CBI Currency Auction 4/5/2011

[Doc31]

Currency Auctions

Announcement No. (1869)

The latest daily currency auction was held in the Central Bank of Iraq on the 5-APR-2011.

The results were as follows:

DetailsNotesNumber of banks17

Auction price selling dinar / US$1170

Auction price buying dinar / US$-----

Amount sold at auction price (US$)191,205,000

Amount purchased at Auction price (US$)-----

Total offers for buying (US$)191,205,000

Total offers for selling (US$)-----

Exchange rates

Dollar's exchange rates / in Baghdad markets

Oil ... high ... dated Brent Crude $120.20

Gold ... insane ... running in a $12 channel but in a very nervous pattern

Zeroes ... near ... but the obvious withdrawal of the money supply (read that as big bills) by the CBI causing more inflation and pressure for the clowns of the GOI to RV is requiring larger and larger "gulps of air" by the banks to maintain liquidity. Statistically, they are still small as the cash portion 4.235M is only 2.21%

I decided to post something this morning because so many folks are leaving me messages checking to see if I'm OK ... I'm fine ... thank you for checking ... just very busy ... this morning I had a few minutes ... and for the first time in weeks I felt like I had something to write about ... I hope you do when I'm through ... lol. Besides when your pastor friends and your wife start busting on you to post ... perhaps you should make some time ... that peace at home thang don't ya' know.

Nah, it wasn't like that at all ... she's my best friend, wife and lover ... she is simply the best.

OK ... let's see if I remember how to do this ...

The thing that has continued to bother me is the quality of the news that we are getting ... our news-hounds are doing their job ... the writers on the other end ... not so much.

Is it just me or does it appear that the guts have been ripped from the articles ... perhaps I've been here so long that I've become overly jaded ... or ... perhaps I can smell the bull in the other pasture because of the amount of droppings ... are you with me?

For a while articles with the titles we were looking for and hoping to see were often 2 sentences in length!!!!!! What's up with that? For instance the ORIGINAL LOI post ... ridiculous.

Another thing that has bothered me is that ... let's face it ... at $80 ... oil is over-priced ... nah ... I'm not going to buy your world instability, weak dollar, challenges ... that is what is in the press ... not what can be seen statistically. The instability in the ME is not the overriding factor ... go look at the rise in relation ... it doesn't explain the $74 at the middle of the month rising the last few days of a month to be at or near $90 which would last 10-15 days and then fall to $74 again ... next month same thing. Yes someone was artificially manipulating oil ... I believe for the Iraqi RI/RV. Marry that with where we started to see civil unrest in Egypt, Libya, Tunisia, etc. and while you see blips you don't see full scale UPS ... instead it's blips up, settling, and remaining high. Nope ... the dollar IS weak but go look at it against other currencies vs oil. It just isn't so.

Gold ... don't get me started ... I've been telling you it was insane for a very long time. Many of you have told me that it is the first thing that you are going to buy ... good luck with that. Remember, I'm not your Mom ... if you are led to do this ... do what you've got to do. Here's how I see it ... mass hysteria/speculation has driven gold to dizzying heights. Why do I believe that? ... well, gold and silver for nearly 200 years has had a relationship mathematically. That ratio ordinarily is 17:1 gold vs. silver (varying from about 15:1 to 20:1). Today silver is quite high at $38.40 (and perhaps that is appropriate but I doubt it and fodder for another post) ... if we apply our 17:1 rule we find that gold should be about $652 and it is 10% higher than TWICE that ... heck, even if we apply the 20:1 ratio it would only be $768. You say "well Doc31 ... you just don't understand metals and silver is actually way low because of the amount of surface silver available today vs that buried deep ... silver is scarce ... with the vaporization processes utilized in industry today it is a diminishing commodity ... (I told you it was a topic for another discussion ... let me step off here). And you'd be right ... I'm no metals expert but I believe that it is obvious that I do know a few things about metals via fairly intense study.

Indeed, if we were to divide $1434.04 by 20 it would put silver at $71.70! Even Silver guys would have a hard time with that number ... no don't start that weak dollar stuff either ... go find a currencIES vs gold chart and a currencIES vs silver chart ... you'll see that the dollar is indeed weak but not disproportionately to the others (if it were there would be a divergent line between the currencIES and the USD ... there isn't.

