Open Market Operations aka "Currency Auctions"

[Darin]

OK I am still wondering what happens to the 21 trillion that they can take out of circulation. Where does it go? Do they destroy it? What about the dinar that is being pulled in from the auctions. Where does it go? Do they destroy it? See I am not as concerned about what Iraq would have to cover post RV as much as I am concerned about how much all the dinar the CBI has taken in pre RV would be worth post RV. There is somewhere around 59 trillion dinar in exsistence today. My question still remains. What happens to that 59 trillion. The way I see it they would have to destroy probably 50 trillion dinar wether it is in circulation or not pre RV so that they could RV. That is of course if they would RV to 1. Say they RV to .01 then I could see the 59 trillion being a little bit more manageable but do we really think their plan is to RV to .01? I mean maybe it is but all the propaganda seems a little overboard for that.

Its added to the value of the existing currency (hard currency and electronic)

If they removed 20% of their money supply, the value of the IQD should raise by 20%..

Do you see where I am going with this?

Destroying that currency adds value to the still existing currency.

[20MillionDinar]

OK I am still wondering what happens to the 21 trillion that they can take out of circulation. Where does it go? Do they destroy it? What about the dinar that is being pulled in from the auctions. Where does it go? Do they destroy it? See I am not as concerned about what Iraq would have to cover post RV as much as I am concerned about how much all the dinar the CBI has taken in pre RV would be worth post RV. There is somewhere around 59 trillion dinar in exsistence today. My question still remains. What happens to that 59 trillion. The way I see it they would have to destroy probably 50 trillion dinar wether it is in circulation or not pre RV so that they could RV. That is of course if they would RV to 1. Say they RV to .01 then I could see the 59 trillion being a little bit more manageable but do we really think their plan is to RV to .01? I mean maybe it is but all the propaganda seems a little overboard for that.

Dinarck, I don't know if they mean "destroy" as in actually burning it or something along those lines. But by retrieving the notes and keeping it reserves it could technically mean the same thing. If they are in the CBI's reserves and are technically not in circulation they are considered as good as destroyed.

They say that their total M2 is 59.6 trillion right? Then they also say that their total M1 (notes/cash) is 50.4 trillion.

Then they further go on to say that roughly 34.4 trillion out of the 59 trillion is deposits component. This mean savings accounts, money market accounts, and CD's. How is it possible then to have 50 trillion as their M1 figure when 34.4 trillion out of the 59 trillion total M2 is deposits component? It is impossible. If 34.4 trillion is deposits component then only 25 trillion can be actual physical currency. The rest of the M1 is bank reserves - which the CBI states is 24.9 trillion. Check this out: the 24.9 trillion (bank reserves) added to the 25 trillion actual physical currency equals their M1.

So they are counting the bank reserves and everything else in circulation as their current M1. However, these figures as we now know are a little misleading to say the least. Actually, I would say they are intentionally manipulating these numbers for whatever reason...

Bank Reserves

ID Current Account 24,940 25,348

M1 MAY2011 50,495

M2 MAY2011 59,602

deposits component of M2 34,405

Foreign Currency Deposits 7,363

Reserve Requirement

(Reserve maintenance period, in billions of Iraqi Dinars)

a Required reserves 7,038 Note 3

b Excess Current Account 21,500

[dinarck]

Its added to the value of the existing currency (hard currency and electronic)

If they removed 20% of their money supply, the value of the IQD should raise by 20%..

Do you see where I am going with this?

Destroying that currency adds value to the still existing currency.

Well the value isnt rising so we can assume that they are not removing any from circulation. What about the remaining currency? Say they bring in from the auctions 10 trillion dinar. Then they remove the 21 trillion. That would leave 38 trillion. Still a good chunk. What you are saying is at that point the exchange rate should change to 600 to 1 since almost 50% of their currency would have been removed. So it would cost them 31 billion dollars to bring their exchange rate to that not including the speculators that would need to be paid out at that rate. Just thinking while typing here.

[Dalite]

Here's a thought:

20Mill did a scenario of CBI auction buybacks of dinar.........looks like 30- 50Trillion dinar bought back per year, at least (based on more like a trillion per week to me).

Well thats been going on for several years right....

