Circulation problems of Iraq? Look at USD

[hame55]

Just wanted to drop some lobster bait here....

Dont' ask for a link, it was posted here with a reference yesterday on another thread - US dollar global circulation estimated at 200 Trillion by research group. Can Iraq support a 30 Trillion RV at a dollar? Given our own circulation numbers, why not? Sure we are a much larger economy, but given Iraq's resources and potential, and assuming they have been pulling into the CBI a few trillion IQD here and there for years, and given fiat money system and fractional lending practices, why would anyone think the lobsters have a circulation argument here? Too many trillions, blah, blah. That's the main argument. Any takers?

[fastarnie]

If this is Lopster bait, you should of posted in the lop section. Most of the people you are refer to can't post anywhere else.

[keepmwlknfny]

Just wanted to drop some lobster bait here....

Dont' ask for a link, it was posted here with a reference yesterday on another thread - US dollar global circulation estimated at 200 Trillion by research group. Can Iraq support a 30 Trillion RV at a dollar? Given our own circulation numbers, why not? Sure we are a much larger economy, but given Iraq's resources and potential, and assuming they have been pulling into the CBI a few trillion IQD here and there for years, and given fiat money system and fractional lending practices, why would anyone think the lobsters have a circulation argument here? Too many trillions, blah, blah. That's the main argument. Any takers?

Here is the main difference.....the USD is not a pegged currency.....the faith behind the dollar and our country is what gives it its value....

Iraq is a pegged currency....which means its value depends heavily on the central banks reserves to back it.....

Fractional banking doesnt have anything to do with backing the value of your currency...thats for commercial banks (lending practices)

[ijdk]

Keep, quick question. In the future will the IRaqi dinar NOT be a pegged currency? If not, would that make any difference?

[rapidwind]

Here is the main difference.....the USD is not a pegged currency.....the faith behind the dollar and our country is what gives it its value....

Iraq is a pegged currency....which means its value depends heavily on the central banks reserves to back it.....

Fractional banking doesnt have anything to do with backing the value of your currency...thats for commercial banks (lending practices)

Not exactly true. The pegging can be done several ways and the country can say this is what the value is and we will match every dollar out there. As long as there is no run on the bank they only need 10% if that on hand to back it. Now the argument can be made that if it RVs and people are cashing out all across the globe then they are going to need all that cash, again no they don't. Iraq has a built up value from their oil sales and can back their currency using those proceeds and any future sales. Money will be transferred using electronic means and debts will be settled at the end of the period, usually every month or two months depending on the agreement.

Now Iraq comes out and says IQD = USD so a 1:1 ratio. I as a consumer gets 1:1 minus whatever the spread. Lets say 10% for easy math, so I will get $900,000 from the US bank. Where did this $900,000 comes from? Not Iraq, but from the bank's reserves. The US bank now has a choice. They can hang on to it, trade back IQD for USD, sell it to another bank, or sell it back to Iraq. Iraq has promised a 1:1 so it is as good as cash until the rate changes. It is a real pain transporting cash so they are not going to do it everyday but once a week to once a month depending on volume. Banks all over the world who change money keep a good amount of different currencies on hand to cover any money changing needs for businesses and travelers so some IQD will never have to be covered by Iraq as it will be changed here anyway. Other banks will buy the cash from the cash in banks to invest for venture capitalism in Iraq. Again transferring USD from a third party and placing IQD into Iraq. They probably will pay something less the 1:1 but more the the 90% so both banks make money. This USD will come from American or any other country. Again it is a pain to transport money so they will be wanting to buy millions to billions at a time to ship together. The last one, where banks sell it back, there Iraq can essentially write an IOU saying we will pay you at this rate (better then 1:1) but space it out over x number of months/years. Terms are agreed upon and Iraq has time to payoff any loans they can not cover.

I can not go on with a break down of how China pegged their currency but that is a basic example. International Monetary policy is twisted and can be very confusing but there is a lot of freedom to create value out of almost nothing.

