pocono Posted February 2, 2013 Report Share Posted February 2, 2013 You.sure.about that? I have read of countries before that closed its.borders to any outside exchanges of their currency during redenominations. And i know saddam is no longer in power but Iraq also closed its borders before when they removed the 25 dinar note from circulation..... I could be mistaken..... A careful read of CBI Law,Annex A, Article 32 might indicate what they're obligated to do.. 1 Link to comment Share on other sites More sharing options...
Darin Posted February 2, 2013 Report Share Posted February 2, 2013 Well that is what it will take....either way, the money supply has to be taken care of. Change the monetary policy and/or take care of the excessive amount in circulation. Not a simple task, and not a quick one. but the possibility is there... . Exactly... Monetary policy change can simply be the missing link to a rise in value. How they were to go forward and value their currency would completely change. They may be a pegged currency, but their pegging their currency to a fiat currency. Its a piggy-back system. The value of dinars is equal to a set exchange rate of the USD. Is it a good system? It works, but what if the currency your pegging to has higher inflation than you care to proceed with? You can normally buy gold to hedge against inflation, but that concept doesn't work with the dinar. When the dollar value goes down due to inflation, the dinar follows suit. Hence, when our dollar buys less imports, so does the dinar. Link to comment Share on other sites More sharing options...
dontlop Posted February 2, 2013 Report Share Posted February 2, 2013 all the dinars in control of the cbi will simply just be tossed away in the fire pit .. no need to back those any more .. there in the fire .. the only ones they are going to have to buy back are they ones they dont have their hands on. like the ones in my safe deposit box .. those they cannot tos into the fire .. i got those ..so they have to honor those ....most people i iraq dont use dinars they use dollars .. the country is dollarized ... so most of the dinars are in the cbi . most of which are electronic . blloooopp fire pit and delete . gone ..this will most likely be done at the beginnng of the month before govt checks in dinar go out so those dinars are in the cbi and not on the streets ... one day their check will be for 400 dollars instead of 400,000 .. like right now .. beginning of february ..perfect timing .. so monday could be our day .. 1 1 Link to comment Share on other sites More sharing options...
boomer113189 Posted February 3, 2013 Report Share Posted February 3, 2013 dontlop you just described Redenomination at 1000 old dinar to 1 new dinar exchange rate like the articals have been saying " one day their check will be for 400 dollars instead of 400,000 " 1 day iraq will pull the trigger and do it it just a matter of timing 1 Link to comment Share on other sites More sharing options...
keepmwlknfny Posted February 3, 2013 Author Report Share Posted February 3, 2013 all the dinars in control of the cbi will simply just be tossed away in the fire pit .. no need to back those any more .. there in the fire .. the only ones they are going to have to buy back are they ones they dont have their hands on. like the ones in my safe deposit box .. those they cannot tos into the fire .. i got those ..so they have to honor those ....most people i iraq dont use dinars they use dollars .. the country is dollarized ... so most of the dinars are in the cbi . most of which are electronic . blloooopp fire pit and delete . gone ..this will most likely be done at the beginnng of the month before govt checks in dinar go out so those dinars are in the cbi and not on the streets ... one day their check will be for 400 dollars instead of 400,000 .. like right now .. beginning of february ..perfect timing .. so monday could be our day .. Yea they will be tossed....after they are exchanged for a new set which will need the backing the old dinars once had.....all assuming they keep the monetary policy the same.... The new ones that were exchanged for will now have the reserves backing them.... As much scrutiny that Iraq is under for being one of the most corrupt countries in the world, you dont think that the CBI nor anyone else knows how much currency they printed? lol..... 1 Link to comment Share on other sites More sharing options...
makecents Posted February 3, 2013 Report Share Posted February 3, 2013 (edited) so in this case the us also has a deficit .. and its the us that needs to square that away .. i dont see how you come up with the question . it depends on a deficit or surplus in the trade balance to determin who owes who . talk about complete rediculousness.. only you would say china has to pay in your secenario What? YOU are the one that said if you have a trade deficit the other country "has to pay", here is the quote if iraq bought 20 billion dollars worth of goods from the us .. and the us bought 25 billion of oil .. . the us would have a trade deficit of 5 billion dollars they would need to pay iraq or they could let it ride into the next phisical quarter or year.. .. There is no settlement of trade deficits, no one owes anything or pays the other country anything (that is why one tries to avoid trade deficits after all). The surplus country doesn't just give the money back! You statement is beyond ridiculous! Edited February 3, 2013 by makecents 2 1 Link to comment Share on other sites More sharing options...
