Understanding the auctions

[Sirius]

ok think of it like this ..... you get paid form your employer , where does he get the money from ... a bank .... where do the banks get there money from , the central bank ..... how does the central bank get there money back the buy up excess from the banks when cash is deposited, there is no need for the banks to hold vast reserves of cash.

Yes, this is just how they keep the Dinar at the 1170 rate, they sell to other banks and buy it back and this is just how they hold that value. Dirty float if you will.

[dinarx2]

I can fully accept that. The DFI was protected for the benefit of all Iraqis.

But, this doesn't address where the Dinar they are buying came from.

If they are selling dollars from the DFI, and building Gold reserves, this doesn't feed the people or enhance the rebuilding of infrastructure; which is what I thought the DFI was supposed to provide for.

Again, if the CBI never auctioned Dinar, and the Dinar isn't a tradable currency, where did the Dinar they are auctioning off come from.

I think the missing element here is what percentage of these auctions are limited to banks in Iraq, or the region that does accept the Iraqi dinar as payment.

If the Auctions never leave the area that accepts the Dinar as payment, the claim that all auctions are for selling Dollars begins to get legs.

However, that doesn't explain where your or my Dinar came from, if the CBI never auctions Dinar...

Ok think of a circle.....Government pays people in dinar.. , people spend dinar at businesses in Iraq.......business go to bank to buy dollars so they can pay for things being imported......bank goes to CBI auction with dinar to buy dollars for business....CBI sells dinar to governement in exchange for dollars from oil sales.......governemnt pays people in dinar

[MrFnHappy]

I don't believe anyone said the CBI "never" sells dinar, but it is infrequently.

The dinar is in the CBI vaults, that's where it comes from. When they used 27 jumbo jets to bring it into country, it didn't all go on the streets, some went into the CBI vaults. I can remember at least one article with a De La Rue VP stating they had printed more dinar for Iraq.

[dinarx2]

our dinar came from someone who went to a bank or purchased dinar for dollars

The CBI only sells at auction to other banks not to people

[Dalite]

Ok think of a circle.....Government pays people in dinar.. , people spend dinar at businesses in Iraq.......business go to bank to buy dollars so they can pay for things being imported......bank goes to CBI auction with dinar to buy dollars for business....CBI sells dinar to governement in exchange for dollars from oil sales.......governemnt pays people in dinar

This works great, if all auctions are contained within Iraq. The circle is not broken.

But, where did all the dinar that is held outside of Iraq come from, if The CBI never auctions Dinar for dollars?

You don't take in sequentially numbered, uncirculated bills as payments...

I fully understand the concept of velocity.

However, no velocity can occur without an initial (and/or subsequent ) launch(es).

I think this issue is key to understanding the numbers involved in the decision to RV, RD then RV or RI.

Having said that, I believe it is a more likely probability that the CBI buys and sells Dinar; otherwise, we would never own any if they only bought Dinar back, and never sold it.

It's that old Chicken and the Egg argument...o

[dinarx2]

In the past Large quantities of physical dinar have been used by the Iraq government to pay for things imported from neighboring countries

From what I understand much of the dinar in the US came from banks in nieghboring countires

[TFK]

our dinar came from someone who went to a bank or purchased dinar for dollars

The CBI only sells at auction to other banks not to people

Very good!!

As I understand it, if you look at the dinar auctions, it's only Iraqi banks that participate.

Iraqi banks buy US dollars from the CBI auctions with the dinar the bank's customers deposit.

The CBI also sells dinar for dollars to the GOI to pay for all the many expenses a government of 35 million, mostly poor people would have.

The GOI receive the dollars to run the country from oil sales. (DFI)

The money keeps moving in cycles and the CBI makes a great profit increasing it's reserves. They can literally pull trillions of dinar off the streets, if and when they choose, as they build their USD reserves. A country of 35 million people with USD cash reserves of $250B is astounding! This is all being done without even monetizing anything yet or using fractional reserve banking. Freekin amazing!!

Iraq is sort of like the Clampet's prior to realizing the value of their land. Once valued the Clampet's moved to Beverly Hills to live the high life. Iraq is about to do the same thing. Don't believe me? Just look at their oil rich neighbours. I see Bagdad in 10-15 years looking like Dubai!

It's a dual currency country until they rv and go it on there own. It's not going to be a lop, it will be a very good return for us!!

In the past Large quantities of physical dinar have been used by the Iraq government to pay for things imported from neighboring countries

From what I understand much of the dinar in the US came from banks in nieghboring countires

Yes, Jordan for the most part!!

[Dalite]

In the past Large quantities of physical dinar have been used by the Iraq government to pay for things imported from neighboring countries

From what I understand much of the dinar in the US came from banks in nieghboring countires

I know that a lot has come from both Jordan, and Kuwait.

I have straps (bundles of one hundred notes) in the following denominations; 50, 250 and 500. I also have purchases of half million, million and one and a half million in 25k and 10k notes.

All are sequential serial numbers ( by order ) All are uncirculated.

These were not taken in as payment. They were sold, uncirculated and sequential numbers.

This is not a natural occurring situation. They were purchased, for resale, from the CBI.

I know to belabor the point is non productive, but still see no way for so many sequentially numbered, uncirculated notes, in multiple denominations could be so readily available for sale, unless made available by the CBI.

