M1 vx. Monetary Base

[Darin]

I have yet to find a CB that employs fractional banking, if someone could show me one that does, I could entertain the premise.

In order for your loans to be paid off, a straight-up RV would need to happen, because if they RD, then your still have the same value in USD, which is how you need to look at this.

Whether the CB exmploys fractional banking, that does not mean much as the private or public banks of the country may allow it.

Which once again, expands the money supply.

I just started at the CBI for the example.

So yes, you can continue & entertain the idea.

[Rossenbos]

This is most likely the best and most civil thread I read in my months here at the forum.

And it's thanks to 20Million's work and his attitude. Respect and integrity.

I can only give his posts 1+ so I wanted to say in this post: I tip my hat to you, sir. You are a gentleman. A wise one (as to make the distinction from "intelligent" as intelligence hasn't gotten us anywhere so far :-) ).

Wisdom = Intelligence + Compassion.

I have nothing to add. I'm reading all your stuff with interest ( all of you on this thread) and with this energy and input, I actually believe WE ARE MAKING THIS HAPPEN right now.

THANKS TO ALL!

( There has been hardly any bashing in this thread....)

[MrFnHappy]

Whether the CB exmploys fractional banking, that does not mean much as the private or public banks of the country may allow it.

Which once again, expands the money supply.

I just started at the CBI for the example.

So yes, you can continue & entertain the idea.

My apologies, but apparently I'm not understanding your post.

The CBI dictates banking law, and yes, they allow commercial banks to employ fractional banking, but the CBI itself maintains 100% backing, just like all the other ME oil producing nations do.

Edited August 11, 2011 by MrFnHappy

[estewart]

I don't think it would be possible to increase the value of the exchange rate without either increasing production, removing currency, or both.

The 1170 seems to be Shabibi's magic number, that, when combined with the currency liability and country's production, has been effective in controlling inflation.

What ever value that is given to the dinar must be sustainable.

The t-bills don't remove money from the street, and they further ad the burden of debt service; the interest paid on them.

The 27 trillion figure (more or less) seems to indicate what is needed to support spending at the current rate; again limited by production from increasing in value, or liability....

It is not that they cannot expand or contract the money supply; have press, will travel!

The problem is that all seem to be linked as a complex solution to control inflation.

A reduction of money at the current rate gives the remaining money higher purchasing power, as it will upset the balance of money to goods.

Too much money chasing the same amount of goods creates inflation, as the goods go up in price to restore the balance,

Too little money chasing the same amount of goods create higher prices, as the inventory must be replaced to stay in business, and restocking costs more.

It seems that the 27 million is just right at 1170.

So, the money has to be reduced, or production improve in a very large rate to increase the value.

Also, there are 27 times ( a thousand times a billion), and you would have to move 999,999,999,999.99 dinar before you touch the first trillion , and you still have to move 25 more until you get anywhere close to the billions category.

Even if you made 50 trillion disappear from M2, you would still have 9 trillion liability, with the potential to cost 27 trillion USD if they meet the $3.00 plus goal that is often mentioned.

What could they sell to raise 27 trillion Dollars backing.

Maybe my math is wrong, or I am viewing this wrong, but it would seem the entire money supply would have to be reduced to well below 100 billion to allow the rate to approach the dollar range, and that is where a RD would put it in a single action with the existing numbers.

Hopefully, I am missing something here....

No.

WHEN there is an abundance of money in people's pockets, inflation occurs. That's right. That's true. BUT when there is too little money in people's pockets to buy stuff, costs of stuff goes DOWN, not also up. The cost of "restocking" is insignificant in relation to the fact that merchants not only must continuously place their stuff "on sale" when people aren't buying because they don't have enough to even pay their due bills but the merchant's must ALSO continually reduce prices to be able to much move merchandise at all. The overall general situation can result in stagflation. And worse.

