Brietling and his post about IMF loans

[sandyf]

This is exactly what I'm saying!!!! The only options I see:

1) Continue on the path inwhich they are on. The best thing they did, was to not completely form their government. No one can hold Iraq accountable because there is no completely formed government to hold to the fire. Yes Maliki is the PM but he doesn't completely form the government.

2) Because they have already sold T-BILLS, a LOP is off the table, as well as a Re-denomination!!! I challenge everyone to look up the definition of Re-denomination!!! It's not in any dictionary!!! Re-denomination is a term used by currency speculators, mostly IQD speculators.

Investopedia states: Definition of 'Re-denomination'

a.)The process whereby a

country's currency is recalibrated

due to significant inflation and currency devaluation. Certain currencies have been redenominated a number of times over the last century for various reasons.

b.)The process of changing the currency value on a financial security.

Read more: http://www.investopedia.com/terms/r/redenomination.asp#ixzz20jtViJsS

Wikipedia states: Redenomination is the process of changing the face value of banknotes or coins used in circulating currency.

When redenomination occurs, financial data that spans the change must be correctly accounted for. For example, the GDP reported by the Central Bank of Nicaragua is properly documented.

http://en.wikipedia.

org/wiki/Redenomination

Neither Wikipedia or Investopedia are reliable resources to be quoting from due to anyone can add or remove data from those sites.

3) So far what we have already hear was that they plan to introduce small notes to the market and slowly withdraw the larger notes. This isn't Re-denomination nor is it dropping of the three zeros!!! This is simply adding small notes to the market and slowly removing the larger notes. Again because their Finance/Treasury sold government T-Bills, they can't simply drop anything!!!!

I do believe that possibly, they maybe sitting around a table trying to come up with some ideals. I also believe that the RV isn't entirely in their hands. As long as they play on the ideal of not having a completely functioning government to handle their affairs, we will continue to read articles of the prolonged currency issues...unless..........

4) That region splits into 3 separate states inwhich it appears that is what the Kurds are aiming for, then baghdad to take all the time they need. The north has given contracts to exxonmobile to get started in the oil field and I believe they will, if they haven't already will start developing before the end of the year.

KEEP AN EYE ON EXXONMOBILE STOCKS!!!

Some of this post is not correct. The sale of Bonds or T-Bills(Debts) would not have any bearing. Redenominations and revaluations are real and they are concerned with currency, in other words CASH.

Following a redenomination or revaluation all accounts would have to be restated in line with accounting practice. It is only 'cash items' in the accounts that are influenced by any change in value. Capital, shares,assets, debts etc are not considered as 'cash items' and retain previous value..

[rambo12354]

I was reading another site today and it had a snippet from Brietling (someone who I don't follow so I can't confirm how knowledgeble or good he/she is). Britling mentioned that the IMF had given loans to Iraq, which means its impossible for Iraq to LOP.

Can anyone boldly confirm that the IMF did indeed provided loans to Iraq and how this would hurt a LOP/help us? Thanks yall.

IMFSurvey Magazine: Policy

Subscribe The IMF’s new lending framework focuses on the underlying objectives of a country’s structural reform program rather than on specific actions (IMF photo)

Related Links

• G-20 strengthens IMF
• IMF revamps lending
• Lending reforms Q&A
• IMF key issues: lending
• Changing IMF combats crisis
• Crisis shapes IMF priorities
• IMF urges social safety nets
• IMF’s new crisis loans
• IMF sharpens risk assessments
• Read summary of Board discussion

IMF REFORM

New Rules of Engagement for IMF Loans

By Camilla Andersen

IMF Survey online

April 13, 2009

• Streamlined approach aims to remove stigma of borrowing
• Reform does away with "hard" structural conditionality
• New focus on objectives rather than specific actions

As part of a wide-ranging reform of its lending practices announced in March, the IMF has redefined the way it engages with countries on issues related to structural reform of the economy.

The IMF’s intention is to do away with procedures that have hampered dialogue with some countries, and prevented other countries from seeking financial assistance because of the perceived stigma in some regions of the world of being involved with the Fund.

Structural reforms refer to changes in the underlying makeup of an economy, such as fiscal systems, social safety nets, and measures to improve competitiveness and strengthen the financial sector.

“We arrived at these reforms by listening to our membership, consulting with a variety of stakeholders, and reviewing past experiences,” John Lipsky, the IMF’s First Deputy Managing Director, said. “These reforms will pave the way for countries to work more effectively with the Fund on crisis prevention and crisis resolution.”

