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Thanks for posting that Panhead.
That proves another thing the gurus have said for years is a lie.
That Iraq can back the currency with oil.
That is not true and this clearly explains it.
Iraq currency is backed by foriegn currency reserves, and that is only gained with SURPLUS oil revenues.
Strategy to raise the value of the Iraqi dinar
The dollar is currently worth 1170 dinars Iraqi (Reuters - Archive)
Alaa Youssef - Baghdad
An Iraqi official announced the adoption of a new strategy intended to raise the value of the Iraqi dinar against foreign currencies.
The chancellor said the central bank in the appearance of Dr. Mohammad Saleh, told Al Jazeera Net "I have been working for years to improve the value of the Iraqi dinar exchange, several measures have been taken until we came to the stability of its value at 1170 dinars to the dollar." He explained that he had talked with some fluctuations up and down according to the impact of the overall situation in Iraq in the absence of stability.
Reform progress
. He disclosed that the new strategy has begun the reform of management system of the national currency and payment system of Iraq, said that this will be the basis for the application of strategy to reform the currency. He favored the Iraqi official that these steps will take a year or more. On the zeros added in the Iraqi currency, which made the value of the disbursement of land, Saleh said that the zeros added that high inflation rates since the Iran-Iraq war and the subsequent siege and invasion, and thus doubled the cash block several times.
In 1990, the cash block of 28 billion dinars, and became a six trillion dinars in 2003, while now stands at 25 trillion dinars. He said that this has become necessary to change the payment system because the Iraqi economy on the verge of developing and producing oil major which leads to spending significantly.
According to the adviser at the CBI, the new strategy will shift the current monetary mass (25 trillion dinars) to 15 billion dollars through the adoption of coins and currency Iraqi few.
And the ability to withstand the Iraqi dinar against foreign currencies, Saleh said that "the Iraqi economy is strong, has great resources to qualify to stand in front of foreign exchange if there are economic and monetary policy is correct, and political and economic stability and security."
He expressed optimism that the Iraqi economy will recover, which is reflected in the rise of the dinar against foreign currencies.
Relative stability
. For his part, said a banking expert, Mohammed al-Samarrai said the Iraqi dinar was relatively stable at the present time, is affected by the conditions of security rise and fall of a simple not as great as in the past.
He assured the island revealed that the dinar is witnessing now balanced and influenced by the simple economic decisions and political inappropriate in the exchange rate, without prejudice was balanced.
He hoped that the high value if foreign investors have entered the Iraqi market, or if there is openness towards the private sector. Samurai called to re-construction of the many industrial projects that have been stalled as a result of the blockade and invasion which led to the destruction of industrial equipment.
He pointed to the neglect of 36 factories giant in the past seven years. And the actions necessary to raise the value of the dinar against foreign currencies, "said Samarrai, including stabilizing the security situation and the political decisions and laws that encourage private sector support, and encourage the entry of foreign and domestic investment, and encourage the return of capacity to rebuild it.
Excess oil. The Iraqi banking expert Mohamed Kamel Hussein said that there was a perception among the Iraqi Central Bank to lift three zeros from the value of the dinar, by issuing a new currency to improve its value.
However, he believed that the lifting of the three zeros will not change anything because the factors affecting the exchange rate of the dinar against foreign currency depends on the surplus that is supplied by oil revenues.
Provides lift the productive capacity of large oil revenues diminish the value of inflation, and thus raise the value of the dinar by providing a surplus of foreign currency.
The exchange value of the Iraqi dinar was the strongest in the region late seventies of the last century, but began to decline during the Iran-Iraq war before riven by the blockade.
Have fallen to their lowest levels during the U.S. invasion in 2003, amounting to U.S. dollar exchange rate four thousand Iraqi dinars.
http://translate.google.com/translate?hl=en&ie=UTF-8&sl=ar&tl=en&u=http://www.aljazeera.net/NR/exeres/24F5C8D0-E457-425C-8134-E3B2F61EB19B.htm&prev=_t&rurl=translate.google.com&twu=1
Not really. They could have hundreds of trillions printed and stacked up at the CBI available for future use. It's simply a stack of meaningless paper until they issue it.
