THE CBI HAS THE MIGHT - BY TD

Here is a flyby from TD -- keeping in touch with Dianr Daily and keeping us Updated

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Hey Ponee, I'm enjoying my partial retirement and I see I'm not being invited to any B-BQ's here after my post last week. Well, that's fine. I'll hold some of my own and you all are welcome.

I see Baghdad Investor and Currency Watch have decided to do a "Guru TD sees the light" article. What took you so long ?

I will say that after reading the article I am more convinced than ever of the STRONG POSSIBILITY of what I mentioned days back with Iraq's possible intention to do ONLY in house exchange.

My obtained information was rumors through my friend but Currency Watch actually pulled out the article from the CBI which essentially confirms that they do have the discretionary power to act as they wish in terms of exchanging of notes & coins and that by legal terms they have that to do a in house exchange only.

Here's the link :

http://www.cbi.iq/documents/CBILAW-EN_f.pdf

Point 1) discusses that the CBI shall have the exclusive right to issue bank notes and coins intended for circulation in IRAQ.

2) Discusses Only Bank notes & coins issued by the CBI that have not been demonetized shall be legal tender in Iraq.

3) The CBI may by regulation, limit the amounts of bank notes and coins that must be accepted as legal tender in payment for an obligation and restrict the denomination of such bank notes and coins in which payment may be made to specified amounts or a range of amounts.

This does indeed mean the CBI CAN DENY REDEMPTION IF their discretion
warrants any conditions such as a run on the bank or on Iraq as a whole.

Well, thank you Currency Watch for the investigative research behind the rumor I presented the other day.

I had not been aware or seen the CBI bylaws prior to my post BUT it does confirm the REAL POSSIBILITY of my post.


Also Currency Watch did provide this link :


[url=http://dazzlepod.com/cable/09BAGHDAD265/?q=rasheed bank iraq]http://dazzlepod.com/cable/09BAGHDAD265/?q=rasheed%20bank%20iraq[/url]

Which speaks about no treaty between Iraq-US , etc. to honor any exchanges. You can read for yourself.

Anyhow, again we must ask what DISCRETION will they in fact use ?
It's anyone's guess but these are telling clues of what LEGALLY they can do.

Also debated on Currency Watch was the amount of dinars outside the country as being about 25 Trillion rather than 30-40 Trillion (as my guy estimated). Who know for sure ? My amigo did state that there was also a ridiculous amount of counterfeit dinars out there too so I believe that's how he got the number he spoke to me of.

It is this amount of notes of redemption , whether it be 25 TRILLION or more that concerns me most and I do believe the CBI cannot afford to redeem such amounts. I do believe that will constitute a RUN ON THE BANK & THIS MAIN POINT was my rational for C/E of 95% of my notes.

Couple other points brought up in the comments section :

I too expressed with my friend possibility of flying over there and doing my C/E in Iraq to which he pointed out very possible dangers such as confiscating of my notes and even possibly smuggling of notes into the country. SO, think twice about your travel plans.

As I told Ponee on the phone before my post, that in the Summer I had visited Turkey where I showed some of my Dinar at banks and currency exchange locations and NOT ONE would exchange them. As a matter of fact one Banker VP of the largest state Bank warned me at that time to get rid of my Dinar. And as you know Turkey is right next door to Iraq.

Again my stance remains the same : I'm relieved to C/E. Treat all as rumor & opinion BUT the BYLAWS in the CBI are real, legal & VERY POSSIBLE TO EXECUTE.

Ultimately you have to decide how much risk you can afford.

Now back to our daily entertainment of "Any moment now" RV calls, "Groups cashing out" and such. ENJOY !

BEST REGARDS,

TD

I have looked and looked at the first reference from TD. In context, (Article 32, Page 17 of the PDF), I have to disagree with TD. This is from the section titled Article 32 Issuance of Currency, I just do not see any way to fairly interpret this as TD did.

Well Kevin I read it too and number 3 does spell out "restriction of payments made if notes & coins" which tells me they CAN deny payment .

Yes it does, but when you read the entire paragraph keeping in mind that is is about the ISSUANCE of currency I feel that to interpret it the way he did is a bit of a stretch ... maybe I am wrong, and I certainly have a lot of respect for TD, but I just can't agree with him on this. I read it as giving them the authority to restrict the circulation of certain denominations, like for example the small denominations at this time. Maybe I'm wrong .. but only time will tell.

What about the part of the currency being only legal tender in Iraq and not intended to be valid outside the country ? Plus no legal treaty to force the Iraqis to accept currency held in USA and elsewhere ?
You are right time will tell but it's troubling that first TD gets his rumor from an Iraqi source and then Marques comes up with the CBI stuff .
I agree with TD that the 25 trillion dinars outside Iraq is the most concerning . Even at 1166 how in the world can they redeem all that ? And I don't buy into the $32 oil credit stuff made up by gurus !
Well another twist to the dinar saga !

What about it, the USD legal tender in the USA, there is no obligation to accept them outside of the USA. Again, I may be wrong, and right now I do not have the time to fully research this, but I am pretty sure you will find similar wording in our Federal Reserve Act. Regardless, I doubt you will find a treaty anywhere forcing any sovereign country (and Iraq is a sovereign country) to accept the currency held in another country. The IMF may have a say in it, but you will not find a treaty ...

Iraq want's to step up on the world stage, and IMO such an act as suggested would lend serious doubt to the meaningfulness of their "full faith and credit" at a time it was most important to them. 

I'm not sure anyone (other than the CBI) really has a handle on how much dinar is actually in circulation let alone outside Iraq. But according to the 2012 CBI economic statement, 24 T held outside seems a bit high. Regardless, it is I think noteworthy that the foreign assets held are 3X larger than what they show for currency in circulation. Perhaps there is an accountant in the crowd who could more accurately parse the report, but to me it looks like they are in very good shape indeed.

Yes some of the tings that have been stated by TD and others is a bit worrisome, but there is not much we can do about it get out or let it ride is about it, me, I'll let it ride.