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what does this mean?


JoeFriday
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In other threads dontlop has said

saddams currency reserves "foriegn reserves ",, were depleted halfway through the iran iraq war by 1985 .. yet the value was held at over 3 bucks for one dinar
I don't understand what this means. As Doctor Robins points out the dinar was not internationally tradable, but even so if the "value was held at over 3 bucks for one dinar" then some entity somewhere has to be offering that rate. If the CBI reports "sorry we have no dollars" when a importer wants to convert, then they are not holding the value at 3 bucks. The cost (in dinars) of most things in Iraq would skyrocket, i.e. hyperinflation which is pretty much the opposite of holding value. Can you explain this to me dontlop?
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Now I don't assume to know the answers, but if you go and read the history on the CBI website you will see that in 1987 the value of the dinar was at 3.21 to the dollar. The black market value was 1.89 to the dollar, so yes it was artificially held at the 3.31 value, and hyperinflation was the end result. They started printing money like mad men. Why, as I said previously I don't assume to have all the answers.

Edited by fastarnie
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Now I don't assume to know the answers, but if you go and read the history on the CBI website you will see that in 1987 the value of the dinar was at 3.21 to the dollar.

Right, but the CBI site does not say the reserves were gone. But its close to the same question, what does it mean that the "dinar was at 3.21" as the history page says, IF it was the case that the CBI did not provide that rate to exchangers, even in Iraq (if that was the case and if they had no reserves as dontlop claims, what would they have used to do such exchanges?).

The black market value was 1.89 to the dollar, so yes it was artificially held at the 3.31 value, and hyperinflation was the end result. They started printing money like mad men. Why, as I said previously I don't assume to have all the answers.

i do not understand the black market rate being lower than the offical rate either. This is the case today as well. Officially the rate is 1170 but the black market rate is said to be more like 1200 (so not that much off). Still if you can just go to the CBI and get 1170 (or back in 1987 get 3.21) why would anyone go to the street corner to get less than that? Unless the CBI didn't really offer that rate?
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I don't know for sure, but like the Fed here, they don't deal directly with the public. Just banks. Guessing here as I don't know CBI policy regarding the average joe. For that matter I'm not too keen on the Feds policy either. I'll stop here, but those are good questions for someone who knows. I'll look in on this tomorrow to see what's up.

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It just isn't relevant to us what the rate within Iraq was at that time. It could have been $10,000 for one dinar, but so what, because it existed in a closed system, just as it does now. If you can't spend your dinar at the corner store in the U.S. for a loaf of bread, but only in Iraq, what does it matter what the rate is? I'm not going to Iraq anytime soon.

Unless the currency is tradable in an open international market, it is worthless to us.

Edited by RVPleaseToday
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It just isn't relevant to us what the rate within Iraq was at that time. It could have been $10,000 for one dinar, but so what, because it existed in a closed system, just as it does now. If you can't spend your dinar at the corner store in the U.S. for a loaf of bread, but only in Iraq, what does it matter what the rate is? I'm not going to Iraq anytime soon.

Unless the currency is tradable in an open international market, it is worthless to us.

Agreed.

However if inside Iraq you could exchange dinar for (e.g.) $3 then they were actually maintaining that rate but not internationally However if dontlop is correct that the reserves were gone, then such a rate could not even have been internal as there would be no dollars to exchange. I'm guessing that in fact they were not "maintaining" such a high rate inside or outside Iraq. Perhaps that was the official government rate, but if no one could actually get it, then its meaningless.

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In other threads dontlop has said I don't understand what this means. As Doctor Robins points out the dinar was not internationally tradable, but even so if the "value was held at over 3 bucks for one dinar" then some entity somewhere has to be offering that rate. If the CBI reports "sorry we have no dollars" when a importer wants to convert, then they are not holding the value at 3 bucks. The cost (in dinars) of most things in Iraq would skyrocket, i.e. hyperinflation which is pretty much the opposite of holding value. Can you explain this to me dontlop?

no it was explained but you chose to pick out one line in a convesration and pretend it was the entire conversation .. ask your boy friends

Edited by dontlop
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no it was explained but you chose to pick out one line in a convesration and pretend it was the entire conversation .. ask your boy friends

I didn't take anything out of context. I just want to know what it means when you claim a $3 rate was maintained or held, yet they had no reserves which means no rate could be supported. Thus your statement is self contradictory. Perhaps I misunderstood what you meant, which is why I asked. But, instead of simply explaining what you posted, you choose to throw some slurs around instead.
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From dontlop's post on this topic quoting a CIA analysis report.

During the 1970s the official and market rates generally corresponded and by 1980 the country had $35 billion in foreign exchange reserves. Because of the war with Iran that figure had fallen to $2 billion by 1987. The currency depreciated rapidly in the unofficial market during the Iraq-Iran war and after the first Gulf War the pace of depreciation increased further. During 1997 to 2003, the exchange rate fluctuated between 1500 -2000ID per $1 and was fairly steady at about 1950 ID to $1 in recent years. Although the Regime did not alter the official exchange rate after 1983, it acknowledged the rate differential in 1999 by allowing state run banks to exchange hard currency at the rate of 2000 ID to $1."