dontlop Posted February 3, 2013 Report Share Posted February 3, 2013 (edited) What? YOU are the one that said if you have a trade deficit the other country "has to pay", here is the quote There is no settlement of trade deficits, no one owes anything or pays the other country anything (that is why one tries to avoid trade deficits after all). The surplus country doesn't just give the money back! You statement is beyond ridiculous! your right , no one wants a trade deficit like the one you described with china .. or the one i described with iraq .because that trade deficit has to be coverd with foriegn reserves .. in my example .. which you call rediculous .. the united states spent 5 billion more in iraq .. its a net gain for iraq of 5 billion dollars .. iraq spent 20 billion here.. we spent 25 billion there .. how did your china thing go .... the us spent 399 bilion in china ..... china spent 104 billion here .. we owe china the difference .. you say china owes us i say we spent 295 billion more dollars in china than they spent here . so those dollars are accountable and are in china and if china wanted to have that in cash chinese yen ...,,we wouldnt have it in foriegn currency .. so we owe it to them . we owe them over a trillion dollars worth of yen right now ..do we have it ? nope ... ..they hold our promisary debt notes . and we cant pay. what whats next we go to the exchange and buy chineses yaun to buy things .. well guess what was used to buy those yaun .. yep the us dollar debt note .. yep we owe that much to them .. swap it out if ya want .. with what .. more yaun .. ya need to buy more yaun to do that ..what are ya going to buy it with .. dollars ? .. then ya owe them the yaun again for the next set of dollars . it doesnt work like that when ya go to the exchange to buy your chinese yaun ... who do ya think you bought it from . our government ..the us treasury ? .. we dont print yaun .. the chinese government does .. our government owes their government the difference Edited February 3, 2013 by dontlop 1 1 Link to comment Share on other sites More sharing options...
makecents Posted February 3, 2013 Report Share Posted February 3, 2013 (edited) your right , no one wants a trade deficit like the one you described with china .. or the one i described with iraq .because that trade deficit has to be coverd with foriegn reserves .. in my example .. which you call rediculous .. the united states spent 5 billion more in iraq .. its a net gain for iraq of 5 billion dollars .. iraq spent 20 billion here.. we spent 25 billion there .. how did your china thing go .... the us spent 399 bilion in china ..... china spent 104 billion here .. we owe china the difference .. you say china owes us i say we spent 295 billion more dollars in china than they spent here . so those dollars are accountable and are in china and if china wanted to have that in cash chinese yen ...,,we wouldnt have it in foriegn currency .. so we owe it to them . we owe them over a trillion dollars worth of yen right now ..do we have it ? nope ... ..they hold our promisary debt notes . and we cant pay. what whats next we go to the exchange and buy chineses yaun to buy things .. well guess what was used to buy those yaun .. yep the us dollar debt note .. yep we owe that much to them .. swap it out if ya want .. with what .. more yaun .. ya need to buy more yaun to do that ..what are ya going to buy it with .. dollars ? .. then ya owe them the yaun again for the next set of dollars . it doesnt work like that when ya go to the exchange to buy your chinese yaun ... who do ya think you bought it from . our government ..the us treasury ? .. we dont print yaun .. the chinese government does .. our government owes their government the difference OH for goodness sake. One last time. Here is what you said if iraq bought 20 billion dollars worth of goods from the us .. and the us bought 25 billion of oil .. . the us would have a trade deficit of 5 billion dollars they would need to pay iraq or they could let it ride into the next phisical quarter or year.. .. That is WRONG. Neither country owes the other anything. In the China case we buy $399B of stuff from Chinese merchants and they buy $104B of stuff from US businesses. That's it, the end. No one owes anyone anything. Its bad for the US as in the end China has $295B and the jobs and economic growth that go with it. Edited February 3, 2013 by makecents 2 1 Link to comment Share on other sites More sharing options...
