Iraqi dinar value will increase against US dollar, Iraq economic expert

[zigmeister]

The article and plan is from the Parlimentary "experts", who apparently have taken the bait and can't wait to tell everyone how clueless they are.

That's funny. I hear ya. Thanks Dallite, I always appreciate your thoughts and input, so glad you are back.

[gregp]

Maybe this is what is meant by 1000:1 or 1000 IQD = 1 Gold coin ? in either case the average citizen needs currency /debit cards/ ATM's. I don't believe the CBI will be selling bucket loads of gold coins only to be spent at the market place on groceries. Iraqi's need currency with value now! not Gold coins....IMO

THX Yota!

I agree unirod. How will they buy a loaf of bread with a gold coin? They would have to buy the whole isle. What size is the coin? Sounds like it will be light in gold and heavy in copper or some type of metalic filler. They definatly won't be solid gold. Too soft. So with that said it could happen. They just have to mint gold washed coins. Gypsy style gold coins. So with that said, I agree with unirod. They need a real currency. Gold coins would work on large purchases. They would definatly pull in the dollars for a trade. Give us your dollars and we will give you a gold coin. Then what you do?

[SocalDinar]

The sale of these gold coins will ensure that the inflation will be absorbed, the devaluation of the US dollar will happen and the price of the goods will also get reduced in the market of Iraq.

Even the Iraqi economists know what's coming down the pike. They like many are looking at hard assets instead of the US Dollar. This is a bad position for us to be in right now with the IQD, if this is true? It looks like they are planning to dedollarize their economy with gold instead of IQD. JMO

They would need small denoms of gold to dedollarize LOL

Seems strange Butifldrm. A Central Bank with a fiat currency should not want gold being used as money. They lose control if anything tangible is used as money instead of their monopoly currency. The fed manipulates the price of gold by releasing gold into the market below value. The fed controls many central banks pegged to the USD including Iraq. Strange indeed.

Thanks Yota

[Muleslayer]

Well if you Head to Myrtle Beach look me up, I'm here, that goes for anybody!! All is welcome!!

Gonna be in Hilton head weekend of sept 21 for my youngests wedding on the beach.

Don't know how close that is to myrtl beach but maybe we will cross paths.

Big 6' 2 salt and pepper "heavy on salt" same for beard. Buy u a beer if we meet.

[Dalite]

They would need small denoms of gold to dedollarize LOL

Seems strange Butifldrm. A Central Bank with a fiat currency should not want gold being used as money. They lose control if anything tangible is used as money instead of their monopoly currency. The fed manipulates the price of gold by releasing gold into the market below value. The fed controls many central banks pegged to the USD including Iraq. Strange indeed.

Thanks Yota

The dinar is not currently a fiat currency.

It is backed 100% (130% at last info release) by Foreign Reserves.

The Foreign Reserves consist of tangible and intangible assets; some of which are fiat currencies.

While maintaining a fully backed currency, introducing gold, just as Congress has the authority to mint coin in the US, allows the economy to grow without introducing more currency that must be backed.

Kennedy was going to have congress mint silver coin in large quantity in a power play with the Federal Reserve.

History tells how well that idea was accepted. We lost Kennedy, and , shortly thereafter, we lost silver coin.

[dontlop]

it is funny . that the dinar is not a fiat currency .. but it is backed by one .. or two ...

its up to the imf .. not maliki ... it wont be malikis way ..or shabbibis way .. its the imf way or the highway ...

fiat currencys are not a joke .. you are bound by contracts .. with the imf .. and if they think they will just rv become rich.. and destroy america and the west . we have intel established all over the middle east now ... guess what .. that dinar can be destroyed just like any other currency that gets destroyed ,,

either you play by the rules .. "all of them " ,, or you cant play

iraq has to sign on the dotted line..

im sure they have multiple choices of which line they can sign .... the more oil they sign away ..the higher their currency will go on rv day.. but yes i agree one day iraq will have a fiat currency also ..

its just a system of control in the currency world that works ..

if iraq thinks they can go on its own ... and create their own currency and make their own rules .. .. well we will see

maliki will play .. or he will get voted out .. whos gonna help them .. iran .. syria .. north korea .. all three are broke ..some coincidence huh ..remember what bush said about the axis of evil ."..iraq,,... iran .,, syria.. north korea .. "<<<< theres your axis of evil ..now iraq is in a pickle .. duh which way did he go ,, which way did he go .. either iraq changes .. or it joins the broke countrys till they do.. right now iraq makes around 300 million a day .. to be split up by 25 million iraqis .. thats 12 dollars a day per capita "person".. hardly rich

Edited September 14, 2012 by dontlop

[zigmeister]

It occurred to me last night, could this be a way to bring in the small denominations(coins) and sell them with the "gold coins" tag, only they won't be necessarily?