So if electronic is involved in there somehow then there's far more than enough to cover how ever many trillions up to about 300-500 Trillion or possibly more.

So definitely think there is capacity in that argument.

What say yee all

I appreciate what is being done here, and the cooperation of all.

On the auctions, it is more of a daily tide. Dollars flow out, Dinar flows in - Dinar flows out, Dollars flow in.

There are usually up to 21 banks, apparently all within the region that banks dinar.

The CBI is helping them keep their balance of both currencies.

The same Dinar, or Dollars going out of the CBI today may flow back in from one or more of the banks by weeks end.

I think this may be a dead end.

The T-bill auctions may be worth looking into, but there is overlap in new sales, and any of the debt cashed in.

And this creates another fluid situation that is hard to track.

The numbers from the CBI are probably the most dependable indicators, but being one to two months behind on posting information makes the last complete information set a month or two old.

They data are good for spotting trends, but nailing some of the answers down is like trying to nail jell-o to a tree.

I am hopeful a trend can be spotted, and it may lead in a direction that looks promising.

[dinarck]

Dinarck, I don't know if they mean "destroy" as in actually burning it or something along those lines. But by retrieving the notes and keeping it reserves it could technically mean the same thing. If they are in the CBI's reserves and are technically not in circulation they are considered as good as destroyed.

They say that their total M2 is 59.6 trillion right? Then they also say that their total M1 (notes/cash) is 50.4 trillion.

Then they further go on to say that roughly 34.4 trillion out of the 59 trillion is deposits component. This mean savings accounts, money market accounts, and CD's. How is it possible then to have 50 trillion as their M1 figure when 34.4 trillion out of the 59 trillion total M2 is deposits component? It is impossible. If 34.4 trillion is deposits component then only 25 trillion can be actual physical currency. The rest of the M1 is bank reserves - which the CBI states is 24.9 trillion. Check this out: the 24.9 trillion (bank reserves) added to the 25 trillion actual physical currency equals their M1.

So they are counting the bank reserves and everything else in circulation as their current M1. However, these figures as we now know are a little misleading to say the least. Actually, I would say they are intentionally manipulating these numbers for whatever reason...

Bank Reserves

ID Current Account 24,940 25,348

M1 MAY2011 50,495

M2 MAY2011 59,602

deposits component of M2 34,405

Foreign Currency Deposits 7,363

Reserve Requirement

(Reserve maintenance period, in billions of Iraqi Dinars)

a Required reserves 7,038 Note 3

b Excess Current Account 21,500

This is just another question that a RV to 1 overnight brings up. Does it go into their reserves? Is it destroyed? Does it become worth 21 trillion USD? Does the IMF say you have to destroy that currency pre RV or do they say RV and make it worth 21 trillion USD? How does that work? Darin brings up a good point noting that destroying it adds value to the exsisting currency which makes sense. What about the new currency? Do they only print the amount that is left in circulation after everything they want is "pulled" in? Why would they print 30 trillion in new notes if they are destroying tens of trillions now. Haha? More questions than answers but at least we have plenty of discussion points.

[MrFnHappy]

I appreciate what is being done here, and the cooperation of all.

On the auctions, it is more of a daily tide. Dollars flow out, Dinar flows in - Dinar flows out, Dollars flow in.

There are usually up to 21 banks, apparently all within the region that banks dinar.

The CBI is helping them keep their balance of both currencies.

The same Dinar, or Dollars going out of the CBI today may flow back in from one or more of the banks by weeks end.

I think this may be a dead end.

The T-bill auctions may be worth looking into, but there is overlap in new sales, and any of the debt cashed in.

And this creates another fluid situation that is hard to track.

The numbers from the CBI are probably the most dependable indicators, but being one to two months behind on posting information makes the last complete information set a month or two old.

They data are good for spotting trends, but nailing some of the answers down is like trying to nail jell-o to a tree.

I am hopeful a trend can be spotted, and it may lead in a direction that looks promising.

Exactly, dinars in....dinars out.....it's how they run the country.

The GOI sells oil for DOLLARS. The GOI uses these DOLLARS to buy DINARS which in turn they use to run the govt' ie; salaries, development projects, subsidies to citizens, etc. Those DINARS end up in the hands of the banks who in turn go to auction to buy more DOLLARS that the CBI has gotten from the GOI. And so the circle goes.