I apologize for my response as it is done on my lunch break at work so it a little rushed.

[keepmwlknfny]

Keep, quick question. In the future will the IRaqi dinar NOT be a pegged currency? If not, would that make any difference?

Not sure...I mean they talk about the dinar being a reserve currency but that would be years down the road....they could change it if they felt their economy was strong enough but the CBI is and has been complaining about how the govt has screwed up making Iraqs economy less dependent on oil and more diversified.

So I dont really know if they are ready for such a move....not saying its impossible though

[keepmwlknfny]

Not exactly true. The pegging can be done several ways and the country can say this is what the value is and we will match every dollar out there. As long as there is no run on the bank they only need 10% if that on hand to back it. Now the argument can be made that if it RVs and people are cashing out all across the globe then they are going to need all that cash, again no they don't. Iraq has a built up value from their oil sales and can back their currency using those proceeds and any future sales. Money will be transferred using electronic means and debts will be settled at the end of the period, usually every month or two months depending on the agreement.

And Iraq cant match anything close to a 1 to 1 rate if the numbers in circulation are true. According to the IMF these types of currency rely heavily on its reserves....not future sales from exports....and where are you getting this 10% number from? I think your confusing reserve requirements of the CBI for its commercial banks.....

Now Iraq comes out and says IQD = USD so a 1:1 ratio. I as a consumer gets 1:1 minus whatever the spread. Lets say 10% for easy math, so I will get $900,000 from the US bank. Where did this $900,000 comes from? Not Iraq, but from the bank's reserves. The US bank now has a choice. They can hang on to it, trade back IQD for USD, sell it to another bank, or sell it back to Iraq. Iraq has promised a 1:1 so it is as good as cash until the rate changes. It is a real pain transporting cash so they are not going to do it everyday but once a week to once a month depending on volume. Banks all over the world who change money keep a good amount of different currencies on hand to cover any money changing needs for businesses and travelers so some IQD will never have to be covered by Iraq as it will be changed here anyway. Other banks will buy the cash from the cash in banks to invest for venture capitalism in Iraq. Again transferring USD from a third party and placing IQD into Iraq. They probably will pay something less the 1:1 but more the the 90% so both banks make money. This USD will come from American or any other country. Again it is a pain to transport money so they will be wanting to buy millions to billions at a time to ship together. The last one, where banks sell it back, there Iraq can essentially write an IOU saying we will pay you at this rate (better then 1:1) but space it out over x number of months/years. Terms are agreed upon and Iraq has time to payoff any loans they can not cover.

This whole theory is basically stating that Iraq is going to go further into debt, and spend their oil revenues for centuries (which is their only source of income really) to pay off speculators....you really find that likely??

I can not go on with a break down of how China pegged their currency but that is a basic example. International Monetary policy is twisted and can be very confusing but there is a lot of freedom to create value out of almost nothing.

China is manipulating their currency for a lower value.....the reason for all the drama and their currencies value is because they have the reserves to support a much higher exchange rate but they are purposely keeping it low for import/export advantages.....is there a country that you know of, that has a fixed exchange rate/pegged currency (like Iraq) that has little to no reserves but has a high valued currency??

[ijdk]

Thanks keep.

[dinarck]

Not exactly true. The pegging can be done several ways and the country can say this is what the value is and we will match every dollar out there. As long as there is no run on the bank they only need 10% if that on hand to back it. Now the argument can be made that if it RVs and people are cashing out all across the globe then they are going to need all that cash, again no they don't. Iraq has a built up value from their oil sales and can back their currency using those proceeds and any future sales. Money will be transferred using electronic means and debts will be settled at the end of the period, usually every month or two months depending on the agreement.

