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It takes 2 consecutive quarterly reports of negative GDP growth to be considerer a recession. The last report was Dec 17th, it showed a 4.9% increase and followed the previous GDP quarterly of 3.8%.
So the next quarterly isn’t due until about March 17th… if it drops from 4.9% down into the negatives… then we can wait till about June 17th and if it is also negative… then we can say we are in a recession.
The stock market can certainly be looked at as a leading indicator though.
Bob... your sources told you this yesterday... "Actually we are at reversal point today."
The DOW dropped 300 points...
The S&P dropped almost 3% for the day.
So let me know what they say tonight... might help me decide what to do tomorrow.
"At this point it could go either way, turning up here or taking another step down."
LOL... way to go out on a limb.
Bernanke... I posted this yesterday
http://www.imf.org/external/np/tr/2008/tr011608.htm
I will summarize.
Bernanke believes the Fed. Res. played in a big part in the great depression by tightening the money supply and has stated that the Fed will not make the same mistake again.
In other words… dollars for everyone!!
Invest appropriately.
Read this… and knowing that Bernanke is still chairman of the fed… it explains the policies we’ve seen the last couple years and should give a HUGE hint as to the policies you will see over the next couple years… at least as long as Bernanke is there.
In their 1963 book "A Monetary History of the United States, 1867-1960", Milton Friedman and Anna Schwartz laid out their case for a different explanation of the Great Depression. After the Depression, the primary explanations of it tended to ignore the importance of money. However, in the monetarist view, the Depression was “in fact a tragic testimonial to the importance of monetary forces.”[6] In his view, the failure of the Federal Reserve to deal with the Depression was not a sign that monetary policy was impotent, but that the Federal Reserve exercised the wrong policies. They did not claim the Fed caused the depression, only that it failed to use policies that might have stopped a recession from turning into a depression. Ben Bernanke, the now current Chairman of the Federal Reserve, later acknowledged that Friedman was right to blame the Federal Reserve for the Great Depression, saying on Nov. 8, 2002:
"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again." [7]
Before the 1913 establishment of the Federal Reserve, the banking system had dealt with periodic crises in the U.S. (such as in the Panic of 1907) by suspending the convertibility of deposits into currency. The system nearly collapsed in 1907 and there was an extraordinary intervention by an ad-hoc coalition assembled by J. P. Morgan. The bankers demanded in 1910-1913 a Federal Reserve to reduce this structural weakness. Friedman suggests the untested hypothesis that if a policy similar to 1907 had been followed during the banking panics at the end of 1930, perhaps this would have stopped the vicious circle of the forced liquefaction of assets at depressed prices. Consequently, in his view, the banking panics of 1931, 1932, and 1933 might not have happened, just as suspension of convertibility in 1893 and 1907 had quickly ended the liquidity crises at the time.”[8]
Essentially, the Great Depression, in the monetarist view, was caused by the fall of the money supply. Friedman and Schwartz write: "From the cyclical peak in August 1929 to a cyclical trough in March 1933, the stock of money fell by over a third." The result was what Friedman calls the "Great Contraction"— a period of falling income, prices, and employment caused by the choking effects of a restricted money supply.
The mechanism suggested by Friedman and Schwartz was that people wanted to hold more money than the Federal Reserve was supplying. As a result people hoarded money by consuming less. This caused a contraction in employment and production since prices were not flexible enough to immediately fall. The Fed's failure was in not realizing what was happening and not taking corrective action.[9]
http://en.wikipedia.org/wiki/Causes_of_the_Great_Depression
I gotta believe we are talking about something different…
But look at it this way. If you are saying that one dollar equals 69 cents, then the opposite must be true… 69 cents is equal to a dollar. Show me where I can make that FX swap cause I’ll do it 24/7.
I got a hell of lot of 69 cents that I'd be happy to swap for a dollar
There obviously is not and never will be an FX pair for dollars to cents.
Please take the time to read this document.
It describes redenominations (lopping).
Just because someone on a dinar board says that only countries with high inflation lop… does not make it a fact.
The true facts are that it is preferred… and most lops occur only after inflation has been bought under control. Some times years after. That is exactly the case for Iraq now. They suffered from massive inflation through the 90’s and early 2000’s
http://convention2.allacademic.com/getfile.php?file=apsa05_proceeding/2005-09-05/40104/apsa05_proceeding_40104.pdf
Dropping Zeros, Gaining Credibility?
Currency Redenomination in Developing Nations
Afghanistan has a Central Bank, no currency board. They lopped.
Turkey didn’t have a currency board, they lopped.