Yep. Pretty much.
All the private banks are required to have a certain amount cash as reserves. I'd guess that a lot of those bank reserves are kept at the CBI for security reasons. That currency is part of the money supply.
But cash the CBI has, as long as they have it, it's not part of the money supply. When currency is printed up, piled onto a pallet, and delivered to the central bank, it's not part of the money supply until they issue it.
Exactly! You got it.
All currency redeemed, or bought back, by the CBI is no longer considered in circulation.
Remember the Kuwait story and their dinar.
Kuwait only had about 400 million dinar in circulation when Saddam invaded them. He broke into the Central Bank of Kuwait and stole billions that they had stockpiled for future use. That’s why the value of the Kuwaiti dinar plunged on the street, he basically dumped billions of illegal Kuwaiti dinar into circulation on top of the small legitimate amount.
That currency in Central Bank is not part of currency in circulation.
Still not undestanding you.
Again, you are saying the CBI takes in 1 million and gives out 1 million, which by any math standard known to man, is a wash. No reduction.
Are you thinking the million 25K notes being destroyed are removed from circulation?
Yes that is true. BUT… the million small denoms they gave the bank is new to circulation.
Currency owned by the Central Bank is not in circulation.
Some banks may have deposits held at the Central Bank, but that’s money owned by those banks. The CBI can’t give that money away. If they did, they would have to replace it.
How do you come to that figure? 50%?
If the CBI takes the 1 million in 25K notes and gives the bank 1 million in smaller denoms, how does that reduce the money supply?
Took a million in, gave a million out.
Who's giving them to the CBI?
More specifically, who is giving them to the CBI and expecting nothing in return?
Or are you thinking they are buying them back now for dollars?
Go to a search engine.
Search for Phoenix and Dinar.
You should find plenty.
Phoenix is his dinar pumper name on the big dinar sites.
I'm trying to understand your thinking here.
So you, or an Iraqi walks into a bank... hands them a stack of 25K notes. The bank gives you back a stack of lower denoms. The bank then takes them to the CBI for destruction. They give the CBI the stack of 25Ks.
Now what?
Do you think they don't have to give the bank something for those 25Ks? Every bank would go bust if that's true.
It would depend on what they give you for them when you turn them in.
If they give you 25 thousand in smaller denomination then it wouldn't reduce the money supply one single dinar.
If they only give you 25 dinar, then it's a lop, and believe me, they will lop ALL denomination, not jus the 25Ks.
Do you think they will screw everyone holding 25Ks and tell people that have 10Ks that they hit the lottery?
Money Supply Numbers
http://www.cbi.iq/documents/key_financial.xls
Scroll down to line 80, Item 5.
MONEY SUPPLY
M1=37.3 Trillion
M2=45.4 Trillion
Deposits component of M2=23.6 Trillion
So if you take M2 and subtract the deposits you are left with currency in circulation.
45.4 minus 23.6 = 21.8 (currency n circ)
Which is verified by looking up at Line 75 which they call Currency outside of Banks. Currently 21.8 Trillion.
So yes… the money supply is 45.4 Trillion.
M1 and Currency in circulation are just smaller parts of the money supply.
The M2 number is the number they really have to support. If you don’t think that then try telling all the people with bank accounts that they wont get the big RV, only cash holders.
With a lop the exchange rate will be 85 cents per dinar. If you live in Iraq it will be worth $297.50.
If you live outside of Iraq you will have to find someone willing to exchange it for you. They will probably charge a pretty big fee. IMO you'll be lucky to get $200 for it.
Maybe you should read this
http://ihwiki.advfn.com/index.php?title=Handbook#Deletion_of_Posts
Posts about or focusing on other Members and their reasons for posting on the board (i.e. "XYZDownDaDrain" is just a basher, ignore him", "XYZToDaMoon" is a pumper").
Not really sure what they include and dont. Like do they include the debt to Kuwait for the invasion? Not sure.