I can't see how any substantial amount of dinar could have possibly been taken out of circulation for 2 reasons.

1) the CBI financial indicators say so.

2) any substantial reduction in dinars without a reciprocal increase in value almost simultaneously, would bring their local economy to a halt....remember, the low value is why the circulation is so large (think in terms of value in USD, not number of dinars).

Edited August 8, 2011 by MrFnHappy

[sonny1]

OK I am still wondering what happens to the 21 trillion that they can take out of circulation. Where does it go? Do they destroy it? What about the dinar that is being pulled in from the auctions. Where does it go? Do they destroy it? See I am not as concerned about what Iraq would have to cover post RV as much as I am concerned about how much all the dinar the CBI has taken in pre RV would be worth post RV. There is somewhere around 59 trillion dinar in exsistence today. My question still remains. What happens to that 59 trillion. The way I see it they would have to destroy probably 50 trillion dinar wether it is in circulation or not pre RV so that they could RV. That is of course if they would RV to 1. Say they RV to .01 then I could see the 59 trillion being a little bit more manageable but do we really think their plan is to RV to .01? I mean maybe it is but all the propaganda seems a little overboard for that.

hey buddy, sorry for being a dickkk to you last week. very good break down everyone. they do destroy the notes when they come back in to the cbi's possession. they have been buying back a large amount of dinar, just like i have saying for months. (i have been wrong on alot also) the cbi has been setting up for this to rv for some time now. great job, this is the best breakdown-chat-non kindergarten chatter that has ever been on this site.....thanks.

when iraq rv's, there money rv's as well, them covering a rv will be no problem, i just hope you guys can see this now. there are more factors involved than a rv-lop, iraq needs a private sector built, if iraq lops it makes worthless money just as worthless. some seem to forget, iraqs dinar should be worth at the least jordan-bahrain. iraq is 3rd in oil-2nd in natural gas-and have minerals and alot of gold.... my point is that shabbs would of rd'd a long time ago, everything is being set up for a straight up revalue.

[MrFnHappy]

Dinarck, I don't know if they mean "destroy" as in actually burning it or something along those lines. But by retrieving the notes and keeping it reserves it could technically mean the same thing. If they are in the CBI's reserves and are technically not in circulation they are considered as good as destroyed.

They say that their total M2 is 59.6 trillion right? Then they also say that their total M1 (notes/cash) is 50.4 trillion.

Then they further go on to say that roughly 34.4 trillion out of the 59 trillion is deposits component. This mean savings accounts, money market accounts, and CD's. How is it possible then to have 50 trillion as their M1 figure when 34.4 trillion out of the 59 trillion total M2 is deposits component? It is impossible. If 34.4 trillion is deposits component then only 25 trillion can be actual physical currency. The rest of the M1 is bank reserves - which the CBI states is 24.9 trillion. Check this out: the 24.9 trillion (bank reserves) added to the 25 trillion actual physical currency equals their M1.

So they are counting the bank reserves and everything else in circulation as their current M1. However, these figures as we now know are a little misleading to say the least. Actually, I would say they are intentionally manipulating these numbers for whatever reason...

Bank Reserves

ID Current Account 24,940 25,348

M1 MAY2011 50,495

M2 MAY2011 59,602

deposits component of M2 34,405

Foreign Currency Deposits 7,363

Reserve Requirement

(Reserve maintenance period, in billions of Iraqi Dinars)

a Required reserves 7,038 Note 3

b Excess Current Account 21,500

What Does M1 Mean?

A category of the money supply that includes all physical money such as coins and currency; it also includes demand deposits, which are checking accounts, and Negotiable Order of Withdrawal (NOW) Accounts.

What Does M2 Mean?

A category within the money supply that includes M1 in addition to all time-related deposits, savings deposits, and non-institutional money-market funds.

