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***** CBI Currency Auction 11-07-2011 *****


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Queezy,

I sure hope you are correct!

can the 21 banks involved in that auction be identified with how much each spent at the auction?

does Iraq even have 21 banks authorized?

Unfortunately, I'm not that knowledgeable about the specifics of the Iraqi banking system, but this has been brought up many times in the past... they used to have around 16 to 22 banks, depending on what document you read, which is a mix of state-owned banks and private banks. I'm not sure if they have data for what each bank buys from the CBI in US Dollars, but if you think daily that the total is around 150million to 200 million USD, that's around $7,500,000 to $10,000,000 each bank for 20 banks. There's 30 million people in Iraq, and like 35 to 40% (I could be wrong on this, but I know the number of children is high) of them are children under age 18, so probably figure around 25% of that 30 million is working adults and not every single person uses banks for money depositing. A lot could be commercial entities using the banks for their deposits, so it really just depends on what the USD are used for, but Iraqis are paid in Dinar, so I'm not entirely sure...

EDIT:

Demographic statistics

Iraq has a young population.

The following demographic statistics are from the CIA World Factbook, unless otherwise indicated.

Population

31,234,000.[1] (April 2009 IMF est.)

Age structure

0-14 years: 39.7% (male 5,398,645; female 5,231,760)

15-64 years: 57.3% (male 7,776,257; female 7,576,726)

65 years and over: 3% (male 376,700; female 423,295) (2006 est.)

http://en.wikipedia.org/wiki/Demographics_of_Iraq

Edited by TQueezy
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I think this thread is really confusing. I always thought that the auctions are the the way the CBI was sucking in the dinar. They want to get as much of it out of circulation as they can before they RV. Am I right or wrong? I know they use them to stabilize the dinar.

Some of you are saying they are selling dinars. Some of you are saying they are selling dollars. Since it is a foreign currency auction, doesn't that mean they are selling the foreign currency, the dollars? Since they are using the 1170 rate, it seems like they are selling the dollars. :unsure:

Does someone have a link to a good explanation of the currency auctions by doc31 or someone who really knows? I tried to search and find it, but I was unsuccessful.

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I think this thread is really confusing. I always thought that the auctions are the the way the CBI was sucking in the dinar. They want to get as much of it out of circulation as they can before they RV. Am I right or wrong? I know they use them to stabilize the dinar.

Some of you are saying they are selling dinars. Some of you are saying they are selling dollars. Since it is a foreign currency auction, doesn't that mean they are selling the foreign currency, the dollars? Since they are using the 1170 rate, it seems like they are selling the dollars. :unsure:

Does someone have a link to a good explanation of the currency auctions by doc31 or someone who really knows? I tried to search and find it, but I was unsuccessful.

Yo Doc31, you out there?????

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I think this thread is really confusing. I always thought that the auctions are the the way the CBI was sucking in the dinar. They want to get as much of it out of circulation as they can before they RV. Am I right or wrong? I know they use them to stabilize the dinar.

Some of you are saying they are selling dinars. Some of you are saying they are selling dollars. Since it is a foreign currency auction, doesn't that mean they are selling the foreign currency, the dollars? Since they are using the 1170 rate, it seems like they are selling the dollars. :unsure:

Does someone have a link to a good explanation of the currency auctions by doc31 or someone who really knows? I tried to search and find it, but I was unsuccessful.

Fox,

I would recommend going back and reading some of Doc31's old posts. He used to provide them daily with his commentary. He had the best handle on the info I have yet to see. They will give you a better idea what TQueezy was trying to share with you. (Great job TQueezy) Also, you may want to consider what it means if they are buying dollars...maybe they are running low on dinars in country and most of Iraq is using dollars...just a thought.

Have a great day,

Design Interrupted

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I did try to search through a bunch of stuff from Doc31, but there is so much and I don't have a date or title to search for, so I don't know how to find it. Did any of you make a copy of the info and save it? A good explanation in simple words could help lots of us.

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Okay, look at my edit to the original post below this... read it as I'm putting in the edits...

Simple as that, they are buying US Dollars from the Central Bank of Iraq in exchange for the Iraqi Dinar they have in their vaults that they likely collect from local business deposits and individual citizens. That means more US Dollars are going into circulation and Iraqi Dinar are being taken out of circulation...

Wonder what happens when they revalue and have been reducing the money supply of Dinar this whole time and introducing more US Dollars? Someone's going to make a killing on the spread when Iraqis turn in their typical US Dollars for the New Currency at the new exchange rate...

Sorry if I sound dumb...But I don't see how the dinar is coming out of circulation....

