Are we only looking at a initial RV of .003

[ha ha]

Hey haha.... I can appreciate what you are asking for a link.....one from the internet? LMAO

Those articles are all over this site. Do your own diligence.

If you were any kind of researcher... you would know.... info I provided, has a the info you are asking for IMF Public Information Notice 10/34.

I am the new guy here.... just defending a friend...... do your own diligence and you will find the truth.

Links are a dime a dozen. Education and diligence is given freely to those with wisdom.... when the student is ready, the teacher appears.

It is easy to sit back and trash and bash on someone not here.... waiting for everyone else, to provide you links so you can sit back on your rusty dusty and do what, exactly? Not read what was said?

Take it for what it is worth.... I can care less.

Don't just come here today and assume you know more than anyone else. The friend you are defending has even said few days ago that he believed the rate would 1.75 to 2.65. You are misrepresenting the whole facts as we know it. Let me challenge you again, show us where the CBI/IMF says the rate would be .003. l will apologies as you do so.You need to do your due deligence before you can say anything folks will believe in. You are manufacturing tissue of lies and not actually defending anybody.

[ha ha]

I'm thinking open a foreign dinar account with the Bank of Abu Dhabi in Washington DC, put your dinars in there, and just sit on em until the value goes up to where you are satisfied.....

Works for me.

Thank you Chief. l am seriousy thinking of turning my IQD to foriegn currency account for tax purposes.

[kingfish]

I'm thinking open a foreign dinar account with the Bank of Abu Dhabi in Washington DC, put your dinars in there, and just sit on em until the value goes up to where you are satisfied.....

Works for me.

Can you deposit in IQD funds?

Most accounts in the US have to be converted to USD before depositing.

That would be the answer if you can hold your deposits in IQD and they RETAIN THEIR VALUE IN IQD.

Thanks for the help Chief

Edited September 22, 2010 by kingfish

[muchodinaro]

UNTIL SOMEONE CAN PROOVE MY NEXT STATEMENT WRONG THIS IS MY STORY....If the RV comes out at a low rate (less than .86) every investment firm in the world, forex trader etc will buy up as many dinars as the portfolio's will allow! That is because we all know they can support 2 + $ and the speculation will drive the cost up to 3 + $ and create a much bigger pay out for Iraq in the long run, so no the rv will not come out very low in my opinion.

Please let me know if this argument holds any water, I am open to critisism!

I think you are right. If it were to come out low, investors everywhere would be buying. They would know that the price of the dinar was going to skyrocket. That is why it will be comparable to Kuwaits money. GOOOOOOO RV/RI!

The one thing that Iraq needs more than anything is for it' people to be able to purchase all of the goods that are currently being sent and stock piled in all of the warehouses. A low rate would reduce the country's purchasing power not only in country but around the world. Iraq will need to pay it' bills and a low rate would not help at all. The low rate would also increase the monetary surplus which would reduce the value even further. A higher rate would allow the iraqi's to spend, which would reduce the amount of currency in circulation and help to keep their inflation low. At rate of 2.00 will allow the country to operate at an inflation rate that would stimulate growth and also allow other countries to continue to invest in Iraq. Remember that this currency was created by countries that are depending on it's value to jump start the world economy. Many budgets are and have been established based on the rate that is in Iraq's budget from last year so they know already. Why do you think that "O" is still spending? He is not panicking about our trillion dollar debt is he??? Just wait and see what is about to happen world wide once the GOI is established...

I love that positive vibe! I'm with your line of thinking all the way. I'm not concerned about the rate, but I am concerned about " when " is this currency going to RV.

I bet it would help you all if you understand, that Enoch8 is referring to an IMF document, dated Feb 24 2010 and released March 10 2010. IMF PIN 10/34.

It show 2 rates, regardless of whether or not there is an RV.

The Nominal Rate is 1170 and the 'Real Exchange Rate' shown is 292. That is $.00342 .

What he is telling you, is that the current Auction price is.... according to GOI/MOP and CBI Reports to the IMF, the IMF is showing that the Purchace Power Parity is 4 times undervalued..... regardless of removal of the large notes from circulation.

Don't read anything else into what he said. If you understand what he is referring to, you will also understand, that he is also pointing you to CBI press releases, that state plainly, the intend to drop the 000s

What is .00342 if you drop 3 zeros? Hmmmmm?

Enoch and Scooter know what they are talking about. Listen and you will learn.

"There is a principle that is a bar against all information, which is evidence against all argument, that cannot fail to keep a man in everlasting ignorance. That principle is contempt prior to investigation."

The entire thread is posted elsewhere.

It seems to me, it is good news, that Shabibi could increase the value by a minimum of 4 times..... right now, today, even IF the do not RV.... based on the amount of GDP vs Liquidity reported for 2009.

400% is a great return .... even as a worst possible case scenario.

There is no guarantee, we will make millions off of our thousands...... but it is a fantastic and safe bet we are gonna make a huge windfall.

If you are looking for a guaranteed win..... then you may want to try, the Hearts Casino in Wonderland or the Special Olympics.

Anybody who tells you you are guaranteed to make a killing on ANY investment, is either a liar or an ignorant fool.

Scooter and E8 you guys rock!!! Please keep up the great work you do.

Go to bed son, and turn that computer off. You have school tomorrow!

[pourit]

My best advise is quit worrying about what rate it will be and when it will come out. Start spending time on how to A) Protect it Get the best rate of return C) Pay the least taxes and D) Figure how you can help the world with this winning lottery ticket. You can't affect the rate and date anyway. Quit worrying about something you have ZERO control over and change the things you do have control over. GOOD LUCK..... POURITFORWARD

[War Eagle]

We think there are 6 lower denoms .At .0003 the 50 dinar is worth .15,the 20 would be .06,the 10 would be .03,the 5 would be .025,the 1 would be .0125 ,the 1/2 would be .00625 ,the 1/4 would be .003125. this would be quite a rv,and we would all get filthy rich-----------------------------NOT.PATENTLY RIDICILOUS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[Zekiel]

Oh for pete sake..... who said anything about a .003 RV?