IN the US the adjustment of the PRIME RATE is the fine tuning means for regulating control over inflation which naturally occurs as a result of the issuance of fiat currency which has no intrinsic specific value. Inflation automatically results as a consequence of the existence of "funny money." BUT the adjustment of the Prime Rate is slow to effect the economy. It takes time for the adjustment to show much effect at all. And it has only but little effect on the currency in circulation, the amount of which is the problem causing inflation, and the skyrocketing of prices.

]

FORTUNATELY, there exists another means for controlling inflation which the FED applies. The following which I am about to disclose I cannot prove or supply a cite for. . . . because none exist.

First, a telescope has two adjustment knobs for focusing the instrument. One is for fine tuning, and the other is the gross adjustment, where this latter brings focus mostly good. The Prime Rate compares with a telescope's fine tuning knob, and a telescope's gross adjustment knob compares with the Federal Income Tax. It is my personal observation that the sole purpose of the Federal Income Tax is to suck weal out of the economy and on a routine basis. . . . and strictly for the purpose of reducing the amount of currency in circulation. THIS IS the main tool the FED applies toward keeping inflation under control. HOWEVER, even this means is proving ineffective, as there is much taxes "due" which are not being collected for one reason or another. And this is WHY the IRS applies such effort to seek out tax "cheats." Some of their Agents carry guns. The FED has to control inflation and the Federal Income Tax is their main means for doing this.

BUT, of course the reasonable question arises is: How could the Federal Income Tax possibly reduce the currency in circulation when the government takes it and re-spends it? Huh? Obviously, no reduction could occurred. Right?

WRONG!

WHEN Reagan was President he got to wondering one day what all the government spent the collected Federal Income Tax money on. So he established the Grace Commission to investigate this matter, which it did. The resulting report you can Google. Look up, "grace commission report" (include quotes).

The finding of the Grace Commission was that all the money collected through the Federal Income Tax was being turned over to the Federal Reserve, and not one penny went to the government. Technically the money was being applied toward paying something on the interest charges owed to the FED in relation to the National Debt, which is now heading toward twenty trillion. All US currency in circulation was borrowed into existence either by the government from the FED or by banks borrowing from the FED. . . or was created by banks through the issuance of loans for houses and/or for cars.

The FED does not NEED the Federal Income Tax money it collects. The FED has no use for it. After all, the FED can freely issue all the fresh money it likes. In fact, a short recent first-time audit of the FED revealed that the FED recently created over 16 trillion which is distributed to a number of banks around the world while the government had no knowledge of the FED doing this. And the heads of many of these banks sit on the Board of the FED. These guys gave the money to themselves! And the 16 trillion has most likely been converted into gold and silver, already. Doing that helps to keep the 16 trillion out of the "currency in circulation" and thereby no adding to the currency in circulation so as to not adversely effect inflation.

SO, it is clear, that the FED most likely ELIMINATES what all it receives in the form of the Federal Income Tax. It "burns" it. And in the process it keeps the majority mass from buying "too much stuff!" Never mind, the overall situation keeps many impoverished.

See? Doing all like this is the ONLY WAY the "handlers" behind the FED, the Rothschilds et al can remain in "business," "lawfully" running their printing presses to print all the money they like.

"

Again, it is not true that "Too little money chasing the same amount of goods create higher prices, as the inventory must be replaced to stay in business, and restocking costs more.

[Darin]

My apologies, but apparently I'm not understanding your post.

The CBI dictates banking law, and yes, they allow commercial banks to employ fractional banking, but the CBI itself maintains 100% backing, just like all the other ME oil producing nations do.

Well, with that said, consider this idea/theory:

What is an abundance of people deposited money into accounts within local private banks. Than another abundance of people showed up and drew loans. Just substantially expanding the money supply, how is the CBI going to back those funds? It is out of their control, so to speak.

In an idea sense, I believe they have a buffer zone to work with. Which may let them put money into circulation or drawn out to maintain the 1170.

In other words, manipulated.