dontlop Posted February 3, 2013 Report Share Posted February 3, 2013 (edited) OH for goodness sake. One last time. Here is what you said That is WRONG. Neither country owes the other anything. In the China case we buy $399B of stuff from Chinese merchants and they buy $104B of stuff from US businesses. That's it, the end. No one owes anyone anything. Its bad for the US as in the end China has $295B and the jobs and economic growth that go with it. ok so china comes up with 295 bilion extra us dollars , so they just throw it away according to you .. . according to you everyone just goes to the foriegn exchange before they buy things in another country . .. so if 295 billion dollars exchanged into chinese yen equalling the deficit in trade .. so we can buy things from chinese companys .. now those dollars have to be honored by the united states treasury..,we didnt give them gold for those yaun .. we gave them debt notes .. the us dollar promisary note ..and the chinese says i want to redeem your debt notes ..and we dont have the foriegn reserves ..what do they do .. they run up a trade deficit .. and our govt owes that money to china .. its not a forgiven debt .. why do you think we owe china so much money .. Edited February 3, 2013 by dontlop 2 2 Link to comment Share on other sites More sharing options...
dontlop Posted February 3, 2013 Report Share Posted February 3, 2013 (edited) Investopedia explains 'Trade Deficit' Economic theory dictates that a trade deficit is not necessarily a bad situation because it often corrects itself over time. However, a deficit has been reported and growing in the United States for the past few decades, which has some economists worried. This means that large amounts of the U.S. dollar are being held by foreign nations, which may decide to sell at any time. A large increase in dollar sales can drive the value of the currency down, making it more costly to purchase imports. Read more: http://www.investopedia.com/terms/t/trade_deficit.asp#ixzz2JnQqM8xM Edited February 3, 2013 by dontlop Link to comment Share on other sites More sharing options...
makecents Posted February 3, 2013 Report Share Posted February 3, 2013 (edited) ok so china comes up with 295 bilion extra us dollars , so they just throw it away according to you .. . What? Of course they don't throw it away. It ends up in their reserves (either due to US buyers needing Yuan, or Chinese sellers accepting dollars but wanting Yuan). according to you everyone just goes to the foriegn exchange before they buy things in another country . .. so if 295 billion dollars exchanged into chinese yen equalling the deficit in trade .. so we can buy things from chinese companys .. now those dollars have to be honored by the united states treasury..,we didnt give them gold for those yaun .. we gave them debt notes . No, they have dollars, they can spend them as they see fit. There is no "redemption". . the us dollar promisary note ..and the chinese says i want to redeem your debt notes ..and we dont have the foriegn reserves ..what do they do .. they run up a trade deficit .. and our govt owes that money to china .. its not a forgiven debt .. why do you think we owe china so much money .. Because they take that money and buy US Treasury bonds with it, i.e. loaning us back the money we spent on their products. The $1.2T we "owe" China is in US Treasury bonds that China (in large part) purchased with the excess funds from our trade imbalance. Edited February 3, 2013 by makecents Link to comment Share on other sites More sharing options...
skitealwedrop Posted February 3, 2013 Report Share Posted February 3, 2013 What reserves could the CBI have based on the fact that the Iraqi's trade with USD? We are all aware of that fact. I know that the Iraqi's have become dependent on our currency. That's the problem with Iraq. The US government shipped too many pallets. USD is their currency of choice. My concern is that the Iraqi's are trading with Iran and Syria with payment via USD. I would not trust the bastards in the sand pit. Link to comment Share on other sites More sharing options...
makecents Posted February 3, 2013 Report Share Posted February 3, 2013 (edited) Investopedia explains 'Trade Deficit' Economic theory dictates that a trade deficit is not necessarily a bad situation because it often corrects itself over time. However, a deficit has been reported and growing in the United States for the past few decades, which has some economists worried. This means that large amounts of the U.S. dollar are being held by foreign nations, which may decide to sell at any time. A large increase in dollar sales can drive the value of the currency down, making it more costly to purchase imports. Read more: http://www.investopedia.com/terms/t/trade_deficit.asp#ixzz2JnQqM8xM Just as I said, they can do anything they want with the dollars, like buy other currencies or buy their own currency on the open market. So indeed its bad for the US, but nothing is "owed" due to the trade deficit, Its the fact that often what China does is lend the money back to the US by buying US Treasure bonds. Of course selling off lots of US Bonds or cash would tend to lower the price and be bad for China as well, so neither country wants that to happen. Edited February 3, 2013 by makecents Link to comment Share on other sites More sharing options...