Enoch did not say that.

Read what he said. He is telling you, that the Real Rate listed by IMF for 2009, IMF Public Information Notice 10/34 shows has shown a Real Exchange Rate of 292 Dinar to 1 USD since March 1, of 2010. That has nothing to do with an RV.

What he is showing you, is the Auction Rate should be at .003 since 2009..... because the Purchase Power Parity is only 25% currently of what it should be given the current reports. That simply means the Iraqis are making only 25% of their real income, in buying power.

He also said, that he believes the 3+ rate will come..... but said he doubts the RV will start much higher than a dollar, to begin with..... and supports that with statements from the CBI all year long, that tell us they plan to reduce the money in circulation by systematically removing the large bills from circulation.

Tuesday, September 21st, 2010 08:22

BAGHDAD: The announcement by the Iraqi central bank intention to delete the three zeros of the dinar, the reactions and the wide economic and financial circles, as the consequences of this step on the markets, especially that the zeros added to the currency a few years ago inflated the money supply.

The newspaper "Life" London for a Chief executive for Bank of "guidance" Abdul Aziz Hassoun, step task, pointing out that[g] "it needs to be studied carefully in order to avoid chaos and confusion in the market, if it does not possess the qualifications and capabilities required to implement the resolution, which aims to get rid of the huge mass of paper by the client, which led to problems in the trading and banking. "

For his part, said Dean of the Faculty of Management and Economics at the University of Karbala governor Mohsen that the Iraqi currency is now a "mass of paper," considering it[g] "a problem in itself stands in the way of developing the national economy."

He pointed out that the first step in this direction, '"to issue the two categories of paper currency, one million dinars and the second thousand dinars to grow the confidence of the citizens and enable it to deal with the new currency as soon as issued."

He improved that the application of step "will not take more than a year or two",[/g] because deletion of zeros "will in the future to carry the citizen small amounts of currency, and increase its value in conjunction with a qualitative shift in the Iraqi economy, through optimum utilization of agricultural resources, industrial, transport and storage, and development of effective national staff, through a policy of balanced economic and financial. "

". He explained that the deletion of zeros will lead to an increase in KD by traders rather than the dollar, which "means the added strength of the national currency." [/g]

As explained Advisor to the Governor of the Central Bank the appearance of Mohammed Saleh said that [g]"zeros formed a cluster of up to four trillion banknote, worth 27 trillion financial dinars, up from 25 billion dinars in 1980."

http://translate.google.com/translate?hl=en&sl=ar&tl=en&u=http://www.alrafidayn.org/

As that happens.... then you will see, the value increases, incrementally over time.

You give a better explanation of it than Scooter or Enoch..... then come talk to me. But sitting here trashing folks doing the research for you, while ya sit on your dead arse..... just sayin'..... ya darn well better know who the he!! yer referrin to before ya start talkin' Smack.... and let yur Pelican Beak beak overload yur Humming Bird arse!

Here is IMF PIN 10/34

http://www.imf.org/external/np/sec/pn/2010/pn1034.htm

IMF Executive Board Concludes 2009 Article IV Consultation with Iraq

Public Information Notice (PIN) No. 10/34

March 1, 2010

Public Information Notices (PINs) form part of the IMF's efforts to promote transparency of the IMF's views and analysis of economic developments and policies. With the consent of the country (or countries) concerned, PINs are issued after Executive Board discussions of Article IV consultations with member countries, of its surveillance of developments at the regional level, of post-program monitoring, and of ex post assessments of member countries with longer-term program engagements. PINs are also issued after Executive Board discussions of general policy matters, unless otherwise decided by the Executive Board in a particular case.

On February 24, 2010, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Iraq.1

Background

The Fund has been closely engaged with Iraq since 2003. Initial work focused on providing policy advice, mainly on monetary and fiscal policies, and technical assistance to rebuild essential economic institutions. In September 2004, the Fund approved Emergency Post Conflict Assistance for Iraq, which—in combination with a debt sustainability analysis—paved the way for an agreement with Paris Club creditors. Since then, Iraq successfully completed two precautionary Stand-By Arrangements whose main objectives were to achieve macroeconomic stability; promote growth; and continue the process of structural reforms.

Substantial progress has been made since 2003, despite the difficult security situation. Inflation has been reduced to single digits, the international reserves position has improved markedly, and direct fuel subsidies were eliminated, while the pension system was put on a sustainable footing, which created room for priority spending on investment and the social sectors. Several steps have also been taken to strengthen public financial management, improve transparency in the oil sector, and rebuild capacity at the central bank, and the authorities have initiated the restructuring of the two largest state-owned banks. In addition, important advances have been made in attaining long-term debt sustainability. In 2004, Paris Club creditors agreed to reduce Iraq’s external debt by 80 percent in net present value terms. Also, bilateral debt agreements with several non-Paris Club creditors have been concluded, although this process is yet to be completed.

Iraq’s economic performance was strong in 2008, aided by record oil prices and improved security. Oil production rose to 2.3 million barrels per day (mbpd), the highest level since 2003. As a result, real GDP is estimated to have grown by 9½ percent in 2008, up from 1½ percent in 2007. Crude oil export receipts reached $61 billion in 2008—65 percent higher than in 2007—and the current account recorded a large surplus. The government budget registered a lower-than-expected surplus of 1½ percent of GDP in 2008. This reflected a significant increase in government spending that more than offset the higher-than-budgeted revenues. This increase in government spending reflected in part a large wage adjustment to compensate for the erosion in real wages that had taken place in previous years.

