Let us have a THINK

[rockfl9]

On ‎4‎/‎26‎/‎2019 at 3:24 PM, rockfl9 said:

At least a few Dinarians are questioning that MAYBE the current exchange rate is what it should be !  When Shabibi tried to change it to 1166  IT didnt hold and had to go back to 1180 and now is 1190. HMMMMM!  

Iraq has more needs than money , WHY would it plan to give it away. 

A look into the future: 

The population is increasing at a greater rate than income.

More are joining the ranks of unemployed adding to welfare costs.

Not enough safe water.

Not enough electricity.

Poor sanitation.

Need to import more food.

A financial death-spiral.

 

NOW wouldn't you think that IF the RV of the dinar would give Iraqis MORE purchasing power and raise the standard of living that the CBI/MOF/GOI would not just DO IT !   I am sure they would .. BUT there must be a problem there.  There is at least one,  there would have to be a corresponding increase in oil revenues to cover the increase .  BUT those revenues could only increase a few percentage points a year.

There is no magic,  Just to double the exchange rate would require at least double the oil production !  Given the time to drill a well lay the pipes and expand shipping capacity it would take years . 

[rockfl9]

11 minutes ago, rockfl9 said:

NOW wouldn't you think that IF the RV of the dinar would give Iraqis MORE purchasing power and raise the standard of living that the CBI/MOF/GOI would not just DO IT !   I am sure they would .. BUT there must be a problem there.  There is at least one,  there would have to be a corresponding increase in oil revenues to cover the increase .  BUT those revenues could only increase a few percentage points a year.

There is no magic,  Just to double the exchange rate would require at least double the oil production !  Given the time to drill a well lay the pipes and expand shipping capacity it would take years . 

OH some dinarians  would say just change the rate to a dollar and make it International ,  now ALL the IQD  in the world would be worth a dollar . Take it to a bank and exchange , NO extra oil is needed !  Easy-peasy. 

[caz1104]

LOL......talking to ones self

[rockfl9]

On 5/1/2019 at 5:16 PM, caz1104 said:

LOL......talking to ones self

I do my best THINKING when talking to my self.

Like just the other day I asked myself " What would happen if they just increased the rate 100%  "  ( only a double ) Self said " Well at the next auction they would only get half as many dinar "   .  Then they could just put in twice the number of dollars to make up.  YEAH.  And the next day and the next until they ran out of dollars .  THEN WHAT ?  Everything stops because we know the country runs on dollars.  Well maybe not ,  The CBI could just print more dinar,  Witch is what bankrupt countries usually do !

Then self said "  CBI bankers arent that stupid they know that would happen and never change the rate 100% at one time ... Then I went to sleep.

[caz1104]

 DITTO for me, I fell  asleep right before I read ur post....very therapeutic

[rockfl9]

I wonder if anyone , except me has given serious thought about how a 10 cent RV would happen without trashing the Iraqi economy?

JUST THINK . The smallest note today is a 100. At a 10 cent RV that would be equal to $10. How would any merchant make change ?

They would need to new notes from 50 down to at least a 1/10th   dinar  AND they would have to be ready and available on day one!

HOW could they do this without pre-disclosing the RV ?  Hundreds of people would have to be involved . Would be no way to be sure to keep it a SECRET.

 

 

[caz1104]

NOPE...haven't givin it one thought at all. Just like the average Iraqi I'm sure could give a rats arse about our economy

[rockfl9]

On 5/23/2019 at 4:03 PM, caz1104 said:

NOPE...haven't givin it one thought at all. Just like the average Iraqi I'm sure could give a rats arse about our economy

I was sure you wouldn't care , but I said an Iraqi would care.   The CBI/MOF would care.  An RV of more than one cent would need a load of small notes , the ones that the CBI cant justify printing.  The  mythical 1:1 would essentially require a total replacement of the currency. Every note that now exists would be too valuable to use in normal commerce !!!   

This RV con is so ridiculous .  I do not understand how an  educated person would still believe in   IT ??????