And to further go onto your point.... If they are backed by 100%

Imagine how much value would be added to each individual unit upon the contraction of the money supply (people paying their debts off)

Now all the liabilities disappear while the CBI is stuck holding an excess of foreign cash reserves to back their at previously high monetary base that substantially contracted.

They may have to back it by 100%, but, imagine what happens when the inflated money supply is contracted substantially....

Less money supply, excessive backing, which is than in turn used to increase the value.

[Dalite]

Again, it is not true that "Too little money chasing the same amount of goods create higher prices, as the inventory must be replaced to stay in business, and restocking costs more

You are correct. It should have bee too much money chasing a smaller amount of goods causes the price to rise.

The restocking issue speaks to the point that you may have large markups, you can't achieve 100% profit; you have to spend something to replace what is sold.

The analogy was seriously hosed, and I appreciate you pointing it out.

We were trying to cover the broad strokes of the affects of removing money from circulation and destroying it, as it may apply to the current situation in Iraq.

[dinarck]

estewart your post is intresting. So where does the supposed 200 billion a month come from that the Gov uses to pay Medicade, Military, and so on? I guess maybe sales tax? Where do sales tax go by the way? Fed or treasury? Anyway when I get a income tax refund I get the check from the treasury. Are they linked to the Fed or how does that work? Does the treasury collect and give to the Fed? What a jip that would be.

[FlyHi]

Drox,

How would destroying bills, or deleting the electronic currency, be considering destroying wealth? Each and every IQD in existance poses as a liability. If you have X to back each individual unit, the less units to back means the higher value each unit will be.

So, if $50,000 backs roughly 58,000,000 individual units you get an exchange rate of 0.00086 (1160)

So, if $50,000 backs roughly 5,000,000 individual units you get an exchange rate of 0.01 (100)

Whatever is removed in terms of a liability will re-alloacte that wealth to the existing money supply. Wealth is not destroyed, it is added to the remaining existing units

Think of a piece of pie... If you had 8 slices of pie that were equal in size, each slice would be rather small. However, if you were to use the same pie and cut it into 4 pieces, you would have large slices of pie.

So, the idea is to reduce the money in circulation to reduce liabilities....

Darin your pie slice analogy was a nice simple way to show the effect of re-distribution of wealth with a reduced money supply...something a newbie like me can get my head around!

This total thred has been head spinning but gives a glimpse of the big picture and scenario planning that is involved for Shabs and those appointed to control the money supply and get the IQD into world circulation.

Good stuff all!

[estewart]

estewart your post is intresting. So where does the supposed 200 billion a month come from that the Gov uses to pay Medicade, Military, and so on? I guess maybe sales tax? Where do sales tax go by the way? Fed or treasury? Anyway when I get a income tax refund I get the check from the treasury. Are they linked to the Fed or how does that work? Does the treasury collect and give to the Fed? What a jip that would be.

The Constitution for the United States of America states WHERE the money IS SUPPOSED to come from which the government IS SUPPOSED to be using to fund itself. And the specified source is duties, imposts, and various fees. And a great deal is derived from these sources as most of the goods in stores these days is imported. And this, of course, includes oil. There's way more than enough collected to fund the government and its social programs, too. HOWEVER. . . the US Government likes to spend trillions on wars which benefit the country not in the least except to fund the industrial/military complex and it also sends trillions into this or that country for the 'ell of it, while ignoring its own needs., I.e., New Orleans.

Now, BECAUSE the Constitutionally stated means for funding the government is insufficient for paying for these incredibly insane expenses money is borrowed from the FED, money which is IMPOSSIBLE to ever repay. AND why is that?

The money needed to repay the FED in full does not exist. There is the interest due on the money loaned to consider.