Following the strong economic performance in 2008, more recently the Iraqi economy has been seriously affected by the drop in oil prices from their peak levels in mid-2008. Also, oil production and export volumes have not risen as much as planned due to insufficient investment; production reached 2.4 mbpd. As a result, Iraq’s external position weakened in 2009, with oil export proceeds falling to $39 billion and both the external current account and the overall balance of payments shifting into large deficits. With oil export receipts accounting for about 85 percent of government revenues, the lower oil prices had a similar impact on the government’s budget, which is estimated to have recorded a deficit of over 20 percent of GDP in 2009. The CBI’s international reserves fell by almost $7 billion in 2009, to about $44 billion by year’s end, reflecting the use of government deposits at the CBI to finance the budget deficit. Growth is estimated to have slowed to 4 percent in 2009, even though oil production improved towards the end of the year owing to efforts to address infrastructure bottlenecks.

Iraq’s longer-term economic outlook is strong as oil prices and production are projected to increase markedly in the coming years. However, based on conservative oil price assumptions, the external current account and the overall balance of payments are expected to remain in deficit in 2010 and 2011. Similarly, Iraq’s fiscal position is projected to record significant, albeit declining deficits in both years, before returning to a surplus position in 2012. Financing the budget deficits in 2010–2011, would require additional financial support to fill a financing gap projected at almost $5 billion, even after mobilizing substantial amounts of domestic financing and utilizing the recent SDR allocation amounting to the equivalent of about $1.7 billion.

Against this background, the authorities have designed an economic program for 2010–11 that aims to maintain macroeconomic stability during the period of political transition (parliamentary elections are scheduled for early March 2010) and deepen structural reforms, particularly in the areas of public financial management, the financial system, and oil sector transparency. In support of this program, the authorities have requested a new Stand-By Arrangement from the IMF in the amount of SDR 2,376.8 million (about $3.6 billion). This amount, together with disbursements from the World Bank under a Development Policy Loan and support from some donors, is expected to cover the financing gap for 2010–11. An important objective of the authorities’ fiscal program is to contain current spending in order to gradually reduce the budget deficit and make room for additional investment. Specifically, current spending in both 2010 and 2011 will be kept broadly unchanged in nominal terms at 2009 levels. At the same time, given the urgent need to improve infrastructure and basic public service delivery, a significant increase in capital spending is planned for 2010, following an underexecution of the 2009 capital budget due to administrative capacity constraints associated with security incidents that affected the Ministry of Finance towards the end of the year. Monetary and exchange rate policies will continue to aim at keeping inflation low in 2010 and 2011.

Executive Board Assessment

Directors commended the Iraqi authorities for the progress in rebuilding its economy under extremely difficult security and political conditions. While the medium-term economic outlook remains favorable as oil prices and production are expected to increase in the coming years, major challenges lie ahead. Large fiscal and balance of payment gaps are projected for 2010 and 2011, caused by the lower oil receipts and infrastructure bottlenecks. Directors also noted considerable risks associated with security problems, oil price volatility, and capacity constraints. They welcomed the authorities’ strong commitment to consolidate macroeconomic stability and advance the structural reform agenda, particularly in the areas of public financial management and the banking sector. Directors underscored the importance of steadfast implementation of the economic program, which would help unlock much needed resources from other donors and multilateral development banks.

Directors considered that the 2010 budget, based on conservative oil price assumptions, is consistent with the program’s objectives. They highlighted the need to contain current spending, in particular through rationalizing the government wage bill and streamlining the in-kind Public Distribution System and transfers to state-owned enterprises. This would create room for targeted social safety nets and for essential investment and reconstruction projects, including improving public service delivery and infrastructure in the oil sector. Directors encouraged further reform efforts aimed at improving budget preparation and execution through developing a medium-term budget framework, and broadening the revenue base by introducing a general sales tax.

Directors welcomed the authorities’ continued commitment to strengthen governance and improve transparency in the hydrocarbon sector. Completion of the oil metering system would help facilitate the full reconciliation of oil flows with financial flows between the state-owned oil companies and the budget. Directors congratulated Iraq on becoming a candidate for membership in the Extractive Industries Transparency Initiative. They encouraged the authorities to establish a successor arrangement for the Development Fund for Iraq with the similar standards of transparency and accountability.

Directors supported the central bank’s objective of aiming monetary and exchange rate policies at keeping core inflation in single digits. They called on the authorities to remove the remaining exchange restrictions under Fund jurisdiction. Directors also encouraged the central bank to fully implement the recommendations of the previous safeguards assessment and looked forward to its update. The need to preserve central bank independence was particularly emphasized. Further steps are necessary to strengthen reserve management, banking supervision and prudential regulations, and the AML/CFT framework.

Directors welcomed the authorities’ good-faith efforts to conclude debt agreements with the remaining official and private creditors. They encouraged the authorities to continue to work with non-Paris Club creditors, with a view to securing debt relief on terms comparable to those of the 2004 Paris Club Agreement.

While welcoming Iraq’s participation in the General Data Dissemination System, Directors called for continued efforts to improve the quality, coverage, and timeliness of macroeconomic statistics.

Iraq: Selected Macroeconomic Indicators, 2007–10

2007 2008 2009 2010

Est. Proj.