As part of its lending reform package, the IMF also announced the creation of a flexible credit line (FCL), a type of insurance policy for strong performers, mainly emerging market countries. Access to the FCL is restricted to countries that meet strict qualification criteria. But once a credit line has been approved, a country can draw on it without having to meet specified policy goals, as is normally the case for IMF loans. Mexico has applied for a $47 billion precautionary credit line under the FCL.

Addressing criticism

When a country borrows from the IMF, its government agrees to adjust its economic policies to overcome the problems that led it to seek financial aid in the first place. These loan requirements are known in IMF jargon as “conditionality.” In most Fund programs, the loan money is paid out in tranches that depend on the country implementing the requirements set out in the loan according to a specific timetable.

A country’s progress in implementing the loan conditionality is monitored through reviews carried out by the IMF’s Executive Board. There are two types of conditionality:

• macroeconomic conditions, which may include criteria for containing inflation, reducing budget deficits and public debt, or strengthening the central bank’s reserves, and

• structural conditions, which may include measures to strengthen banking supervision, reform the tax system, improve fiscal transparency, and build up social safety nets.

In the past, the IMF has been criticized by some governments and civil society organizations for demanding too many reforms in exchange for financial assistance. In 2007, a study of IMF lending by the Independent Evaluation Office (IEO) found that “a significant number of structural conditions are very detailed, and often felt to be intrusive and to undermine domestic ownership of programs.”

Overcoming stigma

The IMF’s new lending framework focuses on the underlying objectives of a country’s structural reform program rather than on specific actions that need to be adopted according to a specific deadline. The new framework will apply to all the IMF’s loan programs, including those with low-income countries. It requires the IMF’s Executive Board to assess how much progress a country is making on implementing its structural reform agenda, based on key actions agreed with the country at the outset of the program that will serve as benchmarks.

Under the previous approach, formal waivers were needed to access new loan tranches every time a country failed to comply with structural loan conditions, known as structural performance criteria. This sent a signal to the markets and the public that reforms had gone off track, even if there were good reasons for the delays. For these reasons, structural performance criteria came to be seen as a key source of stigma attached to borrowing from the IMF.

How it will work in practice

Reviews will provide the primary tool for monitoring performance on the structural reform agenda. If the IMF’s Executive Board concludes, on the basis of a review, that the country is successfully implementing the policies have been agreed, and that program objectives are being met, the country will gain access to the next tranche of its loan.

Starting May 1, structural performance criteria will be discontinued for all IMF loans, including for programs with low-income countries. Structural reforms will continue to be part of IMF-supported programs, but only when they are seen as critical to a country’s recovery. And the monitoring of these policies will be done in a way that reduces stigma, because countries will no longer need formal waivers if they fail to implement an agreed measure by a specific date.

New rules of engagement

The IMF is hoping that its new lending framework will overcome the lingering mistrust that has marred its relations with some countries, particularly after the Asian crisis in the 1990s, and that countries in need of help to overcome what has been billed as the worst economic crisis since the Great Depression will no longer hesitate to approach the IMF.

“These reforms represent a significant change in the way the Fund can help its member countries—which is especially needed at this time of global crisis,” said IMF Managing Director Dominique Strauss-Kahn in announcing the changes. “More flexibility in our lending along with streamlined conditionality will help us respond effectively to the various needs of members. This, in turn, will help them to weather the crisis and return to sustainable growth.”

Comments on this article should be sent to imfsurvey@imf.org

[tenmillion]

A question about a "loan" from the IMF...way back there....

Iraq has a Stand By Agreement that was approved on February 24, 2010. It will expire July 23, 2012.

You can read about it on the link below.

http://www.imf.org/external/pubs/ft/scr/2011/cr1175.pdf

The 2,376,000,000.80 SDR is the amount that was approved in March of 2010 which is equal to $3.7 billion dolllars.

Iraq drew 1,069,000,000.56 SDR of the total allocated to them.

The first payment is 6,000,000.09 SDR = $9 million due 2012.

A larger payment is due 2013 - 123,000,000.29 SDR = approximately $184,500,000.44 dollars.

All under "Projected payments to fund" http://www.imf.org/external/np/fin/tad/exfin2.aspx?memberKey1=460&date1key=2012-07-12

[umbertino]

Bedford is not far from where I live. Your lucky! I'm stuck in the concrete jungle for 3 more years. Me and my son are ski/board bums. We're out of here once he graduates from High School.

