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By Adam Montana
Happy Wednesday DinarVets!
It's April first, which means you can expect some pranks today... all from 6 feet away, of course!
There will be no RV pranks in this Weekly update, for the record. If I send out an RV text today, it's the real deal. (I have not yet!)
Day 534,691 of the CoronaVirus lockdown... how is everyone doing? I ask out of real concern. As humans, we are a social species. Social distancing is something we are currently doing to control the spread of a virus that should burn out on it's own if we don't find a cure, but it's still a scary situation. Verizon reports that phone calls are double what they are on a normal Mother's Day, which is proof enough that we need human interaction... the Butterfly Effect is real, my friends, and it applies to more than butterflies and typhoons on the other side of the world. Stay strong and healthy through this, both mentally and physically! Wash your hands and don't be afraid to phone a friend that you haven't talked to in ages - you're stuck in the house, how many more times can you organize the pantry or clean the garage?!
Whatever you do, be sure to show extra love and patience and kindness to the people you're stuck with right now. That's good advice on any day, and it goes double right now.
On to the Weekly! The markets are a jungle, cryptos seem stable, OIL may have stopped the plunge but that's still uncertain, unemployment levels are and continuing that way indefinitely... is there any hope?
There is always hope.
There is also always truth to be found in adages, for example:
Better late than never. Nothing ventured, nothing gained.
As dinar holders, we are most certainly living by those two! One day, soon, these will be things that we look back on and smile about.
The world is being shaken up like never before. There has never been a better time to watch things - unprecedented things - unfold right in front of us.
These are wild and crazy times.
Here's an example: Politicians rarely agree on anything, but a recent (historic) stimulus passed, unanimously. If you read my recent Budget and Auctions post, I described an equally possible scenario that would turn the Iraqi Dinar around overnight.
Many thought the Stimulus bill passing like that just could not happen, just like many would deny the possibility of the Iraqi Dinar increasing in value.
It's not just a "possibility". This is something that is going to happen.
The only question is, when will it be and how prepared are you?
This is going to be the “I told you so” group.
When the world is crying about unfairness and how the rich get richer and a hundred other things, you can join them... or you can think back to that time you could have spent $100 on Amazon stock at $1.73 (currently $1,949.72), $75 on btc at less than 10 cents per coin, or $50 on VIP at DinarVets when the IQD was undervalued and represented an incredible opportunity.
Quick forum PSA: I'm all for diversity and contrary opinions and intelligent discussions. This thread is a great example of intelligent people politely discussing something they don't fully agree on. I could also link to some examples of how not to have an intelligent and respectful debate, but I won't - I'm just going to issue a warning to anyone that comes here just to antagonize members, hit the "dislike" icon, or click that annoying "report" link on anything that you personally don't like.
On a lighter note... @tjokie shared a new crypto with us in the VIP section. Might be worth taking a sWipe at this one.
Before I head out - I mean stay in - this morning, I want to give a quick shout out to the hard working women and men out there still taking care of us... truckers on the roads, people working in the schools to prepare meals for the kids that need them, teachers improvising and doing the best they can with online classes and connections, health care workers, the people in the grocery stores, and more... I appreciate you all.
And last but not least - get in the Powerball Pool!
Keep your heads up, stay safe, wash your hands, and GOOOO RRRVVVV!!!!
By Adam Montana
Happy Wednesday, all!
The news, the news, the news!
I don't have a specific topic to get into today, but I'm working on a couple of deeper posts. While I'm working through those, please feel free to give your feedback and ask your questions below.
On to the weekly - first some general "big picture" world stuff, and then Iraq.
DJIA, the 500, the 2000... One of my favorite parts of today's update is going to be the part that I'm not even doing (yes, I'm talking about @Pitchers recent contributions!) but the following should give some of us a little respite from the last week of holding our breath while watching the markets tank:
Nice little upward tick there across the board. ↗️
No real uptick on OIL, but at the moment... the plunge seems to have hit bottom.
