Members discussion thread for the Debate: Lop vs No Lop, Sonny1 and jmw

[Darin]

I think whether your a so-called LOPster or a believer in the R/V your a single-minded person.

This is all about a retraction of the money supply to provide lower denominations.

We see this being done within two methods:

LOP or R/V

All methods are a re-denomination "so to speak"

Because each method results in new denominations being released.

The better question(s) to try to find an answer to:

Which ever method they choose, which method will result in reaching the highest value the quickest.

A R/D in form of a LOP will help reach it rather faster than any long-term method

I think we could all argue that each method should not be quick or swift, because of the damage it may do.

A prolonged scenario is what we may believe more feasible.

Example: Long-term raising of value, slowly adjusting the rate up to detract the money supply

I am sure they'll choose the best method in which protects them from being damaged. Nothing happens quickly over there, so, it appears it'll just take time.

[Atheist]

I, for one, am a lopster. Sorry to say, but I've been in this almost a year and that is my opinion. Was very hopeful and took many many months to root through the BS and unfortunately, common sense and economics prevail on this investment. Sorry SONNY1, you got your butt kicked on this one! Your rebuttals were "wishful thinking" and offered nothing but weak opinions. JMW offered very detailed research and it's very hard to poke holes in his explanations and view points. Curious on what other members are feeling on this....

My question for the lopsters is why you bother with this investment? I am sure there are other "believable" investments that you could make that would give you a better return than waiting 8 years for the rv and then it lop. I think lopsters really take that belief simply because they don't like to be wrong. I am sure if you are wrong and make millions you will be okay with it. But if they did lop you can say I told you so. If that is not the case, then you really need to ask yourself why you are wasting so much time on this site for an investment you don't believe will make you that much money.

[Rossenbos]

We need to make sure we understand how currencies work though... I have the feeling most of you think currencies work like company shares.

In a company, the company can be (book)valued at x. Say 100.000.000 $.

If we have 100.000.000 shares, these will all be worth 1$, right?

The share price goes up when the company value goes up.

But, as the shares are being traded on a secundary market, the share price can do north due to supply and demand and that pushes the company value further up.

With currency, it's different. There is no simple calculation method. It's not bookkeepers who determine it.

As currency do not just reflect the value of a country, it also reflects a relative value vs other currencies.

To use Iraq as an example: Kuwait's dinar is valued at 3$ something, correct? Kuwait and Iraq share a port. Can you imagine one container coming from the right, valued at x and a container with similar export goods ( but from Kuwait ) coming from the right being valued at 3.000 times more?

So, in due time, the IQD will have to be in sync with the currencies around Iraq.

No think. Which of the two "methods" will benefit Iraq and how: LOPPING or RVing.

It's a matter of step by step determining what the effect will be of either option.

Does someone want to take this a step further?

[jg167]

I have given you the link in another topic. The "search" feature here is hard to use and I don't want to spend the amount of time to find it. But, I know I posted it in a LOP discussion thread on more than 1 time..

Either way, you would have to agree that monetizing non-liquid assets is a possibility.

You don't need the link, you can go do the IFM web site and look directly. I find nothing about monetizing non-liquid assets. http://www.imf.org/external/pubs/ft/aa/index.htm

[jg167]

As currency do not just reflect the value of a country, it also reflects a relative value vs other currencies.

I don't see how. The exchange rate reflects the value to other currencies.

To use Iraq as an example: Kuwait's dinar is valued at 3$ something, correct? Kuwait and Iraq share a port. Can you imagine one container coming from the right, valued at x and a container with similar export goods ( but from Kuwait ) coming from the right being valued at 3.000 times more?

But this would not be the case. The value in any currency is the same for the container. The fact that fewer units of Kuwait currency is needed than Iraqi currency changes nothing about the value of the goods in the container. Are you saying that because Kuwait and Saudi Arabia have exchanges rates of roughly 12 to 1 ($3+ vs $0.26) that they can not engage in trade effectively?

So, in due time, the IQD will have to be in sync with the currencies around Iraq.

Sure Iraq wants to get to rough exchange parity just to make transactions easier so X value is roughly the same amount of currency units.

No think. Which of the two "methods" will benefit Iraq and how: LOPPING or RVing.

An RD is inexpensive ($100M or $200M USD maybe for printing currency and education campaigns), gets the dinar to exchange parity and reduces the number of dinars in the money supply while being minimally disruptive since it is value neutral. An RV even to $0.10 would cost trillions of dollars flowing out of the country for exchange and is extremely disruptive.

[Dalite]

My question for the lopsters is why you bother with this investment? I am sure there are other "believable" investments that you could make that would give you a better return than waiting 8 years for the rv and then it lop. I think lopsters really take that belief simply because they don't like to be wrong. I am sure if you are wrong and make millions you will be okay with it. But if they did lop you can say I told you so. If that is not the case, then you really need to ask yourself why you are wasting so much time on this site for an investment you don't believe will make you that much money.

I also pay taxes, and the IRS is not on my Christmas Card list.

My question is why you don't want folks with realistic expectations, based on available information, who are capable of altering the plans to their best advantage....... Why don't you want these folks around you?

