k98nights Posted April 8, 2010 Report Share Posted April 8, 2010 CBI sells $167m on Thur.April 8, 2010 - 10:46:56BAGHDAD / Aswat al-Iraq: The Central Bank of Iraq Link to comment Share on other sites More sharing options...
paj1985 Posted April 8, 2010 Report Share Posted April 8, 2010 am i thinking wrong here? but why are there auctions to sell the iraqi dinar,do they know it isnt gonna RV so make as much money on wortless notes as possible,some1 plz put me straightare iraq ****** off with investors or do they welcome it?. Link to comment Share on other sites More sharing options...
beau777 Posted April 8, 2010 Report Share Posted April 8, 2010 Hey paj1958 I asked that same qeustion about a year ago and I am still waiting for the answer. Link to comment Share on other sites More sharing options...
Kent Posted April 8, 2010 Report Share Posted April 8, 2010 am i thinking wrong here? but why are there auctions to sell the iraqi dinar,do they know it isnt gonna RV so make as much money on wortless notes as possible,some1 plz put me straightare iraq ****** off with investors or do they welcome it?.You may not like my answer, but I will offer one. When the currency is weak, but the foreign exchange rate is fixed, it gives Iraq the opportunity to increase their foreign currency reserves while continuing to dilute their own money supply. (think selling toilet paper). They have done a lot of that and it is one of the reasons the currency in circulation has gone from about 25Billion to about 25Trillion (figures vary slightly based on different news reports or if you are looking at the CBI site). In my opinion, the good news is that it allows them to support a much improved value based on the reserves they have saved in the process once they no longer operate under a 100% reserve policy. On the other hand, that behavior doesn't speak well for an RV which increases money supply in proportion to the RV. Effectively, it makes an RV that much more expensive.Did that make sense? Link to comment Share on other sites More sharing options...
deanthebean Posted April 9, 2010 Report Share Posted April 9, 2010 Why would they want to rv their worthless currency when they are making a killing selling it. Think about it, would you like to sell all of your junk or throw it all away and start over? I would sell all I can and make a pretty penny off of it and lmao. It’s going to rv real soon I have more to sell. Just like that old saying give a man fish he can eat for one day, teach him how to fish he can eat for the rest of his life.Just trying to keep it real. Later Link to comment Share on other sites More sharing options...
willie Posted April 9, 2010 Report Share Posted April 9, 2010 all money sales have to be exhanged for food and brought into the country they are not just storing US dollars do some research Link to comment Share on other sites More sharing options...
kevin21673 Posted April 9, 2010 Report Share Posted April 9, 2010 never rv when selling **** paper for gold, making to much money off of us believers Link to comment Share on other sites More sharing options...
paj1985 Posted April 9, 2010 Report Share Posted April 9, 2010 thanks kent makes sense m8 and willie thanks for your input but these forums are for asking these questions. but u answered my question all the same thanks. Link to comment Share on other sites More sharing options...
Kent Posted April 9, 2010 Report Share Posted April 9, 2010 all money sales have to be exhanged for food and brought into the country they are not just storing US dollars do some researchYa know, I'm not going to be able to find the article, but one just last month complimented Shibibi on increasing his foreign currency reserves from the sale of dinar. I think it may have been that last IMF report or one of the articles about it. I believe you are mistaken on the exchange of food or goods. CBI has been storing up foreign reserves and they sure haven't been getting it from the budget. Notice line 44 vs line 50 on http://www.cbi.iq/xl&wr/key%20financial.xls . Foreign reserves have been growing tremendously. It is how they have maintained thieir 100% currency reserve.That is also the best reason (IMO) why we can have confidence that the value will increase when Iraq is able to freely trade their currency. Few international currencies maintain anything close to a 100% reserve. That doesn't, however explain a 1,000x to 3,000x increase in value from a big RV. That takes a lot more "creative financing". Link to comment Share on other sites More sharing options...
paj1985 Posted April 9, 2010 Report Share Posted April 9, 2010 kent what do you expect it to RV at then coz these auctions and everything you explained above is no good for us surely? the dinar for food actually sounded good to me but it appears this isnt the case. Link to comment Share on other sites More sharing options...
Kent Posted April 10, 2010 Report Share Posted April 10, 2010 kent what do you expect it to RV at then coz these auctions and everything you explained above is no good for us surely? the dinar for food actually sounded good to me but it appears this isnt the case.paj, watch out - I will give you a $3 answer to your two-bit question. I am not one of the more optimistic on the site (note avatar). I think a modest RV is possible (Adam's old ten cent figure being high). On the other hand, I think a return of 150% from a lop and float or lop/small RV& float is a likely down side (still good on investment terms but it makes you bash bate in this group). There is so much upside possibility if I am wrong it is obscene, so I wait and hope like everyone else. IMO you have to believe all the news is a smokescreen and have more confidence in the rumors than in the news to believe a large RV is probable. I hope my understanding of economics is wrong about the money supply issue, but no one has ever given a good explanation of how the economics, money supply and inflation would work on a large RV and in my understanding a drastic increase in money supply in a country causes inflation unless the economy grows in proportion. When I compare to neighboring, mature, stable, oil rich Saudi Arabia which as an economy less than 5 times that of Iraq and look at a money supply increase of 1,000-3,000 times the outcome is totally irrational. Even if you double or triple the Iraq economy and then change the present 100% currency reserve policy to 10% and buy down the money supply from the reserves, a 1,000 times return seems outlandish and totally unstable. The foundational formula is M x V = GDP. (Money Supply times Velocity of money or the "turn" of money in the economy equals GDP). Inflation is simply too much money chasing not enough stuff. If you increase money, without increasing stuff that can be bought you get inflation (price increases on stuff). Over and over you see the CBI indicating their concern over controlling inflation and everyone ignores that and says "go RV". They look at statements about "removing 3 zeros from the currency" and say "they really meant remove three zeros from the rate". An RV increases money supply in the same proportion as our return on investment!Again, I hope for better, but am prepared for the worst. At least that clarifies the minority position a little. Link to comment Share on other sites More sharing options...
tampa1000 Posted April 10, 2010 Report Share Posted April 10, 2010 With that volume someone must know something we don't, what's going on??? Link to comment Share on other sites More sharing options...
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