jmw Posted September 18, 2011 Report Share Posted September 18, 2011 Which one is it...Sonny says they have 58 trillion of IQD and that is why they won't lop...Dalite tried to explain it to him that they were referring to the 58 billion in reserves but where converting it to IQD only as a reference to their budget...curious what others think. 15/09/2011 10:43 Baghdad, Sep.15 (AKnews) - The deficit of 35 trillion IQD ($29.7 billion USD) in the 2012 Iraqi federal budget will not be paid from the financial reserve of the Central Bank of Iraq. Okay...this first part states that Iraq has a budget deficit of 35 trillion IQD in 2012 but can't use the financial reserves of the CBI Salam al-Quraishi, a government adviser familiar with the issue, told AKnews, the government would rather rely on raising the revenues in the oils exports, in the industry, as well as through a new law of customs to expand the estimated budget of 180 trillion IQD (152.8 billion USD). Here they say they would rather work on improving revenue through increased oil exports and a new law of customs in order to meet their budget. "The Central Bank has 58.9 trillion IQD ($50 billion USD) in financial reserves in order to keep the Dinar's exchange rate. The government can't legally exploit them to balance the budget", Quraishi said. Here is the confusing sentence...The CBI has 50 billion in foreign reserves...see line 75 as of June 2011 on this link Key Financial Indicators As illistrated it shows 53 trillion as of June of this is their monetary base which is Foreign Assets less Domestic Assets...they show it in IQD because it is a speadsheet and everything on the spreadsheet is in billions of IQD...if they don't it wouldn't balance. It also specifically states "Financial reserves in order to keep the dinar's exchange rate"...how do they maintain the exchange rate?...through the auctions by purchasing IQD with US dollars....they can't do it by purchasing IQD with IQD...it also says that the government can't legally touch the reserves...remember the CBI is autonomous from the GOI. "The oil ministry will develop a mechanism to raise the export of oil at the beginning of next year to 2.8 million barrels per day of crude oil to fill the deficit", Quraishi said, but did not give further details again the context of the article is they need to make up their deficit...here they talk about increasing oil production as a way to increase revenue. In 2009, Iraq produced 2.5 million barrels of oil per day (bopd). According to previous announcements by the Iraqi government dating back to 2010, the oil production is already supposed to rise up to 12 million bopd in 2016. If they can get to 12 million bopd their GDP would grow to close to 500 billion per year...which would have a significant improvement on their GDP to currency ratio and could make it 4 to 5 times more valuable than it is today...this would be very good....if they can get it there. Currently, Iraq finances 95% of its annual budget through oil revenues. Reported by Jaafar al-Wannan RN/CU/AKnews http://www.aknews.co...knews/2/261940/ You be the judge on what the article says...it isn't about arguing whether or not it will redenominate it is about comprehending what they are referencing when they say 58 trillion IQD... BTW Sonny...other than saying they won't lop based on that number...maybe you could explain WHY...also, they barely have 58 trillion in their M2...so how could they have an additional 58 trillion in "reserves" in the CBI...my opinion is that it is nothing by an RV Fairy...trying to make a fantasy come true. 5 5 Link to comment Share on other sites More sharing options...
ethan0205 Posted September 18, 2011 Report Share Posted September 18, 2011 This should be an interesting debate... thanks jmw and hope fully sonny1 will show up and explain i love this stuff...... just remember folks we are all family here ay DV lets keeep it clean. GO RV 3 3 Link to comment Share on other sites More sharing options...
xyzzy Posted September 18, 2011 Report Share Posted September 18, 2011 BTW Sonny...other than saying they won't lop based on that number...maybe you could explain WHY...also, they barely have 58 trillion in their M2...so how could they have an additional 58 trillion in "reserves" in the CBI... I think this is the key. Lets assume for the sake of argument that the CBI has 58T in dinar stashed away in addition to the 60T or so in M2. How does that help a huge RV to occur? Iraq can print all the dinars it wants (this is how they got into this mess in the first place). Link to comment Share on other sites More sharing options...