True, the money borrowed does exist in the currency in circulation, but the money to cover the interest does not exist. IT IS TRUE as I previously stated in my last big message that some of that needing-to-be-paid interest does get partly paid down on by the collected Federal Income Tax. BUT that money REDUCES the currency in circulation making it impossible then to even pay off the principle due the FED by the government. Plus also consider just how much annual interest must be due on a repayment plan where the borrowed money is approaching 20 trillion. The amount of the annual collected tax would hardly make a dent in any annual interest payments due. So what can the government do? Answer: Borrow more money from the FED, which, naturally, increases the amount of interest due. BUT as stated, the money needed to pay the interest due does not exist, only the principle minus what was collected in Federal Income Taxes by the IRS exists. That's all. Note, I am leaving out money created by banks to fund loans here as that is small in comparison to the government's monetary activities.

What is interesting is that we live in truly historical times. This incredible scam, the world's greatest bank heist, can't possibly continue much longer. High school students in a distant future time will one day be studying about these times and gasping in amazement. They'll say, "Man! I can't believe this!" Note, I am assuming that in the future students won't be intentionally being dumbed down by government controlled schools so as to avoid the chances of students learning how to think which naturally would lead to an uprising.

Sales taxes go to State Treasuries. Some states have income taxes, some states have sales taxes, instead. Whichever, both are legitimate, and do serve to fund a given state's government. Especially, property taxes. Plus, States have hundreds of fees for this and that.

As to your refund check coming from the Treasury, I can't comment on that. I only talk about things I know about, or I, myself, ask questions., also

HOWEVER, somewhat distantly related, I used to see it stated that cancelled checks received back at the time (the latter '90s) would have in big bold letters stamped on the back of the check in cancelation: FRB. Or, Federal Reserve Bank.

BUT things like this are being fast dealt with. For example, it used to be that the IRS did NOT have a .gov sufix in its URL, because, like the FED, the IRS is not a government agency, even though Congress does write it's regulations. The IRS is an organization based in Puerto Rico. But like magic, nowadays, it has a .gov suffice in it's URL. Go figure.

[Darin]

Darin your pie slice analogy was a nice simple way to show the effect of re-distribution of wealth with a reduced money supply...something a newbie like me can get my head around!

This total thred has been head spinning but gives a glimpse of the big picture and scenario planning that is involved for Shabs and those appointed to control the money supply and get the IQD into world circulation.

Good stuff all!

I find the best way to explain many things is through analogies. Analogies that we all may understand. This helps give a better visual. The complex economics at times can be confusing.

Here is an information video worth watching (10 minutes)

So, if all deposits may indeed be expanded up to 9 times.... I wonder how much this factored into the expansion of the money supply within the CBI..

[en1gma]

I think my brain just had an orgasm

[dinarck]

Thanks estewart. Nice job.

I think my brain just had an orgasm

LOL

[Dalite]

My brain is overheated.

Someone please look this over, and correct the math as needed.......

CBI concludes its week by selling202 million dollars 

8/11/20112:25 PM 

BAGHDAD /Aswat al-Iraq: The Central Bank of Iraq (CBI) has concluded its weekly sessionson Thursday by selling 202 million US dollars in its auction for the sale andpurchase of foreign currencies, based on 1,170 dinars per dollar, a salesfigure exceeding Wednesday’s sales of 182 million dollars, its daily bulletinreported. 

“TheCBI’s cash sales in the day’s auction has reached 3 millions and 510,000dollars, on bases of 1,183 dinars per dollar, including the Bank’s interest of13 dinars per dollar,” the bulletin pointed out, whilst the foreign transfershave reached 199 millions and 400,000 dollars, also with a rate of 1,183 dinarsper dollar.

Thebulletin pointed out that none of the 20 banks that shared in the day’s auctionhad offered a single dollar for sale.

TheCBI holds 5 sessions per week, beginning from Sunday and ending on Thursday,for the sale and purchase of foreign currencies, for which the Bank gets aninterest of 13 dinars per dollar, as well as getting 13 dinars per dollar forthe transfers abroad, the bulletin concluded. 

