Saleh claims GOI can meet payrolls for 3-5 years !

[EverCurious452]

NO ONE KNOWS WHATS GOING TO HAPPEN 

More precisely: no one knows what decisions will be made in Iraq (or any other country for that matter).  But that does not mean they can do ANYTHING.  As far as I can tell the exchange rate for a pegged currency can not exceed the limit of the money supply divided by the reserves.  For Iraq that means that they have somewhere around 15% or so headroom.   So no matter what they decide, they can't go higher than that.  Add in various fudge factors and inaccuracies and what not and maybe they could go 30% or be really generous and say 50%.  But the huge factors (1,000% or 100,000%) tossed around for the RV seem like total fantasy to me.   Do you see things differently?  If so I'd love to hear how you think it could (not will but just could) happen.

[Texstorm]

EC your name gives you away ! You are a LOPSTER ! You should be in the tank permanently. Either you are a believer or not and or  you don't have anything better to do in your life that to F..... with DVRV'ers. According to the WB the US fit's into all the guide lines as a donor nation, not to mention that we have 5,000 other reasons on the ground at this moment. Iraq has been modeled after the US Constitution from the bottom up. I believe that Iraq will not be able to disengage from the US Petro Dollar for many many years to come. Once the security situation is under control you will see a flood of investors , given the fact that the investment laws being passed will lessen the risk. The price per BBL will rise again and Iraq will be rolling in the $ at a phenomenal rate. I believe that the US will accept their currency enter into a fair trade agreement. Also the US will be responsible for Iraqs armament and training. That's why Malaki is gone he tried to do a back door deal with the Russians and he lost his support of the USA. Iraq will succeed for it is written !  

[EverCurious452]

EC your name gives you away ! You are a LOPSTER ! You should be in the tank permanently. Either you are a believer or not and or  you don't have anything better to do in your life that to F..... with DVRV'ers. According to the WB the US fit's into all the guide lines as a donor nation, not to mention that we have 5,000 other reasons on the ground at this moment. Iraq has been modeled after the US Constitution from the bottom up. I believe that Iraq will not be able to disengage from the US Petro Dollar for many many years to come. Once the security situation is under control you will see a flood of investors , given the fact that the investment laws being passed will lessen the risk. The price per BBL will rise again and Iraq will be rolling in the $ at a phenomenal rate. I believe that the US will accept their currency enter into a fair trade agreement. Also the US will be responsible for Iraqs armament and training. That's why Malaki is gone he tried to do a back door deal with the Russians and he lost his support of the USA. Iraq will succeed for it is written !  

As I said in the post just previous to yours, I don't see how a gigantic boost in the exchange rate is possible, so I'm curious as to why others do not see this as a problem.  You did not address it either.  If the things you state were to come to pass, and they might, that will be good for Iraq's economy and may put some upward pressure on the exchange rate (that the CBI might try to resist if they can) but nothing remotely close to the sort of thing posited for an RV as the term is used here.

[Texstorm]

RED RUBIES WILL GET YOU BOILED  ALIVE ................................LOL                     KEEP IT UP !

[rockfl9]

EC dont spend a lot of band width haggling with Shabs, Caz and Texstorm.  They arent dumb. They've been given the facts many times . They know there is a boogieman under the bed but until they bend over and look its best to ignore and go on as if it isn't there.

It's not that they can explain an rv. They realize they can't  But will simply go on believing the myth . Because it makes them happy.

[EverCurious452]

It's not that they can explain an rv. They realize they can't  But will simply go on believing the myth . Because it makes them happy.

Yea I'm sure a lot of that does go on.  Given how clear cut it is (or at least seem to me) its an amazing case of cognitive dissonance 

[Texstorm]

EC my disdain for antagonist who arbitrary interjects a line of illogicalness negates the balderdash of your intelligence. To put it plainly " If I only had a brain" !

[EverCurious452]

EC my disdain for antagonist who arbitrary interjects a line of illogicalness negates the balderdash of your intelligence. To put it plainly " If I only had a brain" !

If my point about the limits of the exchange rate for a pegged curency is so illogical it should be trivial for you to show that, but you do this instead.