Sorry for the off topic post peeps.

If you're a skier then you got to definitely come vist here... In the Dolomites, my friend. My city ( Trento) is very close to all the main spots ( Madonna di Campiglio, Val Gardena, etc.)

[randalln]

Disagree. Turkey is a clear example of where a country RD'n had 2 currencies co-exist with 2 different exchange rates for at least an entire one year period of time. This is fact. This sis also the model Iraq says they are following for their RD. This is also fact. They CAN RD and have both currencies co-exist with 2 different rates. The old notes at .00086 and the new notes at .86. That's EXaCTLY what tureky did and it was successful.

Yes but no one outside the country had large amounts of old Lira in (cash ).Turkey was not in the stone age ......and used digital bill payments before during and after

Iraq shot its self in the foot by using Islamic banking for so long ....and dealt with cash ...not digital currency (wanting to hide their wealth from the world like a drug dealer )

That now they have to take in to consideration all the currency that is out in the world .....none of the other countries had this problem ...and thats just the FACTS

running two rates at the same time only works inside the country ....once you try to get other countries banks to accept the notes at different rates ....S#!T falls apart ...Just ask Venezuela

That is too much of a hassle for other countries banks to deal with .....

[randalln]

A question about a "loan" from the IMF...way back there....

Iraq has a Stand By Agreement that was approved on February 24, 2010. It will expire July 23, 2012.

You can read about it on the link below.

http://www.imf.org/e...2011/cr1175.pdf

The 2,376,000,000.80 SDR is the amount that was approved in March of 2010 which is equal to $3.7 billion dolllars.

Iraq drew 1,069,000,000.56 SDR of the total allocated to them.

The first payment is 6,000,000.09 SDR = $9 million due 2012.

A larger payment is due 2013 - 123,000,000.29 SDR = approximately $184,500,000.44 dollars.

All under "Projected payments to fund" http://www.imf.org/e...1key=2012-07-12

all countries that are not part of the basket ...barrow money(SDR's) from the IMF ...this is how they pay outstanding debts with other countries not bordering them

they give the IMF their currency (at a program rate) and the IMF gives credit on their behalf ...to the debtor (the other country the bought stuff from)

Its called keeping the money moving

[TAV]

Some of this post is not correct. The sale of Bonds or T-Bills(Debts) would not have any bearing. Redenominations and revaluations are real and they are concerned with currency, in other words CASH.

Following a redenomination or revaluation all accounts would have to be restated in line with accounting practice. It is only 'cash items' in the accounts that are influenced by any change in value. Capital, shares,assets, debts etc are not considered as 'cash items' and retain previous value..

Okay, then here's the scenario.....I live in Iraq..... what you are saying; "If I purchased 1 million Dinars in T-bills using IQD and the CBI formally Lop the three zeros off the actually "cash items only" my T-Bill wouldn't be affected because it's a debt?

I agree with you concerning "accounting practices" because the General Accepted Accounting Principles (GAAP) via Financial Accounting Standards Board (FASB) has been mandated by the SEC to regulate the accounting practices here in the U.S.

The International Finanical Report Standard (IFRS) via International Accounting Standards Board (IASB) regulates the International markets.

I also know that the U.S. is slowly synchronizing its accounting standards to that of the (IFRS) in order to show continuity with the rest of the world.

Therefore, how would I receive my bi-annual annuity or interest payment if it's based on the face-value of the T-Bill...... especially being that they Lopped the actual currency?

[Man_Kind]

Yea there seems to be plenty of those around lately!!

agree ! We gotcha back keepm !

[King Bean]

The most important thing I am watching is the stand-bye arrangement between Iraq and the IMF which expires on July 23, 2012. At that point Iraq owes the largest payment they have ever paid to the IMF 2,376.80 million in SDR. I watching to see if they ask for an extention.

http://www.imf.org/external/np/fin/tad/exfin2.aspx?memberKey1=460&date1key=2012-07-12

I believe I read they received an SBA extension until February 2013. No link, sorry. Lets see how this affects things for the next 7 months.

[TAV]

I don't disagree with sandyf because anything is possible at this stage-of-the-game. Debt is debt for many people and now an investment for investors.