So the CBI was NOT "maintaining" or "holding" the exchange rate to $3, they just maintained the fiction of this rate in some official documents but no one on the planet was doing exchanges at that rate so its meaningless. When their reserves dropped to nearly nothing, the actual exchange rate followed right along. As I keep saying for small economies the exchange rate really by definition is approximately M2/reserves.

Edited by JoeFriday
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in another thread .............................................. DINARK SAID

hide a massive RV. It's a joke. The dinar is on a crawling peg to the dollar .

WHY DOES DINARK WANT TO HIDE THE RV , AND WHY DOES HE LIE ABOUT THE DINAR BEING ON A CRAWLING PEG WHEN IT IS NOT ?

DONT GET ME WRONG .. IM JUST HERE BECAUSE I WANT THE TRUTH TO GET OUT ABOUT THIS DINAR .. THESE GURUS LIKE DINARK PASSING OUT BAD INFORMATION HAVE GOT TO BE CLEANED UP :banhammer::cigar:

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no it was explained but you chose to pick out one line in a convesration and pretend it was the entire conversation .. ask your boy friends

I thought this fourm was about dinar, not spreading your homophobic hatered, what is next are you going to start making racial slurs.

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I thought this fourm was about dinar, not spreading your homophobic hatered, what is next are you going to start making racial slurs.

your smart .. i dont get it .. explain this homophobic hatred and how it applys to me

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I am smart, thank you very much. Read your post, if you cannot find the homophobic statement in it maybe someone will help you.

..i was thinking ..well maybe this madmaxipad is some kind of sissy himself... dont prove it to me ... you explain it .. your making the unfounded accusations

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i do not understand the black market rate being lower than the offical rate either. This is the case today as well. Officially the rate is 1170 but the black market rate is said to be more like 1200 (so not that much off). Still if you can just go to the CBI and get 1170 (or back in 1987 get 3.21) why would anyone go to the street corner to get less than that? Unless the CBI didn't really offer that rate?

Fastarnie is on the right track....the CBI doesn't deal with the public, so if "Joe Iraqi" needs or wants dollars he must go to a bank or street vendor.

Bear in mind the CBI charges a 13 dinar spread when selling dollars, so the rate to those who can deal direct with the CBI is already at 1179. Every bank or currency exchange business charges an additional fee....no one is in business to NOT make money.

I believe that this is why some refer to the CBI's policies as hurting the dinars value, when in reality, the CBI is only doing what every other CB and banking institution does.

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Fastarnie is on the right track....the CBI doesn't deal with the public, so if "Joe Iraqi" needs or wants dollars he must go to a bank or street vendor.

Bear in mind the CBI charges a 13 dinar spread when selling dollars, so the rate to those who can deal direct with the CBI is already at 1179. Every bank or currency exchange business charges an additional fee....no one is in business to NOT make money.

I believe that this is why some refer to the CBI's policies as hurting the dinars value, when in reality, the CBI is only doing what every other CB and banking institution does.

Sure, all that makes sense. I was thinking of the CBIs member/partner/downstream banks as in the same group as the CBI itself as far as rates go, but you're right that the rate will get a little lower at each step.

in another thread .............................................. DINARK SAID

hide a massive RV. It's a joke. The dinar is on a crawling peg to the dollar .

WHY DOES DINARK WANT TO HIDE THE RV , AND WHY DOES HE LIE ABOUT THE DINAR BEING ON A CRAWLING PEG WHEN IT IS NOT ?

DONT GET ME WRONG .. IM JUST HERE BECAUSE I WANT THE TRUTH TO GET OUT ABOUT THIS DINAR .. THESE GURUS LIKE DINARK PASSING OUT BAD INFORMATION HAVE GOT TO BE CLEANED UP :banhammer:/> :cigar:/>

That other thread must be in this forum since Dinarck can not post anywhere else, so why not go respond in context.
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in another thread .............................................. DINARK SAID

hide a massive RV. It's a joke. The dinar is on a crawling peg to the dollar .

WHY DOES DINARK WANT TO HIDE THE RV , AND WHY DOES HE LIE ABOUT THE DINAR BEING ON A CRAWLING PEG WHEN IT IS NOT ?

DONT GET ME WRONG .. IM JUST HERE BECAUSE I WANT THE TRUTH TO GET OUT ABOUT THIS DINAR .. THESE GURUS LIKE DINARK PASSING OUT BAD INFORMATION HAVE GOT TO BE CLEANED UP :banhammer:/> :cigar:/>

Lol....so the dinar isn't on a crawling peg to the dollar huh? O wait...I forgot. It's a conspiracy artificial program rate right? Give me a break......I am using my phone now so I won't do your homework for you but google is your friend. Probably your only friend so use it genius.

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