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TLAR says this all has to come to fruition
G-Lin BAGHDAD - and babysit - Iraqi Central Bank decided Tuesday to support commercial banks to five trillion dinars and finance the budget six trillion dinars.
According to a statement of the bank, "public opinion" has received a copy of it, he was "in line with the central bank's tasks and responsibilities in supporting the development and stimulate the Iraqi economy, the Administration approved the Central Bank Council, among other proposals made by the Bank's management,
including the liquidity support specialized commercial banks in the amount of five trillion dinars to enable them to provide loans to industrial and agricultural and providing housing and real estate loans in support of economic activity and job creation."
"It also decided to finance public Budgeting state $ 6 trillion dinars run through 50% of the deposits of commercial banks reserves with the Central Bank of Iraq," noting that "he also decided to buy back treasury bonds from the secondary market, where the central bank will buy about (5 ) five trillion dinars first stage of those bonds. "
~~~
The bank said that "the actions taken by the Bank for upholding the private reserves of the Central Bank of Iraq." http://alrayy.com/132047.htm
G-Lin With the lack of liquidity, the central Alnkadih..alpennek recorded a significant drop in sales of the dollar Tuesday, 27 January 2 / January 2015 12:38
[Baghdad-whereCentral bank sales declined in the auction for the sale of foreign currencies on Tuesday to $ 69 million after yesterday reached 77 million and 907 000 dollars.
According to a statement of the bank received by all of Iraq [where] a copy of the "amount sold by the bank the size of today's auction at the price of the dollar stood at 69 million and 593 000 dollars at the exchange rate in 1166 dinars to the dollar and with the participation of 12 banks."
He pointed out that "the quantity sold in cash amounted to 21 million and 780 thousand dollars, and the quantity sold Khawwalat amounted to 47 million and 813 thousand dollars."
The statement said that "the Iraqi Central Bank to continue buying and selling dollars at 1166 dinars," adding that "the sale of remittances price 1187 JD / dollar, including the commission of the Central Bank of 21 dinars per dollar, with total cash sales price of $ 1190 JD / dollar, including the commission Bank Central of 24 dinars per dollar. "
It was noted a reduction in central bank sales index in the past few days, where no more than $ 200 million as in the past, and that 17 of the current month since with the exception of January 20, reaching sales of $ 224 million.
The reason for this decline and whether it is due to the popularity of the auction or not known yet reduce the amount of supply of the dollar.
This decline also may come to coincide with the passage of Iraq in financial distress and a lack of liquidity due to reduced imports because of falling world oil prices and the government's efforts in austerity to meet the shortfall in the budget of 2015's rate of 25 trillion dinars.
The statistical interview [where] about central bank sales of the dollar last year 2014 amounted to 49 billion, 579 million and 738 000 Dolar.
http://www.alliraqnews.com/2014-06-14-07-34-14/164811-2015-01-27-09-38-29.html
Jeff19 Today's CBI Update (Press release) in line with the central bank's tasks and responsibilities in supporting the development and stimulate the Iraqi economy, and in light of the financial challenges faced by the country, the Department of the Central Bank Council approved the proposals made by the inter bank's board.
01/27/2015 [url=http://www.cbi.iq/documents/press for-e 27-1-2015.pdf]http://www.cbi.iq/documents/press%20for-e%2027-1-2015.pdf[/url]
(Press release) The Board of the Central Bank of Iraq Directors discussed the special day 25/01/2015 financial situation in Iraq, and the large budget deficit.
01/27/2015 [url=http://www.cbi.iq/documents/press for 27-1-2015.pdf]http://www.cbi.iq/documents/press%20for%2027-1-2015.pdf[/url]
OLdwazhisname Okay, let me take a stab at this to further the discussion. We have seen a number of articles of recent where the CBI and other economic advisor/parliamentarian-types have talked about increasing liquidity and taking steps to improve the value of the dinar.
This is exactly what the CBI is telling us that they are going to do. Taking our clues from other Central Banks in other countries, those countries support liquidity in their private banks by lending to them on a “temporary” basis.
In the this country, banks have the ability to raise funds from lots of sources, so we have a phrase that describes the role that our Fed plays. It’s called “the lender of last resort”.
