International Monetary Fund show his conviction for the financial policy for Iraq

[Dinar_o'saurs]

It's a link to aknews.com

.......... to which I just tried and can't connect to them either. We must have overloaded them.

Here is the article..........

Baghdad 8 October (aknews) – the Iraqi Central Bank, announced Saturday that there is acceptance of the International Monetary Fund on the Iraq political cash.

Deputy Governor Central Bank of Iraq the appearance of Muhammad Saleh Kurdistan News (aknews) that "the IMF is convinced that monetary policy in the country is a true and correspond to the reality of the Iraqi economy." "The Central Bank monetary policy followed to reduce inflation and provide cover for the local currency and economic controls commensurate with political finance in Iraq." He noted that "the Central Bank continually reviews the rally monetary and mechanisms lmaalh annual inflation and gaps facing foreign and local currency used in the country." Iraqi Central Bank announced Thursday a high fiscal reserves of $ 8 billion since the beginning of the year, stating that the reserve was 50 billion at the end of last year and now stands to 58 billion dollars. Officials say the Central Bank of Iraq to rise up is a sign of political maturity and sophistication, symmetry cash with political finance in the country. And is keen to address gaps in local and foreign currency. The ECB notes that the Reserve Bank is not sluggish or a stock is used on the open market in order to achieve a balance between liquidity and demand in the local currency. From: Jafar Alunan, en: Salam bagdadi

[RodandStaff]

Rod,

There are always options. I try to call it like I see it, but I do realize that I don't have the ability to see it all.

Presently, as long as Iraq can avoid collapsing into civil war, any and all resistance to the CBI plan to ReDenominate will ultimately force Shabibi to increase the value as a means to keep inflation in check. Every small increase offsets a little more of the spread we paid when we purchased. The way I am seeing it now, anything of an increase that puts me in the plus column is incentive to continue holding out for a better deal.

Thank you Dalite for your time, your precise answers to the best of your ability with the knowledge we presently have in hand. I appreciate it very much. Like I have egged others on in the past, and will do no less with you... ... I always leave that door open for "what if"? You admit yourself what sounds "plausible", and logic would indeed back up most of your views. Though let's be honest... and as you have already said... no one, you, Adam, or any other person that we at least have connections with anyway... know exactly what is going to come down until it happens. They could succumb to fractional banking, they could do all sorts of wild unpredictable moves that no one saw coming... we just don't know...after all... it is Iraq!!! You take the "safe road".. and I applaud you for that. I tend to think just about anything could happen... anything. So what is the use in losing sleep over this? It will do what it will do!! But I really appreciate your well thought out answer... we all need to learn whatever we can, and you seem pretty good at teaching and passing on what you have learned. Thanks again!

Now for Iraq... getter dun boyz!!!

[billbill]

Great post! As always, the debate after the post is very educational and interesting. Just hope we can keep it respectful.

Thank you Dalite for your time, your precise answers to the best of your ability with the knowledge we presently have in hand. I appreciate it very much. Like I have egged others on in the past, and will do no less with you... ... I always leave that door open for "what if"? You admit yourself what sounds "plausible", and logic would indeed back up most of your views. Though let's be honest... and as you have already said... no one, you, Adam, or any other person that we at least have connections with anyway... know exactly what is going to come down until it happens. They could succumb to fractional banking, they could do all sorts of wild unpredictable moves that no one saw coming... we just don't know...after all... it is Iraq!!! You take the "safe road".. and I applaud you for that. I tend to think just about anything could happen... anything. So what is the use in losing sleep over this? It will do what it will do!! But I really appreciate your well thought out answer... we all need to learn whatever we can, and you seem pretty good at teaching and passing on what you have learned. Thanks again!

I couldn't agree more Rod!

Edited October 8, 2011 by billbill

[Canuklady]

10/8/2011 | (Voice of Iraq) - (Rn) of the Iraqi Central Bank announced on Saturday that there is acceptance of the International Monetary Fund on the Iraq political cash. The deputy governor of Central Bank of Iraq the appearance of Mohammed Saleh told the Kurdish news agency (Rn) that "the Fund International Monetary convinced that monetary policy in the country heading trend is true is commensurate with the reality of the Iraqi economy. " He added that "the central bank follows the monetary policy to reduce inflation and provide cover for the local currency and controls economic commensurate with the fiscal policy pursued in Iraq." He noted that "the bank Central review continuously Ssayasth cash and mechanisms for the dependents of annual inflation and gaps facing the use of foreign currency and local communities in the country. " and said the Iraqi Central Bank last Thursday, the high reserves of financial $ 8 billion since the beginning of this year, indicating that the reserve was 50 billion last year and is now to 58 billion. Officials in the Iraqi Central Bank to increase reserves is a sign of the maturity of monetary policy and its development and consistency with fiscal policy in the country. and is keen to address the gaps in the economic circulation of local and foreign currency. indicates the central bank reserve bank is not stagnant or stock is used in the open market in order to achieve a balance between liquidity and demand in the local currency traded. From: Jafar Allonan, the Open: Peace Baghdadi

http://www.sotaliraq.com/business.php?id=4225

This is extremely encouraging. Great post ! +1 to you. As always, I learned a ton from the entire discussion. RV!