What if we were to agree (no I'm not suggesting that these numbers are the real deal ... it's a math exercise ... I knew you knew that!) that silver was undervalued ... let's say it was something near $12 low or 31.6% (nope I don't) and $50 was what it should be valued at ... still with me? ... since it is adjusted correctly (fictionally rather than actually) we have to use 17 as the multiplier and we see that gold should be at $850. Are you still a buyer at it's current level?

I know that it is obvious that I am not ... shoot ... $50 silver to me would not be reflective of it's value but hoarding and media driven hype ... I actually think that at $38 it is just that ... but that's just me.

Let me give my disclaimer again ... I am not a metals guy ... nor your investment counselor ... I'm just a math and patterns guy ... oh, yeah ... and I'm not your Mom!

Yesterday I got a call from a friend ... as I listened I began to smile ... it's happening ... Zürich ... "yes, yes" ... right up to the part where the bankers told them that if they waited until tomorrow/end of week (depends on the source) that the rate would be higher. This is the point that the smile left my face.

Folks ... I know that we are all anxious ... many of us are hurting and want the pain eased minimally and erased if possible. The crap that we are sometimes willing to swallow is astounding. I'm not throwing stones at the originator of this story ... not at all ... I don't know them and for all I know they were posting what they believed to be intel. However, we've got to use our heads. Zürich bankers have been doing what they do for what 200 years ... more you say?! These are the "all-pros" of banking. They are in it TO MAKE MONEY! That's it! The services that they offer are meant to be unique enough to attract the wealthy and then they extract from the wealthy ... hence TO MAKE MONEY. Currency conversion is part and parcel of their business. Ask yourself (and I'm not going to go look up the exact numbers ... you'll get the point) if a Zürich banker knew that the currency exchange rate absolutely would be going up in a day or a few days ... WOULD HE BE TELLING A POTENTIAL CUSTOMER THIS NEWS? The answer is of course NO! The banker would make the exchange at the low rate (what was it $3.80 something), pocket the increase (about $2.32/IQD or so),

and accept the new position offered to him by his superiors for having in less than 96 hours made the bank millions upon millions of dollars! No ... I don't care that the original story was in euros and conversion is necessary ... the story is the same.

Lesson: Don't be a Sheeple! Think ... most of this stuff is common sense. I'd love for it to come in at either rate ... probability says very low chance ... no that doesn't mean it is impossible. My point is to just take everything with "a grain of salt" ... ask yourself ... "does it pass the smell test"?

On to another point ... I've a friend who after last Monday's "Failure to Launch" (yes that was for you movie buffs ... don't think I've ever made a movie reference before ... and from your response I'm thinking you shouldn't look for it again ... tough crowd!) was very "disappointed" ... he has some serious needs as do many of us and so last Monday was just a total let down for him. Indeed, I saw yesterday(?) where a guy who has been here a very long time had "lost faith" in his investment.

Two things ... 1) disappointment brings about strong emotion ... do not act upon that emotion UNTIL you've sorted out what is real and what is anger/disappointment/etc ... I often have to recenter an IQD holder with some very sobering words ... "so, you are a seller now ... because I'm a buyer" ... that usually snaps them out of their pity party. 2) choose more wisely where you put your "faith" ... there is but One real choice!

Here it is ... I'm not dis-gusted, dis-enchanted, dis-appointed, or dis-(whatever, you fill it in) ... I'm not "DIS" anything.

Ultimately, and I know you don't want me to use the "I" word but I'm going to anyway ... ultimately ... my spirit is at peace ... I like many think that the RI/RV is "imminent"! Since that's the program ... why not be at peace. The Book says that meanwhile I am to "occupy" ... I am busy doing just that and endeavoring to "put my hand to it mightily!"

I hope that this has brought you some perspective and at least a portion of peace as I've run out of time ... I'm a bit rusty as you can see ... so play nice!

Peace to all

Doc31

[PacoTaco]

Thanks Doc!!!

[dinar-racer]

AAAAAAAwsome Doc31 Glad to see you back.

[lionfish]

Thanks for the post! I have been waiting for one from you:)

[DinarDiva007]

Doc thanks so much, LOVE the commentary!!!

