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CBI and IMF agree on exchange rate


rockfl9
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Dontlop,

 

LOL!!! I personally don't give a rats Arse what anyone says........................it's all speculation/guess work or BS. I let the blowhards who think they know something put forth jibberish. Last I looked NO ONE has a true grasp on anything...................it sure as heck doesn't stop em from blowin smoke up folks butts tho. I'll sit back and watch all you self proclaimed experts explain something that has no answer(as of yet)..............and laugh. Us dumb hicks sure as heck can't think for ourselves and need the massive ego boys/girls to splain things to us-LOL.

 DL :: You certainly  learned a lot in the last 6 months... No one , gurus included, have any idea how a significant ( e.g.greater than a tenth of cent) RV could possibly happen . Let alone when . The only ones that will make a profit are the dealers and they dont ever want to see a lop/rv or they are out of business.

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We don't know how many dollars will be deposited in the cbi since the new policy's

They will be getting the equivalent of dinar for their foriegn currency deposits

Sounds like de-dollarization coming to Iraq

They deposit their dollars and when they by externally those buys will be met with dollars from the cbi

This could be a major collection of dollars from the streets

Legal tender laws could mean only dinars will be used in iraqi markets

They seem to be sliding away from multiple currencys in iraq and are headed to dinar market economy

I always thought the streets were the secret reserves waiting to be called in and added to the reserves

Could be a hundred billion dollars headed to the cbi

Could be 500 billion if maliki and barzani and talibani and mutlag and the rest all turn over their foriegn currency for dinar

We will all be watching this unfold

They could end up with a 3 or 4 dollar dinar after they delete 3 zeros

Or they could end up with a penny as it stands

We do not know I'm including you in the we part

The first step was when the govt said all govt payrolls and contracts will be paid in dinar

It looks like they are adding to that with the latest developments

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Legal Tender Act passed, Feb. 25, 1862

On this day in 1862, Congress passed the Legal Tender Act to finance the Civil War. It allowed the federal government for the first time to print paper money, called greenbacks, that was not backed by an equal amount of gold or silver.

As the government’s hard currency reserves dwindled, the legislation created a new path for it to pay its bills. By obliging creditors to accept the greenbacks at face value, the legislation also energized the economy even as Congress kept inflationary pressures in check by enacting an income tax and steep excise taxes.

The act legitimized paper currency in “payment of all taxes, internal duties, excises, debts, and demands of every kind due to the United States, except duties on imports, and of all claims and demands … and [it] shall also be lawful money and legal tender in payment of all debts, public and private, within the United States.

By the time the war ended in 1865, the government had printed nearly $500 million in greenbacks — the equivalent of more than $7 billion today.

In 1870, the U.S. Supreme Court, in a 4-3 ruling, declared paper currency to be unconstitutional. The majority opinion, written by Salmon Chase, the chief justice, found that Congress had violated Fifth Amendment guarantees against deprivation of property without due process of law. As the wartime treasury secretary under President Abraham Lincoln, Chase had played a key role in authorizing greenbacks.

On the same day that the court ruled, President Ulysses S. Grant nominated two candidates to fill judicial vacancies. They were confirmed by the Senate. At its next session, the tribunal agreed to revisit the greenback issue. It reversed its earlier decision, in a 5-4 ruling that held the Legal Tender Act of 1862 to be a justifiable use of federal power during a national emergency

Read more: http://www.politico.com/story/2014/02/this-day-in-politics-legal-tender-act-passed-feb-25-1862-103857.html#ixzz3QpNQVfXR

It looks like the usa did it when they were in trouble and at war to finance their way out of a mess

Printed money up , just like that

Edited by dontlop
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So where is iraq in the scheme of things

Are they where the usa was in 1862

Ready to make things work

As the government’s hard currency reserves dwindled, the legislation created a new path for it to pay its bills. By obliging creditors to accept the greenbacks at face value

Kinda looks like it

I wonder if the collection of the foriegn currency in iraq will help change that face value

And does it need to be backed by an equal amount of assets

In the USA it didn't in 1862

I wish I could put some backround music to this

Like the stuff I'm hearing in this movie on my surround sound

Like a suspense type sound

This is going to make for a great movie like rockfla says

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The greenback sure wasn't a reserve currency in 1862 yet it wasn't backed equally to the value of the greenback

Imagine that

The green back was good for all transactions in the USA and if you were importing you coukdnt use the greenback to pay your duties on " imports "

So they had to use gold or silver to import and gold or silver to pay the duties on imports

So will iraq use dollars for imports and pay tariffs on imports in dollars also like the usa did with imports using gold or silver as the hard currency for trade and duties

Or euros of course what ever hard currency they choose for importing

Edited by dontlop
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  • 1 month later...