Installer36 Posted September 18, 2011 Report Share Posted September 18, 2011 xyzzy doesnt the auctions have a bearing on what is truly out there? And if it does where would one look for that info.....saying what they brought in in Fiscal 2011... from the auctions...Thanks Chris 1 Link to comment Share on other sites More sharing options...
zigmeister Posted September 18, 2011 Report Share Posted September 18, 2011 xyzzy doesnt the auctions have a bearing on what is truly out there? And if it does where would one look for that info.....saying what they brought in in Fiscal 2011... from the auctions...Thanks Chris Here a link to just this discussion 20 Million had a couple of days ago. It gives you an approximate. My link Link to comment Share on other sites More sharing options...
Sirius Posted September 18, 2011 Report Share Posted September 18, 2011 I think this is the key. Lets assume for the sake of argument that the CBI has 58T in dinar stashed away in addition to the 60T or so in M2. How does that help a huge RV to occur? Iraq can print all the dinars it wants (this is how they got into this mess in the first place). One thing to ponder, it is the CBI which is not part of Iraq, who prints the money like the Federal Reserve in the US. The Fed just put out 16 Trillion US dollars for bailouts in 2008 so when people say the US only has X amount of dollars in circulation it is not accurate at all, due to the electronic banking being used.. This how these Central Banks get the countries into a debt they can never repay. So this would be tough to figure out. Link to comment Share on other sites More sharing options...
xyzzy Posted September 18, 2011 Report Share Posted September 18, 2011 xyzzy doesnt the auctions have a bearing on what is truly out there? And if it does where would one look for that info.....saying what they brought in in Fiscal 2011... from the auctions...Thanks Chris If you assume that they are selling dollars for dinars (which I think they are) then indeed this is a way to lower the money supply. I have't ever seen a full list of all the auctions ever done to be able to total that up, but on the CBI's main page they show M2 growth (year over year) so the money the CBI is putting into the economy via loans (or other means, not sure what that would be) is greater than the dinars they are taking in via auctions. 1 1 Link to comment Share on other sites More sharing options...
donnydoright Posted September 18, 2011 Report Share Posted September 18, 2011 If you assume that they are selling dollars for dinars (which I think they are) then indeed this is a way to lower the money supply. I have't ever seen a full list of all the auctions ever done to be able to total that up, but on the CBI's main page they show M2 growth (year over year) so the money the CBI is putting into the economy via loans (or other means, not sure what that would be) is greater than the dinars they are taking in via auctions. Here's the list... http://www.cbi.iq/documents/CBI_FOREIGN_EXCHANGE_AUCTIONS.pdf Link to comment Share on other sites More sharing options...
jmw Posted September 18, 2011 Author Report Share Posted September 18, 2011 http://www.cbi.iq/do..._sta2009_en.pdf 2.3.14. Issued currency The liability of the CBI towards banknotes and coins issued as a legal tender in Iraq under the Central Bank of Iraq Law of 2004 is stated at the face value. The issued banknotes and coins that are returned to the CBI are reduced from the issued currency balance. Any un-issued and returned banknotes and coins kept in the CBI vaults are not reflected in the financial statements. The cost of printing the banknotes and melting of coins is recorded in the income statement when incurred. Link to comment Share on other sites More sharing options...
donnydoright Posted September 18, 2011 Report Share Posted September 18, 2011 Here's the list... http://www.cbi.iq/documents/CBI_FOREIGN_EXCHANGE_AUCTIONS.pdf BTW, i've heard it read both ways as the Actions are Buying dinar and i've read that the Auctions are selling dinar.....i've never been able to come to an educated conclusion Link to comment Share on other sites More sharing options...
xyzzy Posted September 18, 2011 Report Share Posted September 18, 2011 Here's the list... http://www.cbi.iq/documents/CBI_FOREIGN_EXCHANGE_AUCTIONS.pdf Thanks, but as an image I can't shove that into a spreadsheet. I don't happen to have an OCR app handy. BTW, i've heard it read both ways as the Actions are Buying dinar and i've read that the Auctions are selling dinar.....i've never been able to come to an educated conclusion I don't think it makes sense that they would be selling dinar, but supplying the Iraqi banks with dollars. But I agree its confusing. Since other central banks don't auction their currency (at least that I can find) we have no model. Link to comment Share on other sites More sharing options...