[HYDRANT]

YIP HEEEEEEEEEEEEEEEEEEEEE DOCS BACK THANK YOU FOR RESUMING YOUR POSTES I HAVE REALLY MISSED YOU AND YOUR POSTS THANK YOU

[Moto144]

Currency Auctions

Announcement No. (1869)

Indeed, if we were to divide $1434.04 by 20 it would put silver at $71.70! Even Silver guys would have a hard time with that number ... no don't start that weak dollar stuff either ... go find a currencIES vs gold chart and a currencIES vs silver chart ... you'll see that the dollar is indeed weak but not disproportionately to the others (if it were there would be a divergent line between the currencIES and the USD ... there isn't.

As always...Thanks for the post Doc1!

Do you not think it accurate to say, the US is not the only country that has been on a PRINTING spree!

The vast majority of currencies have not been backed by gold for quite some time, putting most in the same boat as the USD.

Just some food for thought!

[jdjtj3]

Nice to log on here this morning and see your post...have missed it..thank you for all the time and effort you put forth....I for one apprecaiate it!

[Babs47]

Thanks so much, Doc31, for taking time out of your busy schedule to share your views with us! I missed your posts a lot!

[crcme]

Doc - You have been missed. I am glad you are back.

[tjmunson]

Welcome back Doc. Similar to how you've dedicated your life to helping others, your posts are like medicine to many of us. I know it's a lot of time for you but I need my daily dose otherwise I may come down with a nasty case of dinarrhea

Peace!!

[drox]

Doc is back.... back again... doc is back doc is back doc is back....

Great thoughts, couldn't agree more on your gold assessment. It still might run up a bit just because of the fear that exists but man I think it is poised for an unexpected hard fall.

[Lori Lee]

I so look forword to reading Doc31 's insight... very realistic and down to earth..!!! Thanks for sharing and glad your back if only for today, will be looking for more post later to keep me grounded....

Many Blessing to all

GO RV

[pleasantvalleySunday]

Hello Doc31! I know you know you've been missed Thank you for taking time to share this am!

I do so much enjoy your input and opinions ... you have my respect for being as honest as anyone that we learn from!

[jomur]

Thanks for the post, Doc. We love your perspective & sound advice! Glad your better half nudged you along to visit us again!

[all4one]

so good to hear from you Doc, a much needed and deserved break from this insanity was more than yours for the taking. meanwhile we not so grounded folks have soared and crashed like a scene from Top Gun, complete with the call signs and complications. ROGER THAT!! God bless you! Eric

[kcw]

I always appreciate your time and effort. I look forward to read/learn from your posts and do miss them Thank you!!!! and may GOD bring back to you 100 fold for the seeds you plant with every post

[txk9popo]

Thanks for the Post Doc, good to have you back. I too, feel the rv is imminent. Not as soon as I would like, but feel sometime before July (I hope), but will continue to hang on if not...

[4Horsn2]

Good morning, Doc! Thanks for your time and efforts...was indeed good to see a post from your point of view this morning! Thanks again and take care!

[duty.rec]

Yes it is good to see your post again Doc31.

It is nice to read some interesting news and info.

I hope you continue to keep up the good work.

Go RRRRRRRRRRRRRRRRRRRRRRRVVVVVVVVVVVVVVVVVVVVVVVVVVV

[Darin]

Doc, you can clearly see that you are missed.... I hope you are able to find time to continue posting your early morning stats & opinion. I believe your knowledge can greatly contribute to those frustrated with continuous disappointment.

I'm trying to recall a pattern on the auctions. If I recall, yesterday's auction was very similar to value in today's auction. From my recollection, Sunday auctions generally start pretty low and if I were to throw a % increase that represents that average increase, I would say 33%. (I.e., If Sunday was 1,000,000, Monday would roughly be around the 1,300,000 value). I am throwing these figures from the top of my head. It seems that the value of each auction is increasing... Now, if I recall, the values decreasing was a good sign as it was to draw in the 000s. Now, for simple clarification, when we see that the CBI has an auction for 191,000,000... They are drawing in IQD for exchange of USD, right? Basically saying.... If that were to be so, than that means the CBI acquired 191,000,000,000 IQD. (I use a 3 zero method when converting the value from USD to IQD, due to simplicity). At those #s alone, it would not take long in my mind to acquire all hard currencies on the street. Now, I must be thinking wrong here, but that doesn't make sense. Lets say they acquired IQD, but the value given was in IQD. This means they acquired 191,000 in USD value. (See the swing?) This would make more feasible sense as it would take much longer to acquire all the big-bills. Sometimes, it may be nice to help w/ clarification for those that are not understanding it correctly. If the CBI auctions are drawing in big bills (000s), than we will know that just because there was an auction today, doesn't eliminate the chance of a RV tomorrow. Right? -- That's how I follow it.