The rate is 1166 to 1 no matter how much spin the dinar community wants to put on it.  If and when the CBI issues new currency without the three zeros, which incidentally, is exactly what they are saying they will do, the exchange rate will change to .86 simultaneously.  You can't do it any other way.  I will be a happy man when ALL dinarians finally understand this simple fiscal fact.  The ONLY way you can drop the three zeros off the bills is by doing a currency re-print with a new ISO code.  1000 dinars will become 1 dinar.  The exchange rate will go from .00086 to .86 simultaneously with the new currency issue.

I understand what you (and many other people are saying) but it just is not factually true.  Rather than engaging in this direct debate I will ask a different question that relates in principal to the idea you're discussing:

 

Question:  If a publicly traded company on the NYSE reports an increase in net profits of 1000%, does this cause the stock value to rise?  Why?

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What is the real exchange rate today? I think it is closer to 1220. Funny things with the tariffs . If a importer applies for an exchange on a tariffed item the bank will deduct the tariff and credit to the GOI! Not waiting 60-90 days for the tax? Much different from a sales tax. This plus increasing unemployment ,the economy will slow down,.

This certainly is a government hurting for cash!

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I understand what you (and many other people are saying) but it just is not factually true.  Rather than engaging in this direct debate I will ask a different question that relates in principal to the idea you're discussing:

 

Question:  If a publicly traded company on the NYSE reports an increase in net profits of 1000%, does this cause the stock value to rise?  Why?

Profit is Income / Expenses! Iraq,s Expenses are greater than Income by 25%. How does that relate to the dinar value?
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  • 2 weeks later...

Profit is Income / Expenses! Iraq,s Expenses are greater than Income by 25%. How does that relate to the dinar value?

Well, from a financial perspective only, profit = revenue - costs.  The point of the question is to highlight the incorrect mindset that many people in the LOP tank have which is something like this:  If a company increases profits, then its stock price will rise.  This is incorrect, stock price and profits have nothing to do with the value of a stock.  The same holds true for currencies.  The LOP crowd believes it is "impossible" for the dinar to RV because of all of these rules relating to the money supply, when in fact those rules do tend to apply...however they are not mandatory.  If a country were to all of a sudden 2x or 3x their money supply, would the value of their currency decrease by 50%+?  The answer is maybe.  It all depends on what happens to the DEMAND for the currency after those changes are projected to the world.  Just like a company on the NYSE reporting massive increase (or decrease) in profits.  

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Investors use the price-earnings ratio of a stock to determine relative value compared to companies in similar industries. So if the if the earnings were to increase the price will increase to balance the equation.

A similar thing happens with a currency IF it is in a FLOATING exchange regimen. But here the investor would look at changes in the GDP-Debt ratio primarily.

With a PEGGED currency Only the central bank's reserves/ liabilities ratio matters. The assets of the country generally have little effect on the currency.

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  • 2 weeks later...

Investors use the price-earnings ratio of a stock to determine relative value compared to companies in similar industries. So if the if the earnings were to increase the price will increase to balance the equation.

A similar thing happens with a currency IF it is in a FLOATING exchange regimen. But here the investor would look at changes in the GDP-Debt ratio primarily.

With a PEGGED currency Only the central bank's reserves/ liabilities ratio matters. The assets of the country generally have little effect on the currency.

Again, while what you're saying is technically true, it is not a hard rule.  There is no mandate that if earning were to increase the price will increase (it would actually be free cash flow by the way, not revenues), it all has to do completely with supply and demand of investors purchasing/selling stock.  There is no computer system somewhere that calculates and sets stock prices, there is no law that governs how the performance of a company dictates its stock price, it is ALL a by-product of investor behavior.  There have been many instances throughout history where stocks have risen and fallen with no seeming correlation to actual performance of a company.  If a company reports increased earnings, but a news article comes out that causes people to doubt the long term potential of the company (regardless of it is factual or not), and they sell off their shares the price will fall.  

 

Now in the event of a currency peg, what you are saying is true.  But when a currency is placed into the free market, the only thing that governs its price is simply what people are willing to pay for it--period.

Edited by bigzac
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