Now Iraq comes out and says IQD = USD so a 1:1 ratio. I as a consumer gets 1:1 minus whatever the spread. Lets say 10% for easy math, so I will get $900,000 from the US bank. Where did this $900,000 comes from? Not Iraq, but from the bank's reserves. The US bank now has a choice. They can hang on to it, trade back IQD for USD, sell it to another bank, or sell it back to Iraq. Iraq has promised a 1:1 so it is as good as cash until the rate changes. It is a real pain transporting cash so they are not going to do it everyday but once a week to once a month depending on volume. Banks all over the world who change money keep a good amount of different currencies on hand to cover any money changing needs for businesses and travelers so some IQD will never have to be covered by Iraq as it will be changed here anyway. Other banks will buy the cash from the cash in banks to invest for venture capitalism in Iraq. Again transferring USD from a third party and placing IQD into Iraq. They probably will pay something less the 1:1 but more the the 90% so both banks make money. This USD will come from American or any other country. Again it is a pain to transport money so they will be wanting to buy millions to billions at a time to ship together. The last one, where banks sell it back, there Iraq can essentially write an IOU saying we will pay you at this rate (better then 1:1) but space it out over x number of months/years. Terms are agreed upon and Iraq has time to payoff any loans they can not cover.

I can not go on with a break down of how China pegged their currency but that is a basic example. International Monetary policy is twisted and can be very confusing but there is a lot of freedom to create value out of almost nothing.

I apologize for my response as it is done on my lunch break at work so it a little rushed.

Keepem is 100% correct. Why would Iraq buy back their own currency at 1000 times what they sold it for? Why not RD and not have to pay out tens of trillions to speculators? Or why not just stay at 1166 and keep pocketing oil profits instead of spending trillions in future oil profits to pay us millions for dinar we bought from them for thousands?

[MrFnHappy]

Keepem is 100% correct. Why would Iraq buy back their own currency at 1000 times what they sold it for? Why not RD and not have to pay out tens of trillions to speculators? Or why not just stay at 1166 and keep pocketing oil profits instead of spending trillions in future oil profits to pay us millions for dinar we bought from them for thousands?

I've asked the same question more than once and NEVER gotten an answer. It is Shabibi's JOB to keep as much of the CBI's reserves IN the CBI and he can't do that with a straight up RV.

[mrmcwhipit]

Not exactly true. The pegging can be done several ways and the country can say this is what the value is and we will match every dollar out there. As long as there is no run on the bank they only need 10% if that on hand to back it. Now the argument can be made that if it RVs and people are cashing out all across the globe then they are going to need all that cash, again no they don't. Iraq has a built up value from their oil sales and can back their currency using those proceeds and any future sales. Money will be transferred using electronic means and debts will be settled at the end of the period, usually every month or two months depending on the agreement.

Now Iraq comes out and says IQD = USD so a 1:1 ratio. I as a consumer gets 1:1 minus whatever the spread. Lets say 10% for easy math, so I will get $900,000 from the US bank. Where did this $900,000 comes from? Not Iraq, but from the bank's reserves. The US bank now has a choice. They can hang on to it, trade back IQD for USD, sell it to another bank, or sell it back to Iraq. Iraq has promised a 1:1 so it is as good as cash until the rate changes. It is a real pain transporting cash so they are not going to do it everyday but once a week to once a month depending on volume. Banks all over the world who change money keep a good amount of different currencies on hand to cover any money changing needs for businesses and travelers so some IQD will never have to be covered by Iraq as it will be changed here anyway. Other banks will buy the cash from the cash in banks to invest for venture capitalism in Iraq. Again transferring USD from a third party and placing IQD into Iraq. They probably will pay something less the 1:1 but more the the 90% so both banks make money. This USD will come from American or any other country. Again it is a pain to transport money so they will be wanting to buy millions to billions at a time to ship together. The last one, where banks sell it back, there Iraq can essentially write an IOU saying we will pay you at this rate (better then 1:1) but space it out over x number of months/years. Terms are agreed upon and Iraq has time to payoff any loans they can not cover.

I can not go on with a break down of how China pegged their currency but that is a basic example. International Monetary policy is twisted and can be very confusing but there is a lot of freedom to create value out of almost nothing.

