .. However I do not see any serious movement in that direction .In reality Iraq has little to offer. Insufficient electric and water limits industrialization . I am eager to see what they are going to propose in the next budget!
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