dontlop Posted February 3, 2013 Report Share Posted February 3, 2013 Just as I said, they can do anything they want with the dollars, like buy other currencies or buy their own currency on the open market. So indeed its bad for the US, but nothing is "owed" due to the trade deficit, Its the fact that often what China does is lend the money back to the US by buying US Treasure bonds. The debt to China is in fact far more dependent on the trade deficit, which should be the main concern for those troubled by this debt. •The basic logic is straightforward, the trade deficit with China is the mechanism through which China obtains the dollars it needs to buy U.S. government bonds or any other dollar denominated asset. •China is in a position to buy large amounts of U.S. government bonds while most other countries are not, because most other countries are not running large trade surpluses There is no special importance to the fact that China’s government is buying government bonds, as opposed to any other asset. •If China holds $2 trillion in U.S. government bonds then the interest on these bonds is paid out to China rather than people in the United States. In that sense it can be seen as a drain on the U.S. economy. •However if China were to sell its $2 trillion in bonds, and instead buy $2 trillion of stock in U.S. companies then the dividends and capital gains from this stock would go to China instead of to people in the United States. This would also be a drain on the U.S. economy. Link to comment Share on other sites More sharing options...
keepmwlknfny Posted February 3, 2013 Author Report Share Posted February 3, 2013 What reserves could the CBI have based on the fact that the Iraqi's trade with USD? We are all aware of that fact. I know that the Iraqi's have become dependent on our currency. That's the problem with Iraq. The US government shipped too many pallets. USD is their currency of choice. My concern is that the Iraqi's are trading with Iran and Syria with payment via USD. I would not trust the bastards in the sand pit. Just talking about the foreign currency reserves which they predict will be over 100 billion by years end......it consists of mostly USD but there are others included...... Link to comment Share on other sites More sharing options...
sandyf Posted February 3, 2013 Report Share Posted February 3, 2013 thanks keep.....plus one for the record my greatest fear is a new currency. I fear that we will not have a trade in period. Not sure if that is likely, but that seems to be such a worry that I can not shake. You have every right to be concerned, in the event of an RD we could face total loss. Below is extracts for the Zambia RD technical guidelines. All reference to exchange is based on 'in country and if you notice the change in code would stop international transactions. I am not saying this will happen but is no good to bury your head in the sand. 7.2 The ISO Code of the Kwacha The International Standardization Organization (ISO) provides international standard codes (ISO 4217) to identify every currency in the international market. The ISO Currency code prescribes a three letter structure. The current currency code for Zambia is ‘ZMK’, where the letters ‘ZM’ stand for the country code for Zambia and ‘K’ stands for, ‘Kwacha’. Any modification to a currency requires a permanent change to its ISO code. Therefore, effective 1st January 2013, the new alphabetic ISO Code for the Zambian currency will be ZMW, where the letter ‘W’ represents the rebased Kwacha. The letter ‘W’ being the second character in the Zambian currency name ‘KWACHA’. This code has a numerical equivalent – also three digits – used for the registration of specific operations such as credit cards. The current numeric code for Zambia is 894. The new numeric code will be 967 and also becomes effective on 1st January 2013. Table 1: ISO Code 4217 for Zambia Current Code New Code Alphabetic ZMK ZMW Numeric 894 967 The alphabetic and numeric currency codes, ZMK and 894 respectively will no longer be in use effective 1st January 2013. The currency code is used primarily to record financial settlements in international and domestic payment systems. Therefore with effect from 1st January 2013, all transactions in Zambian Kwacha in these systems will be expressed as the rebased currency ZMW. 7.6 Exchange of Banknotes and Coins All stakeholders will be able to exchange cash holdings of the old banknotes and coins for the rebased currency over the counter at commercial banks and other designated institutions from 1st January 2013. The exchange of old notes and coins for the rebased currency will be FREE of CHARGE for all stakeholders. 7.6.1 Over the Counter Limits The exchange of old notes and coins over the counter will be limited to an amount of K25million (K25,000 rebased currency) per individual transaction. The commercial banks will still be required to observe Anti-Money Laundering Directives. 7.6.2 Transition Phase The period from 1st January to 30th June 2013 has been designated as the transition phase during which both the old and rebased currencies will circulate simultaneously. During the transition phase, goods and services may be paid for using both currencies, as long as the equivalences are observed. Effective 1st July 2013, simultaneous circulation of currencies will cease and the old currency shall not be accepted for the purchase of goods and services. 9 7.6.3 Post Transition Phase Commercial banks shall continue to exchange old banknotes and coins for the rebased currency for their clients and non-clients. In so doing, commercial banks will still be expected to comply with Anti- Money Laundering Directives. The exchange of the old currency for the rebased currency in designated exchange centers will continue for 12 months (until 30th June 2014). Thereafter, exchange will only take place at the BOZ as below: a) Exchange at Bank of Zambia and Commercial Banks Effective 1st July 2013 to 30th June 2014, stakeholders shall exchange old currency for the rebased currency at BOZ, commercial banks and designated agents. Exchange at Bank of Zambia Effective 1st July 2014 to 31st December 2015, stakeholders shall exchange the old currency for the rebased currency exclusively at BOZ. The old currency, consisting of banknotes and coins, shall cease to be legal tender after 30th June 2013, but shall be accepted for exchange purposes only. 2 1 Link to comment Share on other sites More sharing options...