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I did try to search through a bunch of stuff from Doc31, but there is so much and I don't have a date or title to search for, so I don't know how to find it. Did any of you make a copy of the info and save it? A good explanation in simple words could help lots of us.

Fox,

Search Doc31 back to February and March - the posts he started. Hope that helps!

Design Interrupted

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Sorry if I sound dumb...But I don't see how the dinar is coming out of circulation....

The only way it's really coming out of circulation is on my speculation that they are buying Dinar back from local banks (where businesses locally and individuals deposit their money) in exchange for the US Dollars the CBI has. Once the CBI gets those Dinar, do they circulate them back out? In order to do that, wouldn't they have to sell them back to the bank? Do you see the CBI buying local banks' foreign currency reserves, like the US Dollar? I never see the local banks selling US Dollars back to the CBI for more dinar, so where do the citizens get dinar from? They likely get paid in dinar, so their employers must get dinar from the banks, hence the companies are probably the biggest customers at the banks, depositing US Dollars and Dinar both at the banks and getting back what they need in dinar to pay citizens and the rest is probably just kept in their. The point is, Dinar is literally being traded back to the CBI daily in massive amounts from these smaller banks... so what does the CBI do with all those paper dinar notes? What's the flow of them, do they go back out to the banks on regular distributions? If so, what is the mechanism for that? No one know, and no one has ever been able to answer this question for me. My speculation is that they are keeping them stashed away, "lifted, removed, deleted, etc." from the currency. Like the 3-zeros articles always talk about, that is how they are getting rid of the dinar. But the money supply isn't going down, it's just being replaced with US Dollars, so when the revaluation happens, the CBI is going to make a killing off of exchanging US Dollars in circulation for the new lower note currency at the higher exchange rate. The spread will likely be insane and the CBI will rake in tons of profit, basically paying for the printing of the new currency and for infrastructure rebuilding. Their current rake is 13 dinar per transaction, so they make a bundle as is with US Dollar/IQD exchanges.

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The only way it's really coming out of circulation is on my speculation that they are buying Dinar back from local banks (where businesses locally and individuals deposit their money) in exchange for the US Dollars the CBI has. Once the CBI gets those Dinar, do they circulate them back out? In order to do that, wouldn't they have to sell them back to the bank? Do you see the CBI buying local banks' foreign currency reserves, like the US Dollar? I never see the local banks selling US Dollars back to the CBI for more dinar, so where do the citizens get dinar from? They likely get paid in dinar, so their employers must get dinar from the banks, hence the companies are probably the biggest customers at the banks, depositing US Dollars and Dinar both at the banks and getting back what they need in dinar to pay citizens and the rest is probably just kept in their. The point is, Dinar is literally being traded back to the CBI daily in massive amounts from these smaller banks... so what does the CBI do with all those paper dinar notes? What's the flow of them, do they go back out to the banks on regular distributions? If so, what is the mechanism for that? No one know, and no one has ever been able to answer this question for me. My speculation is that they are keeping them stashed away, "lifted, removed, deleted, etc." from the currency. Like the 3-zeros articles always talk about, that is how they are getting rid of the dinar. But the money supply isn't going down, it's just being replaced with US Dollars, so when the revaluation happens, the CBI is going to make a killing off of exchanging US Dollars in circulation for the new lower note currency at the higher exchange rate. The spread will likely be insane and the CBI will rake in tons of profit, basically paying for the printing of the new currency and for infrastructure rebuilding. Their current rake is 13 dinar per transaction, so they make a bundle as is with US Dollar/IQD exchanges.

Kinda makes sense when you think about it.....No Iraq citizen came become a millionaire with that math... 1,000,000 USD = 300,000 Dinar with the rate of what is posted on this site.....Well I guess it is the same....

Edited by Primma
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What banks are they selling to? If it is just other Iraqi banks then they are selling just to do their daily business, just a thought. I honestly don't have a clue if this affects the RV in any way.

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Okay, look at my edit to the original post below this... read it as I'm putting in the edits...

Simple as that, they are buying US Dollars from the Central Bank of Iraq in exchange for the Iraqi Dinar they have in their vaults that they likely collect from local business deposits and individual citizens. That means more US Dollars are going into circulation and Iraqi Dinar are being taken out of circulation...

Wonder what happens when they revalue and have been reducing the money supply of Dinar this whole time and introducing more US Dollars? Someone's going to make a killing on the spread when Iraqis turn in their typical US Dollars for the New Currency at the new exchange rate...

Exactly TQueezy! It doesn't get any simpler (or complicated for that matter) than this.