BTC has stabilized a bit, giving a few more of us a breather. Did it hit bottom, or will today's difficulty adjustment spur another drop? And don't forget about the upcoming Halvening, ETA 14 May 2020.
A snippet from thehalvening.com website:
GOLD - after a long, boring ride with no changes - at least something is reacting positively to all this market madness! There's a good article in the VIP section that may make you less eager to own something that you don't actually have control (physical) of.
Coronavirus, while lowering crime rates in some cities, is still an issue. Stay away from people, wash your hands, let the thing run it's course. Don't be part of the problem, my friends! Thanks.
US citizens may be a step closer to getting a check as part of a stimulus package. Bernie Sanders may have dropped out, or maybe not. Does it matter? Who knows, but the recent health pandemic has been a great test run!
On to Iraq - up above I said "news news NEWS", right? I sure did... but, do you know what's not in those three words?
We've been through a bit of a rollercoaster over the last few weeks and months, between the Kung Flu and the (old/new/quit/appointed/current) Iraqi Prime Minister (currently Adnan al-Zurufi), but we aren't forgetting about one of the biggest reasons for the recent Iraqi shake-up: Iran. A giant positive to reflect on right now is the lack of Iran in the news.
One of the most recent items of note regarding Iran was their last ditch effort to hold on to power... and as I suspected, it seems to be falling flat.
Keep your eyes on the prize, my friends... keep your eyes on the prize. Sometimes the most important news is what is NOT being talked about.
This is a good thing. Also a good thing, and something that is not written yet, is the part on the wikipedia page about the upcoming rate change and Zurufi's role in the implementation. GOOOO RRRRVVVVV!!!!
The IMF has stated that CoronaVirus is impacting the entire world, and Iraq is included... a reasonable reaction to that would be "Oh, great, another reason for Iraq to ask for more handouts!" But, @Mary B posted a good article yesterday regarding the World Bank on Iraq... here at DinarVets, we've been expressing for some time now that it's time to stop enabling Iraq's policy of "pleading poverty". This may be the beginning of the end of that practice - in a good way, for us!
They aren't broke, they have the means, and it's time for them to get it together. ‼️
Another financial article was posted by @screwball regarding Iraq's debt obligations - a few comments were made about how this could be a doorway to a GCR. While I don't subscribe to a universal "reset" happening, there are some valid portions of the theory... and the current global financial situation is edging closer and closer to something big happening, which could easily incorporate a major increase in the Dinar. All they would be doing is piggybacking on larger events, and this is a real possibility. When the world is at it's craziest, and all focus is elsewhere.... suddenly!
Regardless of how or if a form of GCR occurs (it will), the topic ties into the post I published on Iraq's Auctions and Budget and how Iraq uses a banking/legal strategy to retain control of their funds, despite being on the hook for a lot of money. They use a completely legal strategy to handle their business, and it's very similar to something the wealthy have done for ages, and it's something YOU should be doing as well. Check this post in the VIP section.
Just about done here, I know this Weekly is late today!
I'm keeping an eye on this one:
More to come!
Be sure to get in the Weekly Lotto Pool - if you win and your numbers aren't in there, we can't share! So... get in.
By Adam Montana
Goooooood morning DinarVets!
What a week... I don't have to tell you the markets crashed, Oil is down, and half the world is now zombies.
But I will tell you anyway!
Before I get into the "doom and gloom" portion, here's a name for you: Adnan Al Zurfi. That's the name of the person just appointed to the Iraqi Prime Minister position.
Truthfully, my friends, it's too soon right now to know if he will be the one to ring the bell for us. Let's be patient and give it a few days for some news to come out, and I'll be back with a formal Prime Minister post in a couple days.
Back to the "gloom and doom" - the world is screwed. It was nice to know you all!
Ok, I'm kidding... mostly.
I believe education is key in most things, including the Dinar, and Coronavirus is no exception.
COVID 19 / CoronaVirus / CoronApocalypse / "the end of the world as we know it" is a big deal, and it's going to have an impact on the Iraqi Dinar. My official stance on the pandemic is this: I believe it will run it's course, we will survive as a species, and you should (please) try not to be Patient 31 .
