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rockfl9
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Posts posted by rockfl9
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EC,, A good explanation .! The FOREX is only a reporting service. There are currency traders around the who post bids and offers and the FOREX generally posts the mid-point .
But I am sure they are in some way regulated. For example the Interbank market limited to the central banks and large money_centered banks are regulated by the BIS . It is a very elite group that trades in private. Currencies are commodities and regulated as such.This is what you will find on forex. Regulated by a countries commodity regulators.
A note here is that these dealers seldom deal with Physical currencies . The trades are between accounts.The problem dinar holders will have is to find an institution that will collect the dinar and when they find they may have more than they can sell locally , send the excess back to the CBI. That institution does not exist today.
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Wondered what happened to you.
NO .!!!!!! Way back, some how banks were able to get dinar through official channels . Possibly a US bank operating with the CPA. Then , I'm guessing here , that bank ceased to operate . Or policy changed and taking dinar out of the country was prohibited. My guess about 2006.
If you read the CBI law it makes some specific statements that the IQD intended for consumption ONLY . IN IRAQ. That is it is not to be transported IN or OUT of the country. I remember a email from Mr .Issa when asked by a member here if they could send IQD to be deposited into an account and he replied, NO! IT would NOT be accepted.
SO when you bought IQD in those days , it was somehow obtained from banking channels but it was a mistake. and the banks no longer offered it.
That opened the door for the dealer channel , to find unscrupulous Iraqi's to smuggle it out .
Only time will tell if the GOI will change the law and allow it back into the country.
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Don't look for IQD on FOREX for a (long ) while. My guess is NEVER. The reason is simple. OFFICIALLY the IQD DOES NOT EXIST.. The CBI wants it that way. IT was Never intended to leave the country.. What you have was smuggled out. The banks and pro currency traders know that . IF the CBI were to issue a BUY BACK it would only happen in country . Currencies are traded on FOREX because people want to BUY things that must be paid for in a country's domestic currency.. Right now Iraq doesn't produce anything that is exported except oil and gas priced in dollars.
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I forgot to add one more comment. What IF the CBI were to actually buy IQD at 10 cents !!! ALL that " CHUNKY MONEY " would come out of the mattresses . FAST. Iraqis know they can buy anything with dollars . Not so with IQD,.
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You can sell anything at any price (offered) on Ebay, ,, , I heard of a person that sold bags of DIRT !!!!
Did you read AMs July 12 message ? It has a couple of unusual assumptions . One is that the CBI would directly ?? offer to buy back IQD at a profit to the seller. There is no way to do that except in Iraq. Once the dinar is circulated the CBI NEVER expects to get it back. Trading is done thru the FOREX market in general and here the price is set by demand..Central banks only deal with other central banks and regulated by the BIS.
Again doing the Math. If the CBI were to set the rate at 10 cents ( which it can do for the Iraqi market) BUT NOT increase the reserves that would be a FLOAT in the International Market and that would be a dilution in value of 100 ( or more ) ...
The attempt would be viewed as a price manipulation... The BIS/IMF have rules against overt price manipulations and would send the CBI to the penalty box. i.e. If the CBI were to actually do that in Iraq it would be a drain on the reserves and make the IQD worth les Internationally...
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I know the guru's have touted that there will be an RV which will create enormous demand for IQD and all you have to do is go into a bank and EXCHANGE for dollars. But consider that if the RV is .10 that is $100K per mil ! WHO has that kind of money to put at risk? Dinarians would have waited 17 years for that ., It could be another 17 years and the IQD would go nowhere ( the bloom is off the rose ). In the last 15 years we have seen several problems for Iraq. The most serious financially is the loss of income. The solution was to reduce production which also reduces income. Iraq is going (?) broke.
The NET is that if Iraq were to attempt an RV of any amount under these conditions --- NO educated currency manager would BELIEVE it !
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On 7/9/2020 at 6:14 PM, SocalDinar said:
Maybe sell them on Ebay.
.People are getting $40+ for a single 25,000 dinar note. Amazing
That's a far cry from going to a BANK and exchanging whole mils COD !!!