In other words, when banks need quick funds or in the event of an emergency, a bank can turn to the Fed and get liquidity to carry it through its need. I would estimate that Iraqui banks don’t have a lot of sources for funding.
Deposits are probably hard to come by, correspondent banks don’t function there, public funds are dried up. The banking system needs support from the Central Bank to get things going, hence the announcement that the CBI is going to make loans to banks totaling 5 trillion dinars (say 5 billion USD).
These loan will come with conditions most likely, especially what they have to do with those funds (support the private sector).
They also announced that they will lend to the GOI 6 trillion dinar (say 6 billion USD). As seen, it helps make up the budget shortfall, but just as importantly, it appears to be kickstarting into gear a more “normal” operating Central Bank.
It should signal to us, as Tlar pointed out, that we are at the starting gate (whatever the roll-out is, I don’t know but we’ll probably see it more clearly shortly).
In this country, we call this type of action “stimulus” by the Fed. Flooding USD (hopefully not dinar) into the economy. Why do I say that?
Again using our own observed experience with the Fed, Stimulus drives down the value of the currency in question. More dollars chasing the same amount of goods. Inflation is stimulated (meaning a “cheaper” currency).
A secondary benefit (and maybe the primary reason for doing this), is it signals the targeted financial stimulus into a given situation and encourages others to follow. The astute investor types will see this support and follow suit. The CBI is signaling its intentions to commit a particular way and “the herd” follows.
hi-five Here is a link - compliments ofDinarVets and Butifldrm. It is nine pages and spells out the new CBI monetary policy instruments.
http://www.cbi.iq/documents/monetary_policy_en_f.pdf
Looks like Iraq is now ready to open up the private sector!!
DreamWeaver Great explanation. Appreciate, it. Had a question about this point: "A secondary benefit (and maybe the primary reason for doing this), is it signals the targeted financial stimulus into a given situation and encourages others to follow.
The astute investor types will see this support and follow suit. The CBI is signaling its intentions to commit a particular way and “the herd” follows."
OWHN, does this mean that by "targeting" the stimulus into banks to pass on to private sector it will attract private investors to Iraq?
Would appreciate you spelling it out a little for those of us (me) who are very challenged when it comes to grasping economics.
Thanks in advance for your patience and please keep these type of posts coming. IMO it really helps us understand this side of the investment. Best thoughts ~ DW
Oldwazhisname By "targeted", what I mean is that a very common investment strategy is follow "the big money" in your personal investing. I'm sure analysts are/will be evaluating what effect this stimulus will have on individual industries, geograhpic areas and segments of the local economy.
Wih that cue, investors will naturally hop on board for the ride. From the CBI's perspective, it becomes a self-fulfilling prophecy that their stimulus works to prime-the-pump for the economy begins to multiply as goods and services cycle around as the money supply becomes a multiplier of activity.
BTW, imagine trying to ramp up an economy when there is no money (meaning physical currency) to use in the market place.
Not only does the CBI and Saleh talk about increasing liquidity but I'm thinking that the currency auctions are drying up due to the lack of physical currency in the marketplace. Someone else might want to comment on that phenomenon.
Rockstar “Not only does the CBI and Saleh talk about increasing liquidity but I'm thinking that the currency auctions are drying up due to the lack of physical currency in the marketplace." That sounds reasonable to me thanks for posting!
DreamWeaver Thanks, OWHN. So, guess it makes sense that before initiating their stimulus package, they would either RV or do bank loans in USD?
Oldwazhisname Not sure if an RV is a necessary requisite. What I mentioned earlier is an absolute truth as we recently saw with Euro and several years back with a trend in the comparative (and absolute) value of the USD.
Recently, the European Central Banka announced the intent to do a massive stimulus in Europe to help stave off recessionary pressures.
The consequence was that the Euro dropped relative to other currencies (and a prime reason that the Swiss CHF disengaged from being pegged to the Euro, which caused an overnight upward increase in the value of the CHF of like 30% relative to the Euro).
When the Fed did its long series of stimulus, the value of the USD dropped, especially compared to commodities like Gold and Silver.
Not so much relative to other currencies because those country's Central Banks were doing the exact same thing, creating stimulus in their own countries. Most all currencies sort fo all sunk together.