[Texstorm]

There is nothing trivial about Iraq ! The Sumerians and the Akkadians In an syntactic, morphological, and phonological convergence of the third millennium "Sprachbund" were forgotten until the 19th century when Assyriologist began deciphering the cuneiform inscriptions. What do you not understand about Mesoptamia ? Which begins in the Lower Paleolithic period until the Achaemenid Empire ? Do you not read scripture? Do you have any evangelical knowledge of Bablon ? I'm amazed by those who proclaim that they have the antiphon when in fact they don't have a clue.

[EverCurious452]

There is nothing trivial about Iraq ! The Sumerians and the Akkadians In an syntactic, morphological, and phonological convergence of the third millennium "Sprachbund" were forgotten until the 19th century when Assyriologist began deciphering the cuneiform inscriptions. What do you not understand about Mesoptamia ? Which begins in the Lower Paleolithic period until the Achaemenid Empire ? Do you not read scripture? Do you have any evangelical knowledge of Bablon ? I'm amazed by those who proclaim that they have the antiphon when in fact they don't have a clue.

Ohhh-kay then.  I have no idea what any of that means.   I will take it that your answer to the question of how can the exchange rate for a pegged currency exceed the ratio of the central bank's foreign reserves to the money supply is:  "a miracle occurs" and that this absolves you of any further consideration of the matter.  ok, got it.  hope that works out for you.

[EverCurious452]

Actually I should have said "I'd like to hope that works out for you, but I know it won't so that's hard to do".

Edited September 7, 2015 by EverCurious452

[Texstorm]

There is nothing trivial about Iraq! The Lower Paleolithic period was documented from Mesoptamia in the 3rd millennium BC, to the cuneiform records that ends with the Achaemenid Empire. In the establishment of the Caliphate in the late 7th century AD , the region became known as Iraq. Do you not read scripture? Do you not think that Babylon will rise again? Make no mistake this is an evangelical experience in the happening, we are literally witnessing scripture unfold before our very eyes. I am not making assumptions, hypothesis or a supposition! " what's in your wallet" a get out of free hell card !

[SocalDinar]

Jeffrey Dahmer had one of those cards . He ate people and still made it in.

[Texstorm]

Thanks for ruining my breakfast SD ! Coffee came out my nose.

[caz1104]

Actually I should have said "I'd like to hope that works out for you, but I know it won't so that's hard to do".

 So now you can predict the future but laugh at those do the same.........typical LOPster mentality. I know for I am -LOL

[caz1104]

A one way crystal ball if u will-lol

LOPsters, the gift that keeps on a givin!!!!

[EverCurious452]

 So now you can predict the future but laugh at those do the same.........typical LOPster mentality. I know for I am -LOL

I am not laughing at anyone (its you that tacks an LOL on the end of pretty much anything).

I am not predicting the future either, I am only saying that its not true that "ANYTHING" is possible.  I have laid out a very simple constraint that I think limits what Iraq CAN do.  So if you are counting on Iraq doing something that is not possible, then that is not going to work out.

 

Do you agree that the CBI can not raise the rate past the limit of the size of their reserves divided by the size of the money supply or not Caz?

[Texstorm]

The truth is that there are only a small amount of currencies that are pegged to the US dollar and Iraq is one of them. Iraq so far has decide to use a pegged exchange rate that is set and and maintained artificially by the government. This rate does not fluctuate in trade day, and may be reset on a particular date know as a "REVALUATION DATE ! ". A Government of emerging market countries often do this to create stability in the value of their currency. In order to keep the pegged foreign exchange rate stable, the government of the country must hold large reserves of the currency  to which country that the currency is pegged in order to control changes in supply and demand. Do you not think that in all of these years of auctions, that Iraq hasn't got a dollar or two ? 

[caz1104]

I am not laughing at anyone (its you that tacks an LOL on the end of pretty much anything).

I am not predicting the future either, I am only saying that its not true that "ANYTHING" is possible.  I have laid out a very simple constraint that I think limits what Iraq CAN do.  So if you are counting on Iraq doing something that is not possible, then that is not going to work out.

 

Do you agree that the CBI can not raise the rate past the limit of the size of their reserves divided by the size of the money supply or not Caz?

 

 

Do you, or have you ever own Dinar? And what was the last cartoon name you used? 

[caz1104]

Do you, or have you ever own Dinar? And what was the last cartoon name you used? 

 

 

Also if you believe something is "impossible" .......why worry your head about it? You've made up your mind. Why should you care or argue with others that don't have the same belief. Life is full of differing opinions...........if not vested why should you care?