Romania… no currency board… lop.
If you knew what a currency board was… you would understand that it’s a silly statement to claim that only a currency board can lop.
Can you point to where it says that a lop can only be done by a currency board?
LOL… Strong… The dollar is worth a dollar.
As I said before, anyone that truly believes the dollar is only worth 69 cents, then send them to me and I’ll send you 75 cents back. You’d be making a profit right.
When people say that a dollar is only worth 69 cents, they have to be using some reference to time… like compared to the year 2000 the dollar is only worth 69 cents now… compared to then.
But in the present… in the now… a dollar is worth a dollar and is worth 100 cents. That will always be true. In 20 years that will still be a true statement.
Now in 20 years a dollar may only be worth half of what it is today, but at that time a dollar is still worth a dollar and still worth 100 cents
Floating and Fixed… two different animals.
Iraq has a fixed exchange rate, they can set it at 1:1 and it will be exactly 1:1.
http://www.investopedia.com/articles/03/020603.asp?partner=answers
What Is an Exchange Rate?
An exchange rate is the rate at which one currency can be exchanged for another. In other words, it is the value of another country's currency compared to that of your own. If you are traveling to another country, you need to "buy" the local currency. Just like the price of any asset, the exchange rate is the price at which you can buy that currency. If you are traveling to Egypt, for example, and the exchange rate for USD 1.00 is EGP 5.50, this means that for every U.S. dollar, you can buy five and a half Egyptian pounds. Theoretically, identical assets should sell at the same price in different countries, because the exchange rate must maintain the inherent value of one currency against the other.
Fixed
There are two ways the price of a currency can be determined against another. A fixed, or pegged, rate is a rate the government (central bank) sets and maintains as the official exchange rate. A set price will be determined against a major world currency (usually the U.S. dollar, but also other major currencies such as the euro, the yen, or a basket of currencies). In order to maintain the local exchange rate, the central bank buys and sells its own currency on the foreign exchange market in return for the currency to which it is pegged.
If, for example, it is determined that the value of a single unit of local currency is equal to USD 3.00, the central bank will have to ensure that it can supply the market with those dollars. In order to maintain the rate, the central bank must keep a high level of foreign reserves. This is a reserved amount of foreign currency held by the central bank which it can use to release (or absorb) extra funds into (or out of) the market. This ensures an appropriate money supply, appropriate fluctuations in the market (inflation/deflation), and ultimately, the exchange rate. The central bank can also adjust the official exchange rate when necessary.
Floating
Unlike the fixed rate, a floating exchange rate is determined by the private market through supply and demand. A floating rate is often termed "self-correcting", as any differences in supply and demand will automatically be corrected in the market. Take a look at this simplified model: if demand for a currency is low, its value will decrease, thus making imported goods more expensive and thus stimulating demand for local goods and services. This in turn will generate more jobs, and hence an auto-correction would occur in the market. A floating exchange rate is constantly changing.
In reality, no currency is wholly fixed or floating. In a fixed regime, market pressures can also influence changes in the exchange rate. Sometimes, when a local currency does reflect its true value against its pegged currency, a "black market" which is more reflective of actual supply and demand may develop. A central bank will often then be forced to revalue or devalue the official rate so that the rate is in line with the unofficial one, thereby halting the activity of the black market.
In a floating regime, the central bank may also intervene when it is necessary to ensure stability and to avoid inflation; however, it is less often that the central bank of a floating regime will interfere.
LOL... Are you really that ignorant? Are you incapable of reading the actual EO for yourself. It's only about 2 pages. Anyone with third grade reading comprehension would see that I am correct.
Good grief... stop reading the (PRWEB) crap. Anyone can do a press release through that. I'm willing to bet that it was a dealer that paid for that pres release.
Read the actual Executive Order... It can not be more clear that it has absolutely nothing to do with what that press release claims.
Here is the White house press release.
http://www.whitehouse.gov/news/releases/2003/05/20030522-15.html
http://en.wikipedia.org/wiki/Executive_Order_13303
Executive Order 13303 was issued on May 22, 2003 by United States President George W. Bush to protect the Development Fund for Iraq for the rebuilding of Iraq from any legal attachments or liens. Further, it protects Iraqi oil products and interests and ownership by US persons (defined to include US corporations) from attachment as well. Executive Order 13303 also terminates sanctions specified in EO 12722, EO 12724, EO 13290, as it applies to the development fund. In effect, EO 13303 provides an extraordinarily broad legal shield for any and all contractors and mercenaries working in Iraq on behalf of US corporations in any oil related enterprise.
http://reclaimdemocracy.org/weekly_2003/oil_corporations_iraq_immunity.html
Executive Order 13303 decrees that "any attachment, judgment, decree, lien, execution, garnishment, or other judicial process is prohibited, and shall be deemed null and void," with respect to the Development Fund for Iraq and "all Iraqi petroleum and petroleum products, and interests therein."