Oil and gas sector

Total exports of oil and gas (in billions of U.S. dollars)

37.7 61.7 38.9 48.4

Average crude oil export price (in U.S. dollars/barrel)

63.0 91.5 56.5 62.5

Crude oil production (in millions of barrels/day)

2.0 2.3 2.4 2.6

(Annual percentage change)

Output and prices

Real GDP

1.5 9.5 4.2 7.3

Non-oil real GDP

-2.0 5.4 4.0 4.5

Consumer price inflation (end-of-period)

4.7 6.8 -4.4 6.0

(In percent of GDP)

Investment and Saving

Gross domestic investment

19.8 28.1 28.1 31.5

Of which: non-government

4.1 2.0 3.7 4.1

Gross national savings

32.5 43.2 8.7 10.5

Of which: non-government

7.1 15.4 11.3 2.9

(In percent of GDP, unless otherwise indicated)

Public Finances (cash basis)

Government revenue (including grants)

83.7 84.3 76.5 75.4

Of which: Oil revenue

74.0 77.6 68.0 67.0

Expenditure

74.0 82.6 99.0 94.5

Of which: Current

57.7 56.4 78.4 67.0

Of which: Capital

15.6 26.1 24.4 27.5

Budget balance (including grants)

9.7 1.7 -22.6 -19.1

Primary fiscal balance

10.5 2.2 -21.7 -18.0

Non-oil primary fiscal balance

-53.4 -64.7 -78.7 -74.2

Total government debt (in billions of U.S. dollars)

103.1 95.6 90.2 33.8

(Annual percentage change)

Monetary Sector

Base money

73.9 54.5 0.1 13.5

Currency issued

31.2 36.3 13.4 15.2

(In billions of U.S. dollars, unless otherwise indicated)

External Sector

Merchandise trade balance

13.4 20.8 -1.9 -2.4

Exports of goods

37.8 62.0 39.3 48.8

Imports of goods

24.4 41.2 41.3 51.2

Current account

7.2 13.1 -12.8 -16.8

Current account (in percent of GDP)

12.7 15.1 -19.4 -21.0

Total external debt (in percent of GDP)

181.0 110.5 137.1 42.1

Central banks gross reserves

31.5 50.2 44.3 44.0

In months of imports of goods and services

7.7 11.9 8.5 8.1

Memorandum Items

Nominal GDP (in billions of U.S. dollars)

57.0 86.5 65.8 80.3

Local currency per U.S. dollar (period average)

1,255 1,193 1,170 ...

Real exchange rate 1/

280.7 342.5 292.0

...

Sources: IMF staff estimates and projections.

1/ Calculated as the nominal exchange rate adjusted for the inflation differential between Iraq and the United States. Increase in the index denotes appreciation.

1 Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.imf.org/external/np/sec/misc/qualifiers.htm.

IMF EXTERNAL RELATIONS DEPARTMENT

Public Affairs Media Relations

Do you know what this means? I am telling you, these guys know what they are talking about.

Just sayin'

Edited September 22, 2010 by Zekiel

[ha ha]

Simply highlight for the readers where the CBI/IMF says the rate will be set @ .003, period. thanks

[Zekiel]

Simply highlight for the readers where the CBI/IMF says the rate will be set @ .003, period. thanks

Nominal GDP (in billions of U.S. dollars)

57.0 86.5 65.8 80.3

Local currency per U.S. dollar (period average)

1,255 1,193 1,170 ...

Real exchange rate 1/

280.7 342.5 292.0

The Real Exchange Rate shows 280.7 IQD per 1 USD vs 1255 for 2007; 342.5 vs 1193 for 2008 and 292 IQD per 1 USD vs 1170 per 1 USD for 2009.

2010 is not listed yet.

Now.... I signed up here, to explain this for you.

I cannot guarantee the accuracy, because we cannot be certain, but have formed what we believe to be a very good theory.... so call it OPINION for now.

Where is shows Local Currency per USD 1170 (above) is the "Defacto" Exchange Rate, that is known per IMF Article XIV rules, as the Program Rate. (That, we know to be FACT)

Where it shows Real Exchange Rate 292.0 we believe to be the Dejure Rate.

IMF defines that and I do not have time here to post the links, as it is some rather lengthy research...... but IMF definitely states that many countries have both Dejure and Defacto Rates, but use one or the other.

What we are saying, that is in the contents of IMF PIN 10/34 shows, the overall purchase power of the 27 IQD in issue, is only valued at about 25% of the Nominal GDP.... and about even less than that of projected 2010 estimated returns, in M1, M2 and Foreign Reserves, that are even greater than the GDP.

.00086 x 27 Trillion IQD = About 20 Billion US Defacto Rate

.00342 x 27 Trillion IQD = About 80 Billion US DeJure Rate

Now look above at the 2009 Nominal GDP...... 80.3 Billion in US

So.... I stand on what I said..... Enoch is showing you, the current Program Rate of 1170 is 400% undervalued as of 2009 and probably more than that, with projected 2010 and 2011 figures.

The Program Rate under IMF Article XIV protection is not the same as the RV Rate under IMF Article VII Requirements.

Are you starting to get it now?

I could go on.

Now combine that info with the many articles this year, stating the CBI intent to remove zeros from circulation..... along with XE statement on their site, that says, a 1000 IQD Note Pre RV will be worth the same as a 1 IQD note Post RV.

There is a recent Press release, that I posted the link to above, in this thread, that says..... from the CBI 2 economists estimates, that it will take no longer than 1 or 2 years to complete the process of reducing the currency from 27 Trillion to about the required estimates .... some say 25 Billion in circulation... but our data shows they could have as much as 80 Billion IQD in circulation to hold a value of $3.42.

That means, some very good economists in Iraq, think they should come out at about around $1.00 and it would take, about a year or 2 to progressively reach about $3.42, by the most recent figures, which means they will regulate the value in a Free Float, not by adjusting the rate, like a Managed Float or Peg, but by infusion of IQD or Removal of IQD from the market place to adjust for Supply and Demand, at the target Rate..... which looks like they want Over a Dollar but closer to KWD.