Do you benefit from not accepting the policies?

It it helpful to you to insist the CBI is all BS, and the Gurus are all Gospel?

Do you find comfort in surrounding yourself with others that never challenge you to broaden your horizons?

I could write hundreds of questions that would force you to look within yourself for the answers to your own questions, but intuition tells me you aren't too interested in that approach to problem solving.

But every question deserves an answer...

I am here to keep up with what is going on, because I am pragmatic enough to view all the possible outcomes, because I bought my ticket and am taking my chances; same as everyone else.

Why are you here?

[dinarlady]

I think sonny1 won this debate, yes jmw had the numbers, but i am an investment banker and these numbers can not be trusted. my coworkers and myself watched this debate, and every point sonny1 made was valid and real, the numbers coming out of iraq are false, and completely fabricated. sonny1 was right about building the private sector. the smart people know that it wont rv at $3.00 but we will easily get .10 to .80 out of this.

[Dalite]

It's fairly simple.

Which process realigns value to GDP and provides for quicker growth potential.

The GDP doesn't support much of a RV, and a RV would only magnify the negatives of not dealing with the remnants of past inflation. Other countries would view a RV as an indication that Iraq was not a serious player for investment.

RD would get the currency in line with GDP, instill confidence in investors and allow the GDP to quickly rise and support further increases in the value of the currency.

We need to make sure we understand how currencies work though... I have the feeling most of you think currencies work like company shares.

In a company, the company can be (book)valued at x. Say 100.000.000 $.

If we have 100.000.000 shares, these will all be worth 1$, right?

The share price goes up when the company value goes up.

But, as the shares are being traded on a secundary market, the share price can do north due to supply and demand and that pushes the company value further up.

With currency, it's different. There is no simple calculation method. It's not bookkeepers who determine it.

As currency do not just reflect the value of a country, it also reflects a relative value vs other currencies.

To use Iraq as an example: Kuwait's dinar is valued at 3$ something, correct? Kuwait and Iraq share a port. Can you imagine one container coming from the right, valued at x and a container with similar export goods ( but from Kuwait ) coming from the right being valued at 3.000 times more?

So, in due time, the IQD will have to be in sync with the currencies around Iraq.

No think. Which of the two "methods" will benefit Iraq and how: LOPPING or RVing.

It's a matter of step by step determining what the effect will be of either option.

Does someone want to take this a step further?

I think sonny1 won this debate, yes jmw had the numbers, but i am an investment banker and these numbers can not be trusted. my coworkers and myself watched this debate, and every point sonny1 made was valid and real, the numbers coming out of iraq are false, and completely fabricated. sonny1 was right about building the private sector. the smart people know that it wont rv at $3.00 but we will easily get .10 to .80 out of this.

The numbers from the CBI are fabricated and cannot be trusted...

Determined by you and your investment banker coworkers, who happened to be on the clock on a Sunday evening.

Nice.......

Sonny1 did a great job of keeping morale up.

Honestly, if you are advising others on investment, are claiming CBI numbers are bs and not to be trusted, aren't you glad you didn't let people know who you work for?

No one won and no one lost.

Both presented their points well.

[Legolas]

I think sonny1 won this debate, yes jmw had the numbers, but i am an investment banker and these numbers can not be trusted. my coworkers and myself watched this debate, and every point sonny1 made was valid and real, the numbers coming out of iraq are false, and completely fabricated. sonny1 was right about building the private sector. the smart people know that it wont rv at $3.00 but we will easily get .10 to .80 out of this.

The CBI and IMF are lying? The accounting firm of Ernst and Young are backing their lies? To what end? And on what evidence are you basing that accusation? If you believe the purpose is to deter investment in the Dinar, how would you explain the fact that Iraq has continued to allow unrestricted shipment of Billions of Dinars each month for years now for sale by dealers, and has said absolutely nothing to refute the lies of the pumpers and gurus? Logically, if they wanted to deter investment, wouldn't they at least "attempt" to put an end to both?

[umbertino]

Well which one is it??! I need to know if I should go buy some more dinar or throw all mine into the river.........

Keep......As soon as you learn about that please let me know...Thanks in advance.... Smile

[umbertino]

I think sonny1 won this debate, yes jmw had the numbers, but i am an investment banker and these numbers can not be trusted. my coworkers and myself watched this debate, and every point sonny1 made was valid and real, the numbers coming out of iraq are false, and completely fabricated. sonny1 was right about building the private sector. the smart people know that it wont rv at $3.00 but we will easily get .10 to .80 out of this.

DinarLady... You're an investment Banker... So you know stuff... Therefore I think that you know what you're talking about and thus I have to trust you... Ok.. Let me get back to you later on.... Good Luck to us...

[Realdinar]

DinarLady... You're an investment Banker... So you know stuff... Therefore I think that you know what you're talking about and thus I have to trust you... Ok.. Let me get back to you later on.... Good Luck to us...

I believe the lopsters are here for the same reason we all are here...we all hope it will r/v.

The lopsters have educated themselves. Seem smart and "matter of fact". So if even they 100% believed it would lop, they would not be invested.