I apologize for my response as it is done on my lunch break at work so it a little rushed.

[/quote

Nice explanation Rapidwind,

[DaveD]

Just wanted to drop some lobster bait here....

Dont' ask for a link, it was posted here with a reference yesterday on another thread - US dollar global circulation estimated at 200 Trillion by research group. Can Iraq support a 30 Trillion RV at a dollar? Given our own circulation numbers, why not? Sure we are a much larger economy, but given Iraq's resources and potential, and assuming they have been pulling into the CBI a few trillion IQD here and there for years, and given fiat money system and fractional lending practices, why would anyone think the lobsters have a circulation argument here? Too many trillions, blah, blah. That's the main argument. Any takers?

No link and no proof.... sounds like something dinar holders will state over and over as fact from now on.

I searched the internet for something like this and nothig showed up. Well... two things did.

One was some guy claiming the US was really 200 trillion in debt, not the 14 advertised.

The other was some guy talking about US total assets being 200 trillion.

Neithier of these have anything to do with currency in circulation.

[hame55]

Not exactly true. The pegging can be done several ways and the country can say this is what the value is and we will match every dollar out there. As long as there is no run on the bank they only need 10% if that on hand to back it. Now the argument can be made that if it RVs and people are cashing out all across the globe then they are going to need all that cash, again no they don't. Iraq has a built up value from their oil sales and can back their currency using those proceeds and any future sales. Money will be transferred using electronic means and debts will be settled at the end of the period, usually every month or two months depending on the agreement.

Now Iraq comes out and says IQD = USD so a 1:1 ratio. I as a consumer gets 1:1 minus whatever the spread. Lets say 10% for easy math, so I will get $900,000 from the US bank. Where did this $900,000 comes from? Not Iraq, but from the bank's reserves. The US bank now has a choice. They can hang on to it, trade back IQD for USD, sell it to another bank, or sell it back to Iraq. Iraq has promised a 1:1 so it is as good as cash until the rate changes. It is a real pain transporting cash so they are not going to do it everyday but once a week to once a month depending on volume. Banks all over the world who change money keep a good amount of different currencies on hand to cover any money changing needs for businesses and travelers so some IQD will never have to be covered by Iraq as it will be changed here anyway. Other banks will buy the cash from the cash in banks to invest for venture capitalism in Iraq. Again transferring USD from a third party and placing IQD into Iraq. They probably will pay something less the 1:1 but more the the 90% so both banks make money. This USD will come from American or any other country. Again it is a pain to transport money so they will be wanting to buy millions to billions at a time to ship together. The last one, where banks sell it back, there Iraq can essentially write an IOU saying we will pay you at this rate (better then 1:1) but space it out over x number of months/years. Terms are agreed upon and Iraq has time to payoff any loans they can not cover.

I can not go on with a break down of how China pegged their currency but that is a basic example. International Monetary policy is twisted and can be very confusing but there is a lot of freedom to create value out of almost nothing.

I apologize for my response as it is done on my lunch break at work so it a little rushed.

Nice job here Rapidwind. These are some of the concepts I'm getting at. Showing the 200T outstanding USD is the larger picture of what modern economies do globally. Moeny is making something out of nothing. Let's face it, no matter WHAT you say, Keep, you have to admit it's nothing but an artificial system, subject to all the vagaries, shenanigans, corruption, 10% backing (or less), "faith" in government, resources, etc you can imagine.

Basically it boils down to this: the US banksters and wealthy elite involved in this war of choice against Iraq for its oil will not pass up a chance like this to make millions. We are fleas on the dog, shake as it might. We are going to make money too.

No link and no proof.... sounds like something dinar holders will state over and over as fact from now on.

I searched the internet for something like this and nothig showed up. Well... two things did.

One was some guy claiming the US was really 200 trillion in debt, not the 14 advertised.

The other was some guy talking about US total assets being 200 trillion.

Neithier of these have anything to do with currency in circulation.

OK newbie.