If we finance an automobile at book value, we become indebted to the banks. For the banks, they receive a monthly annuity payment based upon the book value from us debtors when we sign the purchase agreement at the dealership. These payments will remain the same regardless of the diminishing value of the car. Even though the book value of the car has diminished (which is still debt for us), the accounting practices still remains the same and the bank(investor) continues to collect their monthly annuity unchanged. The positive side for the person in debt is that they maybe allowed to claim a credit on the diminished value of the automobile and although it may not come in the form of cash; it may still provide relieve in other areas where money is owed.

No difference.

If the government wants to build the infamous "high speed railway", they can raise the money by simply selling Bond to the public and paying their investors bi-yearly at 8%. (At this rate I know investors would be all over this, but I'm using 8% as an example) and I invested 1 million USD expecting to receive 8% yearly or 4% every six months totaling 8% at the end of the year(I don't have tables A,B,C or D in front of me... n=5 years i= 8%) I'm looking to have in my bank account at the end of five years: $1,480244.28 USD!!!

If the government sold bonds for this high speed railway system, then lopp three zeros off the actual currency and say the bonds are safe, "this would greatly tip the market toward all the bond holders, maybe even collaping other parts of the economy".....today's housing market is a great example of this. People couldn't pay and government had to subsidized the banks with bailout money.

Re-denomination does the exact same thing.

Everyone likes to use Turkey as an example but what people aren't mentioning is that Turkey wanted to become a part of the EU but hadn't been officially accepted!! "Not sure about today given the EU's finanical position" but Turkey already started using the Euro as a primary currency in their local markets...... as well as the Turkish Lira....... as well as the USD!!

Turkey is a key NATO partner and NATO will not allow Turkey to fall!!!

In our so-called "perfect market" it's either all or nothing!!!

Removing large notes slowly and inserting small notes slowly as per CBI is no different than removing 1 dollars bills slowly and inserting 100 pennies slowly!!!

Turkey is proped up!!!

Edited August 10, 2012 by TAV

[Dalite]

Okay, then here's the scenario.....I live in Iraq..... what you are saying; "If I purchased 1 million Dinars in T-bills using IQD and the CBI formally Lop the three zeros off the actually "cash items only" my T-Bill wouldn't be affected because it's a debt?

I agree with you concerning "accounting practices" because the General Accepted Accounting Principles (GAAP) via Financial Accounting Standards Board (FASB) has been mandated by the SEC to regulate the accounting practices here in the U.S.

Therefore, how would I receive my bi-annual annuity or interest payment if it's based on the face-value of the T-Bill...... especially being that they Lopped the actual currency?

Since there is no financial tool known as a lop, I can't address what would happen, as I don't understand what doesn't exist.

However, if they RD, which is what the CBI is pushing for; everything Dinar is divided by 1000; everything.

If you had a 1 million T Bill worth a thousand USD ( usung even numbers for simplicity), after a RD you would have a thousand dollar T Bill worth a thousand USD.

If it was paying 1000 dinar a month interest, worth $.86, after RD it would pay 1 dinar a month worth $.86

Lower denominations, T Bills, "Electromic" Dinars are not treated any different.

Lower Denominations; same thing. So are groceries, utilities, rent, mortgages, salaries, fines, all things dinar are simply divided by 1000, but retain the same value. Nothing changes, other than the remnants of past hyperinflation being extracted by the numbers on the bill.

It is revenue neutral in all respects.

If, and that is a big if, the plan goes into effect, it will likely be preceded by an increase in value from the 11xx:1 rate that it has at that time to 1000:1. That move would put it on parity with the dollar, further simplify tranactions, and start the process of lowering the dependence on the USD.

Anyone that tells you it will not effect small bills, stock, electronic money, etc..... They are telling you a story.. Breitling has the story memorized... Everything is divided by the decimal amount equal to the number of zeros removed. In this case, 1000 becomes 1, and $ .00086 becomes $.86. The same applies to all financial matters. There are no exemptions. That is how a RD works.

However, if they have invented a process, and named it a lop, anything is possible, as that would be a totally new process that they could make up as they go. I don't think anyone here, any economist, any fiduciary, the IMF, Paris Club or anyone in the money business could either, as that term doesn't currently exist as a financial tool. It was merely created to give a very negative connotation to the concept of Redenomination. The purpose is to discourage the research into and understanding of the redenomination process often used by countries who have overcome past hyperinflation and are removing the past remnants from ther currency; and financial system..

.

[TAV]

Since there is no financial tool known as a lop, I can't address what would happen, as I don't understand what doesn't exist.