We're going to get through this. It's going to hurt a little, but with some education and common sense - we will get through it.
For anyone looking for education on CoronaVirus and how a Quarantine helps, this is probably the best visual I've found. A major goal in quarantine is to "flatten the curve".
Wash your hands, everyone, and just stay home if you can. If you can't, well... screw it. Be sure to lick everything you see in public, including the elderly, especially if you're not sick. You're helping by spreading strong saliva.
By Adam Montana
Good morning, DinarVets!
This one took me a bit to write up, and I'll be candid here - it was the most fun I've had writing an update in quite some time!
Like many of you, I do fairly frequent "check ins" on my feelings about this investment... and I have questions, just like everyone else. "Is this still worth waiting on? Did the bus turn around and it's time to get off?"
An Iraqi RV is not a guarantee, so these are fair questions any sane and intelligent person should ask themselves once in a while.
I'm happy to state that today is not the day I'm getting off the bus. In fact, I'm pulling the seatbelt tighter!
There was a question posed a couple weeks back about "sterilization". The CBI employs a procedure called "sterilization" as a monetary policy, but that is different than what may have been being asked... which is why I asked for clarification on it.
I wanted to go deeper into the topic, but my post on CBI Auctions and the Iraqi Budget was already getting a bit lengthy. As of this morning (Friday 13 March 2020), there is a lot of "sterilization" talk - and most of it is not related to monetary policy, but actual disinfecting. The CoronaVirus is currently causing chaos in the markets, creating instability and fear that is likely to last a bit longer (but not forever), and it's always good to "get back to the basics".
You know - a "check in". In these crazy times, are we the crazy ones? Are we crazy for sitting this ride out a little longer? Should we be throwing in the towel, selling all our dinar, and spending all of our money on toilet paper and hand sanitizer?
I think the answer lies at least partly in the following subjects, so let's get into it!
The topics today are as follows: CBI Auctions, and the Iraqi Budget.
Before we do a little bit of a deep dive, I have a couple of opinions that may seem contrary - namely, the Budget and the Auctions, while important to Iraq, will probably never have a significant impact on (when or if) the RV.
In spite of that, the seatbelt just got tighter, and my smile got bigger. These are complex topics, I'm going to simplify a little and I'm only covering a few of the aspects, but these are major parts of the topics and therefore a major factor in the size of my current smile. The summary, which you'll understand if you can make it through this entire post, is simple. Despite these scary and crazy times we are living in, Iraq and the Iraqi Dinar still have incredible potential.
The rate of a currency is generally set by the countries Central Bank, not the IMF or anyone else. Iraq's rate is set by the CBI (Central Bank of Iraq).
Ready? Here we go!
CBI Auctions. These are used by the CBI to regulate the money, control the money, maintain the money - specifically, the rate and the amount in circulation. Actually, the CBI is selling USD at the auctions... but this will turn into a 7 hour read if I go too deep into that!
It's helpful to understand where Iraq comes up with the USD to sell at the CBI auctions. The short version is this: Iraq's primary source of revenue is OIL. Payments are made in US Dollars, paid to the DFI (Development Fund For Iraq). The USD is then transferred to the Ministry of Finance (MoF), and the MoF sells it to the CBI in exchange for Dinars - the same Dinars that the CBI collected through the Auctions of USD.
See how that all came full circle? Money in, money out, easy peasy. (This will take us to the Budget later.)
(Fun fact! Dollars go to the DFI account rather than directly to the MoF to prevent the money from immediately being confiscated to pay reparation debts... kind of like using an IBC to protect assets.)
We can expect the auctions to continue while the Dinar is pegged to the dollar, undervalued, and the circulation needs to be controlled.