Although banks cant avoid handling USD fear of contamination could make them avoid taking in IQD. Maybe they will require appointments and meet you at the door wearing PPEs.
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I am sure there is no negative selling price for anything.. It has to be a quirk in the reporting system ! If some dollars were paid by the holder of the contract then that was the price paid for the oil. Of course the seller did suffer a paper loss. As with most commodities there is always a dealer waiting to swoop in on a real bargain ..
Back to the RV news. strange that Ali Alak would publish a report explaining the DEVALUATION process ! And a few economists caught it. Could he be setting things up for a devaluation.. That is not good news for dinarians. The GOI has always had a financial reporting problem.
One side thinks there is $70B in the treasury and the other says it is only $600M ? If they do not have enough to pay the bills ( salaries) and cannot or won't borrow to cover , the country ( and it's bank ) will collapse. IQD will be worthless even in Iraq. Even 1500:1 would be a Wonder.
Dinar buy-back ?? could this be another SCAM??? E.g. start a rumor there is a shortage. AHHA something is going to happen. Now offer a BUY-back .. HAHAAAAA THEY KNOW SOMETHING... GOTTA GET SUMMORE Dinar . Whoops the price is now $1150. DARN !
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Hello EC.. You maybe correct when it comes to a futures contract. But it is a stretch of the imagination to think that the deal would have to close for such a impossible amount . Surely if someone had that contract for say $41 and sold it for $1 , somebody got that oil for $1 . It was a loss in the contract of $40 BUT the oil sold for $1 NOT MINUS $40. but that may be the way it had to be reported.. Speculators loose some money in futures but the commodity always gets sold for some amount of REAL money.
It does remind me of an investment class I had where the prof said " " NEVER invest in futures or CURRENCIES ,leave those to the pros.
You could end up with a box car of porkbellies !!!
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Although it is probably meaningless to comment at this time , the report of a negative price for oil was an ERROR. The lowest price for the sale of ANY commodity is ZERO CENTS. That would be FREE. You cant buy anything for MINUS one cent , There is no way to account for Negative moneys ... It was probably supposed to be a -40% drop and got entered in the price field.
THE lowest sale price for oil THIS YEAR was $19.74.
Mark that up to Comodity Trading 101.
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The only real income Iraq gets is USD.. It can use USD to import things needed for the military or ration card items BUT it must pay salaries in dinar and to do that it must go to the banks and exchange dollars for dinar . That has been called an AUCTION in the past and it will continue in the future no matter what it is called. Right now things are closed up. But soon the people will need other items and will need dollars.
I haven't seen what the latest HCL law looks like BUT the original law said that ALL crude production must be controlled by the central .
That means the Kurds would have to surrender control of their oil fields ---- That was the sticking point. I DO NOT believe the Kurds would ever agree to that condition. Agreed they would Deliver a portion of the product But not control of the fields.
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I dont think the auctions will stop. The proposal is that control of the auctions move from the CBI to the MOF... Be careful here . The CBI was doing a good job keeping the rate stable which made it's major customers ( the importers) happy and rich. If the MOF takes over it will concentrate on meeting the budget for salaries etc. and DAMN the importers !!
Also the MOF does not have the experience to run the auctions and we should expect some foul ups during the learning period.. Expect shortages of goods and unstable prices.
Certainly the importers were cheating and the CBI probably know that .. But was aware that if they reported them shutting any importer down would not solve the problem and possibly their own employees were complicit.
If this goes thru expect some interesting events .
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Continued.
IF the bonds go into DEFAULT the CBI is BANKRUPT and thus would have no standing as an International institution. That is only a logical conclusion .. But in todays world some thing would have to serve as an exchange agent for the GOI at least on a cash in/out basis.
Iraq's oil dollars would be collected and paid out thru Banks in other countries.
I know I am painting a bleak picture for Dinarians to expect an RV of any size that would be profitable . But it is a cruel world .