[Carrello]

This is extremely encouraging. Great post ! +1 to you. As always, I learned a ton from the entire discussion. RV!

Ditto, Canuk!

Thanks PPP.

[keepmwlknfny]

Rod,

The US has led the rest of the world to near collapse by using the advantage of being the worlds reserve currency as a means of economic terrorism. They have near abouts drove the wheels off this approach, and it will bite us in the backside.

Having said that, the US has a method. The Fed can print money, and keep it stacked like cord wood. It has no value until it is loaned into the economy. This happens when a treasury bond is sold, giving value to a corresponding amount of freshly minted paper from the fed.

Shabibi has stated that the CBI will resume bond sales next year. To me, that is somewhat promising.

But, in the realm of the here and now, Iraq has a number of restraints.

The Paris Club is financing the debt that was not forgiven. It is amortized for 20 to 30 years; dependent on the payment path Iraq takes. While the Paris Club cannot prevent Iraq from inflating away it's debt by using fractional reserve practices, they can certainly make it so Iraq will never again have benefit of their services. Potential investors will take note, and act accordingly.

The IMF has some very specific guidelines for their debtors; of which Iraq is one. They have very specific limitations on currency that is hard pegged to another country's currency. While Iraq is beholding to the IMF, I don't believe fractional reserve banking is an option. Also, there are strict limits on the percentage of increase and the time duration between value increases that would limit changes to below 10% every 90 days. By some accounts, it is limited to 2%.

I have learned to never say never, and it is rare for you to ever see me speaking in superlatives. I have no control of the situation, and can only rely on the accounting of those who do. For that reason I won't say it can or can't do something, only relay an interpretation of the CBI's stated intentions, and what governs them. The math part is easy, as it is externally defined, and there is only one solution for an equation with known variables. In this case, 110%, 58 billion, backing the exchange rate, Paris Club and IMF provide some numbers to work with.

When Iraq has paid off the Paris Club, and is no longer beholden to the IMF, they will clearly be in the driver's seat. For the present time, utilizing some of the banking tools that always eventually cause failure would be like getting caught wrecking the family cay that you snuck out when the parents were asleep.

There are always options. I try to call it like I see it, but I do realize that I don't have the ability to see it all.

Presently, as long as Iraq can avoid collapsing into civil war, any and all resistance to the CBI plan to ReDenominate will ultimately force Shabibi to increase the value as a means to keep inflation in check. Every small increase offsets a little more of the spread we paid when we purchased. The way I am seeing it now, anything of an increase that puts me in the plus column is incentive to continue holding out for a better deal.

"Shabibi has stated that the CBI will resume bond sales next year. To me, that is somewhat promising."

Isent that one of the ways we were talking about that they could use to reduce the money supply??

[caughtinthecrossfire]

Daylite, RodAndStaff...you two...are excellent examples of people to discuss/debate objectively and most respectfully. Opinions are great but I think that

Dhardage said it well concerning someone's tone and use of wording....answering someone's question without trying to make themselves feel smarter by talking down to someone!

Read more: http://dinarvets.com...0#ixzz1aJifX7H5

Thanks to all of you for perfect displays of respectful opinion (and all views have made me ponderous, haha). I love this site's supporters!!

Oh, yeah, and Keepemwalkinfunny...I do believe you are correct. I recall several posts about that being an option for reducing the amounts of dinar in circulation. HA! but I can't find the posts in my searches. I think I was reading some from no more than two weeks ago, too.

Again, great to log in and see great posters!!!

[Doctor Smith]

Dhardage,

Thanks for being pragmatic and keeping an open mind about the possibilities.

I appreciate your understanding, and I do sincerely hope for a very nice outcome in the future on what we hold today.

Every day, I look for that one thing that I may have missed before to make me understand that the reward could be sooner, or larger.

The day I stop doing that, may be the one that determines why I post or try to share another point of view.

Thanks again...

The CBI won't be responsible for our Dinar. The Treasury of the country you are in will accept it. And because it will now be worth a dollar (for example) they will be able to convert it to any currency, precious metal, commodity, electronic Dollars etc etc that they desire. Once the IMF agrees the Dinar to be worth 1 Dollar for example that's it.

Is it somehow better to bail out failing Banks so their CEO's can give themselves bonuses? After they have run themselves into the ground? Look at all the Dollars credited to foreign banks.