Imo, the problem with lopping is it is not very transparent on whats going on and seems like investors are getting ripped off. The only response from the lopsters ive seen is "tough luck".

I dont see it that way at all. The value is stated on my dinar. You cant say my 25000 dinar note is only 25 dinar. Its not what is printed on it, regardless of its dollar value. So the real issue is

Iraq does not have the means to rv? Then they cant rd, either, unless they clearly point out my dinar is obsolete. Because I bought 25000 dinars, not 25 dinars. It is what it is....Its either 25000 dinars or nothing. Atleast Kuwait can read, when they ri, didnt people make a large return? They didnt say, oh well, new rules...your dinars arent reeeeaallly, worth what it says on the note there buddy.....lopsters if iraq doesnt have the means or substance to have an rv, thats their problem and they are broken and still need to be fixed, not well we will rip off everybody that invested in us and say your 25000 dinar notes arent reeeeallly a 25000 dinar note, its actually 25 dinars. Thats called lying. If they cant afford to rv then they need to fix their issue. Lopsters you guys act like harvard grads, go fix their problem.

[Darin]

Another interesting point many fail to think about:

When we read all these articles, they speak of the following:

Lifting zeros, deleting zeros, removing zeros, and so forth (in reference to the 000s)

Not all current notes have 000s... So it seems that they're saying they will be left untouched.

It doesn't sound like they're saying, we're going to be introducing a brand new currency like we did in 2004....

And any adjustment made to a 000 note would have to have the same process applied to a non-000 note (i.e., 50, 250, 500, etc.)

This confusion has obviously hit the market place as many people within the region have gone to houses to trade their 000s for pennies on the dollar with use of scare tactics.

[Darin]

Thanks Darin...figured that question was yours....

have you read article VIII?....please point out where it talks about monetizing non-liquid assets...I can't find it anywhere.

50% of their M2 is electronic...in banks....but that does not mean they are held for reserves...it just means they are in banks...the CBI website states they are only required to hold 15% as reserves....if they hold more than that they would have excess liquidity and would not be earning interest on that amount...so it is doubtful that more than 15% is held as reserves at the commercial banks.

Fractional reserve banking does make the money supply grow...but it is not used by central banks to cover the value of their currency...not for Iraq not for anyone....Marcus is really the one that made me start doing more and more research...he is smart...but a lot of his theories are flawed.....I just worry about who he is hanging around with these days.

Correct me if I am wrong, according to Shiria law, banks are not allowed to collect interest on what they hold. And the CBI financial spreadsheet clearly states bank reserves. Unless we are interpreting the word "bank reserves" on an excel spreadsheet that is put out through the CBI website, I'll read it at face value.. "Bank reserves." And in Jan 2011, it was 27 trillion with 24 trillion outside of banks.

So, for a country that relies on hard currency, a majority do not do bank deposits. They hold onto thier currency under a mattress, or hidden within their house.

This is M1 - M2 from my understanding includes their electronic currency.

As for Article VIII - I do not have the availability at the moment to access the information, until later.

If I recall correctly, you have to read the article and understand it.

Refer to Section B Page 42 (I think.....)

What they're referring to is allowing the use of previously excluded items from Article XIV

What was "once" exclude may now be included: Such as precious metals, gold that is not used in payments, etc. etc.

You can't just hit CTRL+F and search for monetize, non-liquid assets, etc. etc. You actually have to "read" it..

[Atheist]

I also pay taxes, and the IRS is not on my Christmas Card list.

My question is why you don't want folks with realistic expectations, based on available information, who are capable of altering the plans to their best advantage....... Why don't you want these folks around you?

Do you benefit from not accepting the policies?

It it helpful to you to insist the CBI is all BS, and the Gurus are all Gospel?

Do you find comfort in surrounding yourself with others that never challenge you to broaden your horizons?

I could write hundreds of questions that would force you to look within yourself for the answers to your own questions, but intuition tells me you aren't too interested in that approach to problem solving.

But every question deserves an answer...

I am here to keep up with what is going on, because I am pragmatic enough to view all the possible outcomes, because I bought my ticket and am taking my chances; same as everyone else.

Why are you here?

If you knew for a fact it would lop would you still be sitting here waiting anxiously? I see some of the lopsters with thousands of posts. Why would you waste your time if you have no doubt it will lop? I don't believe it will come out at 3-1 but I do hope for 50 cents. That is why I am here. I read the gurus for entertainment only. Do you ever see the lopsters with any other opinion besides it will lop? They have decided it is not possible. So if it is truly not possible to rv, then why are they on a site that is hoping for an rv? Who exactly is wasting their time?

[20MillionDinar]

The CBI and IMF are lying? The accounting firm of Ernst and Young are backing their lies? To what end? And on what evidence are you basing that accusation? If you believe the purpose is to deter investment in the Dinar, how would you explain the fact that Iraq has continued to allow unrestricted shipment of Billions of Dinars each month for years now for sale by dealers, and has said absolutely nothing to refute the lies of the pumpers and gurus? Logically, if they wanted to deter investment, wouldn't they at least "attempt" to put an end to both?

http://www.moneyandmarkets.com/my-challenge-to-sp-moody%E2%80%99s-and-fitch-downgrade-the-long-term-debt-of-the-united-states-before-it%E2%80%99s-too-late-39029

Dear S&P, Moody’s, and Fitch,

You are the world’s three dominant rating agencies, largely controlling the ratings of bonds and debts issued by thousands of corporations, municipalities, and sovereign governments.