I'll look for it. It was recently stated on a post last week and had the name of the organization doing the research referenced. While I do, why not add something to the conversation that is constructive?

[DaveD]

I'll look for it. It was recently stated on a post last week and had the name of the organization doing the research referenced. While I do, why not add something to the conversation that is constructive?

Constructive... like making up some fantasy numbers with nothing to back them up? I'll get right on that.

[DaveD]

Here is something constructive.

Here is a link from the Fed Reserve.

http://www.federalreserve.gov/releases/H6/Current/

It shows latest M1 2.2 Trillion and latest M2 is 9.8 Trillion

Here is the link from the Iraq Central Bank.

http://www.cbi.iq/documents/key%20financial.xls

It shows Iraq’s latest M1 is 60.3 Trillion and M2 is 70.4 Trillion

So according to each central bank Iraq has 27.4 times more M1 and 7.2 times more M2 than the United States…

This is while the United States has a 15 Trillion dollar GDP and Iraq has a 100 Billion dollar GDP. That’s a 150 times larger economy with 7 to 27 times less currency.

If that sounds bad for a big RV… and it should… it actually gets much worse. 80 to 90 percent of Iraq’s GDP is oil sales which is dollar denominated. The Iraqi economy that generates demand for dinar is only about 10 to 20 billion a year. That’s pathetic to say the least.

[dinarck]

Nice job here Rapidwind. These are some of the concepts I'm getting at. Showing the 200T outstanding USD is the larger picture of what modern economies do globally. Moeny is making something out of nothing. Let's face it, no matter WHAT you say, Keep, you have to admit it's nothing but an artificial system, subject to all the vagaries, shenanigans, corruption, 10% backing (or less), "faith" in government, resources, etc you can imagine.

Basically it boils down to this: the US banksters and wealthy elite involved in this war of choice against Iraq for its oil will not pass up a chance like this to make millions. We are fleas on the dog, shake as it might. We are going to make money too.

OK newbie.

I'll look for it. It was recently stated on a post last week and had the name of the organization doing the research referenced. While I do, why not add something to the conversation that is constructive?

That seems to be the general thinking by many. Greed and corruption some how ensures the IQD to massively increase in value overnight. Problem is greed and corruption have been prevelant from the beggining of history and there has never been a massive overnight RV. EVER!!!!! If you would like to believe that the greedy and corrupt people are going to give you millions of dollars for free then I dont know what to say about that. The fact is the corrupt and greedy have already scored in a big way with forced access to the oil fields of Iraq and it has nothing to do with their hyperinflated currency. Many would like you to believe different and that fact alone should throw up a big red flag. This talk about the Rothschilds and big bankers and George Bush is nothing but a bunch of nonsense that people use to convince themselves of the pending impossible.

[truthful1]

I love the " iraq has to rv......its the only way they can prosper, rebuilt, etc.....etc..."

The only thing iraq does by a straight rv to a dollar......is create trillions in debt and liabilities.

Then....the next comment......"but the authors, rothchilds, bush , haliburton.....have planned this mega event"

The rothchilds didnt get rich by giving away trillions of dollars. do you think iraq wants to refuelthe u.s. war chest......to pay for the next

Occupation???

Iraq will someday be a superpower......and that will happen because they wont pay out trillions or give away free oil for years.

the truth even slapped me in the face a little too.

Edited May 10, 2012 by truthful1

[GotSix]

I've asked the same question more than once and NEVER gotten an answer. It is Shabibi's JOB to keep as much of the CBI's reserves IN the CBI and he can't do that with a straight up RV.

True to an extent if a perfect world.....but you need to educate yourself & understand the outside politics that's involved when it comes to Iraq

[Farmall]

True to an extent if a perfect world.....but you need to educate yourself & understand the outside politics that's involved when it comes to Iraq

With your apparent vast knowledge of outside politics and how it relates to the dinar, would you expound on that for us? Thought you might like that word used again, since you had such an aversion for it the other day.