There are some people who believe the Auctions in Iraq need to stop, and there's good reason for that - few countries have had success with them. For example, South Sudan (who knows where that is?) tried it four times after they devalued. South Sudan, which is known as one of the most underdeveloped nations in the world, and who's primary export is timber. That's no knock on wood, the world needs wood... but wood isn't oil, and South Sudan isn't Iraq. (Sudan and South Sudan don't even make the top 100 in the world for oil reserves.) Iraq is obviously different, both in potential here and in the successful practice of having auctions.
Other countries to do currency auctions include Jamaica, Uganda and Sierra Leone. Like South Sudan - none of them are Iraq, and none of them carried Auctions as long as Iraq... in fact, the auctions in those cases were failures.
With those examples in mind, of course we'd like to see the currency options stop.
And they probably will, at some point. But most likely not until after the RV.
Since the auctions aren't stopping, and Iraq is not the same as the countries that failed at auctions... what can we expect during a major rate change?
Fantastic question! I'll take a stab at it, using examples to make the point.
At the auctions, the CBI operates buy/sell at about a 2% difference, which is an effective start of the spread that will affect every single one of us.
If the rate were changed today to 1IQD per 1USD and the IQD returns to the global market (it will, at any significant increase in rate), then we will be trading in at the rate stated by the CBI minus middlemen fees - what it costs to actually get the money through the various institutions and into your account. (This isn't Bitcoin, you know!)
If the CBI is using a 2% spread, they will "buy" at .98 and "sell" at 1 per US dollar. I fully expect that to fluctuate, perhaps wildly. They may pay .99 at first to show their confidence, and then lower it to .90 or further. (The bigger the differential, the more beneficial it is to them for the day profits.) They may quickly move to a flat 1:1 "Auction rate" simply to reinforce the rate and show that they are going to ditch the auctions soon - a lot of this is going to depend on the market. It is a business, after all.
A 2 cent difference may not seem like much, but bear with me... It is important to understand the spread!
I'll keep using the 1:1 number. For example, Iraq announces that the dinar is equal to the US dollar, the CBI is backing it, the IQD goes on the global market, and the rate sustains itself after a short time due to market demand. At this point, a lot changes, but those are different (and much longer) conversations. When we exchange, we are not going to the CBI - we are going to a bank that will trade IQD for dollars (or any currency). That bank will rely on the CBI buy rate first, which means they are getting a max of .98 USD per 1 IQD. Then they have to pay tellers and all their other expenses, so they add their spread on top of that - and this is assuming the bank you use is buying (selling) direct with the CBI. (They won't be.) By the time it gets to you, the CBI may have an advertised rate of $1, but you're only putting .70 in your pocket (before taxes).
That "spread", or "cost", is unavoidable. We are not going to get the full "rate".
Of course, you will get a better rate (money in your pocket) if you're VIP here at DinarVets, but that's not the point of this. The point is the Auctions will continue, and looking at past auctions - even yesterday's or today's auction - will not give us clues to if Iraq will RV today or tomorrow. (If we could see tomorrow's auction, that would be a different story!)
The Auctions are good to see, in Iraq, because they are proof that Iraq is stable, still in business, and functioning. But the CBI Auctions will not give us the RV date until after you get my text message.
The Iraqi Budget. The Iraqi Budget is important to Iraq because it defines how they spend money - and yes, it's the same money that was mentioned above, which comes mostly from oil sales. The MoF distributes IQD to each department according to the Budget. The Budget allocates resources to specific departments, based on a percentage of revenue or a fixed amount, and the individual departments spend their portion accordingly - just like giving your kid an allowance.
A Budget works the same way in most places, and Iraq is no different. Politicians lobby for their departments, asking for more money always, and this is why a "tripartisan" government is so important and mentioned so much in the current Prime Minister debacle. If a Prime Minister came in and seated all members of one political group, it would be like the US having only Democrats or only Republicans in power. The reason we hear about the Iraqi Budget so much is simple - they are all fighting for money. (Or power, but it's really the same thing.)
The reasons I say the Iraqi Budget doesn't matter are pretty simple. You've made it this far, stick with me just a little further!