Now..... do you get it?

See?

Try a little credit where credit is due. Enoch and Scooter a very very good researchers..... along with so many others.

Maybe they did not drink the Koolaid!

Read more:

Sorry for a couple typos..... IMF Article VIII not VII.

Hope that helps those who thought E was saying 3 tenths of a penny RV....... NOT!!!! He is saying.... over a Dollar, certainly nothing under GCC Regional Rates..... and that over a year or 2 look for the 3+ range and that can definitely be backed and supported by volumes of articles and documents in years of research.

Is he right? I honestly do not know. But personally, at least these guys are putting out research facts and statistics, with some really really good explanations..... and not just spreading circular lies, based on Sugar Watered Koolaid. OPINIONS???? YES!!!! ONLY OPINIONS..... but I for one.... think they are very very well founded opinions.

[fatbob]

Well said. Thanks for the info.

[ha ha]

Mr Zekiel

l want to thank for your post. If any thing else, l love your conclusions. Scooter, GG and many other noted gurus (except Med who stick with .76 to .86),have come to the same conclusions as you did here, for that, l congratulate you.

Scooter projections is bewteen 1.7x and 2.65. GG projected 2.75 and 3.30. Your projection, which is very soothing, is over a dollar until a year or two before it can attain 3.xx. Thank you again for your efforts, my friend. Have a good one.

[ReachingHigher]

Ok, I admit I know nothing about anything.

That being said here is my perspective on why it can't come out too low.

If the RV comes out at .003 then for all intents and purposes Iraq will be all but giving away their natural resources for pennies.

Forgive me if this is overly simplistic, but they have resources "for sale" - gas, oil, etc, and if they RV low then the rest of the

world can basically come in and rape and pillage and take all of Iraq's natural resources for next to nothing.

THAT makes no sense. Why would they do that? They have a right to a fair market price for what they have for sale.

I know, there are something like set prices for the ME oil countries, but still, do they open their doors to the world for free?

Coming out too high also would seem to mean it would be too expensive for investors to come in and invest to rebuild their infrastructure.

So, it would seem to me a middle ground number for the RV would be more reasonable.

Any thought on this are welcome.

The lowest of the rest of the ME oil countries are at least at: 0.27 (UAE, Saudi Arabia, Qutar), and Israel is at 0.26. From there you jump to Bahrain and Kuwait with over 3.00.

Seems to me they would not come in lower than 0.27.....but what do I know?

Peace.

[duke2b]

Great Post Zekiel.

Very well said without bashing.

Keep up the good work!

[deenar]

3 cents is better than where we are now

Currency Auctions

Announcement No. (1738)

The latest daily currency auction was held in the Central Bank of Iraq on the 21-SEP-2010. The results were as follows:

Details Notes Number of banks 19 Auction price selling dinar / US$ 1170 Auction price buying dinar / US$ ----- Amount sold at auction price (US$) 251,125,000 Amount purchased at Auction price (US$) ----- Total offers for buying (US$) 251,125,000 Total offers for selling (US$) -----

[/qu.003 is a little less than one third of a cent, not 3 cents.

[gfulcher66]

Good read gents. I will be tickled pink at a dollar! I would love to hold on to a million and wait for the $3+ rate but i doubt they would let us do that.....we will probably only have 90 days or less to cash in.

Thanks again for the info, I read it in full at the GET team forum as well

[viper51]

Ok listen up. I have told you before about one very improtant factor on the rate and what it will be close to. Once again Iraq has been working furiously since 2004 to meet the requirements to becoma a member of the WTO. This goal HAS NOT CHANGED Iraq is still pushing very hard to accomplish Membership in the WTO. Iraq has met with the WTO 2 or 3 times this year already on this matter. What is one of the REQUIREMENTS THE WTO HAS MADE OF IRAQ THAT MUST BE MET AND I REPEAT MUST BE MET before Iraq can join the WTO? IRAQ MUST RV THE DINAR CLOSE TO OR BETTER THAN THE USD. A figure that came up was 1-IQD = $1.17 USD. NO WAY will Iraq embarrass themselves and RV at .003 EVER! I know for a fact as long as Iraq is positioning to join the WTO we WILL be in very good shape. If Iraq would for what ever reason drop their pursuit of membership to the WTO THEN AND ONLY THEN would I be concerned. Right now all is good so relax and keep your eye on Iraqs movement on the WTO membrship. When they announce Iraq is becoming inducted as a member to the WTO, PACK YOUR BAGS cause the RV will happen fast.

Edited September 23, 2010 by viper51

[msmortgagewiz]

Oh for pete sake..... who said anything about a .003 RV?

Enoch did not say that.

Read what he said. He is telling you, that the Real Rate listed by IMF for 2009, IMF Public Information Notice 10/34 shows has shown a Real Exchange Rate of 292 Dinar to 1 USD since March 1, of 2010. That has nothing to do with an RV.

What he is showing you, is the Auction Rate should be at .003 since 2009..... because the Purchase Power Parity is only 25% currently of what it should be given the current reports. That simply means the Iraqis are making only 25% of their real income, in buying power.

He also said, that he believes the 3+ rate will come..... but said he doubts the RV will start much higher than a dollar, to begin with..... and supports that with statements from the CBI all year long, that tell us they plan to reduce the money in circulation by systematically removing the large bills from circulation.

Tuesday, September 21st, 2010 08:22

BAGHDAD: The announcement by the Iraqi central bank intention to delete the three zeros of the dinar, the reactions and the wide economic and financial circles, as the consequences of this step on the markets, especially that the zeros added to the currency a few years ago inflated the money supply.