In other words, if ExxonMobil or ChevronTexaco touch Iraqi oil, it will be immune from legal proceedings in the United States. Anything that could go, and elsewhere has gone, awry with U.S. corporate oil operations will be immune to judgment: a massive tanker accident; an explosion at an oil refinery; the employment of slave labor to build a pipeline; murder of locals by corporate security; the release of billions of tons of carbon dioxide into the atmosphere. The president, with a stroke of the pen, signed away the rights of Saddam's victims, creditors and of the next true Iraqi government to be compensated through legal action. Bush's order unilaterally declares Iraqi oil to be the unassailable province of U.S. corporations.In the short term, through the Development Fund and the Export-Import Bank programs, the Iraqi people's oil will finance U.S. corporate entrees into Iraq. In the long term, Executive Order 13303 protects anything those corporations do to seize control of Iraq's oil, from the point of production to the gas pump -- and places oil companies above the rule of law.
The word "currency" is nowhere in that document.
Maybe you can point it out for me?
Am I missing something here? That order has been quoted over and over thousands of times on dinar boards. This is the first time I actually read it. Is something missing? Is it really just that little 4 page document?
From what I read that order has absolutely nothing to do with investing in Iraq or buying dinar. It’s specifically an order that protects the Iraqi Development Fund, and their oil/gas and profits from such… it just protects them from being sued. And that’s all... zero, nada, nothing about Americans investing in Iraq.
It clearly states...
"From December 2003, currency in circulation is the new currency issued by the CBI less redemption of old and damaged new currency notes."
There is nothing outdated about this. It's still relevant to the finacials on the CBI which are kept up to date and it very plainly states that since 2003 the amount is less NEW currency notes.
Not sure how you can comprehend that to be old notes.
This is the form that explains the CBI financial information.
http://www.cbiraq.org/Key%20Financial%20Indicators%20Documentation.pdf
a - Currency outside banks, i.e., the currency component of the money supply as
shown in the Analytical Balance sheet (Item 8) which is derived from the following sources
(currency put into circulation reported by Issuing Dept. less vault cash(item 8.1 of Analytical
Balance Sheet) reported by Research & Statistics Dept.). From December 2003, currency in
circulation is the new currency issued by the CBI less redemption of old and damaged new
currency notes. Prior to October 2003, currency in circulation is all Iraqi Dinar (other than the 25
swiss Dinar notes) issued by the CBI (both Swiss and Saddam Dinar at face value) less
redemption of old and damaged notes and issued currency in vaults of CBI.
It clearly states that redeemed dinars, that would include the ones bought back at auction, are not included in the figure. So this whole notion that the CBI is holding dinars that they bought back and can destroy them at any time and reduce the currency amount is not backed by anything and actually refuted by the Central Bank of Iraq.
I'm not saying this is a done deal. But it is a fact that the MOF is pushing the hell out this plan. It's up to the CBI, they put it off back in 2006 and they may well put it off again. The MOF claims there is support for it within the CBI this time. We shall see.
Bumping up the bank reserve rates to 75% lately and the removal of the coins (in one month) are both signs that would concern me.
Hilarious... so if it's a known scam artist telling you this... it shouldn't matter???
Did someone mention common sense?
From 2003... when the currency was first introduced.
This has been known from the very beginning.
http://www.globalsecurity.org/wmd/library/news/iraq/2003/07/iraq-030707-usia03.htm
Question... Do I really need to change my notes? Won't the new Iraqi government change the design again anyway?
Answer... Yes... Yes, you should change all your current dinars when the time comes. After the changeover period, the normal Iraqi ("print") dinars, and former national ("Swiss") dinars will no longer be valid. Once there have been national elections, and there is a new Iraqi Government, the new Government may introduce new notes, or a new currency. But this will be further down the line.
It has everything to do with it. The NID is/was a direct 1 for 1 replacement of the Saddam Dinars. The inflation generated zeros are left over from the Saddam notes.
I bet you are unaware of the fact that when Iraq had this highly touted rate of 3 dollars to 1 dinar, that Iraq had absolutely no Saddam dinars at that time. When Iraq had that wonderful rate the only thing in the country were the Swiss dinars. That was around 1980. It was after Saddam took power and burned through all of Iraq’s foreign currency reserves, starting the downfall of the value, that he then decided to just print currency… problem was, he didn’t have access to the Swiss plates, so thats when the Saddam dinar came about. 1986 was when the first Saddam dinars hit the market. Saddam dinars were never worth very much.