SKH (IT)

http://en.aswatalira...e&id=144241&l=1 

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

Here is how that auction was listed on the CBI site

Currency Auctions

Announcement No. (1957)

The latest daily currency auction was held in the Central Bank of Iraq on the11-AUG-2011. The results were as follows:

Details Notes 

Number of banks 20 

Auction price selling dinar / US$ 1170 

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

Amount sold at auction price (US$) 202,910,000 

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

Total offers for buying (US$) 202,910,000 

Total offers for selling (US$) ----- 

Of this total $3,510,000 was cash sales at 13 dinar per dollar commission, netting 45,630,000 dinar 

The Dinar transferred abroad netted $199,400,000 and.the 13 dinar commission would be 2,592,200,000 dinar.

If my math is anywhere near correct, they made 2,592,832,000 Dinar profit (around $222,000.00) 

Approximately  237,404,700,000 dinar showed up on foreign shores, and there seems to be no shortage of Dinar for sale..

(but, if accurate, 237,405,700,00O Dinar were removed from M2, and offset by foreign assets worth $202,910,000.00)

That could create 237,404.7 new Dinar holders with a million each.

Could some one please check this math and find where I messed up.

I don't think that could be correct...

Someone please tell me I am reading this wrong, or is this what we are looking for.

We don't always get the complete breakdown, and I could be reading it wrong.

Why would Shabibi shift this kind of liability abroad?

[Darin]

Dalite,

I think you have to look at remittances in U.S. value...

Remittances normally refer to payments abroad.. So, for example, the payments to import tonnes of wheat would most likely be done in U.S. dollars or another tradeable currency.

[Dalite]

Dalite,

I think you have to look at remittances in U.S. value...

Remittances normally refer to payments abroad.. So, for example, the payments to import tonnes of wheat would most likely be done in U.S. dollars or another tradeable currency.

No problem with that, just pointing out that according to the breakdown, the entire amount of the auction was cash purchases and foreign transfer of dinar.

I don't think the CBI was paying out to purchase dinar; if they were, it would be at 1170, not 1183.

It looked like a large transfer of M2 abroad, and a smaller amount in cash exchanges.

[Darin]

No problem with that, just pointing out that according to the breakdown, the entire amount of the auction was cash purchases and foreign transfer of dinar.

I don't think the CBI was paying out to purchase dinar; if they were, it would be at 1170, not 1183.

It looked like a large transfer of M2 abroad, and a smaller amount in cash exchanges.

The #1 thing that continues to make following certain aspects of the process confusing is they can switch back & forth to referencing it in IQD or USD.

Which makes it really confusing as to understanding the process entirely.

For example, they may be sending USD abroad, but referencing it in value of IQD

We used to see the budget #s, and they switched back and forth all the time in valuing it in IQD and/or USD

[drox]

Drox,

How would destroying bills, or deleting the electronic currency, be considering destroying wealth? Each and every IQD in existance poses as a liability. If you have X to back each individual unit, the less units to back means the higher value each unit will be.

So, if $50,000 backs roughly 58,000,000 individual units you get an exchange rate of 0.00086 (1160)

So, if $50,000 backs roughly 5,000,000 individual units you get an exchange rate of 0.01 (100)

Whatever is removed in terms of a liability will re-alloacte that wealth to the existing money supply. Wealth is not destroyed, it is added to the remaining existing units

Think of a piece of pie... If you had 8 slices of pie that were equal in size, each slice would be rather small. However, if you were to use the same pie and cut it into 4 pieces, you would have large slices of pie.

So, the idea is to reduce the money in circulation to reduce liabilities....

You bring up valid points, they may not be able to draw in too much because it could cause cash shortages.