The newspaper "Life" London for a Chief executive for Bank of "guidance" Abdul Aziz Hassoun, step task, pointing out that[g] "it needs to be studied carefully in order to avoid chaos and confusion in the market, if it does not possess the qualifications and capabilities required to implement the resolution, which aims to get rid of the huge mass of paper by the client, which led to problems in the trading and banking. "

For his part, said Dean of the Faculty of Management and Economics at the University of Karbala governor Mohsen that the Iraqi currency is now a "mass of paper," considering it[g] "a problem in itself stands in the way of developing the national economy."

He pointed out that the first step in this direction, '"to issue the two categories of paper currency, one million dinars and the second thousand dinars to grow the confidence of the citizens and enable it to deal with the new currency as soon as issued."

He improved that the application of step "will not take more than a year or two",[/g] because deletion of zeros "will in the future to carry the citizen small amounts of currency, and increase its value in conjunction with a qualitative shift in the Iraqi economy, through optimum utilization of agricultural resources, industrial, transport and storage, and development of effective national staff, through a policy of balanced economic and financial. "

". He explained that the deletion of zeros will lead to an increase in KD by traders rather than the dollar, which "means the added strength of the national currency." [/g]

As explained Advisor to the Governor of the Central Bank the appearance of Mohammed Saleh said that [g]"zeros formed a cluster of up to four trillion banknote, worth 27 trillion financial dinars, up from 25 billion dinars in 1980."

http://translate.google.com/translate?hl=en&sl=ar&tl=en&u=http://www.alrafidayn.org/

As that happens.... then you will see, the value increases, incrementally over time.

You give a better explanation of it than Scooter or Enoch..... then come talk to me. But sitting here trashing folks doing the research for you, while ya sit on your dead arse..... just sayin'..... ya darn well better know who the he!! yer referrin to before ya start talkin' Smack.... and let yur Pelican Beak beak overload yur Humming Bird arse!

Here is IMF PIN 10/34

http://www.imf.org/external/np/sec/pn/2010/pn1034.htm

IMF Executive Board Concludes 2009 Article IV Consultation with Iraq

Public Information Notice (PIN) No. 10/34

March 1, 2010

Public Information Notices (PINs) form part of the IMF's efforts to promote transparency of the IMF's views and analysis of economic developments and policies. With the consent of the country (or countries) concerned, PINs are issued after Executive Board discussions of Article IV consultations with member countries, of its surveillance of developments at the regional level, of post-program monitoring, and of ex post assessments of member countries with longer-term program engagements. PINs are also issued after Executive Board discussions of general policy matters, unless otherwise decided by the Executive Board in a particular case.

On February 24, 2010, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Iraq.1

Background

The Fund has been closely engaged with Iraq since 2003. Initial work focused on providing policy advice, mainly on monetary and fiscal policies, and technical assistance to rebuild essential economic institutions. In September 2004, the Fund approved Emergency Post Conflict Assistance for Iraq, which—in combination with a debt sustainability analysis—paved the way for an agreement with Paris Club creditors. Since then, Iraq successfully completed two precautionary Stand-By Arrangements whose main objectives were to achieve macroeconomic stability; promote growth; and continue the process of structural reforms.

Substantial progress has been made since 2003, despite the difficult security situation. Inflation has been reduced to single digits, the international reserves position has improved markedly, and direct fuel subsidies were eliminated, while the pension system was put on a sustainable footing, which created room for priority spending on investment and the social sectors. Several steps have also been taken to strengthen public financial management, improve transparency in the oil sector, and rebuild capacity at the central bank, and the authorities have initiated the restructuring of the two largest state-owned banks. In addition, important advances have been made in attaining long-term debt sustainability. In 2004, Paris Club creditors agreed to reduce Iraq’s external debt by 80 percent in net present value terms. Also, bilateral debt agreements with several non-Paris Club creditors have been concluded, although this process is yet to be completed.

Iraq’s economic performance was strong in 2008, aided by record oil prices and improved security. Oil production rose to 2.3 million barrels per day (mbpd), the highest level since 2003. As a result, real GDP is estimated to have grown by 9½ percent in 2008, up from 1½ percent in 2007. Crude oil export receipts reached $61 billion in 2008—65 percent higher than in 2007—and the current account recorded a large surplus. The government budget registered a lower-than-expected surplus of 1½ percent of GDP in 2008. This reflected a significant increase in government spending that more than offset the higher-than-budgeted revenues. This increase in government spending reflected in part a large wage adjustment to compensate for the erosion in real wages that had taken place in previous years.

Following the strong economic performance in 2008, more recently the Iraqi economy has been seriously affected by the drop in oil prices from their peak levels in mid-2008. Also, oil production and export volumes have not risen as much as planned due to insufficient investment; production reached 2.4 mbpd. As a result, Iraq’s external position weakened in 2009, with oil export proceeds falling to $39 billion and both the external current account and the overall balance of payments shifting into large deficits. With oil export receipts accounting for about 85 percent of government revenues, the lower oil prices had a similar impact on the government’s budget, which is estimated to have recorded a deficit of over 20 percent of GDP in 2009. The CBI’s international reserves fell by almost $7 billion in 2009, to about $44 billion by year’s end, reflecting the use of government deposits at the CBI to finance the budget deficit. Growth is estimated to have slowed to 4 percent in 2009, even though oil production improved towards the end of the year owing to efforts to address infrastructure bottlenecks.

Iraq’s longer-term economic outlook is strong as oil prices and production are projected to increase markedly in the coming years. However, based on conservative oil price assumptions, the external current account and the overall balance of payments are expected to remain in deficit in 2010 and 2011. Similarly, Iraq’s fiscal position is projected to record significant, albeit declining deficits in both years, before returning to a surplus position in 2012. Financing the budget deficits in 2010–2011, would require additional financial support to fill a financing gap projected at almost $5 billion, even after mobilizing substantial amounts of domestic financing and utilizing the recent SDR allocation amounting to the equivalent of about $1.7 billion.