[dontlop]

in my opinion the stupidest thing i heard in todays world is to sell a gold coin ..painted gold ?.. if it is gold .. will they come with a rubber stamp as to how many dinars they are worth from year to year.. ya cant make gold coins any more ..unless you make them worth .. like 10,000 dollars for one gold coin thats weight in gold is less valuble than the 10,000 dollars ... then if gold prices ever exceed the coins face value they could just melt them down and make new ones .... but if its value isnt the same as its value in weight.. then its just a fiat currency anyway ..so why use gold ,, its heavy .. its not as durable as other metals .. .. just uses other metals for coins ..if they want gold for some reason to hoard .. then they should buy it by the ounce like everyone else

the numbers in this are just an example .. they could be any number ..if the weight in gold exceeds the coin value .. it will be melted ..if it doesnt exceed.. its fiat

Edited September 14, 2012 by dontlop

[strolld2]

Yota, Great Article as always! This could be a great step forward in Iraq Banking System and for the people of Iraq!

[dontlop]

Yota, Great Article as always! This could be a great step forward in Iraq Banking System and for the people of Iraq!

i dont see any thing great about it ..selling a gold coin is to me being decietful .. why not sell gold by the ounce. .. gold is valued by the ounce ..

[zigmeister]

in my opinion the stupidest thing i heard in todays world is to sell a gold coin ..painted gold ?.. if it is gold .. will they come with a rubber stamp as to how many dinars they are worth from year to year.. ya cant make gold coins any more ..unless you make them worth .. like 10,000 dollars for one gold coin thats weight in gold is less valuble than the 10,000 dollars ... then if gold prices ever exceed the coins face value they could just melt them down and make new ones .... but if its value isnt the same as its value in weight.. then its just a fiat currency anyway ..so why use gold ,, its heavy .. its not as durable as other metals .. .. just uses other metals for coins ..if they want gold for some reason to hoard .. then they should buy it by the ounce like everyone else

the numbers in this are just an example .. they could be any number ..if the weight in gold exceeds the coin value .. it will be melted ..if it doesnt exceed.. its fiat

From this article I believe there is a method to their maddness, but what it is, I am unclear. Now from the past they issued coins but the people found they were worthless, perhaps bringing in the "gold" coin gives the coins more value and the people will gobble them up with their dollars. The question is will they be gold or painted gold, will the coins hold more value than the dollar? Is this the smaller denominations entrance? Is this another route to shed the currency we hold? Its very interesting, but there probably is some truth as to their next steps to salvage the dinar.

[dontlop]

as far as backing up money that is removed or destroyed by the cbi .. it doesnt need to be backed up if its being removed from circulation or destroyed ,, the only dinars that need to be backed are the ones that are being used for purchase or legal tender .... destroying or removing dinars from circulation only adds value to the remiaing dinars that are in circulation.. you just have less dinars that are worth the same amount of reserves .. if they destroy every single dinar note except one 25k note .. and it is backed by 67 bilion dollars in reserves .. that one 25k note represents 67 billion dollars worth of dinars

From this article I believe there is a method to their maddness, but what it is, I am unclear. Now from the past they issued coins but the people found they were worthless, perhaps bringing in the "gold" coin gives the coins more value and the people will gobble them up with their dollars. The question is will they be gold or painted gold, will the coins hold more value than the dollar? Is this the smaller denominations entrance? Is this another route to shed the currency we hold? Its very interesting, but there probably is some truth as to their next steps to salvage the dinar.

the only thing i could come up with is a commemorative coin valued in its weight in gold for the new dinar value ..example ..

if they rv at one dinar per one dollar ...and gold is 1000 an ounce ... they make a one ounce coin and its face value at 1000 dinars .. this will seal the rv in gold

[Dalite]

as far as backing up money that is removed or destroyed by the cbi .. it doesnt need to be backed up if its being removed from circulation or destroyed ,, the only dinars that need to be backed are the ones that are being used for purchase or legal tender .... destroying or removing dinars from circulation only adds value to the remiaing dinars that are in circulation.. you just have less dinars that are worth the same amount of reserves .. if they destroy every single dinar note except one 25k note .. and it is backed by 67 bilion dollars in reserves .. that one 25k note represents 67 billion dollars worth of dinars

Dinar removed from circulation are must be retired using foreign reserves.

If all Iraqis gave away all of their dinar to the CBI for free, what you claim would have merit.

True, it doesn't have to be backed when destroyed, but has to be purchased first - and currently the Foreign Reserves are the only vehicle the CBI has to do this.

The reserves decrease with every dinar retired from circulation.

If you removed 60 billion USD worth of Dinar, you would have 60 billion USD worth less in the Foreign Reserves.

The proposed intro of coin that holds value gives the CBI a way to remove paper and keep reserves.

How they go about doing it remains to be seen.

[dontlop]

Dinar removed from circulation are must be retired using foreign reserves.

If all Iraqis gave away all of their dinar to the CBI for free, what you claim would have merit.

True, it doesn't have to be backed when destroyed, but has to be purchased first - and currently the Foreign Reserves are the only vehicle the CBI has to do this.

The reserves decrease with every dinar retired from circulation.

If you removed 60 billion USD worth of Dinar, you would have 60 billion USD worth less in the Foreign Reserves.

The proposed intro of coin that holds value gives the CBI a way to remove paper and keep reserves.