[Nelson0528]

This has been the most positive thread I have read in months. Thanks to everyone for keeping it real, civil and productive. This is why I came to DinarVets in the first place. Happy Sunday everyone!!!

Edited October 9, 2011 by Nelson0528

[MrFnHappy]

Dalite, I won't bother to quote your posts in this thread, but as always, they are well thought out and well written. Thanks for posting.

The only thing I have ever read from the IMF on exchange rate movement is that once a par value has been established, then the country in question is to endeavor to keep the fluctuation to +/- 4% of said par value.

[hame55]

Dalite... I appreciate your input. I have an honest question, and I will start with saying I have no "economics degree".. actually I think that can sometimes stand in the way of the obvious... if you catch my drift. I have been a businessman for 28+ yrs... that, and a bit of research has led me to understand that in America anyway nothing is really "backed" by anything, with fractional banking, printing presses run a muck, and national debt that surpasses what several generations could ever possibly repay!

So here is the basic, simple, but complicated question.... why should it be any different for Iraq? If we are so influential in their country, and they are following our lead, and I am serious now... why would we even think that they would be on any better standing than us? ... the so called "leader of the pack", and do anything different than us? If this "hair brained" kind of thinking proves true... the question would then be not "what will they revalue to".. but "what won't they RV too".. if you catch my drift?

Interested in a break down of these thoughts. I know, a lot of folks wanna dodge this line of thinking, and not really admit the shape we are in here in the good ol' USofA... but I done said it!... call me crazy, or whatever, but seriously is this "not a possibility"???

Exactly. We can go round and round with numbers, real and imaginary, concerning their "ability" to RV. But I am with you on this - simply follow the money. They are going to RV this currency, because the money making potential is too great to ignore.

Simple as that.

Nobody backs their currency anymore. In all truth, the US currency is backed by nothing more than a huge economy and the Empire's military. Nothing more. At least Iraq has tangible assets to back faith in its currency. The US military also backs it. Not a small thing....

[MrFnHappy]

"Shabibi has stated that the CBI will resume bond sales next year. To me, that is somewhat promising."

Isent that one of the ways we were talking about that they could use to reduce the money supply??

Sure, temporarily, the amount in circ would go down....until those bonds need to be redeemed. Of course, the thought process is the CBI and economy can absorb it when that time arrives.

Exactly. We can go round and round with numbers, real and imaginary, concerning their "ability" to RV. But I am with you on this - simply follow the money. They are going to RV this currency, because the money making potential is too great to ignore.

Simple as that.

Nobody backs their currency anymore. In all truth, the US currency is backed by nothing more than a huge economy and the Empire's military. Nothing more. At least Iraq has tangible assets to back faith in its currency. The US military also backs it. Not a small thing....

I'm sorry, but please show me the currencies other than the major ones (USD, EURO, CD, SWF, etc...) that are traded daily on the forex, that are "Fiat" currencies. If there are any, they are few.

Edited October 10, 2011 by MrFnHappy

[ssmith]

Daylite, RodAndStaff...you two...are excellent examples of people to discuss/debate objectively and most respectfully. Opinions are great but I think that

Dhardage said it well concerning someone's tone and use of wording....answering someone's question without trying to make themselves feel smarter by talking down to someone!

Read more: http://dinarvets.com...0#ixzz1aJifX7H5

Thanks to all of you for perfect displays of respectful opinion (and all views have made me ponderous, haha). I love this site's supporters!!

Oh, yeah, and Keepemwalkinfunny...I do believe you are correct. I recall several posts about that being an option for reducing the amounts of dinar in circulation. HA! but I can't find the posts in my searches. I think I was reading some from no more than two weeks ago, too.

Very nice & very impressed....Daylite, Rod And Staff thanks too all you guys

[Dalite]

Dalite, I won't bother to quote your posts in this thread, but as always, they are well thought out and well written. Thanks for posting.

The only thing I have ever read from the IMF on exchange rate movement is that once a par value has been established, then the country in question is to endeavor to keep the fluctuation to +/- 4% of said par value.

This is what I keep running up against when I try to find what determines increases

Other Conventional Fixed Peg Arrangements

The country (formally or de facto) pegs its currency at a fixed rate to another currency or a basket of currencies, where the basket is formed from the currencies of major trading or financial partners and weights reflect the geographical distribution of trade, services, or capital flows. The currency composites can also be standardized, as in the case of the SDR. There is no commitment to keep the parity irrevocably. The exchange rate may fluctuate within narrow margins of less than ±1 percent around a central rate-or the maximum and minimum value of the exchange rate may remain within a narrow margin of 2 percent-for at least three months. The monetary authority stands ready to maintain the fixed parity through direct intervention (i.e., via sale/purchase of foreign exchange in the market) or indirect intervention (e.g., via aggressive use of interest rate policy, imposition of foreign exchange regulations, exercise of moral suasion that constrains foreign exchange activity, or through intervention by other public institutions). Flexibility of monetary policy, though limited, is greater than in the case of exchange arrangements with no separate legal tender and currency boards because traditional central banking functions are still possible, and the monetary authority can adjust the level of the exchange rate, although relatively infrequently.

