*** CBI Currency Auction 13-10-2011 ***

[MrFnHappy]

They are buying and selling USD, which means they are selling and buying Dinar.

If they sell USD, they buy Dinar

If they buy USD, they sell Dinar.

They are the Central Bank, and Iraq is a dual currency country.

There are usually between 20 to 26 banks participating.

If my bank took on a lot of dinar, and my dollar reserves were low, I would wait until the CBI was selling dollars, and would sell my dinar back for dollars untill I had the balance of the two that my bank usually required. The opposite if I took in too many dollars, I would wait until they were selling dinar.

This is the way the CBI acts as a Central Bank, and serves the other banks to keep them in balance and able to operate in a dual currency economy.

It is a very popular forum fact that these auctions are used to take dinar out of circulation. Think about it...

Six days a week, 52 weeks a year, five years, 100 to 200 million per auction; when would Iraq have ceased to have any dinar in circulation?

100 million dollars buys approx 100 billion dinar. Ten days per Trillion Dinar (1000 bililion is 10 x 100 billion, is a Trillion)

Let's be uber conservative and say that it took 2 weeks to take in a trillion Dinar..(10 times 100 billion is a trillion).

That would be 2 trillion dinar off the street in a month. 24 trillion off the street in a year; and these are grossly small auctions of only a hundred million dollars per day, five days a week.

In five years, they would have taken 120 trillion of the current 30 trillion Dinar that the CBI claims responsibility for.

The problem here is that they never had 120 trillion dinar, but if the auctions were used to contract the money supply, that is a very conservative portrayal of how much the cash would have shrunk.

So, if they are buying dollars, they are selling dinar. If they are selling dollars, they are buying dinar.

Wax On, Wax Off...

You've summed it up pretty well. Allow me to add some detail.

The GOI gets paid in USD for oil. The GOI then uses those USD to buy dinar from the CBI. Those dinar then get put into circulation via state employee salaries, govt funded projects etc. Those dinar that were put into circulation by the GOI get back to the banks, who in turn bring them to buy USD that the CBI got from the GOI.

Wax on, wax off.....BUT, apparently (going by the CBI financials), more dinar goes back out than is taken in at auction.

Hope this helps.

Edited October 14, 2011 by MrFnHappy

[JOLLY ROGER]

Here is yet further evidence that there will be an R/D before an R/V. Some of here have tried to twist the CBI actions rdsults to say they are buying back Dinar in order to bring down the money supply. Well as anyone can plainly see they did buy back squat.bbonce again they are flooding the market large sums of money. The is absolutly no feasible way they can do anything but R/D with all the money in circulation especially when they continue to put large amounts of additional funds week after wekk in the market. This sucks and I am getting more ****** off by the day.

OK. Sell your stash and get the hell out.

[Dalite]

You've summed it up pretty well. Allow me to add some detail.

The GOI gets paid in USD for oil. The GOI then uses those USD to buy dinar from the CBI. Those dinar then get put into circulation via state employee salaries, govt funded projects etc. Those dinar that were put into circulation by the GOI get back to the banks, who in turn bring them to buy USD that the CBI got from the GOI.

Wax on, wax off.....BUT, apparently (going by the CBI financials), more dinar goes back out than is taken in at auction.

Hope this helps.

Thanks, that does help. I remember reading that before, but always manage to forget it when trying to put things together.

I do agree; the liability is not shrinking, by any stretch of the imagination.

[thatoneguy]

The US does this every seven years to foil counterfeiters.

Leglislation passed in 1996, first cycle in 1997.

In the times between cycles, soiled currency is removed and destroyed.

It is replaced on a one to one basis.

If not, no bank would take a bill that was taped, tore or printed on.

You would be stuck with it or poorer by the amount if the bank took it to be destroyed and just gave you a lollypop...

If Iraq plans on following the UST template, as many have suggested, or so I have read/dreamed/surmised/guessed? It appears that it's about time to issue some newly designed currency to throw off counterfeiters. Yeah? In order to maintain that healthy, strong, competitive currency, this only seems logical. Alas, this new currency will coexist with the old until the older is withdrawn from circulation. Man, I REALLY hope there isn't going to be that telltale "window" for larger denoms. Sure would be nice to have some 25K's about 10 years from now that are still accepted. Goodnight. Someone wake me up when this shite is over. Chao.

[thatoneguy]

OK. Sell your stash and get the hell out.

Oh, lighten up JOLLY. We've all been frustrated at some point with this investment. Maybe not the investment itself, but all the CCCCAAAAARRRRRAAAAAPPPP that comes out in these articles, the gurus, the spin doctors who only see things one way, etc, etc. Life is gonna go on after this is over, win or lose, and hopefully all of us on DV are intelligent enough to have our presumptions on what will transpire, and if things don't play out in our favor, I hope that some of us don't get brooklyn bridge syndrome. It's an investment, and this has been said many times over and reiterated again yesterday in Adams chat, "don't spend what you can't afford to lose!". This isn't a friggin lotto ticket, though some think it is as they drop money they don't have in pursuit of an uneducated gamble, and the RV, at least for me, is just the beginning. Not trying to be a weiner head, just giving myself a psyched-out reality check... Again.

