Guest views are now limited to 12 pages. If you get an "Error" message, just sign in! If you need to create an account, click here.

Jump to content
rockfl9

Let us have a THINK

Recommended Posts

EC452..  you are close.   There are two "reserves " in the CBI. One is the banks stash that supports the exchange rate . Whenever the bank issues more notes it is supposed to put an amount into that account.  That money belongs to the CBI   .Then there is the Iraqi Treasury, Oil money goes in and expenses take out. That is money the bank manages for the GOI.  The money to buy dinar comes from this account.

IF the bank buys back any dinar it will deduct an equivalent  amount from the reserve account. 

I hope everyone understands that Most of that money and gold is NOT in Iraq. That would be inefficient and risky.  

SD.  You are welcome to comment any time . If you like we  could make you an "Honorary Lopster"

The shortage of small notes will continue to be a problem , so many of them are needed to make change they wear out quickly and are costly to replace.  Thus the strategic need to RD and make coins practical.

  • Like 1
  • Upvote 1
  • Downvote 1

Share this post


Link to post
Share on other sites

You could be right, though If the GOI has an account at the CBI, its irrelevant to the exchange rate and thus an RV.  What draws the reserves down is importers exchanging dinars for dollars to buy foreign stuff and what brings it up is oil dollars being exchanged for dinars to pay the GOI's budget.  That's all that mattes as far as I can tell.

  • Upvote 1
  • Downvote 1

Share this post


Link to post
Share on other sites
17 hours ago, EverCurious452 said:

You could be right, though If the GOI has an account at the CBI, its irrelevant to the exchange rate and thus an RV.  What draws the reserves down is importers exchanging dinars for dollars to buy foreign stuff and what brings it up is oil dollars being exchanged for dinars to pay the GOI's budget.  That's all that mattes as far as I can tell.

That's right!   Another thing is the thought that the HCL would be the trigger for an RV. that is a myth.   The original HCL proposed that a portion of the SURPLUS would be distributed to the provinces, not the people directly. But there is no surplus , the GOI needs all of it to fund the budget.  That is not going to change.

We dont know the state of the Iraqi treasury.  In the annual budget they always show that all the projected income will be spent thru the entire year but we know from the reports that many of the projects are eventually just cancelled  or terminated for lack of funds. 

  • Upvote 1
  • Downvote 1

Share this post


Link to post
Share on other sites

Agreed. No law, HCL or otherwise can alter the basic arithmetic of how a pegged currency works or the amount of USD in the CBIs reserves.  

 

Yet still after all these years, there is a new thread upstairs where folks are teasing apart a translation of a statement on "deleting the zeros" to try an infer and RV (as if the CBI would announce such a thing when they don't even announce the tiny changes they have made (and from time to time likely will continue to make)).  I understand how that sort of wishful thinking can grab you for a moment, but I don't understand how it can hold on for years against the clear fundamentals that say an RV can't happen.  

  • Like 1
  • Upvote 1
  • Downvote 1

Share this post


Link to post
Share on other sites
On 9/29/2018 at 12:21 PM, EverCurious452 said:

but I don't understand how it can hold on for years against the clear fundamentals that say an RV can't happen.  

Like I said EC452  Some things are not worth an argument.... Just like religion..  Some believe and some don't  

But numbers are what matter. 

 

Hey Rock.. Whats the M2 of Iraq and what would a $3.00 Rv cost the country?

Share this post


Link to post
Share on other sites

Just as a point of clarification,  a central bank with a pegged currency would not usually cover (all of) M2 as the difference between M1 and M2 are more complex instruments that can not easily be converted to cash as can be done for M0 (cash) or M1 (M0+checing and savings) if I recall my M's correctly.  M1 for Iraq is somewhere around 60-70 Trillion IQD so a $3.00 RV would require something around $200 Trillion dollars.

  • Upvote 1
  • Downvote 1

Share this post


Link to post
Share on other sites
On 10/1/2018 at 1:14 PM, SocalDinar said:

Like I said EC452  Some things are not worth an argument.... Just like religion..  Some believe and some don't  

But numbers are what matter. 

 

Hey Rock.. Whats the M2 of Iraq and what would a $3.00 Rv cost the country?

As of June 2018 M2 was 88,362,883,000,000 Dinar.... with $55.5 B in reserves ,  puts the real exchange rate at .00062,  EC is correct it is not unusual to cover ALL M2 . Unlike cash where the central bank KNOWS well how much it has issued The financial items included in M2 are too complex and dynamic to be accurately measured.