But, the value is based upon their own monetary tools to find the value. They could switch policies and completely revamp how they value each unit. Upon doing so, they could increase the exchange rate against other currencies which would increase purchasing power. Upon the increase of purchasing power, less currency would be required in circulation to purchase same goods/services. (This would draw in those liabilities, and the CBI could move forward with them as they please)

Next things to look at:

Is the capital reserves to be held by public & private banks in terms of ratios or value. In terms of ratios, as the banks holdings increase (citizens gaining trust in banks) the required capital reserves would go up.

Thus moving additional funds to back the holdings within a bank. Therefore, the higher the value, the less to be held in the banks.

I know that may seem slightly confusing...

But I believe the reserve requirement by banks is 15%

If your holding 1,000,000 (as one particular customer) within a bank, and the bank has 1,000 customers with the same IQD amount in an account. The total volume within the bank would be 1 billion IQD.

15% of that would be 150 million to be held as reserves.

Now, if the purchasing power were to rise (as in value), and in this example lets say it doubles. Maybe each citizen holds an average of 500,000 IQD in an account. Now the 1 billion is reduced to 500 million. The reserve requirement would be 75 million.

Now the banks can decide, continue holding excess reserves to account for additional customers who will make deposits or return funds back to the CBI.

I'm a little fuzzy when considering the exchange process of the reserves. What is received in return as the reserves are bought up or sold off.

Hey Darin thanks for the excellent response. Sorry for getting back to you late but had a lot going on yesterday. I understand your take but I disagree with your example. Your pie example says you have a pie in 8 pieces that suddenly becomes 4 pieces. That is incorrect because you are not showing where the pie is you took out. If you cut out 1/4 of it you have an entire different pie then you started with. A part of it was "consumed" or destroyed. Thus wealth was destroyed. You have less pie.

Think of it like this. If you have an acre of land and you give 25% of it to the neighbor so that you don't have to pay taxes on that portion. Your tax burden is less but have you gained value or lost value? You are suggesting that you have increased the cost per square foot by making it less. I disagree. You have given away part of your wealth for a smaller return. Debt = money and money = debt. A debt was established when that money was created. That debt doesn't disappear when you destroy that same money. It is filtered into the system and is already factored into the whole equation. You just removed any chance of using that money to build more wealth.

Normal money supply contraction methods don't destroy the money they basically hide it. When a FED or Central Bank requires a change they draw them back out. I haven't found anything that shows me any nations destroy currency for any purpose other than to replace it. Can you? So basically I think to destroy the currency you take away more ability for the CBI to back up a higher rate.

Edited August 12, 2011 by drox

[Darin]

Hey Darin thanks for the excellent response. Sorry for getting back to you late but had a lot going on yesterday. I understand your take but I disagree with your example. Your pie example says you have a pie in 8 pieces that suddenly becomes 4 pieces. That is incorrect because you are not showing where the pie is you took out. If you cut out 1/4 of it you have an entire different pie then you started with. A part of it was "consumed" or destroyed. Thus wealth was destroyed. You have less pie.

Think of it like this. If you have an acre of land and you give 25% of it to the neighbor so that you don't have to pay taxes on that portion. Your tax burden is less but have you gained value or lost value? You are suggesting that you have increased the cost per square foot by making it less. I disagree. You have given away part of your wealth for a smaller return. Debt = money and money = debt. A debt was established when that money was created. That debt doesn't disappear when you destroy that same money. It is filtered into the system and is already factored into the whole equation. You just removed any chance of using that money to build more wealth.

Normal money supply contraction methods don't destroy the money they basically hide it. When a FED or Central Bank requires a change they draw them back out. I haven't found anything that shows me any nations destroy currency for any purpose other than to replace it. Can you? So basically I think to destroy the currency you take away more ability for the CBI to back up a higher rate.

I'm still going to argue this.. Sorry

If you go back a few posts, you'll see that I posted a video.

As you can see, fractional banking has basically stolen value from all existing notes in existance.

Going off of memory, it would cost $21.60 in 2007 to buy the same value $1.60 purchased in 1913 (Dates & rates, relatively close)

As you print more money, each unit loses value.