[lotsaleftpedal]

If I recall correctly from a previous post on this forum, the CBI deals with other currencies in addition to the dollar and dinar.

Is this not correct?

[zigmeister]

If I recall correctly from a previous post on this forum, the CBI deals with other currencies in addition to the dollar and dinar.

Is this not correct?

Yes.

[Dalite]

If I recall correctly from a previous post on this forum, the CBI deals with other currencies in addition to the dollar and dinar.

Is this not correct?

The foreign reserves are made up of 45% dollars, 45% euro, and 10% British pounds and gold.

I would guess they handle the currencies of Jordan and Kuwait; possibly Turkey and Iran as well, but not as reserves.

[sonny1]

Here is yet further evidence that there will be an R/D before an R/V. Some of here have tried to twist the CBI actions rdsults to say they are buying back Dinar in order to bring down the money supply. Well as anyone can plainly see they did buy back squat.bbonce again they are flooding the market large sums of money. The is absolutly no feasible way they can do anything but R/D with all the money in circulation especially when they continue to put large amounts of additional funds week after wekk in the market. This sucks and I am getting more ****** off by the day.

are you high? the banks didnt buy any dinar, they bought usd.

Announcement No. (1999)

The latest daily currency auction was held in the Central Bank of Iraq on the 13-OCT-2011. The results were as follows:

Details Notes

Number of banks 23

Auction price selling dinar / US$ 1170

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

Amount sold at auction price (US$) 182,245,000

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

Total offers for buying (US$) 182,245,000

Total offers for selling (US$) -----

http://www.cbi.iq/index.php?pid=CurrencyAuctions

auction price buying dinar (thats the iraqi banks buying dinar from cbi, whats that number?........a big fat 0)

the banks are buying usd for dinar.

[burn_the_village]

Per articles from a couple of days ago, it was said what is in circulation in Iraq is 4Trillion yet their M1 is still 55 Trillion as reported in their stats on cbi.iq?

If the article is true, then I believe they are in position to contract money plus they are selling securities. That's reasonable...

For those who preach RD/LOP let me tell you, you can not dispute that we foreign investors did not buy a lot of this dinar....We did!! That M2 only moves in one direction and that's up and that's also during the time where there wasn't but a couple of banks in Iraq!! Its just now this year they have been focusing on their banking reforms!! SO How much did we buy??? I don't know but I think its really a lot. I'm talking about combined bank accounts and cash exchanged all over the world not just to Americans....

I THINK WE BOUGHT TRILLIONS!!!

So if they do anything DEFINITE to their currency like a LOP or what the heck like an RV of anything sniffing a penny there will be a lot of people cashing out at roughly the same time frame because we bought this money for one reason. THATS A FACT

So do the logic....Iraq allowed us to speculate all these years and it takes what? 8 years to do an RD? I mean its their currency they issue and they have to honor, thats their obligation they can not escape. So if they do something definite, are they prepared to cash us out in a short time? Do they like losing money? Do they like to pay westerners speculating on their currency??? Ha! Not if they don't have too and not if they can get it done cheaper...they can so no reason to expect some fat RV either....

BUT NATURALLY IF THEY LOP WE WILL KILL THEIR CURRENCY BY CASHING IN BECAUSE IT WOULD BE OVER AND THEY WOULD BE LEFT WITH ALL OF THEIR CITIZENS HOLDING DOLLARS WHICH IS WHAT THEY ARE DOING NOW W/STILL ZERO CONFIDENCE IN THE DINAR.

This is why their only option is to let it rise slowly and let their people start to gain confidence in the currency again.

They are not lopping. Restructure currency yes

Edited October 14, 2011 by burn_the_village

[JOLLY ROGER]

Oh, lighten up JOLLY. We've all been frustrated at some point with this investment. Maybe not the investment itself, but all the CCCCAAAAARRRRRAAAAAPPPP that comes out in these articles, the gurus, the spin doctors who only see things one way, etc, etc. Life is gonna go on after this is over, win or lose, and hopefully all of us on DV are intelligent enough to have our presumptions on what will transpire, and if things don't play out in our favor, I hope that some of us don't get brooklyn bridge syndrome. It's an investment, and this has been said many times over and reiterated again yesterday in Adams chat, "don't spend what you can't afford to lose!". This isn't a friggin lotto ticket, though some think it is as they drop money they don't have in pursuit of an uneducated gamble, and the RV, at least for me, is just the beginning. Not trying to be a weiner head, just giving myself a psyched-out reality check... Again.

thatoneguy.....The want a be gurus and spin doctors don't have any effect on me. In my defense, to the previously mentioned, I have teflon skin and their nonsense rolls right off.

My weak spot is the "know it all Negative Nellie's". I look at this investment from the 50 yard line. I realize that it may not work out, but yet realize that YES, it may!! Talk about a mood elevator!!!! "YES it may" does it for me!!

I've realized that you can't read and article out of Iraq, discussing removing, deleting or lifting the ZERO'S and believe what you think it says. huh?? There is much conflicting information in these articles, not to mention bad translation.