  • Thanks 1
  • Downvote 1

Share this post


Link to post
Share on other sites
On 9/14/2018 at 1:35 PM, rockfl9 said:

Hi Mark,

NO it is not a pay raise... The civil service law guarantees all salaries.  So they get paid the same amount of dinar at whatever the exchange rate!  So he will  get 500k IQD at the 1 US cent rate .. In fact everything valued in dinar gets the same (official ) value.  The problem is that when the GOI puts up dollars in the "auction" instead of getting 1190 per dollar it only will get 100 !! So to meet the payroll it will have to put up 11 times the dollars to get enough dinar !  Don't you see that as a problem?   It is a basic business rule "You can't pay out more than you take in.

Our government has been doing it for years..What's the diff.

  • Upvote 1
  • Downvote 1

Share this post


Link to post
Share on other sites
5 hours ago, lost one said:

Our government has been doing it for years..What's the diff.

Doing what?

 

Some seem to equate the US debt (at 110% or so of our GDP, which I think is a bad thing) to Iraq doing an RV.  The only relationship I see is Iraq selling bonds denominated in dollars.  Folks buy our bonds as they have confidence that we will make the payments.  If Iraq were to (attempt to) sell bonds equal to 40,000% of their (171Billlion USD) GDP (to raise the 6-7 trillion USD for a 10 cent RV), who would have the confidence to buy them knowing that Iraq's entire GDP would not be enough to pay the interest each year (say 5%).

  • Upvote 2

Share this post


Link to post
Share on other sites

Debt is Debt no matter how you wanna try and twist it. Our gov is Trillions of dollars in DEBT....and the we print currency 24/7.  

Share this post


Link to post
Share on other sites
On 10/10/2018 at 11:44 AM, caz1104 said:

Debt is Debt no matter how you wanna try and twist it. Our gov is Trillions of dollars in DEBT....and the we print currency 24/7.  

And thats why a candy bar that cost 25 cents when we were kids is now over $2,00

The Fed keeps debasing the US dollar.  Biggest Ponzi scheme in the world.

Silver and gold  are cheap and a great insurance policy to the fall of the dollar.

 

Share this post


Link to post
Share on other sites
17 hours ago, SocalDinar said:

And thats why a candy bar that cost 25 cents when we were kids is now over $2,00

The Fed keeps debasing the US dollar.  Biggest Ponzi scheme in the world.

Silver and gold  are cheap and a great insurance policy to the fall of the dollar.

 

:twothumbs:

  • Upvote 1

Share this post


Link to post
Share on other sites
22 hours ago, SocalDinar said:

And thats why a candy bar that cost 25 cents when we were kids is now over $2,00

The Fed keeps debasing the US dollar.  Biggest Ponzi scheme in the world.

Silver and gold  are cheap and a great insurance policy to the fall of the dollar.

 

The solution is to get the government to live within it's means.  Raise taxes and get to a balanced budget .   That would be a hard pill to swallow.  

  • Upvote 1
  • Downvote 2

Share this post


Link to post
Share on other sites

I live in California with the highest taxes in the country. The state is losing many high wage earners because of this.  

We need a smaller less intrusive government.  People need to stop expecting and receiving government handouts.

Higher taxes will just mean more spending. It will do nothing to balance the budget.

 

  • Upvote 2

Share this post


Link to post
Share on other sites
On ‎10‎/‎13‎/‎2018 at 2:43 PM, rockfl9 said:

The solution is to get the government to live within it's means.  Raise taxes and get to a balanced budget .   That would be a hard pill to swallow.  

How bout we streamline Gov.....let an outside firm get rid of the fat

  • Upvote 1

Share this post


Link to post
Share on other sites
On ‎10‎/‎14‎/‎2018 at 9:31 AM, SocalDinar said:

I live in California with the highest taxes in the country. The state is losing many high wage earners because of this.  

We need a smaller less intrusive government.  People need to stop expecting and receiving government handouts.

Higher taxes will just mean more spending. It will do nothing to balance the budget.

 

You are exactly correct.....higher taxes means more ways for these jackas* to waste our monies....and still not touch the deficit!

  • Upvote 2

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.



×

Important Information

By using this site, you agree to our Terms of Use.