CBI Reserves !

[rockfl9]

The MOF has been RAIDING the reserves to cover budget shortfalls for at least the last 4 years.  The CBI replaces the dollars taken with GOI DOLLAR BASED BONDS  ...  So it looks like the reserves are still $70Bn . But $50Bn in cash is gone!  It is a piece of financial engineering. The hope until now is that oil would come back and the GOI would gradually redeem the bonds.  But to be really honest that is the LAST thing they would do.

The real value of the reserves is less than $20Bn, even the gold may have been sold. 

The consequence of the devaluation is that they will need  20% more dinar to support the same dollar amount of commerce. The last thing they want to have to do is to print more of today's dinar.  

They need to get the price of oil back up to the 90-100 dollar range . But that will spur more production in  non-OPEC countries producing another oil glut. 

[rockfl9]

WHY did the CBI devalue the dinar BEFORE year end?   It had to or else the 2020 annual report would show it was insolvent!

NOT good for a central bank. 

Now it is important that the budget include an income tax and some amount of salary reduction. This will allow the GOI to gradually restore the reserves.  

If not  I expect another devaluation at the end of 2021.

[SocalDinar]

On 2/26/2021 at 1:15 PM, rockfl9 said:

WHY did the CBI devalue the dinar BEFORE year end?   It had to or else the 2020 annual report would show it was insolvent!

NOT good for a central bank. 

Now it is important that the budget include an income tax and some amount of salary reduction. This will allow the GOI to gradually restore the reserves.  

If not  I expect another devaluation at the end of 2021.

The Fed is devaluing the US dollar every day. Hyperinflation is coming at some point soon enough. Every Fiat currency eventually fails including seashells.

[rockfl9]

Modern economic theory says that the right amount of inflation is necessary for a healthy economy.  Wages are increasing and if prices increase only as fast as workers can afford to buy ,all is OK. Hyperinflation is when that  parity is lost.

The FED is NOT devaluing the dollar. All fiat currencies are diluted naturally.  The simple fact that there is a expense to produce and maintain a currency (even seashells) erodes the initial value over and over.  But contrary to those promoting a return to a precious metal based system the world is better off with a fiat currency. as long as the concept of VALUE is not violated..  

The expectation that a dinar with a value of   0.0068  can arbitrarily become a value of $1 violates the concept. It is a MYTH. It just can't happen.

[SocalDinar]

Why would Inflation ever be a good thing.? Its just a tax on our savings?  Wages are not keeping up with inflation for most people. Government loves inflation because their payouts never keep up with core inflation rates. Saves them millions

 

Wouldn't take much to tip us into a hyperinflation situation. And if it happens it will happen quickly.

Remember the run on toilet paper? Same could happen with the Dollar and any fiat currency

 

The Fed is debasing the currency at an alarming rate. No such thing as free money. Someone always pays. 

Our kids and grandkids will be paying for these insane spending habits and deficits.  we cant even pay the interest on the US debt

 

I agree that a metal based system completely would be unlikely. In a time of hyperinflation a loaf of bread would be worth a lot of silver. Better off having tradable with value.  Food, Ammo, pharmaceuticals, Alcohol and weed are great tradable items.

 

https://www.usdebtclock.org/

[rockfl9]

Economists have to think nationally or globally.  Individuals  you and i tend to think simply and get burned. 

Inflation is a global fact and any country that tries to stop it will fall .  Accept it and plan accordingly. 

Another fault is to attempt to achieve full employment , another fault . The FED plans for 6% unemployment and roughly 2% inflation .  Anything more or less  and they will apply corrections. 

You cant just SAVE , you must invest and grow your savings .  In your business you  can't just do the same thing and just increase prices, You must add customers or provide more services. That is where the growth comes in.

These new "investments " like crypto and NFTs  , I think , are going to screw things up. They are DARK speculations that take money out of circulation .. Making it hard to measure real growth .

[Laid Back]

I would like to see one of your post the day after the revaluation of the IQD.

 

Go LOPster Tank

Go RV

 

[rockfl9]

16 hours ago, Laid Back said:

I would like to see one of your post the day after the revaluation of the IQD.

 

Go LOPster Tank

Go RV

 

Unfortunately,  Neither of us will be alive .  

[rockfl9]

Just now, rockfl9 said:

 

If an RV to just one cent were possible . WHY did they go the other way ????  As they explained the CBI was bleeding dollars from the reserves.  Another 6 months and the economy would crash. It was a last ditch effort to save the country .  If they screw it up and not include the other income producing measures in the budget they will have to hike the rate again to possibly 1650. A death spiral.

The CBI reported that the reserves lost $20Bn last year. They say $56 is left but I think some of that amount is in MOF IOUs , not cash.   

[Laid Back]

4 hours ago, rockfl9 said:

Unfortunately,  Neither of us will be alive .  