I am the chairman of Weiss Ratings, an independent rating agency. (See Weiss Ratings’ press release on MarketWatch or “Weiss Is Returning to Ratings Business” in the Wall Street Journal.)

And today, I challenge you to promptly take the bold action that you have so far avoided — to downgrade the long-term credit rating of the U.S. government in order to help protect investors and prod Washington to fix its finances.

The necessary first step toward solving our nation’s financial problems is to recognize and confront them honestly. But based on the myriad of risk factors impacting U.S. government debt, which I summarize below, the U.S. government’s triple-A rating is an anachronism that is based largely on hope and fiction.

More than ever before — especially in light of your ratings missteps of recent years — you now have the opportunity to rise to the occasion and warn investors of the true risks they face:

Now is your best chance to proactively downgrade Treasury notes and bonds, TIPS, Ginnie Maes, and all other long-term debts issued by government-run entities.

Needless to say, the downgrade would be historic, pressuring Treasury bond prices lower and adding upward pressure to long-term interest rates. And undoubtedly, as we’ve seen in response to your recent downgrades of euro-zone countries, backlash from government officials is to be expected.

But as history has proven repeatedly, the consequences of procrastination can be far more serious:

First, without the proper warnings, you help entice millions of hard-working citizens, retirees, and their intermediaries to pour trillions more into a potential debt trap … or at best, to be severely underpaid for the actual risks they are taking.

Second, without the appropriate downgrade, you give policymakers a green light to perpetuate their fiscal follies, further degrading our government’s ability to meet future obligations.

Worst of all, by continuing to reaffirm America’s triple-A rating, you help create a false sense of security overall — the recipe for a possible meltdown in the market for U.S. sovereign debts.

In the past, you have often hesitated to downgrade large institutions with deteriorating finances. Please, do not repeat that error. If you do, history shows that it can end in disaster, as illustrated by the following four case studies:

Case Study 1

Major Life and Health Insurance

Companies Failures of the Early 1990s

In its landmark 1994 study of rating agencies, the Government Accountability Office (GAO) concluded that you did not downgrade large insurance companies, which subsequently failed, until it was too late for most policyholders:

S&P

did not issue a “vulnerable” rating for one of the biggest failed companies, Fidelity Banker’s Life, until six days before the failure; and for another, Monarch Life, until 351 days after the failure.

Moody’s

, to its credit, was the first to warn about the failure of Executive Life of California. However, it did not issue a “vulnerable” rating on Mutual Benefit Life, the largest insurance company failure, until two days after its demise.

In the same study, the GAO demonstrated that the nation’s largest insurance rating agency,

A.M. Best

, also failed to protect the public. Best did not issue a “vulnerable” rating on Executive Life of New York until the day after it failed; on Fidelity Bankers Life, until two days after it failed; on Mutual Benefit Life, until three days after it failed; and on First Capital Life, until five days after it failed. Moreover, for Monarch Life, Best never issued a “vulnerable” rating, instead assigning a non-published rating four days after the company failed.

In the final tally, over six million U.S. policyholders were caught in insurance company failures for which they received little or no warning from established rating agencies.

Case Study 2

Enron Failure of 2001

The New York Times reported that you saw signs of Enron’s deteriorating finances in May 2001, but did little to warn investors until at least five months later. Unfortunately, however, that was long after more problems had emerged and Enron’s slide into bankruptcy had accelerated. (See “Credit Agencies Waited Months To Voice Doubt About Enron.”)

At the time, you claimed you had no way of knowing about the company’s internal shenanigans. But you also admitted that, well before the general public suspected wrongdoing at Enron, you were aware of at least one of the critical factors in the failure — that trusts related to Enron had made financial commitments which were tied to Enron’s own stock price. How did you know? Because you rated the bonds and notes sold by those same trusts.

Nevertheless, it wasn’t until November 28, just days before Enron filed for Chapter 11, that you first lowered its debt ratings below investment grade.

Case Study 3

Mortgage Meltdown of 2007-2008

Congress, regulators, investors, and some of your former executives generally agree that your triple-A ratings on mortgage-backed securities grossly overestimated their credit quality; that this played a pivotal role in the debt crisis; and that the primary factor behind your inflated ratings were multiple conflicts of interest between you and the issuers:

Conflict #1.

As with nearly all other ratings you issue, your mortgage security ratings were paid for by the issuers, empowering them to achieve undue influence over the ratings process.

Conflict #2.

You earned substantial additional consulting fees to help structure the very securities you rated.

Conflict #3.

You revealed your ratings formulas to issuers, helping them manipulate their data to game the system and more easily get high grades for their junk securities.