How they go about doing it remains to be seen.

so if they add another 30 trillion dinars into circultation ,, and still only maintain 67 billion in reserves .. that wont devalue the dinars ?

it goes both ways

im sure the people would not turn in their dinars for free .. but the cbi holdings or the govt holdings could be eliminated without any cost except the paper and printing cost of that note .. .. everytime they retire a note .. the rest will gain value .. just like if they added notes ,,,would lose value .. "if the foriegn reserve backing remains the same"

Edited September 14, 2012 by dontlop

[zigmeister]

I see what your are saying, but I think we need to look at the overall picture of this article. There is a lot to it. They want ATM's everywhere, in other words getting people in the "cashless" situation. One of the many problems banks in Iraq have had is lack of clients. So how do you bring them in. What if these gold coins are issued as a one time deal an incentive to bring in clients so to speak. The people bring in their dinar for a gold coin or two for their dinar, whereby setting up their accounts, getting their ATM cards. Now they are on their way to a cashless society and in the bank system. As they pull in the dinar, the value rises against the dollar.

I don't know but this article spells out a process towards a revaluation. The gold coins are just the carrots to bring in the dinar and fill the banks with clients. But I could be wrong, it won't be the first time.

[dontlop]

so if they add another 30 trillion dinars into circultation ,, and still only maintain 67 billion in reserves .. that wont devalue the dinars ?

it goes both ways

im sure the people would not turn in their dinars for free .. but the cbi holdings or the govt holdings could be eliminated without any cost except the paper and printing cost of that note .. .. everytime they retire a note .. the rest will gain value .. just like if they added notes ,,,would lose value .. "if the foriegn reserve backing remains the same"

they could purchase about a trillion a week .. with oil sales capitol .. through auctions.. once the value is set at a dollar .. those dinars will be accepted by the iraqis over the dollar especially if the dollar keeps shrinking from these quantive easing govt buying its own debt .. we have going on .. they must get away from the dollar backing the dinar .. or the dinar will decline in value along with the dollar

I see what your are saying, but I think we need to look at the overall picture of this article. There is a lot to it. They want ATM's everywhere, in other words getting people in the "cashless" situation. One of the many problems banks in Iraq have had is lack of clients. So how do you bring them in. What if these gold coins are issued as a one time deal an incentive to bring in clients so to speak. The people bring in their dinar for a gold coin or two for their dinar, whereby setting up their accounts, getting their ATM cards. Now they are on their way to a cashless society and in the bank system. As they pull in the dinar, the value rises against the dollar.

I don't know but this article spells out a process towards a revaluation. The gold coins are just the carrots to bring in the dinar and fill the banks with clients. But I could be wrong, it won't be the first time.

the way to get them into the cashless banking is to pass the oil laws .. and only issue their checks through the atm .. if they want their share they must sign up for their cards .. eventually they will come to trust the "fact" that when they stick their card into that machine .. out comes dinars .. not gold or dollars .. but new dinars with a value set at the new rates .. and they are able to spend them accordingly to that rate .. its either that or they dont get their share... it costs a fortune to issue all those checks .. they could just hit the send button and send them all a electronic transfer ..

[zigmeister]

they could purchase about a trillion a week .. with oil sales capitol .. through auctions.. once the value is set at a dollar .. those dinars will be accepted by the iraqis over the dollar especially if the dollar keeps shrinking from these quantive easing govt buying its own debt .. we have going on .. they must get away from the dollar backing the dinar .. or the dinar will decline in value along with the dollar

the way to get them into the cashless banking is to pass the oil laws .. and only issue their checks through the atm .. if they want their share they must sign up for their cards .. eventually they will come to trust the "fact" that when they stick their card into that machine .. out comes dinars .. not gold or dollars .. but new dinars with a value set at the new rates .. and they are able to spend them accordingly to that rate .. its either that or they dont get their share... it costs a fortune to issue all those checks .. they could just hit the send button and send them all a electronic transfer ..

It appears the new dinar has been put on hold. I see this article is more about plan B.

[dontlop]

LOL

[Dalite]

so if they add another 30 trillion dinars into circultation ,, and still only maintain 67 billion in reserves .. that wont devalue the dinars ?

it goes both ways

im sure the people would not turn in their dinars for free .. but the cbi holdings or the govt holdings could be eliminated without any cost except the paper and printing cost of that note .. .. everytime they retire a note .. the rest will gain value .. just like if they added notes ,,,would lose value .. "if the foriegn reserve backing remains the same"

If they add 30t and don't increase the Foreign Reserves to back it, inflation will go well into double digits.

This is reality, not a pumper playpen. They can't retire dinar from circulation without using something to redeem them..

All they have to do that with is the Foreign Reserves

Neither the GOI or CBI is going to give up wealth.

The GOI is already operating in deficit, and the CBI is responsible for economic policy.

The GOI has no wealth to give up, and the CBI is obligated to back the exchange rate.

When they remove circulation, the reminding currency gets stronger, and the foreign reserves shrink in proportion to what has been removed.

You can't just magic 30t dinar from circulation without exchanging something of equal value.

Neither are going to write off anything. The Paris Club has already milked that cow.