However, if they RD, which is what the CBI is pushing for; everything Dinar is divided by 1000; everything.

If you had a 1 million T Bill worth a thousand USD ( usung even numbers for simplicity), after a RD you would have a thousand dollar T Bill worth a thousand USD.

If it was paying 1000 dinar a month interest, worth $.86, after RD it would pay 1 dinar a month worth $.86

Lower denominations, T Bills, "Electromic" Dinars are not treated any different.

Lower Denominations; same thing. So are groceries, utilities, rent, mortgages, salaries, fines, all things dinar are simply divided by 1000, but retain the same value. Nothing changes, other than the remnants of past hyperinflation being extracted by the numbers on the bill.

It is revenue neutral in all respects.

If, and that is a big if, the plan goes into effect, it will likely be preceded by an increase in value from the 11xx:1 rate that it has at that time to 1000:1. That move would put it on parity with the dollar, further simplify tranactions, and start the process of lowering the dependence on the USD.

Anyone that tells you it will not effect small bills, stock, electronic money, etc..... They are telling you a story.. Breitling has the story memorized... Everything is divided by the decimal amount equal to the number of zeros removed. In this case, 1000 becomes 1, and $ .00086 becomes $.86. The same applies to all financial matters. There are no exemptions. That is how a RD works.

However, if they have invented a process, and named it a lop, anything is possible, as that would be a totally new process that they could make up as they go. I don't think anyone here, any economist, any fiduciary, the IMF, Paris Club or anyone in the money business could either, as that term doesn't currently exist as a financial tool. It was merely created to give a very negative connotation to the concept of Redenomination. The purpose is to discourage the research into and understanding of the redenomination process often used by countries who have overcome past hyperinflation and are removing the past remnants from ther currency; and financial system..

.

Again, you maybe correct. At this stage of the game, it's hard to say!!!

[rockfl9]

Dalite is correct... This has been done so many times ,IF there was ANY possible trick to profit from an RD, it would have been exposed by now....My thoughts are that there is a lot to be done to prepare for this event that CBI and GOI must make it official to avoid an economic crash!

[Dalite]

Again, you maybe correct. At this stage of the game, it's hard to say!!!

And you are correct. Nothing become history until it happens.

I can try to understand the procedure, but that doesn't mean it will happen here.

Shabibbi has faced resistance since 2006. As he pushes for a target date, the resistance has increased proportionally to the closeness to the date.

It is hard, if not impossible to say what will happen at this point.

I haven't given up on returns, I have just modified my expectations.

I hope to be pleasantly surprised, and find greater returns than I anticipated.

[whatsthis]

I was reading another site today and it had a snippet from Brietling (someone who I don't follow so I can't confirm how knowledgeble or good he/she is). Britling mentioned that the IMF had given loans to Iraq, which means its impossible for Iraq to LOP.

Can anyone boldly confirm that the IMF did indeed provided loans to Iraq and how this would hurt a LOP/help us? Thanks yall.

Here is my answer to your question.

As far as how much they have loaned Iraq I don't know the numbers. Now I do know that with the help of the IMF & World Bank that have been trying to help get Iraq back on their feet they did say to them they will no give any support or any more help to them & recall all loans made at full value on the spot if they lop. The IMF & World Bank have made it clear they will not be involved if Iraq lops their currency. I have seen articals from the World Bank & C.B.I showing it will not be a lop. Those who speak of a lop at this point add words to make it look different than what is being said.

When the C.B.I states a pack of cigarets cost 1000 dinar after the RV the same 1000 dinars will buy 1000 packs of cigarets shows full value not a lop.

But I will leave you to make up your own mind on how you see this investment.

[Dalite]

they did say to them they will no give any support or any more help to them & recall all loans made at full value on the spot if they lop. The IMF & World Bank have made it clear they will not be involved if Iraq lops their currency.

I have seen articals from the World Bank & C.B.I showing it will not be a lop

When the C.B.I states a pack of cigarets cost 1000 dinar after the RV the same 1000 dinars will buy 1000 packs of cigarets shows full value not a lop.

Link please; one for the world bank using the term lop, or recall any loans if it redenominated , one for where they would not give any support.

They never said either, and never published anything that would indicate what you claim. Link please.

The article said that 1000 old dinar would have the same value as 1 new dinar. Both would but a pack of smokes.

It went on to say 1000 new dinar would be able to buy 1000 packs of smokes.