If you reverse that process, could it NOT be argued that value is gained?

Imagine if we hit the "rewind" button on a historic timeline.

If you held $21.60 today and you reverted back to 1913, you could be able to purchase 13-14 times with that $21.60 in 1913 as in 2007.

Difference being, you know hold a higher % of the total money supply with your $21.60

Wealth is not destroyed, its reallocated into existing bills.

Maybe we are both thinking differently on our concepts... But I fail to see how my concept can be argued.

Because if printing money decreases value, why would removing money destroy wealth?

It should be noted, that printing money also does not create wealth.

[Dalite]

The #1 thing that continues to make following certain aspects of the process confusing is they can switch back & forth to referencing it in IQD or USD.

Which makes it really confusing as to understanding the process entirely.

For example, they may be sending USD abroad, but referencing it in value of IQD

We used to see the budget #s, and they switched back and forth all the time in valuing it in IQD and/or USD

That is why I posted the breakdown, as well as the way it is listed on the CBI.

The 1183 exchange rate confirms that Dinar was either sold for cash ( which goes into foreign reserves) or transferred abroad.

Both instances relieve M2, and supplement foreign reserves.

There is no reason for any local bank to buy or sell at more than the 1170 rate.

This may lead to nowhere, but it does show that dinar is sold out of the system either on a straight cash sale, or by transfer abroad.

The down side of that is no matter where it lands, it becomes a part of the M1 liability...

Here is the bulletin again:

TheCBI holds 5 sessions per week, beginning from Sunday and ending on Thursday,for the sale and purchase of foreign currencies, for which the Bank gets an interest of 13 dinars per dollar, as well as getting 13 dinars per dollar for the transfers abroad, the bulletin concluded. 

[Darin]

Dalite,

It is just re-circulated currency. What goes out, eventually comes back, and the process starts over again.

GOI receives USD for Crude Exports

GOI goes to CBI says, here is the USD, give us IQD

GOI takes IQD, distribute the IQD amongst officials for salaries, and pays other expenditures.

Officials spend IQD & expenditures put the IQD into the economy.

Average Citizens receive IQD, trade IQD, and spend IQD.

Some IQD is brought to the banks by businesses & citizens.

Banks hold IQD and can disperse upon demand.

CBI auctions dollars to the banks in return of IQD

CBI replenishes their IQD stock

Banks now have USD on-hand

Local businesses wish to pay for import goods, can convert their IQD to USD to pay for debts

The cycle can go over and over and over. (And my breakdown may not even be entirely accurate, for example, I think the payments to foreign debts would be done through the TBI)

But, the #s supplied does not mean they're giving IQD to foreign banks to disperse & exchange. It could, but I highly doubt that is their #1 intention.

[Bumper64]

Great debate guys and gals!!

Please keep it up!!

I love it!!

[estewart]

I'm still going to argue this.. Sorry

If you go back a few posts, you'll see that I posted a video.

As you can see, fractional banking has basically stolen value from all existing notes in existance.

Going off of memory, it would cost $21.60 in 2007 to buy the same value $1.60 purchased in 1913 (Dates & rates, relatively close)

As you print more money, each unit loses value.

If you reverse that process, could it NOT be argued that value is gained?

Imagine if we hit the "rewind" button on a historic timeline.

If you held $21.60 today and you reverted back to 1913, you could be able to purchase 13-14 times with that $21.60 in 1913 as in 2007.

Difference being, you know hold a higher % of the total money supply with your $21.60

Wealth is not destroyed, its reallocated into existing bills.

Maybe we are both thinking differently on our concepts... But I fail to see how my concept can be argued.

Because if printing money decreases value, why would removing money destroy wealth?

It should be noted, that printing money also does not create wealth.

THAT is the way I see the Federal Income Tax must work. The taxes taken into the FED must not be being re-spent, but eliminated for the sake of REMOVING circulating currency for the sake of controlling inflation. Essentially, destroying money.