1. Whether a specific Department (Defense, Education, etc) is on the Iraqi Budget for a percentage or a fixed money amount, there is a dollar/dinar amount that can be assigned to it based on the current price of oil x demand for oil = projected income / department allocation = $ for Department. This is a simple calculation that can be done in 2 minutes on a 1 page presentation. It's literally 2nd grade math.
2. Regardless of any rate change, that dollar amount can be estimated and stay the same with a simple Amendment. Imagine a late night Parliament meeting - called at the last minute after 8PM one night, emergency, mandatory! One item on the agenda - doors are locked, cell phones left outside - the ONE ITEM is this: We are going to raise the rate at midnight provided everyone signs this Budget Amendment.
The Budget Amendment, in this case, states that the previous passed Budget is fixed at the old rate and all Departments receive an immediate 10% bonus due to the CBI exchange rate adjustment. The rest of the money that becomes available is held in reserve until further modification of the Budget... EVERY SINGLE POLITICIAN is a hero and has almost unlimited job security at that point.
Not one of them loses. It's the biggest slam dunk in Parliament history.
Of course they wouldn't magically start to get along, but that's an offer even that bunch of hooligans couldn't screw up.
3. Bypass the late night meeting and just pass a Presidential declaration stating the same. It accomplishes the same thing, and by the time anyone could complain, the rate would have been in effect long enough that it wouldn't matter. The President knows this. The CBI knows it. You know it. I know it.
The bottom line here? It doesn't matter what the Budget says, because all the Budget really does is allocate money to departments. The rate, based on the global fiat currency exchange program, controls how many wing dings and knick knacks they can buy with their money because of it's international status... but the Department of Wing Dings is still going to have $X of the Budget, the Department of Knick Knacks still has $X, regardless of the rate, and that's the way it works. Fiat currency isn't an "Iraq" thing - it's a WORLD thing. OIL isn't an Iraq thing. Budgets aren't an Iraq thing. Currency manipulation isn't an Iraq thing. NONE of this is unique to Iraq - all of this is "business as usual", and when Iraq changes their rate, that's what it is - business as usual.
There are plenty of good reasons for intelligent people to discuss the Budget and the Auctions. It's important that Iraq continue to be successful in the Auctions, pass their Budget, and continue doing business. While the world demands OIL, those who have it will always have credit. Iraq has proven itself capable of utilizing Auctions as a form of monetary control, and I don't believe their Auctions or Budget are a hindrance to increasing the value of the Dinar.
In fact, it looks quite the opposite. And on that note, I say...
By Adam Montana
Hey hey DinarVets!
I was out yesterday and most of the day before with a bit of a bug - I didn't die, so I assume it's not Corona.
Or maybe it was, and I beat it. Wouldn't surprise me.
This is just going to be a brief post for today. I spent the weekend (before I was attacked by that bug) working on a deep-dive post regarding Iraq's Budget and CBI Auctions. I'll get that posted by tomorrow morning.
To the present moment... we are looking at one of the craziest times in world news that we have ever seen.
We may not have an actual health emergency on our hands - the plain old flu is more dangerous to the population, strictly by the numbers - but we certainly do have a financial crisis on our hands. The world, and the world markets, are treating the Corona Virus as if it were a full blown pandemic - so, whether it deserves to be treated that way or not - that's what we are dealing with.
OIL is down to about $30. BTC leapt off the cliff and plummeted to $6000, wiping out all the recent gains. Stocks... don't even get me started on the markets, I'm just thankful @Pitcher has been willing to share thoughts over the last few updates! It hasn't been pretty.
Iraq is vulnerable to all of these things, just like the rest of the world - and on top of that, they are dealing with a Prime Minister issue.
In spite of all that... guess who's not going anywhere?
Iraq, you, and me. We aren't going anywhere.
Especially not in public without some kind of contraption on our faces
I'm really short on time today, so I'm going to get this posted for now.
Stay tuned for the update on the Auctions and the Budget - I just need to proof it once more and it will be up.
OSI members, I'm a day behind regarding that last notice we were discussing. I'll be following up on that one shortly as well. Thanks for your patience!