Edited August 8, 2011 by MrFnHappy

[dinarck]

hey buddy, sorry for being a dickkk to you last week. very good break down everyone. they do destroy the notes when they come back in to the cbi's possession. they have been buying back a large amount of dinar, just like i have saying for months. (i have been wrong on alot also) the cbi has been setting up for this to rv for some time now. great job, this is the best breakdown-chat-non kindergarten chatter that has ever been on this site.....thanks.

when iraq rv's, there money rv's as well, them covering a rv will be no problem, i just hope you guys can see this now. there are more factors involved than a rv-lop, iraq needs a private sector built, if iraq lops it makes worthless money just as worthless. some seem to forget, iraqs dinar should be worth at the least jordan-bahrain. iraq is 3rd in oil-2nd in natural gas-and have minerals and alot of gold.... my point is that shabbs would of rd'd a long time ago, everything is being set up for a straight up revalue.

No problem Sonny. I recognize your contribution to this site and sometimes things get heated but there was no disrespect meant towards you.

[Rossenbos]

No problem Sonny. I recognize your contribution to this site and sometimes things get heated but there was no disrespect meant towards you.

Crikey guys! Get a room!

[MrFnHappy]

Here's something else I've seen reference to. The USA and Iraq in comparison. The USD and dinar cannot be compared.

I'm sure most know that the USD is a fiat currency, it's value based on our GDP, faith, and perhaps a little fear as we can exert our formidable military might anywhere on the planet in a short amount of time. But I digress......

I doubt that at any time in the near future Iraq could equal or better our GDP (if ever). The USD is still THE reserve currency the world over, which, although dwindling, still shows FAITH in the USD.

I understand that if every dollar came back to the US we would be bankrupt many times over, but that won't happen any time soon....again I say we are still THE reserve currency, and everyone needs dollars.

So I guess my question would be, who would have enough faith in Iraq to support the dinar as a fiat currency......let's face it, Iraq is considered one of the most corrupt countries in the world, security is still questionable, and they still haven't been able to assemble a complete gov't yet.

Here's an interesting little tid-bit too.

Granted, this happened during the Saddam years, and I'm not saying Iraq will do this today, but a few things hit home.

The following are excerpts from a NYT article.

In an effort to fight runaway inflation, Iraq decided last week to invalidate its 25-dinar note. Mr. Abu Bakir, a black-market currency trader, has been wiped out, along with tens of thousands of other Jordanians.

Jordanian businessmen accepted Iraqi currency for payment, often in deals with the Iraqi Government, and squirreled it away. Shepherds sold their flocks, people traded in their gold jewelry and families mortgaged their homes, or withdrew their savings, to buy the Iraqi bills.

"I didn't have anything else so I sold my taxi to buy Iraqi dinars," said 23-year-old Ahmed Said.

Each morning dozens of men carrying bundles of Jordanian dinars descended on the tiny offices in the Shabsoug building in downtown Amman. They bought Iraqi dinars from black marketeers like Mr. Abu Bakir, filling shopping bags with the bills. Government officials estimate the value of hoarded Iraqi currency in Jordan at $100 million.

Baghdad permitted Iraqis to exchange the 25-dinar notes for the new currency, but they closed the borders for six days to keep speculators outside the country. The border was reopened Tuesday, after the Monday deadline to turn in the old notes passed. Baghdad Imposes Exit Tax

In an effort to cut down on smuggling, Baghdad also imposed a stiff exit tax of 15,000 dinars, the equivalent of $250 on the black market and $48,000 at the official exchange rate. The tax has slowed cross-border traffic from Iraq to a trickle.

Iraqi officials say they have no intention of compensating anyone else, even the Jordanian businessmen they traded with.

"It was their mistake to speculate in Iraqi currency," Shawki Kubaisi, the chairman of the Iraqi Trade Bank, said in Amman. "This is a matter of our national sovereignty, taken to improve our economy."

http://www.nytimes.com/1993/05/16/world/fortunes-in-iraqi-bills-gone-overnight.html?src=pm

"This is a matter of our national sovereignty,"

Again, I am NOT saying Iraq will do this, but they could. Iraq, like any other country, is going to protect it's interests first.

I just don't see the dinar going fiat any time in the near future.

Edited August 9, 2011 by MrFnHappy

[MrFnHappy]

Let's see if I can get a response in this thread.....I've tried numerous times, but I never get a response.

Here's something else I've presented previously.

Look at this from the CBI's perspective......imagine YOU are the CBI, and let's also imagine you can rv to $1, or $3, or whatever number you choose.

