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rockfl9
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Posts posted by rockfl9
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The MOF needs to get more dinar per dollar , not less. So the exchange rate must go UP NOT DOWN. There are 100T dinar in M! (cash equivalent funds) . There may be less than $20Bn in reserves. That puts the REAL value at .00002 cents!
5000:1 ??? The CBI still contends that the reserves are $60Bn BUT $40BN is in GOI bonds/notes. The GOI wont be able to cover those in decades , if they are lucky.
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It looks like the 2021 budget will be 70 trillion dinar. But even if oil goes to $48 dollars the revenue will only be 50T dinar. That means a loan of about $20 Bn for the year.
Iraq has exhausted its credit in the normal market the IMF/WB are the only source. BUT is the IMF going to stand back and allow the CBI to INCREASE the exchange rate and give it away! For years the IMF has advised the GOI to reduce costs by eliminating jobs or just plain reduce salaries. The IMF will ,I think, force Iraq to make more permanent changes to its finances.
The real solution is to cut salaries about 25% or change the pay schedule to 6 weeks . An alternative would be to bump the rate to 1400:1. But that would be hard for the economy to take in one jump.
To give a loan the IMF will force the GOI to do one or the other OR a mix of the two. But a change is coming.
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Iraq has exhausted its credit in the normal market the IMF/WB are the only source. BUT is the IMF going to stand back and allow the CBI to INCREASE the exchange rate and give it away! For years the IMF has advised the GOI to reduce costs by eliminating jobs or just plain reduce salaries. The real solution is to cut salaries about 25% or change the pay schedule to 6 weeks . An alternative would be to bump the rate to 1400:1. But that would be hard for the economy to take in one jump.
To give a loan the IMF will force the GOI to do one or the other OR a mix of the two. But a change is comming.
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The only reason for the GOI to allow the dinar to trade across borders is if Iraq produces something of value that other countries will buy.. Oil is traded in dollars and will continue in the foreseeable future. What could Iraqi's make that you would buy. The port of Faw would be important to ship any goods or material but it is years behind schedule.
Iraqi's need something to cause them to get off their buts and not expect the government to provide for their existence. BUT they keep expecting investors to come in and do that AND on Iraq terms. Iraq is on record of being one of the hardest countries to do business .The international oil companies would not be operating there today if the CPA didn't force them in. One or two have abandoned their contracts due to dragged out payment for services.
Another problem is that their education system is not structured for private sector operations. They need engineers, chemists , and technicians not bureaucrats. It might take another decade to make that change.
This all boils down to the fact that there is no reason to invest in Iraq OR its currency. Now or in the next 10 years or more.
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The CBI is going bankrupt!!!!!!!
I dont know why at least a few have realized what has been going on.
The GOI has been raiding the CBI reserves for the last 4 years . The CBI has been forced to exchange dollars for bogus Iraqi bonds . The reserves are down to less than $20Bn in cash. If that continues the reserves will be ZERO in 6 months.
Oil has to go above $60 to get a balanced budget just to cover operating expenses. So they must borrow at least $10 Bn per quarter. 2 quarters and the CBI is wiped out...
Before it gets that bad the CBi will have to move the price of the dollar towards 1500 as the MP has warned. It better not wait to start the move. That shock would wipe out most other banks and businesses.
The lift the zeros plan is GONE. Iraqi's will experience AUSTERITY like they have never seen.
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One good thing that should come out of this mess is a set of uniform rules at least as the federal offices are concerned.
There may be a few CRACKS in the system that Trump supporters have brought up that could happen.
There are two things that are sacred in our elections . first every legitimate vote must count and your vote is SECRET. That means once an individual ballot is entered it does not contain any thing that can trace it back to a specific voter! So you cant invalidate a block of ballots unless it can be proved that ALL of them are invalid. Under present rules that is impossible.
As it stands by our Constitution Trump is OUT as of Jan 20 at noon . If biden is not confirmed, It falls 0n the legislature to provide a temporary executive until a new election. This process has never been thought thru completely. IT would be UGLY. Neither party wants to go thru that.
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The IQD is a PEGGED currency and the CBI wants to keep it that way. But it is what is known as a DEFACTO PEG. The CBI maintains that rate in transactions with customers to give the economy the appearance of stability. When times are bad it antes up some of the reserves . Now times have been bad for so long the reserves have been depleted to a dangerous level and it may not be able to keep doing that. It must admit that the peg is unattainable.