These conflicts help explain why:

• Senator Al Franken has now won bipartisan support for a proposal to do away with your three-way oligopoly of the credit ratings industry. (See Reuters story posted Friday by John Parry, “U.S. amendment could curb rating agencies’ power.”)
• Manhattan federal Judge Scheindlin recently denied your motion to dismiss a class-action lawsuit against you claiming fraud — filed by King County, Washington, and Iowa Student Loan Liquidity Corporation (“For Big Rating Agencies, the Blows Keep On Comin’.”)
• And a California state court has just decided to let the California Public Employees’ Retirement System go forward with its $1 billion lawsuit against you claiming negligent misrepresentation (“Calpers Case Against Ratings Agencies Can Go Forward.”).

Case Study 4

Major Investment Bank Failures

In 2008-2009 Debt Crisis

When major Wall Street firms suffered deteriorating finances, you could have played a role in warning the public of those failures. Instead, it appears you chose not to:

• Bear Stearns failure: On the day of the failure, March 14, 2008, Moody’s maintained a rating for Bear Stearns of A2, the same rating it had published from June 1995 through June 2003; S&P was equally generous, giving the firm an A rating until the day of failure; and Fitch had assigned Bear Stearns an A+ rating throughout the 18-year period between February 2, 1990 the failure date.
• Lehman Brothers failure: On the morning of the failure, Moody’s still gave Lehman Brothers a rating of A2; S&P gave it an A; and Fitch gave it an A+.
• We witnessed a similar pattern of complacency with the failures of New Century Financial, which filed for Chapter 11 bankruptcy in 2007; Countrywide Financial, which was bought out by Bank of America in 2008; Washington Mutual, which filed for bankruptcy in September of that year; and Wachovia Bank, which was acquired by Wells Fargo by year-end 2008.

The Consequences of Complacency

Can Be Catastrophic

In nearly all the failures I’ve cited above, publicly available data made the risks evident well in advance. (See Weiss Ratings study.)

But in virtually every case, rather than protect investors from issuer defaults, your priority seems to have been to shield issuers from investor selling.

And in nearly every case, we now know how catastrophic the consequences have been for investors, for the economy and, ultimately, even for the issuers themselves.

Indeed, if you had not shielded issuers from public scrutiny and selling pressure, they might have acted sooner to bolster their balance sheets. At a minimum, if you had released prompter, incremental downgrades, you could have given investors the chance to absorb the bad news in smaller doses, helping to avoid much of the shock and panic that ultimately prevailed.

This is why it’s so vital that you downgrade U.S. government debt now.

Factors Warranting an Immediate Downgrade

Of Long-Term U.S. Government Debt

The risk factors justify nothing less:

1. Debts and deficits. You have recently downgraded sovereign nations with deficit and debt ratios that are equivalent — or even superior — to those of the United States. Specifically,

• S&P downgraded Spain’s long-term credit rating on April 28 to AA with a negative outlook, due, in part, to its government debts totaling 59.2 percent of GDP. In contrast, the United States government and its agencies have total debts equal to 94.7 percent of GDP, or nearly 60 percent more than Spain’s.
• S&P downgraded Portugal’s long-term credit rating on April 27 by two notches, from A+ to A-, citing the risk of a further downgrade should fiscal consolidation fall short of expectations or should concerns over government liquidity mount. However, in proportion to its economy, Portugal’s current federal deficit is actually smaller than ours — 8.3 percent of GDP compared to the U.S. deficit at 10.6 percent of GDP.
• Greece, at the heart of the crisis, has been downgraded by all three rating agencies. But even compared to Greece, America’s deficit/GDP level is only slightly less bad — 10.6 percent in the U.S. vs. 12.2 percent in Greece.

Of course, there are other factors that have prompted you to downgrade these euro-zone countries — such as panic in their financial markets, a sudden disappearance of liquidity for their bonds, and the surging cost of raising new funds. But it is simply not reasonable to wait for a similar disaster in U.S. government bond markets before downgrading America’s long-term debt.

2. Outdated arguments. It appears that you are making special allowances for U.S. debt because of America’s size and stature in the global financial system. However, that argument is largely outdated.

Given the greater role played by bailouts since the debt crisis of 2008, it is thesmaller nations that may now have a strategic advantage: They can usually count on emergency external financing from richer nations or the International Monetary Fund. The United States cannot. There’s simply no other country big enough to bail it out.

3. Vulnerability to capital flight. The United States is the world’s largest debtor nation, owing far more to foreign creditors than any other country, leaving the U.S. vulnerable to capital flight. Yes, the U.S. has a unique advantage — because the dollar is the world’s primary reserve currency. But that’s a double-edge sword: It also helps ensnare the U.S. into more foreign debts, raising still further America’s vulnerability level.

4. Aggressive central bank action. Among all major central banks, the U.S. Federal Reserve has been the most aggressive in buying up low-quality debt, more than doubling the size of America’s monetary base in just 18 months. This alone should raise serious questions about the underlying stability of U.S. financial institutions, the sustainability of the U.S. economic recovery, and the long-term ability of the U.S. Treasury to fund and repay its debts. (See “Bernanke Running Amuck.”)