Would you RV and make millions of people (many of them infidels ) wealthy with your money, using your oil that's still in the ground (which you technically have no right to use)

or,

RD using only a portion of your cash reserves (and that's only if you allow currency outside your borders to be exchanged) AND get back all your dinar allowing you to nearly eliminate all speculation on your currency.

I've yet to have anyone comment on this....all comments are welcome.

Side note: I too, would prefer that Iraq RV

So, what would you do....

Edited August 9, 2011 by MrFnHappy

[20MillionDinar]

This is just another question that a RV to 1 overnight brings up. Does it go into their reserves? Is it destroyed? Does it become worth 21 trillion USD? Does the IMF say you have to destroy that currency pre RV or do they say RV and make it worth 21 trillion USD? How does that work? Darin brings up a good point noting that destroying it adds value to the exsisting currency which makes sense. What about the new currency? Do they only print the amount that is left in circulation after everything they want is "pulled" in? Why would they print 30 trillion in new notes if they are destroying tens of trillions now. Haha? More questions than answers but at least we have plenty of discussion points.

I cannot answer these questions.... LOL Wish I could. However, it is obvious that our minds are moving and we have come up with all kinds of situation and scenarios. Let's just hope that the "masterminds" behind this entire thing do what is best for everybody involved. And who knows, maybe what they end up doing never even crossed our minds. Just a thought.

I thank you all for this civil debate. It has been fun and entertaining. I will definitely be around for more chat later. Everybody enjoy your day/evenings where ever you are.

Aloha,

Terry

Here's something else I've seen reference to. The USA and Iraq in comparison. The USD and dinar cannot be compared.

I'm sure most know that the USD is a fiat currency, it's value based on our GDP, faith, and perhaps a little fear as we can exert our formidable military might anywhere on the planet in a short amount of time. But I digress......

I doubt that at any time in the near future Iraq could equal or better our GDP (if ever). The USD is still THE reserve currency the world over, which, although dwindling, still shows FAITH in the USD.

I understand that if every dollar came back to the US we would be bankrupt many times over, but that won't happen any time soon....again I say we are still THE reserve currency, and everyone needs dollars.

So I guess my question would be, who would have enough faith in Iraq to support the dinar as a fiat currency......let's face it, Iraq is considered one of the most corrupt countries in the world, security is still questionable, and they still haven't been able to assemble a complete gov't yet.

Here's an interesting little tid-bit too.

Granted, this happened during the Saddam years, and I'm not saying Iraq will do this today, but a few things hit home.

The following are excerpts from a NYT article.

"This is a matter of our national sovereignty,"

Again, I am NOT saying Iraq will do this, but they could. Iraq, like any other country, is going to protect it's interests first.

I just don't see the dinar going fiat any time in the near future.

Iraq's currency is a Fiat currency. There are only 3 currencies that are even remotely close to being "backed" by a commodity. They are the New Zealand Dollar, The Australian Dollar, and the Canadian Dollar. Nothing else even comes close...

Bottom line is, every countries currency is a Fiat currency. Which means, they are backed by nothing but the faith and trust of the country that issues them, period. How do you think they are able to print more and more and more IQD's? Because it is a fiat currency...

You are right when saying the USA and Iraq can't even be compared. But the Central Banking system can definitely be compared along with how they operate, requirements, monetary policy and tools, etc...

If you say that you can't compare Iraq and USA then how can people compare Iraq to Turkey or to Venezuela. Comparing countries doesn't only work in your favor and then not when it doesn't. Just saying.

By the way, I have posted documents supporting the fact that Iraq does not follow a "100% Full Reserve Banking" system. There is proof that they don't! How can you say they do?

Edited August 9, 2011 by 20MillionDinar

[MrFnHappy]

I cannot answer these questions.... LOL Wish I could. However, it is obvious that our minds are moving and we have come up with all kinds of situation and scenarios. Let's just hope that the "masterminds" behind this entire thing do what is best for everybody involved. And who knows, maybe what they end up doing never even crossed our minds. Just a thought.

I thank you all for this civil debate. It has been fun and entertaining. I will definitely be around for more chat later. Everybody enjoy your day/evenings where ever you are.

Aloha,

Terry

Iraq's currency is a Fiat currency. There are only 3 currencies that are even remotely close to being "backed" by a commodity. They are the New Zealand Dollar, The Australian Dollar, and the Canadian Dollar. Nothing else even comes close...