makecents Posted February 3, 2013 Report Share Posted February 3, 2013 The debt to China is in fact far more dependent on the trade deficit, which should be the main concern for those troubled by this debt. •The basic logic is straightforward, the trade deficit with China is the mechanism through which China obtains the dollars it needs to buy U.S. government bonds or any other dollar denominated asset. •China is in a position to buy large amounts of U.S. government bonds while most other countries are not, because most other countries are not running large trade surpluses Finally, that is correct. Note nothing is owed to anyone just due to the trade deficit. There is no special importance to the fact that China’s government is buying government bonds, as opposed to any other asset. Of course it is important. That is why we OWE them money, its principal and interest on the bonds we are paying off. They are loaning us the money we paid them for goods. If they just bought say commercial real estate (in the US or anywhere) this would not result in the US owing China. 1 1 Link to comment Share on other sites More sharing options...
fastarnie Posted February 3, 2013 Report Share Posted February 3, 2013 I wonder how much of the funds that the EU release will be reserves, and how much that total is? The way this is all boiling down is they're pullin somethin out of their shorts, so we wait. Link to comment Share on other sites More sharing options...
boomer113189 Posted February 3, 2013 Report Share Posted February 3, 2013 iraq will get a new currency that is a fact. the only thing we don't know is when it will be released Link to comment Share on other sites More sharing options...
SnowGlobe7 Posted February 3, 2013 Report Share Posted February 3, 2013 Do we really want to see what they can pull out of their shorts?????? 1 Link to comment Share on other sites More sharing options...
boomer113189 Posted February 3, 2013 Report Share Posted February 3, 2013 Do we really want to see what they can pull out of their shorts?????? lol Link to comment Share on other sites More sharing options...
fastarnie Posted February 3, 2013 Report Share Posted February 3, 2013 Do we really want to see what they can pull out of their shorts?????? Yep, cause I'm hopeful it's a higher rate than what the rules of economics allow. Link to comment Share on other sites More sharing options...
keepmwlknfny Posted February 3, 2013 Author Report Share Posted February 3, 2013 I wonder how much of the funds that the EU release will be reserves, and how much that total is? The way this is all boiling down is they're pullin somethin out of their shorts, so we wait. :)/> If its funds from the DFI it will belong to the govt.....so we can safely assume that will not go into reserves. Havent read a whole lot about these potential funds, so we will have to wait and see where they are from. It will make a big difference on where it goes! Do we really want to see what they can pull out of their shorts?????? LOL....i think i just threw up in my mouth a little bit..... Link to comment Share on other sites More sharing options...
fastarnie Posted February 3, 2013 Report Share Posted February 3, 2013 If its funds from the DFI it will belong to the govt.....so we can safely assume that will not go into reserves. Havent read a whole lot about these potential funds, so we will have to wait and see where they are from. It will make a big difference on where it goes! LOL....i think i just threw up in my mouth a little bit..... I thought the DFI funds were held in N.Y. Link to comment Share on other sites More sharing options...
keepmwlknfny Posted February 3, 2013 Author Report Share Posted February 3, 2013 I thought the DFI funds were held in N.Y. Yea there are funds from that being held in NY, but if Im not mistaken, i think they also spread some out in other places. I could be wrong but i think i saw a glimpse of an article talking about the EU funds being released and i thought it mentioned DFI..... Link to comment Share on other sites More sharing options...
Recommended Posts