More Threats to America’s

Long-Term Credit

All told, as proposed by Grant’s Interest Rate Observer, and as summarized here last month in “14 Risks With Supposedly ‘Safest’ Securities,” there are many risk factors which you must consider when evaluating America’s long-term credit rating. These include:

• The U.S. government is now exposed to trillions of dollars in contingent liabilities from its intervention on behalf of financial institutions during the 2008-2009 debt crisis.
• Mandatory outlays for retirement insurance and health care are expected to increase substantially in future years, with the present value of future expenditures estimated by the Treasury Department at $46 trillion.
• The U.S. Federal Reserve, as part of its response to the financial crisis, may be exposed to significant credit risk.
• The U.S. economy is heavily indebted at all levels, despite recent deleveraging.
• U.S. states and municipalities are experiencing severe economic distress and may require intervention from the federal government.
• Elected officials may not take the necessary steps to ensure long-term debt sustainability and may take actions counter to the interests of bondholders.
• The U.S. dollar may not continue to enjoy reserve currency status and may decline in the future.
• A rise in interest rates could adversely affect government finances.
• Improper payments by the federal government continue to increase despite the Improper Payments Information Act of 2002.
• The U.S. government has failed its official audit by the Government Accountability Office (GAO) for 13 years in a row, with 38 material weaknesses found in 24 government departments and agencies.

The case for a U.S. debt downgrade is overwhelming. I challenge you to take the appropriate action. Any failure to do so can only enhance the risk of another financial meltdown for which no bailout would be possible.

Sincerely,

Martin D. Weiss, Ph.D.

Chairman and Founder, Weiss Ratings

[Darin]

Interesting post 20milliondinar

Another interesting tidbit:

Our contract with OPEC nations for crude to be traded in petrodollars ends in 2013.

Will that be extended? Or will we be replaced?

A fall of the dollar would not be so wise if we wished to extend that, huh?

I think we see a big fiasco in 2013 regarding that agreement.

I hope we have a back-up plan..

[20MillionDinar]

http://dailybail.com/home/repo-105-lies-ernst-young-will-be-hit-with-fraud-lawsuit-ove.html

REPO 105 LIES: Ernst & Young Will Be Hit With Fraud Lawsuit Over Lehman Audits: Cuomo Source

We've covered the story of Lehman fraud in great detail...

• Lehman, Citi, BofA - Repo 105 Archive of Fraud

---

Breaking story...

(Bloomberg) - Ernst & Young LLP may be sued for fraud as early as today by New York Attorney General Andrew Cuomo for allegedly helping Lehman Brothers Holdings Inc. mislead investors, according to a person familiar with the matter.

Cuomo will be sworn in as governor on Jan. 1. The suit would relate to Ernst & Young’s audits of Lehman financial statements aimed at downplaying its liabilities, said the person, who wasn’t authorized to speak publicly about the case. The fraud suit would be brought under the state’s Martin Act, said the person, adding that a settlement is possible.

Richard Bamberger, a spokesman for Cuomo’s office, declined to comment. Charles Perkins, a spokesman for Ernst & Young, declined to comment. The Wall Street Journal said earlier today a lawsuit might be filed this week.

Lehman, once the fourth-largest investment bank, failed in September 2008 because of risky real estate bets and too much debt including Repo 105 trades, which it tried to hide from investors, according to bankruptcy examiner Anton Valukas’s report. Valukas, in the report, said Ernst & Young could be accused of “professional malpractice” for its role as auditor.

Repo 105 transactions are a form of short-term financing that Valukas said Lehman used to move as much as $50 billion off its balance sheet temporarily to show investors it wasn’t carrying too much debt.

The Repo 105 transactions were sale and repurchase agreements, so that Lehman was obligated to buy them back, swelling its leverage again.

Material Impact

“The balance sheet manipulation was intentional, for deceptive appearances, had a material impact on Lehman’s net leverage ratio” and caused financial reports to be misleading, Valukas wrote of the defunct New York-based company. Higher leverage undermines a firm’s capacity to absorb financial shock.

Continue reading at Bloomberg...

http://www.cbsnews.com/stories/2009/09/30/business/main5352150.shtml

Fraud Raid on Ernst & Young in Hong Kong

ByCBSNews

• 1 CommentHave Your Say
• Email StorySend to a Friend
• Share ThisTell Your Friends
• Tweet ThisTweet This
• MoreShare It

(AP) Police raided the Hong Kong offices of accounting and auditing giant Ernst & Young as part of a fraud investigation linked to the city's biggest corporate collapse, the company said Wednesday.

New York-based Ernst & Young, one of the Big Four global auditors, said in a statement it had lent police "every assistance" when they visited its offices Tuesday.

The police search came after Ernst & Young was accused in court earlier this month of falsifying documents to shield itself from a negligence claim brought by the liquidators of electronics company Akai Holdings.

The lawsuit ended last week with an out-of-court settlement in which Ernst & Young paid "an undisclosed amount" to the liquidators, Borrelli Walsh. Akai was liquidated in August 2000 and left creditors with debts of more than $1 billion.