donnydoright Posted September 18, 2011 Report Share Posted September 18, 2011 (edited) Thanks, but as an image I can't shove that into a spreadsheet. I don't happen to have an OCR app handy. I have up until the end of 2009 as an Excel file, if i can figure out how to upload it, i'll post it on here Edited September 18, 2011 by donnydoright Link to comment Share on other sites More sharing options...
teddyruxbin Posted September 18, 2011 Report Share Posted September 18, 2011 One thing to ponder, it is the CBI which is not part of Iraq, who prints the money like the Federal Reserve in the US. The Fed just put out 16 Trillion US dollars for bailouts in 2008 so when people say the US only has X amount of dollars in circulation it is not accurate at all, due to the electronic banking being used.. This how these Central Banks get the countries into a debt they can never repay. So this would be tough to figure out. The Central Banks have printed unknown amounts of phantom currency. That's why I think all this RV Vs LOP back and forth using so called 'official data' is a waste of time to begin with. Everyone should understand the Govt will tell you want they want you to know;and leave the rest out.either that or they'll just outright lie I personally can't see how the elites could possibly be planning to LOP when it would cost them so much money,after they went through the trouble of invading and rebuilding Iraq. The fact that they compare it to Turkey doesn't bother me at all.Because the NWO was never heavily invested in Turkey,nor did they have any where near the same amount of reserves as Iraq.The are not the kind of people that would rebuild a country out of the goodness of their heart. 3 Link to comment Share on other sites More sharing options...
Dalite Posted September 18, 2011 Report Share Posted September 18, 2011 If you assume that they are selling dollars for dinars (which I think they are) then indeed this is a way to lower the money supply. I have't ever seen a full list of all the auctions ever done to be able to total that up, but on the CBI's main page they show M2 growth (year over year) so the money the CBI is putting into the economy via loans (or other means, not sure what that would be) is greater than the dinars they are taking in via auctions. You guys are chasing a good lead, which by all appearances looks like it is contracting the money supply. The auctions are a large circle. Up to 26 banks ( maybe more) participate in moving dinar around. It was explained to me to be like a tide. The economy is using dollars and dinar. Dinar is exchanged for dollars, dollars eventually flow through the system from oil proceeds, and end up in circulation. Each bank has to have some of each. The CBI is buying and selling dollars, which means they are selling and buying dinar. If it is at 1168, they are buying. If it is at 1183, they are selling for cash, or transferring abroad. At 1170, transferring between banks. That may not be the most technically accurate description, but the broad strokes is that the dollars they sell to day, they may buy part back next week, and both dollars and dinar are moving through the CBI to the other banks to help them achieve a balance of both. If they were used as a mechanism for contracting the money supply, there would have been no dinar on the street for a long time. This is not to say that they might in the future, but there would have to be another mechanism that does the same good as the auctions introduced. We had some detailed discussions about methods that could be used, but IMF requirements because of their assistance, and Paris Club restrictions, due their debt will keep them from inflating their debt away, or getting too far off of the balance achieved by keeping the amount of cash in circulation, the exchange rate, and the GDP that sets the guidelines. If production goes up, inflation sets in, and calls for upward slippage on the rate. They can't make a broad rate change, without an equal balance in reduction of the cash supply. Any of those three going out of balance affects the other two. Reserves has to back the money supply at the exchange rate. If they want an appreciable increase in the exchange rate, in the absence of explosive and exponential GDP increases, the only way to keep the balance is a corresponding decrease in the money supply.. This is why they say a decrease from 30 trillion to 30 billion will result in near parity with the dollar, as it will yield a 1.17:1 ratio on the 30 billion, while having the same value as the 30 trillion at 1170:1. In this reduction, the foreign reserve value remains the same. So the potential for appreciation from that point forward is greatly enhanced, as there is 1000 times more potential from the reserves, now that it backs 1000 times less cash liability. Does this make sense? I welcome corrections, as I am still trying to assemble the entire flow affecting CBI policy, their abilities and restrictions... Link to comment Share on other sites More sharing options...