The 16 trillion that the FED created a few years ago was not from a stock-pile of existing cash being held on hand, but was fresh-baked.

http://sanders.senate.gov/newsroom/news/?id=9005bc62-9fc2-4fb9-b4cf-4bfa53e68a46

"As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," Sanders said in a statement. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

[Dalite]

Darin,

I don't mean to argue, but I keep going back to this:

“TheCBI’s cash sales in the day’s auction has reached 3 millions and 510,000dollars, on bases of 1,183 dinars per dollar, including the Bank’s interest of 13 dinars per dollar,” the bulletin pointed out, whilst the foreign transfers have reached 199 millions and 400,000 dollars, also with a rate of 1,183 dinars per dollar.

When you see the 1183 rate, someone purchased Dinar, rather than exchanging it through the local banking system.

Here is something to get off the path a bit.

Many Western Carribean Cruises will make the Grand Cayman Islands a port of call.

If you visit the shops and decide to make a purchase, you get change back in USD.

their currency is strong, and their Islands are small.

If you request change in local currency, they are under fairly strict orders not to comply, as the practice, coupled with the high level of Tourism would weaken their economy as the change left with the traveller.

They can reissue new change to replace it, but a little bit would go away with each purchase if they were allowed to make change using local currency.

Anything that got away, was replaced locally, but still remained a liability to their monetary system.

Iraq has no concern of how much Dinar leaves the country. It may be one of their larger exports.

I am going to let this topic go......

[drox]

I'm still going to argue this.. Sorry

If you go back a few posts, you'll see that I posted a video.

As you can see, fractional banking has basically stolen value from all existing notes in existance.

Going off of memory, it would cost $21.60 in 2007 to buy the same value $1.60 purchased in 1913 (Dates & rates, relatively close)

As you print more money, each unit loses value.

If you reverse that process, could it NOT be argued that value is gained?

Imagine if we hit the "rewind" button on a historic timeline.

If you held $21.60 today and you reverted back to 1913, you could be able to purchase 13-14 times with that $21.60 in 1913 as in 2007.

Difference being, you know hold a higher % of the total money supply with your $21.60

Wealth is not destroyed, its reallocated into existing bills.

Maybe we are both thinking differently on our concepts... But I fail to see how my concept can be argued.

Because if printing money decreases value, why would removing money destroy wealth?

It should be noted, that printing money also does not create wealth.

I understand what you are saying. I just think that value wasn't "stolen" at all. Value was received . They bought goods and services with it. You have to have growth otherwise you are dying. Those amounts MUST go up over time! That is why consumerism is so important to the economy. It paces itself. Lots of value took place between $1.60 and $21.60. You can't just erase that. That is what you bought with the creation of that money. You simply can't erase it. If you buy a stock for $10 bucks and it goes up to $50 you can't just sell it and then buy it at $10 again unless it goes down. Value was created between $10 until you sold it at $50 and you can't erase that because you want to buy it at $10 again. Who knows... I fully believe in this investment making a nice return. I think what we are discussing is will the Dinar go to .01 - .10 cents or could it go to $1 or more. I just don't believe they can arbitrarily destroy notes to reduce the supply to raise it to $1 or more levels. I do think with the existing supply they can go to a penny or maybe higher to .10. Eventually growing closer to the Saudi in time. Thanks for the great discussion. Gotta run.

[estewart]

Dalite,

I think you have to look at remittances in U.S. value...

Remittances normally refer to payments abroad.. So, for example, the payments to import tonnes of wheat would most likely be done in U.S. dollars or another tradeable currency.

The USD is the World's Reserve Currency. ALL COUNTRIES use USDs for trading internationally with each other. And all oil is bought and sold using USDs.

China was really upset with the US of A for creating all that currency it did, the trillions, because, China is the world's main holder of US debt in the form of bonds, and the USA's printing presses running amok reduced the value of China's holdings. . . by a lot!