Maybe they have another vehicle than CBI auction available to distribute new, uncirculated Dinar.

I think it is far more reasonable to take what we can see, smell, touch in physical Dinar we all hold, and intuitively know it didn't appear by Divine intervention. It seems much more likely that it wassold by the CBI.

If the CBI never made it available for sale, as being claimed that all auctions sold only dollars, then the other possibility is it is all either counterfeit; or merely an illusion.

Personally, I hope it was sold by the CBI. The other choices I find to be unsavory; at best...

[Dalite]

So, what we can take from the discussion:

1. All CBI auctions are internal to other banks in the region that accept Dinar.

2. All CBI auctions are for the sale of Dollars, and the purchase of Dinar

3. The spread posted on the CBI site associated with the daily auction is there for transparency of how much the other banks lost on the transaction by selling.

4. All Dinar purchased outside of Iraq was bought by individuals traveling to Iraq to make personal purchases, which they arrange to be hand carried back to their home country, or arrange safe passage by other means.

If this sizes it up, I can accept the premise....

I will try to find the paperwork from where the CBI opened an account at the Fed bank in NY for the deposit of spread profits, in dollars, for the sale of Dinar.

IIRC, this was done around 2005, and deposited offshore in the US for debt protection.

I may have misunderstood that flow, but it seemed fairly straight forward...

[TFK]

Personally, I hope it was sold by the CBI. The other choices I find to be unsavory; at best...

The dinar we have all bought here in the US and Canada was purchased by the currency traders we have all come to love/hate. They bought it from Iraqi banks, and Jordanian go between traders, not the actual CBI.

Central banks don't deal with the public or business people, just the actual chartered (registered) banks. The reason they're sequential and uncirculated is because the banks ordered their purchases that way.

I'm not sure there is any way to prove the banks in Iraq can actually purchase uncirculated dinar anymore. The source may very well be dry for the currency sellers here in North America and Jordan and they're now just selling off what they have left.

As for the presumed huge amounts several governments hold in their reserves, all i can think is that they bought it with the debts they were owed years ago and it literally is sitting in their vaults awaiting revaluation. That may be all BS too since there's no way to prove they are holding it.

[dinarx2]

number 4 is people traveling to Iraq Jordan Kuwait etc to buy dinar and transport it to the US

Please note that in Iraq if you were to have a contract for a large amount of money it would indeed be paid with large quantities of sequencially numbered bills. It is not so hard to think about if you remember that one million dinar is only worth about 900 dollars. If you needed to get paid 50,000 dollars that would be a lot of bills all numbered in a row.

Edited July 11, 2011 by dinarx2

[dinarx2]

The latest daily currency auction was held in the Central Bank of Iraq on the 11-JUL-2011. The results were as follows:

Details Notes

Number of banks 21

Auction price selling dinar / US$ 1170

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

Amount sold at auction price (US$) 222,584,000

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

Total offers for buying (US$) 222,584,000

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

Since the indicative rates show 1170 /1168 and the price above show 1170 One can only assume that the bank has sold dollars not dinar as dinar would be sold at 1168 to the dollar.

[Dalite]

Announcement No. (1936)

The latest daily currency auction was held in the Central Bank of Iraq on the 11-JUL-2011. The results were as follows:

DETAILS NOTES

Number of banks 21

Auction price selling dinar / US$ 1170

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

Amount sold at auction price (US$) 222,584,000

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

Total offers for buying (US$) 222,584,000

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

Exchange rates

***************************

Latest currency auction.sold dinar, bought no dinar, they were paid $222,584,000.00 USD and sold no USD.

What gives?

If the CBI was holding the auction, the numbers above said they sold Dinar at 1170 per dollar, took in 222,584,000.00 in USD, and 21 banks participated.

Now, if 21 banks were holding auctions, and the CBI was buying, then they bought Dinar.

It would appear that the more likely event was the CBI sold Dinar to 21 banks for $222,584,000.00

Now this doesn 't look like there were selling Dollars.

I could be reading this wrong, but it looks like they are selling Dinar for dollars...

[Dalite]

The latest daily currency auction was held in the Central Bank of Iraq on the 11-JUL-2011. The results were as follows:

Details Notes

Number of banks 21

Auction price selling dinar / US$ 1170

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

Amount sold at auction price (US$) 222,584,000

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

Total offers for buying (US$) 222,584,000

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

Since the indicative rates show 1170 /1168 and the price above show 1170 One can only assume that the bank has sold dollars not dinar as dinar would be sold at 1168 to the dollar.

I can't chance assuming anything, other than the CBI sold Dinar at 1170 dinar per Dollar.

There is a 13 dinar per dollar interest fee the CBI uses to make the 1183 dinar per dollar exchange.

However, it looks like this auction took in USD and sold Dinar..

If they sold Dinar, they bought dollars.

If they sell dollars, they buy dinar.

I really believe you will find this to be a 2 way street..

[dinarx2]

The information is copied from the CBI web site go to CBI.IQ and click the currency auctions link

read correctly it says that they sold dollars

Total offers for buying (US$) 222,584,000

offers are from the 21 banks at 1170 per dollar.

If you read the rates published on the CBI.IQ web site you will see that the rate for selling dollars is 1170 the rate for selling dinars is 1168

[Sparky69]

MRFNHAPPY.Well stated.All the posts on this thread.Seems pretty cut and dried.

Cheers,

Sparky