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The only way it's really coming out of circulation is on my speculation that they are buying Dinar back from local banks (where businesses locally and individuals deposit their money) in exchange for the US Dollars the CBI has. Once the CBI gets those Dinar, do they circulate them back out? In order to do that, wouldn't they have to sell them back to the bank? Do you see the CBI buying local banks' foreign currency reserves, like the US Dollar? I never see the local banks selling US Dollars back to the CBI for more dinar, so where do the citizens get dinar from? They likely get paid in dinar, so their employers must get dinar from the banks, hence the companies are probably the biggest customers at the banks, depositing US Dollars and Dinar both at the banks and getting back what they need in dinar to pay citizens and the rest is probably just kept in their. The point is, Dinar is literally being traded back to the CBI daily in massive amounts from these smaller banks... so what does the CBI do with all those paper dinar notes? What's the flow of them, do they go back out to the banks on regular distributions? If so, what is the mechanism for that? No one know, and no one has ever been able to answer this question for me. My speculation is that they are keeping them stashed away, "lifted, removed, deleted, etc." from the currency. Like the 3-zeros articles always talk about, that is how they are getting rid of the dinar. But the money supply isn't going down, it's just being replaced with US Dollars, so when the revaluation happens, the CBI is going to make a killing off of exchanging US Dollars in circulation for the new lower note currency at the higher exchange rate. The spread will likely be insane and the CBI will rake in tons of profit, basically paying for the printing of the new currency and for infrastructure rebuilding. Their current rake is 13 dinar per transaction, so they make a bundle as is with US Dollar/IQD exchanges.

Looking at your auction chart explanations, you have the sell price of dinar at 1170, but have them selling 200 billion dollars. They are selling dinar. The purchase price would be 1170 if they were buying them and they sold 200 billion dollars worth of dinar. Not jabbing at you, just stating you are disregarding the entire chart.

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When I first read this article I was thinking bad news, and then after I read this

Simple as that, they are buying US Dollars from the Central Bank of Iraq in exchange for the Iraqi Dinar they have in their vaults that they likely collect from local business deposits and individual citizens. That means more US Dollars are going into circulation and Iraqi Dinar are being taken out of circulation...

I was thinking this is good news. Something so sly and snake-like is typical for banks, and with the RV supposedly around the corner this would be a great tactic to do for the CBI to stay wealthy while keeping the people of Iraq down if all they had was mainly USD in circulation come RV time. Maybe the Iraqis will catch on and stuff a mattress or two instead of switching over to mainly USD.

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Looking at your auction chart explanations, you have the sell price of dinar at 1170, but have them selling 200 billion dollars. They are selling dinar. The purchase price would be 1170 if they were buying them and they sold 200 billion dollars worth of dinar. Not jabbing at you, just stating you are disregarding the entire chart.

Okay, please go back and read the chart carefully...

They sold 222.5 million US Dollars to 21 different Iraqi banks. There's nothing in there about me saying they sold 200 billion dollars.

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Okay, I think I have a better grasp on this now. The banks are selling the dinar to the CBI, and receiving USD. The CBI is selling the USD in exchange for dinar. So I was correct in my original thinking that the CBI is sucking in dinar. Thanks everyone for all your input.

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Okay, I think I have a better grasp on this now. The banks are selling the dinar to the CBI, and receiving USD. The CBI is selling the USD in exchange for dinar. So I was correct in my original thinking that the CBI is sucking in dinar. Thanks everyone for all your input.

Actually, they buy or sell, dependent on the current need

""The CBI currently has the following active and passive instruments that affect market liquidity (base money):

• Foreign exchange auctions, in which the CBI buys or sells dollars to the market in light of its policy objectives; "

If they are buying dollars, they are selling dinar

If they are buying dinar, they are selling dollars

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Okay, please go back and read the chart carefully...

They sold 222.5 million US Dollars to 21 different Iraqi banks. There's nothing in there about me saying they sold 200 billion dollars.

million, billion...either way that number is irrelevant. all i was stating is that you are disregarding the amount of dinar purchased, which is none. their auction isn't designed to deal in USD, it's designed to deal in dinars. they just put the amount of dinar that they sold in USD because if there are other currencies, it would be too much to print and the USD is the world standard atm.

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million, billion...either way that number is irrelevant. all i was stating is that you are disregarding the amount of dinar purchased, which is none. their auction isn't designed to deal in USD, it's designed to deal in dinars. they just put the amount of dinar that they sold in USD because if there are other currencies, it would be too much to print and the USD is the world standard atm.

That's absolutely incorrect. Sorry, but they sell US Dollars to the local banks. Read the above statement posted by Dalite. It's on their website, they state to everyone publicly that they are selling US Dollars to the banks, and we've known this for years.

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