Bottom line is, every countries currency is a Fiat currency. Which means, they are backed by nothing but the faith and trust of the country that issues them, period. How do you think they are able to print more and more and more IQD's? Because it is a fiat currency...

You are right when saying the USA and Iraq can't even be compared. But the Central Banking system can definitely be compared along with how they operate, requirements, monetary policy and tools, etc...

If you say that you can't compare Iraq and USA then how can people compare Iraq to Turkey or to Venezuela. Comparing countries doesn't only work in your favor and then not when it doesn't. Just saying.

Sorry, I have to disagree. The IQD is not fiat. It is backed at slightly over 100% by hard reserves.

What Does Fiat Money Mean?

Currency that a government has declared to be legal tender, despite the fact that it has no intrinsic value and is not backed by reserves. Historically, most currencies were based on physical commodities such as gold or silver, but fiat money is based solely on faith.

Edited August 9, 2011 by MrFnHappy

[dinarck]

I cannot answer these questions.... LOL Wish I could. However, it is obvious that our minds are moving and we have come up with all kinds of situation and scenarios. Let's just hope that the "masterminds" behind this entire thing do what is best for everybody involved. And who knows, maybe what they end up doing never even crossed our minds. Just a thought.

I thank you all for this civil debate. It has been fun and entertaining. I will definitely be around for more chat later. Everybody enjoy your day/evenings where ever you are.

Aloha,

Terry

Hahaha... I hear ya 20Million. This is why I am on this site is to get answers and the main reason I believe the RD to be likely is because it answers alot of them. Trust me there is nothing I would like more than to hear answers to these questions that doesnt involve a RD so I am up for any discussion that may shed light on how a RV would be possible and that is also why I ask so many questions. Lol. Thanks again for opening the debate.

[20MillionDinar]

Let's see if I can get a response in this thread.....I've tried numerous times, but I never get a response.

So, what would you do....

MrFnHappy - You are basing this solely off of the fact that the CBI will indefinitely, no matter what, have to back every single dinar with 1 USD (assuming they RV at 1:1)

Who said that is exactly what has to be done? I think there might be a little bit of some "forum rumor" mixed up in your post.

I don't believe for one second that this is the ONLY way possible, there are a million ways to skin a cat, choose one.

There is your response. What I am saying is you don't know exactly how it will happen and how it works, and either do I.

Sorry, I have to disagree. The IQD is not fiat. It is backed at slightly over 100% by hard reserves.

It is true that it is technically backed by 100% "hard reserves" at this time. But there is nothing stating anywhere that this is how it is has to be indefinitely or even how it HAS to be now.

I respect your opinions and what you bring to the table as well.

OK, now I really have to head out. Be back later. LOL

[Kimberlye]

Sorry to barge in, but I have to say, 20million, you just made my day. I needed to hear that it was at least possible.

Dinarck, Dalite, Sonny, and others: This is why this site is so darn awesome; it's called putting your heads together to answer questions.

I am not smart enough to jump in the debate, but I sure appreciate that you all do!!

20Million, you're my favorite person today.

Kimberlye

[Dalite]

Attached is the trimmed down Key financials for 2011.

They should print out in a landscape format.

Each page should have all the info from the columns.

It will take at least 2 landscape pages to print the rows.

This is in .xls format, then zipped to be accepted as an attachment.

I don't know if this will be a benifit or not

key financial_trimmed.zip

[Darin]

Well the value isnt rising so we can assume that they are not removing any from circulation. What about the remaining currency? Say they bring in from the auctions 10 trillion dinar. Then they remove the 21 trillion. That would leave 38 trillion. Still a good chunk. What you are saying is at that point the exchange rate should change to 600 to 1 since almost 50% of their currency would have been removed. So it would cost them 31 billion dollars to bring their exchange rate to that not including the speculators that would need to be paid out at that rate. Just thinking while typing here.

Well, if the theory that that the CBI is drawing in IQD... Which would draw in more IQD, a 1170 rate, or a higher rate?

Think about that one for a second:

If the rate was where it is now, would it stand better to maintain that rate to draw in more IQD, or to re-evaluate their currency to a higher value and thus not decreasing the money supply as fast.