That also is a violation of TOU, provide something, ANYTHING to prove me wrong
Why don't you provide a link and prove me wrong instead of acting like a child, violating TOU, making personal comments
Kuwait, $32 Billion
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2079rank.html
Iraq, $50 Billion
Iraq is also in a position of needing hundreds of billions to rebuild their country.
Kuwait doesn't have that problem.
Nice fantasy with made up numbers.
Please show me anything that states the DFI is anwhere near $280 billion or that there is $100 billion in frozen assets.
Reports are that all fronzen asssets where added to the DFI years ago.
These are numbers thrown around by the RV every weekend pumpers.
The constant "this was the plan" quotes. More pumper speak.
So I'm sure this was written by one of those guys.
What a funny post that was Pan.
Yes No Yes No Yes No
Political first : The Central Bank denies the deletion of zeros from currency
(No deletion of zeros.)
BAGHDAD - morning
Iraq's central bank denied the rumors in some media on the intention to delete the three zeros from the dinar at the present time. (No deletion of zeros at this time.) The chancellor said the Bank the appearance of Dr. Mohamed Saleh to the editor of "Al-Sabah economic":
The Central Bank is proceeding with the development strategy for the reform of management system of currency and payment system, stressing that the current will not see a raise zeros from the national currency, (current, not raise zeros) but Bank is to examine procedures that facilitate the implementation of this mechanism does not affect the stability of the market. (wait, what, bank will examine implementation of this mechanism)
Saleh disclosed that the central bank will announce on this procedure before time to give citizens the opportunity to organize their situation before the operation, (they will announce before the operation, so it will happen??) adding that such measures will depend on the extent to which security and economic stability. and most likely that the parties embark on speculative currency and prices are behind the firing of such rumors and promoted in the media.
LOL... the rumors are coming from Saleh. He was the one quoted in the media as saying it will happen before the end of the year.
Are you seeing a dinar tie in at all there, or are you just pushing a website?
I tried explaining this to people years ago, but most just ignored it.
The CBI was so determined to fight inflation and stabilize the exchange rate that they didn’t give a crap about the economy.
They maintained a high reserve rate and high interest rate. That’s a VERY tight monetary policy. That’s great for the value of the dinar, but stinks for the economy and it has shown. Iraq's economy, aside from oil, is pathetic.
The banks would not lend money. They could make more money by depositing it and gaining interest. That explains the last sentence in that article.
Now… to spur the economy, they have to move to a looser monetary policy. They have to promote borrowing and spending instead of saving. They do that by lowering interest rates and lowering reserve requirements.
Problem with that. It could lead to inflation, which means the dinar could devalue.
Yes… the dinar could go down in value.
You guys who think this can only go up, may be in for a rude awakening and a good lesson in basic economics.
Did you not look at column 2.
158.5 Cash in local banks.
Iraq reports almost the same exact way.
They report "currency outside of banks" which is their currency in circulation number. They also report cash in vaults. If you add the two together you would get their "currency issued".
They also wont be able to buy back near as much. It all works out the same.
I'm not saying the budget is an issue. I'm just talking about the budget to explain why Iraq is buying back large amounts of dinar. They buy it back, but they turn right around and put it back into circulation through budgetary spending.
Take the US for example.
The United States collects 3 Trillion dollars a year in taxes.
Spending should only be 3 trillion and we would have a balanced budget. Of course we're screwing that up, but that another topic.
Iraq doesn't collect taxes the way our gov does. All they have at this point is oil, they use the dollars from oil sales to buy back dinar to fund the budgets.
I'm not sure what you are talking about.
But I have posted a number of times recently the proof from the Central Bank of Iraq that any REDEEMED (bought back) currency is taken into account when they report the numbers.
Why is this so hard to understand.
Lets use round numbers for simplicity.
Let's say Iraq has 25 Trillion dinar in circulation.
They have a budget of 80 trillion, but we'll say that only 52 trillion of that is in dinar expenditures, the rest are dollars.
So Iraq is going to spend 52 Trillion dinar this year.
They need to buy back 1 trillion dinar a week just to break even and keep the money supply at roughly the same level. (other things will effect money supply, not just Gov spending.)