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Iraq cannot create USD !!!! The CBI/MOF exchange rate is a MANAGED RATE. It really is NOT a true Pegged rate. If you opened eyes you would have noticed that the shortfalls in the last 2 budgets were covered by borrowing from the CBI reserves using dollar denominated IOU's … The hard currency is GONE $40 Bn worth. NOW the new government has used what was left to pay April and May salaries AND that wasn't enough so they used the reserves of the other two government banks as well. So in reality the dinar is now backed by $60Bn
in GOI bonds that we know they in all probability will NEVER be able to pay off. However it is a legal move of sorts at this time . The situation will change if/when the GOI DEFAULTS and its credit status is JUNK.
A managed rate can be anything the government needs to keep commerce moving INSIDE of the country. Outside the country the rate is set by the currency market on a supply/demand basis. Iraq is in a unique position in that it has never officially exchanged their currency outside of the country. So no one outside can demand an exchange of dinar for any other currency. This is the reason it is not on FOREX. AND may never be!!!
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I mean the bank reserves ARE ALL GONE. IF you read the fine print they were used to pay the May salaries.
If you divide ZERO reserves by 88 Trillion dina the NEW rate is . followed by a LOT of ZEROS. When the dealers find that out it will be a fire sale.IF they have any to sell that is. What is worse is that the oil companies have not been paid so shipments will be constrained.
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On 2/17/2020 at 3:24 PM, rockfl9 said:
Guru Sandyf is correct . The IQD will only be worth what the CBI will pay to buy it back in the International market. But the CBI is only paying .00086 to approved Iraqis IN IRAQ. It will not buy it back from any other source AT ANY PRICE. WHY NOT ! because it is afraid of a raid on it's reserves.
To change would require the GOI to change fiscal policy. Iraqs dollars are for the benefit of Iraq ONLY. That is their complete mindset.
The CBi may find it advantageous in the future to adjust the rate to .001 or even 0.10. But that rate will still only stand IN IRAQ. NO non-Iraqi will benefit.!
Remember D J Trump said they are the biggest bunch of thieves he has ever met. THINK why would they pay even $21 to buy back a 25K note when they could just print a new one for 6 cents!
I have to ask that question again.
If the CBI wont buy back dinar from non-Iraqi's WHO will ????? WE get mixed reports of the status of the reserves . I have not seen a CBI annual report for the last 4 years , why not ???? Are they hiding something ?? We have seen articles but only vague statements by MOF that the amount is ADEQUATE .. I am not sure what that means in financial terms.
The CASH window has been closed for several months now which means that Iraqi's out of the country for business or medical reasons probably aren't getting any dollars to live on. Those that were in school abroad probably were required to return home.
The new budget will most likely be month to month.
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Not the reset the GURus were looking for. Instead of an asset based economy we have hell bent wide open credit bulge. The USA and EEC can do it because their bonds can sell.
To combat CV governments are giving out money to keep people fed and housed while they self quarantine. This is a world wide economic bomb no one will escape.
Iraq is broke and it's credit stinks. There is little help in sight. The best they have to offer is a measly 25,000 emergency hand out. THey don't have enough reserves to pay May salaries at the present rate.
They could FLOAT but Abadi is right it would be a bad deal for poor Iraqi's . THe only option is to issue more dinar and forget about growing the reserves. YES it means devaluation in banking terms but for Iraqi's a reasonable solution for the short term.
The first order is to save the country at any cost.
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The MOF will not have enough cash to fund the June salaries.. They will need at least 3 Trillion dinar.
One option is to just create more dinar WITHOUT putting any hard currency in the reserves. A partial FLOAT. i.e. A DILUTION.
Now they really don't have to create a lot more notes, since many Iraqis are on cards they can just post the amount on the cards and put off the pain for another month.
Will that change the exchange rate ? Technically YES BUT they really don't have the reserves to cover the present rate they have been playing that game for a long time just have not admitted it.
This will be the real test for the new PM and new finance minister. I wonder if they really knew what they were getting into..
This WILL put an end to the corruption because there is nothing left to steal.