Ernst & Young said an internal investigation had found certain documents produced for the audits of Akai in 1998 and 1999 "could no longer be relied on due to action of the audit manager," who is now one of its partners.

Ernst & Young did not identify the partner but said he has been suspended from his duties.

Police spokeswoman Candice Siu would only confirm the Commercial Crime Bureau had searched the offices of an accounting firm Tuesday and taken away some documents in connection with a "suspected forgery" case. She did not identify the firm.

Siu said a 41-year-old man surnamed Dang was also arrested. Hong Kong newspaper South China Morning Post identified the man as Edmund Dang, one of Ernst & Young's partners in Hong Kong.

Legolas - The CBI and IMF are lying? The accounting firm of Ernst and Young are backing their lies? To what end? And on what evidence are you basing that accusation? If you believe the purpose is to deter investment in the Dinar, how would you explain the fact that Iraq has continued to allow unrestricted shipment of Billions of Dinars each month for years now for sale by dealers, and has said absolutely nothing to refute the lies of the pumpers and gurus? Logically, if they wanted to deter investment, wouldn't they at least "attempt" to put an end to both?

I don't think I will put too much faith in Ernst & Young and their reports...

“The balance sheet manipulation was intentional, for deceptive appearances, had a material impact on Lehman’s net leverage ratio” and caused financial reports to be misleading, Valukas wrote of the defunct New York-based company. Higher leverage undermines a firm’s capacity to absorb financial shock."

Lehman's was the 4th largest investment bank and now they are Bankrupt! LOL

To what end you say? Hmmm.... I don't know, what type of incentive did E&Y have when they manipulated the books for the 4th largest investment bank? You do the math...

[Dalite]

If you knew for a fact it would lop would you still be sitting here waiting anxiously? I see some of the lopsters with thousands of posts. Why would you waste your time if you have no doubt it will lop? I don't believe it will come out at 3-1 but I do hope for 50 cents. That is why I am here. I read the gurus for entertainment only. Do you ever see the lopsters with any other opinion besides it will lop? They have decided it is not possible. So if it is truly not possible to rv, then why are they on a site that is hoping for an rv? Who exactly is wasting their time?

I know, if the CBI does a RD, as they have announced they would for the last year, that the value will rise as the GDP can support it.

The target seems to be the $3.22 figure that we hear so much about.

That will be about 300% increase, for around 200% net profit; just for a little patience on my part.

The only other recent investment I have thaw has nearly doubled, were I-bonds at $10,000.00 a pop and that took around ten years.

I have seen gold and silver both multiply, and have held both over ten years.

Can it RV?

Given enough time, if Shabibi can continue to keep inflation low, the GOI manage security to make and keep Iraq safe for investors electricity and water infrastructure developed for expansion of production... These things could allow the GDP to grow, and create the reserves needed to support a respectable RV. But the money supply needs to be diminished as the GDP improves.

I bought a block of a highly inflated money supply at a very low price. The country is very volatile, but has great potential. As with every one else, I got caught up in the RV Me a millionaire hype.

I can afford to wait around and see what happens, and I have already learned about some of the options.

As far as lopster, I couldn't tell you.

If you are talking about a redenomination, I know it could happen.

If you call that a LOP, you have been influenced by too many Pumpers. Only you can decide where you stand; aware of the possibilities, or herded by the Pumpers, not acknowledging any other possibility than RV me a millionaire.

Why are you here?

BTW, I can do this all day, everyday, and months at a time.....

[20MillionDinar]

Here's one more link regarding Ernst & Young:

http://knowmore.org/...Ernst_%26_Young

Ernst & Young L.L.P. "is the US arm of Ernst & Young Global, one of the Big Four accounting firms, which includes rivals KPMG, PricewaterhouseCoopers, and Deloitte Touche Tohmatsu. Ernst & Young provides assurance, tax, transactions, and advisory services to public and private companies in a wide variety of industries from about 100 offices throughout the US, including Puerto Rico. Ernst & Young L.L.P. is part of the Americas division of the global accountancy network. Arthur Young and Alwin C. Ernst founded the two accounting firms that were later combined to form Ernst & Young."

Political Influence

• Since 2001, Chairman and CEO James S. Turley gave $4,000 to Democrats and $59,100 to Republicans, including $2,000 to George W. Bush and $42,500 to various Republican organizations.[2]
• In the 2008 U.S. election, Ernst & Young gave $736,753 to Federal candidates through its political action committee - 43% to Democrats and 57% to Republicans.
• In 2006, it gave $961,508 - 38% to Democrats and 61% to Republicans.[3]
• In 2008, it spent $2,313,056 for lobbying.[4]

[<a href="http://knowmore.org/wiki/index.php?title=Ernst_%26_Young&action=edit&section=3" title="Edit section: Business Ethics" style="text-decoration: none; color: rgb(0, 121, 121); background-image: none; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: initial; background-position: initial initial; background-repeat: initial initial; ">edit]Business Ethics