They have been doing it this way for years now.
Think about this. For the last 5 years, let's say Iraqs budget has been 50 Trllion as an average. That means the Iraqi gov has pumped out nearly 250 Trillion dinar in that time. That's what their money supply numbers would be if they weren't taking into account all the bought back money in their reported numbers.
That would depend on how they are removed.
If they give you 25 new dinar for that 25000 note, then it's a very big reduction.
If they give you one thousand new 25 dinar notes for that 25000 note, then that doesn't reduce currency in circulation by 1 single dinar.
Chapter 7 means very little.
You guys talk as if there are tons of sanctions on Iraq. That is not true. Almost all sanctions were lifted years ago, right after Saddam was booted. The only sanctions left are those that prohibit Iraq from dealing in Arms/Weapons. Chapter 7 also keeps the development fund under the direction of the UN... so that would change, but they still need those funds to rebuild the country, not pay speculators.
Iraq has complained about and wants the remaining sanctions lifted because... if I remember right... Iraq has a lot of some type of chemical/fertilizer that it wants to sell. That chemical or fertilizer falls under that Arms sanction because it could be used in making chemical weapons or bombs or something.
There is no big flood gate of activity waiting to happen when Chapter 7 is removed.
It's just another in a long line of pumper exaggerations
Been tested long ago.
Kuwait has less than 1 billion dinar.
Here....
http://www.cbk.gov.kw/cbkweb/servlet/cbkmain?Action=mtbl&archive=201002&tbl=RM02
Kuwait has 803 MILLION. Not Billion, Not Trillion, But 803 Million dinar in circulation.
Saddam Money Supply numbers.
http://www.cbi.iq/documents/Annual_2002f.pdf
Scoll down to table 2
They had 24 Billion in 1991.
The currency in circulation numbers are not my opinion. That's a factual number reported by the Central Bank of Iraq
Currency in Circulation
This has been posted a number of times. I don't know why people continue to try and dispel it.
Many of the raise 3 zero articles have claimed 20 to 25 trillion dinar in curculation.
It's called "currency outside of banks"
http://www.cbi.iq/documents/key_financial.xls
Here they clearly say "currency outside of banks" is the currency component of the money supply, they even say it's the currency in circulation minus vault cash.
http://www.cbi.iq/documents/Key_Financial_Indicators_Documentation.pdf
It really can't get much clearer than this.
This is their currency in circulation number.
People fight it and claim it's not because that one number, that number all by itself assures that there will never be a large RV.
Lop 3 zeros from the number, then a 1:1 exchange rate makes perfect sense.
1:1 without a lop of 3 zeros is simply unreasonable to even think about.
That's a fantasy post.
No link. Annonomous economist (because he doesn't exist).
I looked it up. It was written by a well known pumper from Frank's KTF mission site.
Iraqs budget is 84 Trillion dinar for 2010.
They pay for that budget by selling oil for dollars. They then use those dollars to buy back dinar to spend on the budget.
They would need to be buying back 1.6 Trillion dinar a week to keep the money supply from growing. They are not buying that much back, that's why the money supply continues to grow. If they weren't buying what they have been, then money supply would have sky rocketed and the exchnage rate would have gotten worse.
All of this has just been Iraq demonstating that they can maintain a stable exchnage rate.
Soon they will devide everything by 1000 and continue on their way.
There is not one single shred of evidence that any country holds dinar.
I would love to see some proof it.
I just have you a link that breaks down all FX reserves held world wide. It doesn't mention the dinar once. They could be under the "other currencies", but I doubt that.
Sorry... it's only 10,000%
Not sure where 9000 is coming from.
But you stated the rate could go to 10 cents.
10 cents would be a 10,000% increase
You said "Even 10 cents".
That's a 90,000% increase.
That's made up stuff from a dinar pumper on the KTF mission site.
From the IMF.
Currency Composition of Official Foreign Exchange Reserves
http://www.imf.org/external/np/sta/cofer/eng/cofer.pdf
No mention of the dinar anywhere.
There is not one single reference anywhere to be found that any country holds dinar.
Are you calling a 90,000% increase small?