Oil - I'm starting to notice the squeeze at the pump when filling up. It can be depressing, but than I look at it from a positive perspective. High crude oil prices.... To see that Crude is maintaining over $100 is actually quite scary because we have yet to hit our Summer driving months as winter comes to an end. IMO, you think gas would be at a lower demand throughout the year as the heavy summer driving has not taken place and people may not need the gas to fuel their homes as the temperatures rise. Than I look over to the M.E., and see that tensions are maintaining themselves, or becoming less news worthy (See Egypt). But now we have Lybia.... Causing a ruckus, but, I couldn't see that as being a big deal as Egypt. See, Egypt was located near a channel of water that exports go through. Civil unrest could reduce, prevent, or slow down exportation. --

As for the Imminency, we must remember to look at this from a big picture. We can not look at it from a day to day perspective as we will continously be disappointed. Avoid rumors and do your reading on daily news. Form your own opinion from the news and speculate upon that. There is a lot of ruckus currently going around with the potential chance of GOI joining the WTO upon April 8th... I am not getting my hopes up, because if that may be so, they're doing a good job hiding all information involved. But it is stated as an introduction day. I think that the GOI is making great progress in becoming a full-pledged member, but from what I learned is that an internationally traded currency is not a requirement. However, if you look at the members list, there are very very few full-members that lack that aspect. Therefore, it may be something that is suggested... Now, for those in stressed out at the progress, try and create a checklist to follow....... Here is the checklist I suggest:

** Seating of Final Ministry Positions

** Release of Ch. 7

** HCL Law

Those 3 in my mind are the biggies... Now, don't get too excited just because one happens because you may find yourself disappointed. Remember, as the checklist becomes shorter, the process may go faster. I think Adam said it best that once one of these three gets completed, the others will follow shortly. Which would make a lot of sense... For a number of reasons, such as, if you seat all positions than they can focus their attention to the other issues. I also feel that they have a lot of catch-22s within their system. They can't do this without doing that and vice versa. For example, it may be hard to to accomplish the HCL law while under sanctions, and it may be hard to release sanctions without using the figures from the HCL law. (These are examples and don't take them as the actual road blocks.)

But, as we continue to look at the complete picture.... They are making progress, albeit slowly, but each function that requires attention is getting tackled. The banking sector is getting revamped and networked in a better fashion... I've read over several banking articles, and some seem promising. GOI is taking steps to keep the steady production flow of crude at highest levels and continuing to setup the plan to make higher amounts of production possible. This should be a major focus as they make their most revenue here. The higher amount of crude drilled and exported daily, means the higher amount of $ the GOI makes.

It would be interesting to see what levels of production they maxed out in their history (Even pre-war era)...

As for the articles, it seems like we still get several contradicting articles. It is hard to understand what is actually going on as we hear one thing and quite the opposite even within the same day. That can always be frustrating. -- Makes following the news rather hard in my opinion.

Anyways, sorry for making this long, just hope to keep seeing your morning posts Doc!

[linny0830]

First of all, welcome back Doc, I have truly missed your informative posts and was pleased and felt a friend had came back home when I saw your post. A side note, how lucky your lovely wife is to have a husband to adore her so much. I hope to someday find a man that will be as adoring as you are to her!!

Thank you for taking time from your busy life to post, I do appreciate it very much.

God Bless,

Linny

[ididitfirst]

i don't know your previous posts doc31, but by reading this one, i can see why you were missed. it was a very good read and i hope you will be able to to find the time to post more often from here on out. i look forward to your insights.

[R2d2dc]

Yeah!!!!!! Great Post! Just what I have been needing for a while. Thank you for your perspective and words of wisdom. No I don't need a Mom, it's just really good to hear from you. I have always enjoyed your posts and didn't know how much until you were not doing it for a while. I wouldn't IM you, I figured you were busy or maybe with some luck on a wonderful vacation somewhere having fun. Anyway, thanks for the post today, I will savour it until you have time for another one. Have a Great day and week.

DC

[mkelly]

Great to have you back, Doc. Always enjoyed your level headed and educational posts. This journey will eventually end with a ReVal but when is the question. Am staying for the long haul but hoping for a shorter haul.

Welcome back!! And thank you.