donnydoright Posted September 18, 2011 Report Share Posted September 18, 2011 (edited) 01/01/04 1,695 1,680 2,010 01/03/04 1,665 1,660 1,346 01/04/04 1,640 1,640 720 01/05/04 1,645 1,640 955 01/06/04 1,645 1,640 1,255 01/07/04 1,630 1,625 560 11/30/09 1,181 1,173 67,295 12/01/09 1,181 1,173 184,680 12/02/09 1,181 1,173 115,340 12/03/09 1,181 1,173 141,180 12/04/09 1,180 1,172 143,310 12/07/09 1,180 1,172 110,505 12/14/09 1,180 1,172 109,600 12/15/09 1,180 1,172 241,025 12/16/09 1,180 1,172 168,735 12/17/09 1,180 1,172 134,445 12/18/09 1,180 1,172 116,125 12/21/09 1,180 1,172 91,495 12/22/09 1,180 1,172 251,530 12/23/09 1,180 1,172 120,320 12/24/09 1,180 1,172 192,080 12/28/09 1,180 1,172 115,765 12/30/09 1,180 1,172 149,880 12/31/09 1,180 1,172 115,060 01/05/09 1,180 1,171 263,140 01/08/09 1,179 1,171 238,805 01/11/09 1,179 1,171 102,530 01/12/09 1,179 1,171 328,865 01/13/09 1,179 1,171 239,465 01/14/09 1,179 1,171 213,715 01/15/09 1,179 1,171 221,860 01/18/09 1,178 1,170 120,165 01/19/09 1178 1170 172,090 Edited September 21, 2011 by Markinsa Remove 5 years of data.... 3 4 Link to comment Share on other sites More sharing options...
zigmeister Posted September 18, 2011 Report Share Posted September 18, 2011 Here is an estimateI posted this up on August 7th. This is from the post titled: "Open Market Operations aka Currency Auctions" This thread is pinned at the very top of the news section, the following is from the first page, about half way down: **Disclaimer: Do not take this at face value. This is only an EXAMPLE I am using to make it easier with the numbers. $100,000,000 ($100 Million Dollars) = 116,950,000,000 Iraqi Dinars (roughly 117 billion dinars) It is safe to say that an average currency auction that takes place in Iraq ranges anywhere from $60,000,000 being sold up to $200,000,000 USD being sold. I am not exactly sure but let's go with an average of $100,000,000 per auction. I think we are safe to say that is an "average" currency auction. So if they are able to bring in roughly 117 Billion Dinars per auction. they would need about 10 auctions to bring in a Trillion Dinars. That would be roughly 2 weeks. 2 weeks for 1 Trillion Dinars. So the CBI could technically bring in 2 Trillion Dinars a month right? 24 trillion in one year's time. They have been doing these auctions for quite some time now. Like for years and years... I think it is safe to say that if they wanted to remove physical currency in circulation they could do it using the methods they are using on a daily basis. Simple as that. Read more: http://dinarvets.com.../#ixzz1XxNCCYlw Now that they have transitioned to an e-government this is a very likely scenario! Also, keep in mind that their currency auctions are double this more than often. Just the other day they auctioned off roughly 213,000,000 USD. 2 Trillion Dinars a month is being conservative in my opinion... 4 Read more: All in all you are probably looking at 1 to 2 Trillion dollars per month, give or take. Some months have been lower for sure, but is an idea of possible dinars they are buying back. Link to comment Share on other sites More sharing options...
Installer36 Posted September 18, 2011 Report Share Posted September 18, 2011 Thank you all for the clarification of this. For me this seems like it would play an intricate part in Shabibi's decision. After looking over the spread sheet of the auctions and doing some callculations on these figures I think his only choise is to RV before my daughter gets married .....So Shabs you have 2 weeks and 6 days now do it....PLEASE......THANK YOU ....CHRIS...... 1 Link to comment Share on other sites More sharing options...
