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EverCurious452

cognitive dissonance

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Upstairs there is a recent post touting the CBIs new foreign currency reserves at 72B USD.  The claim is that this means they could support double the current rate as there are 43T IQD in circulation So basically 72B USD / 43 T IQD comes out to about 0.016 which is about double the current rate.  So of course according to the poster this is good news for the RV!  (note some posters have read this as a $2 rate not 2x the current rate).

 

First the CBI increasing its reserves IS good news.  It makes the currency stronger since now if inflation starts to come back they can inch the rate up a little to counter it.  Or if imports again start to exceed oil sales they have a buffer.  That's great for Iraq.

 

But there are 2 big things wrong with the poster's analysis.  

First the CBI must cove the total amount of IQD that could easily be liquidated to exchange (for buying foreign stuff or just to get dollars).  That is (as of last dec) 74T not 43T.  The 43T is cash outside of banks. But the CBI has to cover more than that, i.e. they have to cover M1.

 

Secondly, while I applaud the poster's realization that the rate is determined by the ratio of foreign reserves to the money supply (even if the money supply figure was wrong) they clearly remain hopeful of an RV.  But if you do the same math, even using the incorrect 43T figure for what needs be covered, a 10 cent RV wold require 4.3T USD in foreign reserves (or 7.4T using the M1 figure from last Dec).   So while the CBI increasing their foreign reserves to have around a18% cushion (relative to what they need to support the currency) is great news, it in no way indicates they are on their way to increasing it by 10,000% .  Note that the reserves have been even higher in the past.  IN 2014 they were around 90B.

 

It's a rather pronounced case of cognitive dissonance (generally a human failing that can strike any of us)  to both claim the greater foreign reserves are good due to he impact on the rate, yet not realized that the same logic says the RV can never happen.

Edited by EverCurious452
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I should have said "the rate is LIMITED by" not "DETERMINED by" the ratio of foreign reserves to the money supply.  As it can always be lower (as it is right now) than that ration allows.  But the edit time expired before I could get to it.

Edited by EverCurious452
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The  last M2  number I saw was North of 80T.   Monies in deposit accounts and short term notes must also be counted against the reserves.

They tend to "cherry pick " the numbers and factors  to get an exchange rate they want to see.

Also a few  like to add the gold reserve to the published dollar reserves BUT really that was already included. They probably made a tidy profit with the last runup in gold prices.

 

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 LOPsters are the closet  thing next to the "the end of the world is near" gang, in hoping something negative happens....laughable and sad at the same time. All under their self proclaimed guise of wanting to help....again laughable but sad

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https://tradingeconomics.com/iraq/gold-reserves

Here is some current data.... Swing away!! .  

Gold Reserves in Iraq remained unchanged at 96.30 Tonnes in the second quarter of 2019 from 96.30 Tonnes in the first quarter of 2019. Gold Reserves in Iraq averaged 30.17 Tonnes from 2000 until 2019, reaching an all time high of 96.30 Tonnes in the fourth quarter of 2018 and a record low of 0 Tonnes in the second quarter of 2000.

Iraq Gold Reserves
1Y5Y10YMAX
 
  Compare
 
 Embed
 
 
Iraq Trade Last Previous Highest Lowest Unit  
Balance of Trade 18793.00 7090.00 47550.00 -3492.00 USD Million [+]
Current Account 13954.50 2157.80 32344.00 -15410.00 USD Million [+]
Current Account to GDP 4.90 2.10 12.70 -24.00 percent [+]
Exports 57559.00 41298.00 94209.00 1720.40 USD Million [+]
Imports 38766.00 34208.00 59349.00 2681.90 USD Million [+]
Gold Reserves 96.30 96.30 96.30 0.00 Tonnes [+]
Crude Oil Production 4595.00 4500.00 4830.00 0.00 BBL/D/1K [+]
Terrorism Index 9.75 10.00 10.00 4.09   [+]
 
 
https://tradingeconomics.com/iraq/gold-reserves

Iraq Gold Reserves

Gold Reserves are country’s gold assets held or controlled by the central bank. This page provides - Iraq Gold Reserves - actual values, historical data, forecast, chart, statistics, economic calendar and news. Iraq Gold Reserves - actual data, historical chart and calendar of releases - was last updated on July of 2019.
 
  Actual Previous Highest Lowest Dates Unit Frequency  
  96.30 96.30 96.30 0.00 2000 - 2019 Tonnes Quarterly
 
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SOCAL !  Where did you find those numbers? 

M0 71T

M1 77T

M2 94.8T !!!!

With reserves only $62 Bn   Blows a hole in the exchange rate !   would be .000654  

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19 minutes ago, rockfl9 said:

SOCAL !  Where did you find those numbers? 

M0 71T

M1 77T

M2 94.8T !!!!

With reserves only $62 Bn   Blows a hole in the exchange rate !   would be .000654  

Hello Rock

The link is at the top of my first post  https://tradingeconomics.com/iraq/gold-reserves

 

scroll down and then you can see another column of additional links. I believe the M-2 shown is March 2019

Edited by SocalDinar

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I just checked CBI site and they show M0 = 62T and M1 = 74T.  couldnt find M2 but do remember it was in 80 T area.