Your negative outlook on life is a direct reflection of how much you like yourself.

Those of us with a positive outlook on life found a unique and true happiness that is authentic and raw.

 

Go RV

Go 2021

[rockfl9]

LB.  I am the most POSITIVE  but PRACTICAL person you will ever find.

I seldom believe anything I read or hear until I can check it out. 

One thing I am specially positive about is my belief that the IQD can not increase in value , at least enough to make a real profit.  Anyone with the slimmest amount of banking and accounting knowledge can see that. It cant happen EVER. 

RVers think they have discovered a secret path  to RICHES . The RV rumor has been around over 10 years and every currency trader has heard it many times. 

This is the most clever CONFIDENCE GAME to show up in  centuries. The dealer/guru/pumper consortium have preyed on a group of people with a clever combination of fake news/information provided by dubious EXPERTS.

The most ridiculous line IS that the dinar would equal a dollar!!!

Next is that banks (worldwide ) are preparing to do a mass exchange  when it does.

I don't know how much longer this can go on?? Maybe forever .  Beyond both of our lives. Iraq's only hope is to find a substitute for oil revenue , which will begin to decline in the next 5 years.

[SocalDinar]

The dollar will fail eventually.  22% of all USDs were printed in the last year. Do you see this as a problem Rock.

Free money is never free unless maybe you find it walking down the street on the ground.

[rockfl9]

On 3/30/2021 at 10:04 AM, SocalDinar said:

The dollar will fail eventually.  22% of all USDs were printed in the last year. Do you see this as a problem Rock.

Free money is never free unless maybe you find it walking down the street on the ground.

SD.  I don't know what you mean by FAIL????  The USD IS the most stable currency,  The world financial market is "pegged " to it in some way if not directly.  Most commodities are traded based on the dollar  because of it's proved stability.  Our governments geo-political status (except for the recent DJT fiasco ) maintains that. 

If by free money you are referring to  the stimulus hand out I will agree it turned out badly.  To get people to honker down to contain the virus ( as that was the only defense available )  they needed to do something fast. 

A lot of people got the money but went to work and got paid as usual  . 

A lot of people got money they really didn't deserve, but there was no way to select the truly needy from all.

The IRS and SSA data bases were all they had.  Ideally it  should have been an unsolicited LOAN reported later as a tax adjustment.  

P.s. My check was $240.  But I am sure I will end up paying back many times that in future taxes. 

[SocalDinar]

The USD will not be the world’s reserve currency for much longer. 
It’s not going to end well. 
 

[SocalDinar]

16 hours ago, rockfl9 said:

SD.  I don't know what you mean by FAIL????  The USD IS the most stable currency,  The world financial market is "pegged " to it in some way if not directly.  Most commodities are traded based on the dollar  because of it's proved stability.  Our governments geo-political status (except for the recent DJT fiasco ) maintains that. 

If by free money you are referring to  the stimulus hand out I will agree it turned out badly.  To get people to honker down to contain the virus ( as that was the only defense available )  they needed to do something fast. 

A lot of people got the money but went to work and got paid as usual  . 

A lot of people got money they really didn't deserve, but there was no way to select the truly needy from all.

The IRS and SSA data bases were all they had.  Ideally it  should have been an unsolicited LOAN reported later as a tax adjustment.  

P.s. My check was $240.  But I am sure I will end up paying back many times that in future taxes. 

The wife and I did not  get a check the last two rounds but we did just get a letter from Chase last week that $85,000 of our PPP loan was forgiven. This will be considered income on next years taxes but easy enough for us to wash that income away at the end of the year with new equipment purchases etc...

[rockfl9]

5 hours ago, SocalDinar said:

The wife and I did not  get a check the last two rounds but we did just get a letter from Chase last week that $85,000 of our PPP loan was forgiven. This will be considered income on next years taxes but easy enough for us to wash that income away at the end of the year with new equipment purchases etc...

A lot of firms would not take ppp because they feared the paperwork. If all it took was just the future taxes on the forgiven amount I will take that any day. Good luck.l

I don't get anything from the second payment because they raised the threshold.

Now the Dems want to put thru a big spending plan i.e. a little something for everyone,  And they want to pass it before they loose control. If they get everything it would be a $28T debt. You may be right to be concerned about that.

 

 

T

 

 

 

 

[rockfl9]

This week the CBI announced the reserves increased to  $62.115B.

Using the .000680 rate that converts to 91,4T dinar in circulation..

The CBI website reports that there are  117T dinar in M! ( i.e. cash plus deposits and savings )

That means that at the current rate the CBI liabilities are only 78% funded. 

The reserves are SHORT 25.5 Trillion dinar ..

At the latest rate of increase they MAY be able to cut that in half. 

That would still require a 12% reduction in the exchange rate in December.

I know they promised not to reduce the rate again. BUT let us see what they will do !