Not exactly
From the 2006 Letter of Intent to the IMF.
http://www.imf.org/external/np/loi/2005/irq/120605.pdf
“The projected growth in currency in circulation is consistent with the projected accumulation in net international reserves”
Iraq originally put out 4.5 Trillion dinars. That amount has now grown to an M2 figure of about 22 Trillion. That is what has to be supported. As the M2 grew, so did foreign currency reserves used to back the currency… just as they stated in the LOI. Iraq slowed down the increase in M2 and continued to increase foreign currency reserves which has allowed them to better the exchange rate while still maintaining full support.
People have been speculating for two solid years now that Iraq is removing dinars… and while it is true that Iraq has been taking in dinars in the auctions, it was also true that they were using those dinars to run the government… pay back out. There is zero proof of any reduction of dinar… the opposite is true according to the CBI financials that they post and supply to the IMF, they show an increase for the last two years.
I posted this on here back in May.
http://investorshub.advfn.com/boards/read_msg.asp?message_id=19413136
Iraq at one time had a 1:3 exchange rate. At that time I think they had 1,5,10 and 25 dinar notes.
Then as the value dropped they had to print larger denomination bills. In 1995 Iraq started issuing 250 dinar notes. They issued 2.4 trillion worth.
Then in Aug of 02 Saddam started pumping out 10,000 dinar notes due to further inflation.
That is a perfect example of inflation generated zeros. They print more currency, causing inflation, which they answer by printing more currency at higher denominations… causing higher inflation… it’s a vicious cycle.
This is the same plan from 2006
This is just from a couple months ago. He is talking about the same proposal that he made back in 2006, he even references the old rate. He states that they were reluctant at the time, but now there is a positive attitude. It is the same plan.
CBI meets to discuss removing zeros
There is talk in the street to raise the zeroes or else currency cash ..? .
ف. This proposal submitted after I office in the ministry of the Week and presented this proposal to officials in monetary policy at the Central Bank and then the Central Bank was reluctant to accept this idea, but it became a strong dinar against the dollar (1250) after it (1400) I heard that the bank Central will meet to discuss lifting the three zeroes are positive atmosphere within the bank to accept this idea.
يم.. Many complain of low monthly salary of staff, particularly owners of the lowest degrees of taxes imposed on them .. ية. The ministries say that because of the Ministry of Finance.
http://www.google.com/translate?u=http%3A%2F%2Fwww.sotaliraq.com%2F&langpair=ar%7Cen&hl=en&a...
Again… what was proposed back in 2006…
Iraq is considering redenominating the dinar, printing new banknotes to remove inflation-generated zeros from its currency, the finance minister said on Thursday
They are getting ready becuase they know what's coming.
No, because the Minister of Finance says so.
This is the same plan. Your beef lies with him, not me.
http://www.iraqdevelopmentprogram.org/idp/news/new1297.htm
BAGHDAD - Iraq is considering redenominating the dinar, printing new banknotes to remove inflation-generated zeros from its currency, the finance minister said on Thursday.
Senior government and central bank officials have told Reuters the proposal has been under consideration for some time to make one new dinar equal to 1,000 current dinars, a move that would bring the currency closer to parity with the U.S. dollar.
Asked about such a suggestion in an interview on Arabiya television, Finance Minister Bayan Jabor said: "This is the ministry's suggestion to the central bank. We think in the long term it will be for the benefit of Iraq."
Jabor said surveys indicated popular support for the move. The oil-rich nation's currency was once worth more than $3, he recalled, before the ruinous wars and international sanctions during the rule of Saddam Hussein.
There are currently about 1,450 dinars to the dollar, a rate that has been relatively stable since shortly after the U.S. invasion in 2003. At that time new banknotes were issued by the U.S. occupiers to remove Saddam's image.
Other nations that have been through rampant inflation have followed a similar course, notably Russia in the 1990s. Until the 1980s, many prices in Iraq commonly also used the fils. One dinar equals 1,000 fils. The smallest denomination note today is 250 dinars.
(c) Reuters 2006. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
I see it as a going to 1000:1 and then a new currency with a 3 zero lop and an exchange rate of 1:1
Stockings believes that they have announced that anyone with the means to get about 1 thousand dollars worth of dinars together will soon be a millionaire.