Dalite Posted September 18, 2011 Report Share Posted September 18, 2011 As the auctions totals show, it takes more and more movement to support the exchange rate. From the concept of how much dinar is being withdrawn should require increases in oil production to bring the dollars used to contract the dinar supply. I know the numbers don't support any contraction of the money supply. Can someone tell me how many dollars have been pushed through in any year, balanced against the entire oil revenue from that year? I don't know the results, but I will bet on any year, the amount of dollars sold far exceeds the oil sold to produce them. Plus, from the CBI articles, especially lately, they have been very generous with historical data. It would be great to know the money supply is being contracted. It would be even greater to see the CBI numbers show how much. However, we haven't witnessed the large jump in inflation that would result in less money chasing the same amount of goods(causes price to increase), just as we haven't seen the CBI budge from the rising value of dinar in circulation. Link to comment Share on other sites More sharing options...
zigmeister Posted September 18, 2011 Report Share Posted September 18, 2011 As the auctions totals show, it takes more and more movement to support the exchange rate. From the concept of how much dinar is being withdrawn should require increases in oil production to bring the dollars used to contract the dinar supply. I know the numbers don't support any contraction of the money supply. Can someone tell me how many dollars have been pushed through in any year, balanced against the entire oil revenue from that year? I don't know the results, but I will bet on any year, the amount of dollars sold far exceeds the oil sold to produce them. Plus, from the CBI articles, especially lately, they have been very generous with historical data. It would be great to know the money supply is being contracted. It would be even greater to see the CBI numbers show how much. However, we haven't witnessed the large jump in inflation that would result in less money chasing the same amount of goods(causes price to increase), just as we haven't seen the CBI budge from the rising value of dinar in circulation. When you mean money supply being contracted, what do mean? Link to comment Share on other sites More sharing options...
dinarjones Posted September 18, 2011 Report Share Posted September 18, 2011 Who cares? Give me an RV already so I can plant my grandchildrens future. 1 Link to comment Share on other sites More sharing options...
xyzzy Posted September 18, 2011 Report Share Posted September 18, 2011 So the total of dollars form Donny's list (assuming the last col is thousands of dollars) is 69B USD from 2004 through 2009 in ever increasing amounts. That is about 80T dinars worth. so IF our assumptions are correct (last col is in thousands of dollars and they are buying dinars) this would be much greater then M2, so lots of dinars are also flowing back into the system as M2 is INcreasing according to the CBI and is certainly is not zero. Link to comment Share on other sites More sharing options...
Shick Posted September 18, 2011 Report Share Posted September 18, 2011 Why not put everything on hold until the oil starts pumping. Iraq has 2000 oil refineries and a hundred more would be enough to get them out of their debt. If not then what? Link to comment Share on other sites More sharing options...
Dalite Posted September 18, 2011 Report Share Posted September 18, 2011 When you mean money supply being contracted, what do mean? In the case of bank liability, less is better. If you have 100 units of money, chasing 100 units of goods, it is a great balance If you have 1000 units of money chasing 100 units of goods, the goods have higher value If you have 50 units of money chasing 100 units of goods the money has higher value. In the above, the quantity the goods remains the same. When you have too much money, the goods demand a premium which gives the appearance of higher prices, but really is a loss of buying power. When you have less money, there is a surplus of goods, which gives the money more buying power, as there is less of it. Contracting the money supply refers to removing cash from the economy, giving the remaining cash better buying power. From the bank's point of view, it lessens the liability of backing larger amounts of cash. With less cash, you would have a far better chance to see an increase in the exchange rate to keep the balance. 1 Link to comment Share on other sites More sharing options...
Dalite Posted September 18, 2011 Report Share Posted September 18, 2011 Why not put everything on hold until the oil starts pumping. Iraq has 2000 oil refineries and a hundred more would be enough to get them out of their debt. If not then what? Not only are also from Georgia, you also have a good long term solution. If they can keep it together, improve stability, improve production, increase GDP, you can ( actually will almost have to) add value to your money to offset inflation. Not immediately great for us, as it is a slower process. The Debt is there, but a major portion of the debt, managed by the Paris Club gives 20 to 30 years to pay it off in 2 payments yearly. Kuwait reparations are automatically accrued from 5% of oil sales. 80 % of their debt has been written off, so they really have a lot going for them. Improving the GDP would give greater latitude to increase value using the exchange rate, or by reducing the money supply. It takes longer, but could be viewed as an alternative to redenomination. 1 Link to comment Share on other sites More sharing options...
zigmeister Posted September 18, 2011 Report Share Posted September 18, 2011 GO RV! Haha! A wedding needs you! And that's as good a reason for the RV as any. Indeed it is! Link to comment Share on other sites More sharing options...
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