So, if they are drawing in 1170 dinars per every dollar, they will quickly draw in notes.

If the rate was 1:1 - they may not as quickly draw in the notes...

[dinarslave]

Thank you so very much for your dedication to the RV and helping us to become more educated. I appreciate your hard work!

[dinarck]

Well, if the theory that that the CBI is drawing in IQD... Which would draw in more IQD, a 1170 rate, or a higher rate?

Think about that one for a second:

If the rate was where it is now, would it stand better to maintain that rate to draw in more IQD, or to re-evaluate their currency to a higher value and thus not decreasing the money supply as fast.

So, if they are drawing in 1170 dinars per every dollar, they will quickly draw in notes.

If the rate was 1:1 - they may not as quickly draw in the notes...

So they are removing IQD at the 1170 rate but somehow not allowing the rate to increase due to the reduction of IQD in circulation? Then when they remove a vast amount at the 1170 rate they can then RV to a higher rate? So they would have to list the amount in circulation as 30 trillion so they can keep the rate at 1170 while they remove IQD from circulation? Again typing while thinking. So what you are saying is that there is probably alot less IQD in circulation but they are misinforming us because if the world knew there was less IQD in circulation then the rate would have to increase? Wow my brain hurts. LOL

[Carrello]

Let's see if I can get a response in this thread.....I've tried numerous times, but I never get a response.

So, what would you do....

Here is a response: Thanks for the post.

Feel better? Just kidding, now you know people are reading your post.

Thanks to everyone for the valuable information and healthy debate. If civility is still alive here on DV, as was demonstrated on this thread, I believe the RV can happen as well. Miracles can happen!

[Darin]

From my understanding:

The GOI receives U.S. Dollars from oil sales. The GOI goes to the CBI and gives them the USD to exchange for IQD. The IQD that is received pays for government expenditures such as salaries, etc. The CBI than in turn takes the USD they received from the GOI and sell the dollars (USD) to private banks to draw in IQD.

When we read the Currency Auction details:

When they speak of cash portion of dollars sold in remittance, they're referencing that money is sent as payments.

Which could likely be wire transfers out of the country, or payments for imported goods.

So this is interesting:

If the Iraqis are exporting roughly 2.5 million barrels a day

On a daily basis, they should be collection nearly 250 million a day (rough estimate)

Yet, the cash transaction are roughly in the 2-10 million per day

They must use other banks, such as the TBI (Trade Bank of Iraq) to submit payments to foreign countries to buy goods.

Either way, the larger the volume, the better chance to contract the money supply (IMO) given the current exchange rate.

Let's see if I can get a response in this thread.....I've tried numerous times, but I never get a response.

So, what would you do....

R/D vs. R/V

I believe from my understanding a lot of measures are in place to prevent money landing in the hands of infidels (terrorists)

Pretty sure many countries have a watch-list that watches for particular names and so forth.

So, unless Americans are consider infidels, I don't see to much of their concern.

Yes, people holding IQD would become wealthy, but the people within the country would have an increase in purchasing power too.

If Shabbs were to enter parliament and say "Hey! Do you want 1,000 times your money, or would you feel happier with us removing those silly zeros and your 25k actually is equivalent to 25 as we will run a two-exchange rate system."

Ha, I wonder what parliament will decide.... No change in value, but the nuisance of having to deal with two currencies or the ability to buy more with what you already have..

Hmmmm

I guess all we can do is sit back & wait.

So they are removing IQD at the 1170 rate but somehow not allowing the rate to increase due to the reduction of IQD in circulation? Then when they remove a vast amount at the 1170 rate they can then RV to a higher rate? So they would have to list the amount in circulation as 30 trillion so they can keep the rate at 1170 while they remove IQD from circulation? Again typing while thinking. So what you are saying is that there is probably alot less IQD in circulation but they are misinforming us because if the world knew there was less IQD in circulation then the rate would have to increase? Wow my brain hurts. LOL

Basically... I've thrown this argument out before, but, those that believe in the LOP argue it to death that all money within the CBI would have to be considered in circulation. If it was in reserves, it would no longer count.