Against this background, the authorities have designed an economic program for 2010–11 that aims to maintain macroeconomic stability during the period of political transition (parliamentary elections are scheduled for early March 2010) and deepen structural reforms, particularly in the areas of public financial management, the financial system, and oil sector transparency. In support of this program, the authorities have requested a new Stand-By Arrangement from the IMF in the amount of SDR 2,376.8 million (about $3.6 billion). This amount, together with disbursements from the World Bank under a Development Policy Loan and support from some donors, is expected to cover the financing gap for 2010–11. An important objective of the authorities’ fiscal program is to contain current spending in order to gradually reduce the budget deficit and make room for additional investment. Specifically, current spending in both 2010 and 2011 will be kept broadly unchanged in nominal terms at 2009 levels. At the same time, given the urgent need to improve infrastructure and basic public service delivery, a significant increase in capital spending is planned for 2010, following an underexecution of the 2009 capital budget due to administrative capacity constraints associated with security incidents that affected the Ministry of Finance towards the end of the year. Monetary and exchange rate policies will continue to aim at keeping inflation low in 2010 and 2011.

Executive Board Assessment

Directors commended the Iraqi authorities for the progress in rebuilding its economy under extremely difficult security and political conditions. While the medium-term economic outlook remains favorable as oil prices and production are expected to increase in the coming years, major challenges lie ahead. Large fiscal and balance of payment gaps are projected for 2010 and 2011, caused by the lower oil receipts and infrastructure bottlenecks. Directors also noted considerable risks associated with security problems, oil price volatility, and capacity constraints. They welcomed the authorities’ strong commitment to consolidate macroeconomic stability and advance the structural reform agenda, particularly in the areas of public financial management and the banking sector. Directors underscored the importance of steadfast implementation of the economic program, which would help unlock much needed resources from other donors and multilateral development banks.

Directors considered that the 2010 budget, based on conservative oil price assumptions, is consistent with the program’s objectives. They highlighted the need to contain current spending, in particular through rationalizing the government wage bill and streamlining the in-kind Public Distribution System and transfers to state-owned enterprises. This would create room for targeted social safety nets and for essential investment and reconstruction projects, including improving public service delivery and infrastructure in the oil sector. Directors encouraged further reform efforts aimed at improving budget preparation and execution through developing a medium-term budget framework, and broadening the revenue base by introducing a general sales tax.

Directors welcomed the authorities’ continued commitment to strengthen governance and improve transparency in the hydrocarbon sector. Completion of the oil metering system would help facilitate the full reconciliation of oil flows with financial flows between the state-owned oil companies and the budget. Directors congratulated Iraq on becoming a candidate for membership in the Extractive Industries Transparency Initiative. They encouraged the authorities to establish a successor arrangement for the Development Fund for Iraq with the similar standards of transparency and accountability.

Directors supported the central bank’s objective of aiming monetary and exchange rate policies at keeping core inflation in single digits. They called on the authorities to remove the remaining exchange restrictions under Fund jurisdiction. Directors also encouraged the central bank to fully implement the recommendations of the previous safeguards assessment and looked forward to its update. The need to preserve central bank independence was particularly emphasized. Further steps are necessary to strengthen reserve management, banking supervision and prudential regulations, and the AML/CFT framework.

Directors welcomed the authorities’ good-faith efforts to conclude debt agreements with the remaining official and private creditors. They encouraged the authorities to continue to work with non-Paris Club creditors, with a view to securing debt relief on terms comparable to those of the 2004 Paris Club Agreement.

While welcoming Iraq’s participation in the General Data Dissemination System, Directors called for continued efforts to improve the quality, coverage, and timeliness of macroeconomic statistics.

Iraq: Selected Macroeconomic Indicators, 2007–10

2007 2008 2009 2010

Est. Proj.

Oil and gas sector

Total exports of oil and gas (in billions of U.S. dollars)

37.7 61.7 38.9 48.4

Average crude oil export price (in U.S. dollars/barrel)

63.0 91.5 56.5 62.5

Crude oil production (in millions of barrels/day)

2.0 2.3 2.4 2.6

(Annual percentage change)

Output and prices

Real GDP

1.5 9.5 4.2 7.3

Non-oil real GDP

-2.0 5.4 4.0 4.5

Consumer price inflation (end-of-period)

4.7 6.8 -4.4 6.0

(In percent of GDP)

Investment and Saving

Gross domestic investment

19.8 28.1 28.1 31.5

Of which: non-government

4.1 2.0 3.7 4.1

Gross national savings

32.5 43.2 8.7 10.5

Of which: non-government

7.1 15.4 11.3 2.9

(In percent of GDP, unless otherwise indicated)

Public Finances (cash basis)

Government revenue (including grants)

83.7 84.3 76.5 75.4

Of which: Oil revenue

74.0 77.6 68.0 67.0

Expenditure

74.0 82.6 99.0 94.5

Of which: Current

57.7 56.4 78.4 67.0

Of which: Capital

15.6 26.1 24.4 27.5

Budget balance (including grants)

9.7 1.7 -22.6 -19.1

Primary fiscal balance

10.5 2.2 -21.7 -18.0

Non-oil primary fiscal balance

-53.4 -64.7 -78.7 -74.2

Total government debt (in billions of U.S. dollars)

103.1 95.6 90.2 33.8

(Annual percentage change)

Monetary Sector

Base money

73.9 54.5 0.1 13.5

Currency issued

31.2 36.3 13.4 15.2

(In billions of U.S. dollars, unless otherwise indicated)

External Sector

Merchandise trade balance

13.4 20.8 -1.9 -2.4

Exports of goods

37.8 62.0 39.3 48.8

Imports of goods

24.4 41.2 41.3 51.2

Current account

7.2 13.1 -12.8 -16.8

Current account (in percent of GDP)

12.7 15.1 -19.4 -21.0

Total external debt (in percent of GDP)

181.0 110.5 137.1 42.1

Central banks gross reserves

31.5 50.2 44.3 44.0

In months of imports of goods and services

7.7 11.9 8.5 8.1

Memorandum Items

Nominal GDP (in billions of U.S. dollars)

57.0 86.5 65.8 80.3

Local currency per U.S. dollar (period average)

1,255 1,193 1,170 ...