It is near year end and the CBI must balance the books . Every dinar is a liability . Assets (reserves) minus liabilities must balance or the CBI is bankrupt. IF the CBI is talking to the BIS THAT could be the reason.! The BIS does not like failing central banks .
The only way the CBI can be saved would be to REDUCE the value of its liabilities , a DEVALUATION.
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The GOI needs $6Bn per month just to cover basic operations. At the current price and rate of production revenue is only $3Bn per month. They have been borrowing from the CBI all this year to cover the difference , now the CBI says it cant dilute the reserves any more. Iraq's credit is too bad for any other bank to take the risk.
We will soon read that they will not be able to pay all the Sept. salaries as promised. Some employees and contractors will get STIFFED.!
The only real solution is full austerity, but the people who have been lied to for so long may not take it .
Dark days ahead.
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Resorting to the White Paper approach tells me that Kazimi recognizes that the disorganized approach the previous governments used were the root of the current problem.
Problems were solved simply by throwing money at it, fine ?? as long as the money was there. Comming out of a dictatorship they were not prepared to do anything else.
Now the money is gone . It is time for belt tightening . I am not sure the average Iraqi understands.
I see a withholding tax is proposed AND it applies to everyone. The 15% top rate is a start ,
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White papers dont actually DO ANYTHING. They are a framework document or list of objectives for specific functions to work on. It is a little more broad than a plan.
In one instance of the Iraq white paper the objective is to gradually reduce the cost of government to 25% of GDP. Right now it is 120% of GDP.. Maybe more as the numbers posted vary depending on which article you believe. To get there they must reduce the number of employees instead of just adding more just to solve the unemployment/poverty problem.
The Working Groups assigned to each function would be required to define the possible solutions and define the plusses and minuses of each one. This would include any laws or changes needed.
As far as the banking group taking on the question of the strength/value of the currency and international convertibility that would be a study in itself.
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On 10/13/2020 at 10:11 PM, SocalDinar said:
I like to buy ( exchange ) $100 worth of half dollars every week at the bank
I Usually get at least one pre 64 half dollar . I then exchange the rest for Amazon credits at the coin star machines .no charge if you take the Amazon Card. 100% of the value
Hi SD, I havent seen a silver coin in 15 years...I know back then people were buying bags of unsorted coins and finding silver . But I dont think that is profitable any more.
Mine is stored in a pickle jar.
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Banks do not ever really OWN a foreign currency. They broker it with a third party. Here's thecatch. If the bank has an agreement with an agent, that agent is the one making the purchase and bank performs a service of counting packing and sending it to the agent .. In most cases you wil not be paid until it is received and cleared by the agent.
US banks only have counting machines for dollars and few have people that could validate dinar on sight.
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If you read the latest Economist posts it should be evident that the solution to the only solutions are to get rid of 20% of employees or change the rate to get 20% more dinar per dollar. They need a rate of at least 1500:1 . or both.
The economist proposes a rate of 2000:1 and to use the excess to fund revenue producing projects to absorb unemployment . That is an IDEAL solution BUT it will require Iraqis to take some PAIN for 2 or 3 years.
Kazimi cant do that without the help of parlament and I dont think that will be easy.
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The Kurds have announced a currency at 1228 IQD per USD !!!!! That is a reduction of 3.1 %... WHY did they do that ?? I think Because they need DOLLARS. AND maybe this will get some out of the mattresses. But will the citizens take the bait ?
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The quote by someone that US banks will buy dinar and get USD from the US Treasury is totally false and shows a lack of understanding of the US financial system. The Treasury and the FED only use dollars.
Also banks dont buy foreign currency ,,,, they broker it . But they dont even have to do that if they dont want to. It is optional.
Iraq is having a hard time getting enough dinar to pay salaries. Even in Iraq the GOI must give up USD to buy dinar and they dont have enough dollars to do so. They will resort to print more notes without any reserve backing . What Sadam did to debase the dinar in the first place. Maybe even print a bogus 100K note .
Their backs are against the wall and that may be the only way to keep the economy from total failure.
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It appears he is not a banker , economist or finance person. ? He might do nothing for a while as he learns the job OR He may shake up the banking system.
The CBI cannot afford a lop. Printing the new batch of currency will cost $35-40M . The condition Iraq is in the printer would want the money up front. So RVers are safe there.