Side note… this plan has been around for a year and a half and there have been dozens or so articles written about it with comments from economics experts and every single one of them has interpreted it the way I have. There has yet to be anyone interpreting it as everyone becoming millionaires.
You will have about 1000 apples... not 1 million apples
So now the MOF isn't just talking about a lop, he's published signed conventions with the lop in it... what ever a convention is.
Definition of convention... meeting, gathering are the obvious. It also means... formal agreement.
Soros was just on CNBC about a week ago.
Soros said he was buying the euro and the currencies of Australia, Canada and New Zealand against the dollar, as well as gold.
Can you show me where Soros has ever mentioned, let alone stating he is invested in, Iraqi Dinar? What's the link for the Soros dinar website? Where's the picture?
You haven't made one penny until you sell. Even a rookie investor would know that.
If and when they lop... what do you think the dealers will offer you per million to buy it back. How about shipping?
You paid a premium to get it. You will surely pay a premium to unload it.
Just for you Heavy… I’ll answer this one more time.
I invested in this late 05 I think. Was totally into it and thought I was going to be rich. Then I did true dd. Compared Iraq’s currency, financials, economy and other things to many other countries. In that research never did a true comparison ever lead me to believe that Iraq’s currency was 1000 times undervalued… just the opposite… practically every comparison showed that Iraq’s currency was pretty fairly valued. I also read up and informed myself about currency redenominations. Then in the summer of 06 Iraq announced they had a plan to lop 3 zeros from the currency and issue a new dinar. That was enough for me to get out. They do not have one plan to lop 3 zeros and issue a new currency… and also have a plan to just raise the value 120,000%. The difference between those two plans is monumental and simply doesn’t exist. If you are considering one… then the other is an impossibility.
Now… because I spent so much time in the investment, plus time and effort researching the investment, I am very interested in the subject of the dinar. But being interested in and discussing a subject is far from being emotionally tied to it.
I will have no feeling of joy or loss when they lop.
Currency Trading… Here?
People are buying physical notes from internet dealers at a 20% markup and putting them in shoeboxes in the closet.
That’s like finding a guy in a back alley selling stock certs and thinking… so this is what investing in the stock market is all about.
This is absolutely not a typical FOREX play.
Darock will soon be doing a cut and paste of War And Peace over there.
LOL
The Euro started at .93 according to Strong. I trust him and don’t want to look it up… but just to make it easier, let’s say the Euro started at 1:1. It was pretty close anyway.
Italy had an exchange rate of about 1500:1. When they went to the Euro they didn’t all become millionaires overnight, I’m sure we would have heard something about that. They had to turn in 1500 Lira to get 1 euro.
The same will happen with the GCC currency. Say they set the value at 1:1. Then Iraqis will have to turn in 1214 dinars to get one new GGC currency unit.
Kuwaitis will receive about 3.6 new units for every Kuwaiti dinar they turn in.
Saudis will have to turn in about 4 rials to get one new unit of currency.
Bottom line… The currencies do not all have to be the same before switching to a unified currency.
"IMO, Iraq's currency needs to catch up first before they will be allowed to participate in that."
If that's true... can you explain Italy? The Italian lira was at an exchange rate of about 1500:1 for years and years.
Italy not only survived with a so called “worthless currency”… they thrived and had one of the top 5 economies in the world with that "worthless currency".
They then went straight to the Euro without having to revalue the Lira… there were no issues at all.
Strong... is your source still confirming that no new notes are being released with the coin exchange?
I say 1:1… But it is Revalue not Reveal.
A woman wears revealing clothes.
A currency revalues.
Reval… which is not a word, was just adopted as the short version of revalue or revaluation.
Being the nice guy I am, I'm prepared to offer 75 cents for each dollars that you guys want to exchange at this time.
That would be a sweet 7 cents profit for each dollar.
There is a pretty decent chance that they are going to print a new currency. I'd be concerned about it.
The Minister of Finance stated sometime around the first of December that the CBI was going to take up the lop issue again in 3 months(they set it aside last time they looked at it). That's by the end of Feb. He stated that this time there is support for the idea within the CBI. Those are the words of the Minister of Finance of Iraq.
Interesting side note... for some reason, Iraq decided to pull all their coins from circulation and has allowed only one month for it to happen.
In no way am I saying you should dump your dinar... but you'd be very wise to have a definite exit plan in place.
Yes, it's also reported in the same CBI document.
http://www.cbiraq.org/key%20financial.xls
Look at line 36.
Under Monetary Base
Net Foreign Assets of the CBI
Gross Foreign Assets of CBI
GOLD and SDRs
1.073 Trillion dinars woth of gold and SDRs