Classification of Exchange Rate Arrangements and Monetary

Policy Frameworks

Look down toward the center of the page to see where Iraq is classified against a fixed peg.

I can't ever remember the specifics when posting, and am not totally confident that I am reading this correctly.

Take a look and see what you take away from that page...

[oleman]

Now this is what DV is all about. Valuable information, good opinions, no one complaining about spelling, and I didn't see anyone talking about some ones moma. Thanks for everyones view. I believe this is one of the better threads I have seen in months. Hats off to everyone.

As the DV Motto states. This will help us all be INFORMED, ENGAGED, AND PREPARED.

[xyzzy]

bold added by me

Nobody backs their currency anymore. In all truth, the US currency is backed by nothing more than a huge economy and the Empire's military. Nothing more. At least Iraq has tangible assets to back faith in its currency. The US military also backs it. Not a small thing....

So why does it make sense for the value of their money supply to be 2 or 3x the value of the US supply (if they were to RV at $1), since the Iraqi economy is about 150x smaller.

[E. 1999]

And why are you here? If I thought like you I would sell my dinar and move on to another investment. This forum and any research would be a complete waist of time. Most of us believe we will see a large ROI. I remember in the old days people would say there will never be an rv but will be a slow grow. What happened to all those people who felt that way? I guess they sold their dinar and moved on because we have seen 1170 for several years now. If you research wars most were funded by currency rv's. It is just a miracle that we have this opportunity.

war is no miracle

First post in a year and i have to say this?

[MrFnHappy]

This is what I keep running up against when I try to find what determines increases

Classification of Exchange Rate Arrangements and Monetary

Policy Frameworks

Look down toward the center of the page to see where Iraq is classified against a fixed peg.

I can't ever remember the specifics when posting, and am not totally confident that I am reading this correctly.

Take a look and see what you take away from that page...

OK, so Iraq is listed under "Other Conventional Fixed Peg Arrangements" which would indicate they must follow what you quoted from the IMF.

Having said that, we need to consider that Iraq hasn't formally (re) accepted Art VIII, which means they then must operate under Art XIV.

Article XIV: Transitional Arrangements

Section 1. Notification to the Fund

Each member shall notify the Fund whether it intends to avail itself of the transitional arrangements in Section 2 of this Article, or whether it is prepared to accept the obligations of Article VIII, Sections 2, 3, and 4. A member availing itself of the transitional arrangements shall notify the Fund as soon thereafter as it is prepared to accept these obligations.

Section 2. Exchange restrictions

A member that has notified the Fund that it intends to avail itself of transitional arrangements under this provision may, notwithstanding the provisions of any other articles of this Agreement, maintain and adapt to changing circumstances the restrictions on payments and transfers for current international transactions that were in effect on the date on which it became a member. Members shall, however, have continuous regard in their foreign exchange policies to the purposes of the Fund, and, as soon as conditions permit, they shall take all possible measures to develop such commercial and financial arrangements with other members as will facilitate international payments and the promotion of a stable system of exchange rates. In particular, members shall withdraw restrictions maintained under this Section as soon as they are satisfied that they will be able, in the absence of such restrictions, to settle their balance of payments in a manner which will not unduly encumber their access to the general resources of the Fund.

Section 3. Action of the Fund relating to restrictions

The Fund shall make annual reports on the restrictions in force under Section 2 of this Article. Any member retaining any restrictions inconsistent with Article VIII, Sections 2, 3, or 4 shall consult the Fund annually as to their further retention. The Fund may, if it deems such action necessary in exceptional circumstances, make representations to any member that conditions are favorable for the withdrawal of any particular restriction, or for the general abandonment of restrictions, inconsistent with the provisions of any other articles of this Agreement. The member shall be given a suitable time to reply to such representations. If the Fund finds that the member persists in maintaining restrictions which are inconsistent with the purposes of the Fund, the member shall be subject to Article XXVI, Section 2(a).

I don't have the time, but it would be interesting to calculate whether or not these guidelines you quoted were followed during the time Shabibi kept improving the exchange rate a pip or two at a time until he reached 1170.

Now JMO, none of the above may matter because I do not believe Iraq has established a "par value".

Sorry that I don't have a definitive answer for you.

Disclaimer: the above has been posted after consuming several gin & tonics.

[Dalite]

I know the feeling, and have always had difficulty in understanding if these were just fair weather guidelines, or hard and fast rules.

Plus, now, every time I see the word guidelines, I see Johnny Depp saying "Parlay?"