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On 8/27/2020 at 7:27 PM, SocalDinar said:
Of course its not an investment in Iraq. Never was. Holding any money including that jar of coins everyone has is a loss every day b
Right ! It is a high risk ?? speculation based on a well fabricated rumor ( lie ) that the cbi has a plan to increase the value , overnight with a giant increase .... there is no guarantee of a profit OR that they may never get any money back.
Iraq is broke or going there fast. We must wait for the settlement of salaries for the rest of the year to see what they can do.
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On 8/21/2020 at 6:11 PM, SocalDinar said:
They took USDs for dinar. We helped build their foreign reserves. Shabs was brilliant Sell dinar for USDs knowing most would never make it back into Iraq. Easy enough to convince people to buy it.
No! Dinarians PAID for IQD with their local currency . Mostly to dealers who made a good profit. It was not an investment in Iraq.
The dinar taken out of the IRQA ECONOMY AND held in shoeboxes caused the CBI to print more than would have been normally required it was an added expense.
Not a investment in the country. They would be better off if it stayed in Iraq.
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I think a lot of Dinarians think that they actually INVESTED in Iraq by buying IQD and Iraq OWES them a profit. Actually they caused harm to the Iraqi economy. The dinar held in shoeboxes etc. outside of Iraq messed up the banking system. They can't go International without taking the risk that all that IQD will flood back in causing an oversupply ( i.e. a deflation ) that they dont need. WHY would they want to buy any back??? A carefully managed redenomination is needed but they cant afford it now, .It would be a scramble to get your IQD back to Iraq. It would be a great risk for a bank or dealer to get involved.
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Volunteering has to be almost a passion. Some people get it some dont. Many times people think they dont have anything to contribute. That is where leaders come to play. I have been in scouting , JA , and STEM .
My employer at the time encouraged and made allowances for the time and effort. By nature I could not just watch , I have to get involved or get out.
As far as the Covid Conspiracy goes. We are learning as we go thru this. We dont understand a lot of what we read or hear. A lot of it is misinterpreted or plain wrong. Like Drs misstating cause of death on purpose , or double counts.
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165 K and counting dead people is what we are looking at .Sure the first 10 K were mainly elderly and had known health problems . Would have died soon anyway . But now those numbers are dwarfed by the number of young healthy individuals with no other symptoms but Covid. Masks dont prevent an infection ithey just give a level of protection.,
If DJT would show leadership and set an example by wearing one we would have mandatory mask rules across the country.sooner,
Would have saved many lives .
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I read KristiD's Latest on Breitling. He is a pumper and ignorant one at that.
The CBI IS ON SWIFT. Oil money is posted to Iraqi accounts in London or New York . Then when An Iraqi importer wants to buy goods a SWIFT transfer moves the dollars between accounts.. There is no other way to do it efficiently.
Then he says everybody will want dollars. Not true , they may want Euros , Swiss Franks or even yen depending on where they trade. BUT THEN what happens to the IQD ??? Indirectly he is saying there will not be a DEMAND for IQD. I do think he has that one correct , But I dont think he meant it to come out that way.
That being the case no one would buy IQD in the international market at any exchange rate , they would opt to KEEP their DOLLARS
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Medical care is going digital. In some European countries , If you are on the state medical plan you have no choice . Your card is swiped and your medical record pops up. a chip would be no different and possibly better. Just think it could save your life. Say you are found unconscious . The EMT could scan the chip in the ambulance and get important medical history. Blood type , allergies etc. At the sme time your physician and/or a necessary specialist is alerted. I think it is coming , and would not avoid it.
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EC, from what I have read the BIS is like the Supreme Court of the banking world. Central banks don't have a choice . If they want to deal with other central banks they must abide by BIS directives. The penalty is ISOLATION.
One thing for certain the BIS does not allow banks to manipulate it's exchange rate to make a profit . It expects inter bank exchanges to be at par , that is buy and sell at one price over a period of time.
Increase in value = Bankrupt CBI
in LOPster tank
Posted
Remember that all outstanding IQD are a LIABILITY on the books of the CBI ! It can only increase the value if it has the ASSETS (reserves) to MATCH. There are 60T in paper dinar and at best 60Bn USD in the reserves, although I suspect it is less.
If the rate was increased to 1 cent the reserves would have to increase to 600Bn USD ! That is impossible today and probably ever. The question is WHY would they do it ? There would be a rush to convert dinar to dollars. It would be financial PANIC in Iraq. But any dinar out of the country would still be worth a tenth of a cent .
Making a profit on the dinar is a DREAM. A 10 year long dream for some.