Real exchange rate 1/

280.7 342.5 292.0

...

Sources: IMF staff estimates and projections.

1/ Calculated as the nominal exchange rate adjusted for the inflation differential between Iraq and the United States. Increase in the index denotes appreciation.

1 Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.imf.org/external/np/sec/misc/qualifiers.htm.

IMF EXTERNAL RELATIONS DEPARTMENT

Public Affairs Media Relations

Do you know what this means? I am telling you, these guys know what they are talking about.

Just sayin'

You are a scholar, and I had to quote your entire post just to say thank you for sharing such a educated well written post. I enjoyed reading it.

[BigFrankD]

UNTIL SOMEONE CAN PROOVE MY NEXT STATEMENT WRONG THIS IS MY STORY....If the RV comes out at a low rate (less than .86) every investment firm in the world, forex trader etc will buy up as many dinars as the portfolio's will allow! That is because we all know they can support 2 + $ and the speculation will drive the cost up to 3 + $ and create a much bigger pay out for Iraq in the long run, so no the rv will not come out very low in my opinion.

Please let me know if this argument holds any water, I am open to critisism!

Sorry, but it doesn't. .86 would give them an M2 of around 60 trillion USD. NO ONE would buy any dinar at that rate, it wouldn't be recognized by anyone.

[rsskelton]

Ok, I can't add much to this other than my opinion. I know Scooter, have spoken with him on a couple of occasions and unless he has rethought his position on the rate, I certainly am looking for more than 3 cents. As for Enoch, I don't know him personally, but have listened to him on numerous occasions. Both these guys are brilliant and have two of the best analytical minds I have ever seen. However.......research or no research, it is still just their opinion. Everyone has one of those. I do not see how an extremely low rate can benefit Iraq in the least. I completely agree that if they come in with a very low rate a lot of whales are gonna own an oil rich country. I just don't see that happening, ( with all due respect ).

Of course some of these high rates being tossed around are just plain stupid. Since I am not as brilliant as those guys, but a bit more realistic than the 3 bucks plus crowd, I'm gonna stay where I've been for this whole ride ( and OMG has it been bumpy) and say........somewhere around a buck. Now you guys really don't have to tell me I'm crazy, ( cause I already know that) , as do most of my friends on here who know me. Low rate, high rate, just RV the da_n thing and lets get it over. I want my money....NOW!

RSS

[AVENGER]

Sorry, but it doesn't. .86 would give them an M2 of around 60 trillion USD. NO ONE would buy any dinar at that rate, it wouldn't be recognized by anyone.

Have you looked at the real M2 for the United States lately?

[whatsthis]

Excuse me everyone is missing something here please take note of the date of the post "Posted 21 September 2010 - 01:12 PM " since I have been in since Dec of 2010 I have never hear Scooter or Encho8 say this so this is an old post which means nothing with what is going on today maybe at the time that was the thought with the news that was out but I think a lot has changed since than. I have only heard encho8 say from $1.00 usd to as high as $1.30 usd & even scooter has said .86 cents to maybe as high as $1.15 usd . But let all keep in mind this is just their opinion & we won't know what it is until we see it.

[Dinaronair]

um the org date of this is really old?

[Blu Collar Guru]

The IQD @ $0.03 not a chance! The IQD @ $ 1.03 now that's realistic.............

[20MillionDinar]

UNTIL SOMEONE CAN PROOVE MY NEXT STATEMENT WRONG THIS IS MY STORY....If the RV comes out at a low rate (less than .86) every investment firm in the world, forex trader etc will buy up as many dinars as the portfolio's will allow! That is because we all know they can support 2 + $ and the speculation will drive the cost up to 3 + $ and create a much bigger pay out for Iraq in the long run, so no the rv will not come out very low in my opinion.

Please let me know if this argument holds any water, I am open to critisism!

So does that mean that WE are smarter and more sophisticated then the biggest financial institutions in the world? I mean, we got in at 1170:1, what makes you think that they didn't?

Once it hits $0.02 that is a HUGE increase from where it's at now!!!!!!!

Not sure if this proves you wrong but, my question is: Are we smarter and more sophisticated than the major financial institutions and investment firms?

[DinarDana]

So does that mean that WE are smarter and more sophisticated then the biggest financial institutions in the world? I mean, we got in at 1170:1, what makes you think that they didn't?

Once it hits $0.02 that is a HUGE increase from where it's at now!!!!!!!

Not sure if this proves you wrong but, my question is: Are we smarter and more sophisticated than the major financial institutions and investment firms?

Maybe we are smarter, but here is why I think most financial institutions and investment firms will not invest in IQD is because it is cash currency, this isn't the norm, they like to deal with electronic transactions and it is not a globally traded currency. Too many risks. This really is a high risk speculation, however it allows for many average income folks to get involved. I think this has become a great hobby for me and I have learned a lot. I have in the past always gravitated towards collateral investments, I don't care for vapor money, so this has been so far quite interesting to me on many levels.

I also want to thank Zeikal for excellent post. You explained something that I had a vague understanding of in clear, concise terminology, and I understood it at once.