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Think about this !!! Some people may prove to be carriers of COVID19 or some worse bug and never have any symptoms. note there are known to be hundreds of viruses present in animals but their systems simply ignore them. as long as they stay in the animal they can continue to reproduce . What if we find some humans that acquire a virus and continue to harbor it and spread it to others who can get sick.
Can we quarantine such people forever ? How would we detect it should they violate the quarantine ???
Could we legally tag and isolate them ?
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Hi EV, Dinarians do have a problem using numbers. Worse with facts behind the numbers.
This whole RV thing is the original conspiracy ....
The more unknowns there are in a situation the easier to promote a conspiracy.
But using Occam's Razor you can boil the RV to just one question that is " to support a one cent RV a multitude of people would have to surrender $10,000 to buy a MIL IQD!!!! I don't see a single one.
THEE Conspiracy theory here is that they will simply go to a bank and the bank will be the buyer for some unknown reason.
If there are not private buyers the bank is not interested.
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Written like a true engineer/problem solver this article gets it almost right.
It is true that by artificially keeping the exchange rate high the MOF/CBI has held commodity prices low and held inflation down. Looks good on paper but as we see now has long term consequences.
But this has resulted in almost total dependence on imports stifling the Iraqi private sector. If they let the exchange rate decline imports prices will rise and some Iraqi's may produce items locally, resulting in gradual self sufficiency.
BUT the real ruling class in the country are the rich importers . They use dollars to import, resell at a profit , take the dinar to the CBI for dollars and do it over again. The overhead is low margins are good . Generally they do not want to compete with locally created products. Also they are skimming off dollars in the process.
The problem must be solved thru education and training. but that would take government foresight like our STEM program. Today the typical Iraqi trains for a government position which usually doesn't have a private counterpart.
As the engineer in the article says it is a chicken and egg problem. The GOI must kick things off by finding products that will solve the problem and make that a national priority. To do that they will have to attract outside talent and pay them to provide the necessary expertise . SA, UAE and Kuwait did that 20-30 years ago and now they have flourishing private industries.
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THINK !
The GOIs problem is that it is not getting enough dollars to convert to dinar .... Their payroll is not getting smaller. .
SO Reducing the exchange rate to less than the current 1190 will NOT solve that problem.. They need to increase the rate to say 2500:1 or Cut the payroll in half. Can they just lay off half the people ? I dont think they have unemployment so they would have increase in welfare.
OR actually cut salaries in half.
Both would cause more civil strife.
They already have cancelled all public projects , so that means most contractors are out of work. .
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Iraqs goose (oil income) is cooked. CBI/MOF policy has been to stabilize the exchange rate using CBI reserves. A ploy to keep the citizens happy and the elite business men rich was wasteful. i.e. corrupt. It should have been stopped years ago . Now the fix , if possible , will be painful. Cutting salaries and removing subsidies Is essential.
I can suggest one quick solution . Simply double the exchange rate to 2400:1 and release more dinar. Prices of everything imported will gradually double but will give the GOI some time to work on the solution.
I am surprised to not see any reports of the death rate in Iraq !!! I dont know if it is censorship or they dont have an organized system to report the dead.
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Wonder why they put this out now ?????
Note they dont give numbers.
Didn't give anything of performance during Sadam years or that Sadam Jr. made off with a couple billion USD just before the war !
I have a suspicion that the CBI knows that a lot of dinar is being leaked out to the world. They may be doing it . Why not ,they can always print more at 6 cents per note !
They say the reserves are ADEQUATE ! What does that mean??
I think they are raiding the reserves to keep the country afloat ...
Has anyone seen any recent numbers on virus deaths ? the last I saw was 100 back in February... I smell heavy censorship..
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IQD on FOREX
in LOPster tank
Posted
I wish you luck DB .. It looks like you are going at it the right way, that is Learn as much as you can BEFORE putting any real money to work. Even then be prepared to make some mistakes . One tip I can give is when you learn you have made a mistake GET OUT .. Dont waste time and money trying it save a bad trade. When I buy a stock I pick a point , time and amount for keeping it , and if it fails that test i'm out.