Edited September 8, 2015 by caz1104

[rockfl9]

Texstorm:  You seem to be confused between the CBI currency reserve and the Iraqi treasury. But you are not alone! The proceeds of the auctions go into the treasury, not the CBI reserves. The CBI only gets the commission , which it normally uses for operating expenses. The two accounts are separate. But news articles sometimes refer to the treasury as a reserve.

The IQD is a "pegged currency by design so when the CBI issues say a new 1000 dinar note  it is required to put an equivalent value into the reserve account .  This gives the exchange rate stability.

The CBI cannot remove dinar received in the auction process It turns it ALL over to the MOF ( The Treasury ) to fund the government. It goes back into circulation. In the past there may have been more money than actually needed, but it eventually got wasted on projects that usually went bad.

[rockfl9]

Texstorm:  I should add that exchange rate peg is only good to value the currency at the time NEW currency is released. Because the reserve account may contain other than USD The peg may not track exactly. Typically the CBI will balance  things as close as possible periodically.  If you look at the 2014 CBI annual  report , you will see that due to the loss in the gold and Euros that were in the reserve account the account was short about 800B IQD.   

[Texstorm]

Rock if the CBI wants to borrow from the treasury they can at anytime and in fact a plan is in motion right now to do that if the CBI wants to. As far as the reserve account being short that may not be so because the money actually can be transferred around within the government kind of like a shell game. The CBI can also print money and buy and store gold. I can certainly see how you would interpret the reserve account being short, but it could just as easily show right back up at a plus. 

[EverCurious452]

The truth is that there are only a small amount of currencies that are pegged to the US dollar and Iraq is one of them. Iraq so far has decide to use a pegged exchange rate that is set and and maintained artificially by the government. This rate does not fluctuate in trade day, and may be reset on a particular date know as a "REVALUATION DATE ! ". A Government of emerging market countries often do this to create stability in the value of their currency. In order to keep the pegged foreign exchange rate stable, the government of the country must hold large reserves of the currency  to which country that the currency is pegged in order to control changes in supply and demand. Do you not think that in all of these years of auctions, that Iraq hasn't got a dollar or two ? 

There are about a dozen pegged to the USD and fifteen or so pegged to the EUR.  The central bank does not have to keep "large reserves" it has to FULLY back its money supply.  This is what prevents runs on the banks.  What do you think would happen if the CBI announces "the new rate is 1 IQD per 1 USD, but of course we can only back 1/1000th of the money supply"?  Within that constrain, they can tweak the rate anytime they want.  Auctions net the CBI a very small spared, about 0.02% so no they have not gained much via the auctions, perhaps enough for their operating expenses.

Also if you believe something is "impossible" .......why worry your head about it? You've made up your mind. Why should you care or argue with others that don't have the same belief. Life is full of differing opinions...........if not vested why should you care?

I've stated it several times, I'm curious how people can ignore the clear constraint of reserves and the money supply.  Its very rate (I know of no other case actually) where people are speculating on an event which is mathematically impossible.  I find that interesting.  Why don't you just answer my question instead of questioning my motives?

[EverCurious452]

Texstorm:  You seem to be confused between the CBI currency reserve and the Iraqi treasury. But you are not alone! The proceeds of the auctions go into the treasury, not the CBI reserves. The CBI only gets the commission , which it normally uses for operating expenses. The two accounts are separate. But news articles sometimes refer to the treasury as a reserve.

This is not my understanding. The flow as I understand it is:

The MOF sells oil for USD, they take the USD to the CBI and exchange for IQD for their budget. This causes the money supply to go up and the reserves to go up by the same ratio.

Them retail banks buy USD with IQD at the auctions to serve importers (the total of the auctions matches the import totals). This causes the money supply and the reserves to both go down, again in lock step based on the exchange rate. Because the rate for the first exchange is 1164 and the 2nd is 1166 the CBI makes a tiny profit.

Differences in these two flows month to month is why the reserves and the money supply go up and down, but overall they  both go up if Iraq imports less then the dollar value they export, and they both go down if they import more than they export.  For most of the past few years they have had a trade surplus (e.g. in 2013 imports were about $60B USD and oil sales were about $70B USD).  With the huge drop in oil prices I'd expect this to be reversed, but haven't checked.