Also your data  shows Employment ? rate at 28.6% I think that would likely be UNEmployment  rate.  

P.S. Our power co here is trying something , Instead of putting solar on your home they plan to get people to buy (somehow) a share in some

large arrays and get credit against their power bill.

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22 hours ago, caz1104 said:

 LOPsters are the closet  thing next to the "the end of the world is near" gang, in hoping something negative happens....laughable and sad at the same time. All under their self proclaimed guise of wanting to help....again laughable but sad

Help me out CAZ.  If there were to be a 10 cent RV that would make your 1 mil IQD worth $100000 .   WHY would a savvy investor pay that ?

There is  no pile of dollars that will become available just because the CBI decides to change the rate.  The CBI is not going to dip into its reserves  and send the money out of Iraq  . The people who now own IQD will be stuck with it regardless of what the rate is . At least they can stick it back to the dealers and take a small loss. But if they wait and they DO RD , it will be worthless for sure.

This is a well organized CON GAME.. 

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On ‎7‎/‎6‎/‎2019 at 4:07 PM, rockfl9 said:

Help me out CAZ.  If there were to be a 10 cent RV that would make your 1 mil IQD worth $100000 .   WHY would a savvy investor pay that ?

There is  no pile of dollars that will become available just because the CBI decides to change the rate.  The CBI is not going to dip into its reserves  and send the money out of Iraq  . The people who now own IQD will be stuck with it regardless of what the rate is . At least they can stick it back to the dealers and take a small loss. But if they wait and they DO RD , it will be worthless for sure.

This is a well organized CON GAME.. 

So say's a self proclaimed novelist turned movie maker turned foreign currency expert....what cha going to be tomorrow? Who again is perpetrating the con? Also your response had zip...nada to do with my post....wonder why that is. Your response is & has been the same for as long as you've turned LOPster .

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2 hours ago, caz1104 said:

So say's a self proclaimed novelist turned movie maker turned foreign currency expert....what cha going to be tomorrow? Who again is perpetrating the con? Also your response had zip...nada to do with my post....wonder why that is. Your response is & has been the same for as long as you've turned LOPster .

Does rockfl9 not know that Adam comes on every now and then for a chat? Maybe rockfl9 should ask Adam some of these questions.

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8 minutes ago, Rugbylaird19 said:

Does rockfl9 not know that Adam comes on every now and then for a chat? Maybe rockfl9 should ask Adam some of these questions.

I believe because the "DARK CLOUD GANG" is such a positive force on anything remotely positive not just Dinar they aren't invited to Adam's chats. That's just a guess, Adam or the mods could answer that question 100%

Edited by caz1104

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On 7/8/2019 at 11:48 AM, Rugbylaird19 said:

Does rockfl9 not know that Adam comes on every now and then for a chat? Maybe rockfl9 should ask Adam some of these questions.

Lopsters are not permitted to post on other forums.. Although we can read them.

Before I was banished to the tank I did ask AM where the banks would find the dollars to buy your dinar ., His answer was to read the cash-in guide .. I did ,again, and did not find anywhere that explained where. The assumption was that the RV would attract a lot of new buyers .
By this time the RV story is well known in investor circles. If any one EVER believed in the possibility of an increase in value they would already be IN.  Investors goal is to make a profit with reasonable odds. If the dinar was to increase in value after this 15 year ride , how long would it be for the next increase???

The fact is that a bank will buy the dinar  FOR A CLIENT after a request to purchase is made  NOT BEFORE.  It is not going to buy some and WAIT . That is not normal bank practice. 

The 800#s and call centers are GOORU POO. 

 

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On 7/8/2019 at 11:59 AM, caz1104 said:

Heck ROCKFISH even pissed on the last book he DID'nt write!

Caz ,  You dealer shills can really get nasty.

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I see a few are beginning to question WHO has the button ? Most think it is the gov of the CBI.

Well  about this time last year there was a court ruling that the MOF controls the CBI and would play a part in the change of rate. Most of you missed that because it was buried in the news and didnt show up in rumors or gooru poo.

Shortly after that ruling the CBI loaned the MOF $20Bn  to balance the 2018 budget !!!!!

I havent seen any report this year but guess that they loaned another 20  this year. SO $40 Bn of the reserves are actually GOI  dollar bonds!

Ordinarily a central bank wouldnt do that but Iraq was not able to sell the bonds at a reasonable rate to anyone else.

NOW the MOFs biggest problem is getting enough dinar to meet the monthly payroll. It only has a limited amount of oil dollars to put into the auctions.  That being the case Would the MOF accept a new rate that would result in FEWER dinar per dollar than the 1190 they get today???

I dont think so.  They would like a higher rate like 1300 but that would put more people below the poverty line.  If the last $20 BN goes the same way next year the GOI is at the wall !

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