[titan04]

You have made your point now just Go Away!!

[caz1104]

On ‎5‎/‎25‎/‎2019 at 3:12 PM, rockfl9 said:

I was sure you wouldn't care , but I said an Iraqi would care.   The CBI/MOF would care.  An RV of more than one cent would need a load of small notes , the ones that the CBI cant justify printing.  The  mythical 1:1 would essentially require a total replacement of the currency. Every note that now exists would be too valuable to use in normal commerce !!!   

This RV con is so ridiculous .  I do not understand how an  educated person would still believe in   IT ??????

that's not what you said...so whatever.

[rockfl9]

On 5/23/2019 at 4:03 PM, caz1104 said:

 

In fiscal terms a STRONG CURRENCY is one that has a stable value , i.e. doesn't make large sudden changes.  Like the USD and Euro.  Could also include the IQD if it were openly traded.

The CBI and MOF have always stated that they wanted a stable exchange rate.   

[rockfl9]

On ‎5‎/‎25‎/‎2019 at 6:14 PM, titan04 said:

You have made your point now just Go Away!!

But I have more points to offer !

Take the thought that the IQD could RI to a $3+ rate.  That was a different currency for a totally different country..  The Quaiti RI was the same country government restored AND the same central bank. 

Then there is the 1:1 myth.

WHO would give a dollar for a dinar ???? IF the CBI declared that the dinar was equal to a dollar (in Iraq ) , Iraqi's would go crazy to buy dollars.  Why , because the dollar would always be worth a dollar ,  It would be like an insurance policy.

Then there is the Guru thing !  THEY are all liars some maybe better liars... But THEY don't actually know ANYTHING , certainly don't have any contacts in Iraq. 

Iraq is an awkward situation, it still has both feet in the past.   It had a chance to develop as a modern country but it can't break free of the tribal heritage.  I must hand it to the Kurds though , In spite of being stiffed by Bagdad they are looking pretty good..

[rockfl9]

Every central bank has has two important objectives .. First , keep the exchange rate ( and the effect on domestic prices ) as stable as possible .  Given that WHY would it have any plan to increase or decrease the rate SUDDENLY.  Prices would become unstable. 

Second ,  to keep the country's confidence in it's banking system.  THINK , HOW  Is the CBI going to explain why it suddenly chose to bump up the rate by a large amount OVERNIGHT.  OH WE made a mistake or we just decided to do it because we thought it would BE NICE. Plus there would be no way to do it without maybe half of the citizens getting SCREWED !   Certainly would be a loss of confidence.

I don't know why it isn't clear.  There IS NO plan by the CBI to RV the dinar, PERIOD.  The RV myth is promoted by the GURU's who are at least indirectly supported  by the dealers to make money. 

It is obvious to me that to believe in the TV myth people must NOT have any understanding  of money  markets and currency systems.  AND they dont want to because it will kill the dream of becoming wealthy.  So they are easy prey to any cock and bull line the Guru's put out.

[rockfl9]

THINK.... The  call centers/880#s myth !  THE gurus want you to think the cash out process will be easy so you wont have do a lot of work and you will buy a lot of dinar ,,, An RV would have to be an unpredictable event why would a bank  plan to set up these centers years in advance , waste a lot of time and money.  They haven't and they would not until  needed .. Then there is the advice " dont let your dinar out of sight  "   AND the expectation to just take dinar in and walk out with dollars !   RUBBISH ! Like a foreign check you would make a DEPOSIT and there would be a HOLD until the bank gets the cash!   Banks really dont like to process physical currency and unless you are an established customer they will refuse to do it..  Just more Guru POOOO.  Be prepared to do a lot of leg work . 

Next is the expectation that if the CBI raises the rate ( IN COUNTRY ) that trading over FOREX will follow .  THAT is not a given. The FOREX is a supply/demand trading operation. It will happen ONLY if there is adequate DEMAND AND enough traders think it is worth the risk.