• Securities Class Action against Ernst & Young and HealthSouth Corp, March 25, 2009. The New Mexico State Investment Council and the Educational Retirement Board will benefit from a potential $109 million "settlement of a securities class action settlement brought against Ernst & Young and HealthSouth Corp. According to the law firm representing the plaintiffs, this is among the largest settlements obtained to date against an outside auditor in a securities class action. The suit alleged that over a 7 year period Ernst & Young manipulated its accounting in various ways which resulted in the financial statements for HealthSouth to be materially false and misleading. That, in turn, led investors to pay more than they should have for HealthSouth’s securities and subsequently suffer hundreds of millions of dollars of damages."[5]
• Fiscal Misrepresentation, May 22, 2008. "A class action shareholder lawsuit was brought against Ernst & Young, over issues pertaining to the fiscal health of American Italian Pasta Co. Court documents showed that several other suits had been brought against the Kansas City-based pasta maker, its directors and various officers and Ernst & Young beginning in mid-2005, which claimed that they violated securities laws. Later, all these actions were consolidated into a class action lawsuit in early 2006. That suit alleged that the company, its officers and directors, as well as Ernst & Young, its audit firm issued false and misleading statements in regards to the financial status of the company."
• Tax Shelters, July 3, 2003. "A settlement has been reached between the accounting firm Ernst & Young and the government, over improperly registered tax shelters and improperly maintained lists of people who bought them. Under the settlement terms, the company will pay $15 million dollars to the IRS, and supply details of the deals and customer names to the government."[6][7]
• Suit for Faulty Accounting, March 26, 2007. "The US Securities and Exchange Commission filed charges against accounting firm Ernst & Young LLP, accusing it of compromising its independence and contributing to faulty accounting by its clients. The suit alleged that Ernst & Young provided faulty and inaccurate audit work for Pittsburgh-based PNC Financial Services Group, a large regional bank company. It was the second time in nearly three years that the SEC sanctioned Ernst & Young for alleged violations of auditor independence rules."
• Fraudulent Accounting Practices Suit, April 12, 2007. "An investor class action lawsuit filed against PNC Financial Services Group Inc. and its auditors Ernst & Young LLP, accused them of fraudulent accounting practices, which led to 22,000 PNC investors losing money. The five-year-old litigation stemmed from the Pittsburgh bank's alleged hiding of bad loans. American International Group Inc., the big insurer, helped PNC's ICLC Corp. unit in 2001 fraudulently move $762 million of soured loans and investments off its balance sheet, boosting profit by $155 million. Ernst was accused of helping AIG develop an accounting product to enable PNC's transfers, and then advising the bank, an audit client, on how to account for a version of it."

The reason I posted the previous links and articles was this:

If the 4th biggest accounting firm in the world was in charge of the CBI's reports and they have manipulated and "mislead" multiple times in the past what makes you think they are 100% right on target with the CBI's reports? Seriously, what makes you think their documents and report are 100% correct anyways?

Political contributions, incentives, reasons we don't even know about. That could play a major role in all of this...

IMF: I would take what they say with a grain of salt as well. In fact, the U.S. government, the IMF, world bank, and other major financial institutions are well known to lie, manipulate, and make false statements the majority of the time.

You all know the saying: Don't believe everything you read. Why should it be any different this time. I know, maybe because it backs up your argument as "black & white research."

[Dalite]

I could be wrong, but this may be what led the CBI to use Price Waterhouse Cooper in the recent audit.

[20MillionDinar]

I could be wrong, but this may be what led the CBI to use Price Waterhouse Cooper in the recent audit.

If they are indeed using Price Waterhouse Cooper now then I wouldn't doubt it.

[Dalite]

If they are indeed using Price Waterhouse Cooper now then I wouldn't doubt it.

I seem to remember Scooter getting a copy of the latest audit, and mentioning them as the source.

I have to rely on the CBI.

they have a lot to lose, if the tide turns against them..

I wish the Federal Reserve were a tenth as transparent.

We are just now finally allowed to see FOMC minutes, from meetings 5 years previous.

That took an act of Congress

[Darin]

Hey - I am not arguing that the #s are false, per say. I'm arguing that they may have manipulated the #s that way. Accounting for things maybe they shouldn't have that do exist, but are not technically in circulation.

You would think that the pegged exchange rate of 1170 would budge from time to time, but they're manipulating that to maintain that rate... May that is why the #s are reflected so high.

[MrFnHappy]

It's fairly simple.

Which process realigns value to GDP and provides for quicker growth potential.

The GDP doesn't support much of a RV, and a RV would only magnify the negatives of not dealing with the remnants of past inflation. Other countries would view a RV as an indication that Iraq was not a serious player for investment.

RD would get the currency in line with GDP, instill confidence in investors and allow the GDP to quickly rise and support further increases in the value of the currency.

Good solid thinking right here.

The numbers from the CBI are fabricated and cannot be trusted...

Determined by you and your investment banker coworkers, who happened to be on the clock on a Sunday evening.

Nice.......

Sonny1 did a great job of keeping morale up.

Honestly, if you are advising others on investment, are claiming CBI numbers are bs and not to be trusted, aren't you glad you didn't let people know who you work for?

I was thinking the same.....pretty damn scary.

No one won and no one lost.

Both presented their points well.