Well, they can have it in their banks, but who says they have to distribute it. They may be tight on holding onto the dinars so they could easily erase their existence

The buy/sell of foreign currencies & USD is a big circular effect. But the CBI collects nearly $500 million per month on revenues at the spread. (1168/1170 spread - 2 dinar) Not sure where that topic got that information, but we all know that the CBI should be collecting revenue from the difference and when huge transactions occur, 2 dinar spread adds up rather quickly.

But, if maintaining a low rate such as 1170 draws in more dinar from circulation (money supply), why would they R/V if they can continue to provide these auctions contracting the money supply. The longer the wait, the better the rate so to speak.

Eventually (if this theory is true) drawing in IQD would become rather redundant... At some point, they'll only be able to draw in so much.. (I wonder if we are at that point)

The complexity of the CBI auctions is difficult to understand for most... I can foresee the confusion. But the CBI has a goal to maintain monetary and fiscal policy. If they're looking to maintain a 1170 rate, they need to manipulate the market accordingly.

But if there is a tool that can be used within the currency auctions to draw in dinar, a higher rate would help draw in the IQD.

[dinarck]

From my understanding:

The GOI receives U.S. Dollars from oil sales. The GOI goes to the CBI and gives them the USD to exchange for IQD. The IQD that is received pays for government expenditures such as salaries, etc. The CBI than in turn takes the USD they received from the GOI and sell the dollars (USD) to private banks to draw in IQD.

When we read the Currency Auction details:

When they speak of cash portion of dollars sold in remittance, they're referencing that money is sent as payments.

Which could likely be wire transfers out of the country, or payments for imported goods.

So this is interesting:

If the Iraqis are exporting roughly 2.5 million barrels a day

On a daily basis, they should be collection nearly 250 million a day (rough estimate)

Yet, the cash transaction are roughly in the 2-10 million per day

They must use other banks, such as the TBI (Trade Bank of Iraq) to submit payments to foreign countries to buy goods.

Either way, the larger the volume, the better chance to contract the money supply (IMO) given the current exchange rate.

R/D vs. R/V

I believe from my understanding a lot of measures are in place to prevent money landing in the hands of infidels (terrorists)

Pretty sure many countries have a watch-list that watches for particular names and so forth.

So, unless Americans are consider infidels, I don't see to much of their concern.

Yes, people holding IQD would become wealthy, but the people within the country would have an increase in purchasing power too.

If Shabbs were to enter parliament and say "Hey! Do you want 1,000 times your money, or would you feel happier with us removing those silly zeros and your 25k actually is equivalent to 25 as we will run a two-exchange rate system."

Ha, I wonder what parliament will decide.... No change in value, but the nuisance of having to deal with two currencies or the ability to buy more with what you already have..

Hmmmm

I guess all we can do is sit back & wait.

Basically... I've thrown this argument out before, but, those that believe in the LOP argue it to death that all money within the CBI would have to be considered in circulation. If it was in reserves, it would no longer count.

Well, they can have it in their banks, but who says they have to distribute it. They may be tight on holding onto the dinars so they could easily erase their existence

The buy/sell of foreign currencies & USD is a big circular effect. But the CBI collects nearly $500 million per month on revenues at the spread. (1168/1170 spread - 2 dinar) Not sure where that topic got that information, but we all know that the CBI should be collecting revenue from the difference and when huge transactions occur, 2 dinar spread adds up rather quickly.

But, if maintaining a low rate such as 1170 draws in more dinar from circulation (money supply), why would they R/V if they can continue to provide these auctions contracting the money supply. The longer the wait, the better the rate so to speak.

Eventually (if this theory is true) drawing in IQD would become rather redundant... At some point, they'll only be able to draw in so much.. (I wonder if we are at that point)

The complexity of the CBI auctions is difficult to understand for most... I can foresee the confusion. But the CBI has a goal to maintain monetary and fiscal policy. If they're looking to maintain a 1170 rate, they need to manipulate the market accordingly.

But if there is a tool that can be used within the currency auctions to draw in dinar, a higher rate would help draw in the IQD.

Well if they brought it to .10 they can have mine. LOL

[DinarDana]

Came back tonight to catch up on this thread and I want to thank everyone for the great discussion and research. This is one of the best threads I have read on this site. My head hurts just from reading, can't imagine the thought and research behind it. I hope to check back tomorrow for the continuing saga. Thanks again!! BRAVO!