My concerns are that a stimulus effort by the CBI, where they put out more IQD, will actually cause the same effect in Iraq, exactly the opposite of what we want to see.
That's what makes this such a queer announcement at this time, as the mere announcement of doing something like this will likely have counter-increase effects in the marketplace...
hence, making me wonder if this is truly a pre-RV event or more driven by the longer term goal of getting the private, local economy up and running for a period of time before an increase in value can be realistically established???
In any event, we should know more as this actually gets applied into the marketplace. As always, we wait and see and try to interpret the tea leaves.
Mike Agreed, OWHN, it's definitely a weird announcement. I would imagine that Iraq plans on using the dinar in this stimulus and I would agree that this will push down the value of the dinar and possibly affect inflation numbers as well.
Couple that with today's news about capping the auctions and it gets weirder still. It's going to handcuff the CBI, it's one of the few tools they have to maintain the dinar. Like you said, we'll see.
" We are all born ignorant, but one must work hard to remain stupid " Benjamin Franklin
Schiz I sotra expected this to happen around the time the bonds would start, another tool, eventually stopping the fraudulent auctions altogether.
But who knows, Iraq never stops confusing me. If they can do it backwards, they will and do.
So easy in my head of what they need to do to simplify their currency regime.
Skylimit This might be a case where you watch what they actually do, not what's in the articles. If they try and stimulate using dinars at the current value we're all screwed.
They have spent years dollarizing and not paying anyone to dry up the supply of dinars and now to turn around with this makes no sense. My guess is they will increase the dinar's value within days if they're actually going to implement this strategy.
Kimberly I must admit this topic is not my strong suit.... Tim724, on Bondlady this morning was all happy and seems to think this means they are de-dollarizing also.......
For me de-dollarizing is Not what I want to see unless, they are trading in their 1 to 1 rated dinars for dollars...... I'm not sure I'm liking this.......What am I missing?
DreamWeaver Just couldn't reconcile what they've spent years doing with what they say they plan to do--as I'm easily confused by economics. Got it now, thanks to you guys. It doesn't compute.
So, I'm with OWHN, Mike, Skylimit. Need to see how they act as it only makes sense that IF they plan a stimulus they may well be planning to RV beforehand. Or not ... All I know is I'm going to leave all the pondering on this topic to those, like you guys, more savy. Appreciate you guys and your posts ~ DW
DreamWeaver Really laughing over here as I got a mental image of my Iraqi counterpart--struggling to understand this stuff--giving a press release about how they plan to do a stimulus.
Could these type of articles be authored by ill-informed MPs--much like those articles where they try to explain delete the zeros and monkey up the works? Possibly.
Skylimit Kimberley, lending the banks money when everyone is short of cash is OK and not necessrily dilutive because they can call for the payment back on those loans. We're talking about adding additional dinars while de-dollarizing at 1166, Mike said it best, it's too weird.
Jdinar It's weird to me too... Could this kick start stimulus (liqudity) from the CBI basically be funding or better yet support the backing of the new budget? Since paper currency is supposely scarce this infusion will drive the market. I saw this comment from someone today and wondered...
"...if they open the budget today with an 1166 rate the country of Iraq will automatically be insolvent in the financial sector. Why?
Cause there is no paper currency in circulation to back it up. Remember they collected all the old 3 zero notes, or almost all of them and certainly not enough to back this sizable budget."
KJWayne Just a reminder , IRAQ is very good at deception and false articles to confuse the world. I'll wait!
Oldwazhisname jdinar, I saw that comment, too. It makes no sense to me what that poster was saying. The budget puts currency out and is not dependent upon currency in the marketplace. The fact that there is a shortage in the marketplace, to me, doesn't matter.
The budget can be spent with electronic currency into people's and business' accounts. Think about the last time your government ever gave you cash. I shrugged this off as one of those stupid guru comments designed to mislead people.
Mally I agree it doesn't ad up that they are telling us this now. Could this be the cbi telling their banks that they have their back so they can start making loans and acting like any other bank in an open country.
They have been telling us about kick starting the private sector which takes banks lending which takes a lot more liquidity doesn't it. It makes sense if they are about to change their economy to an open market hell bent on growth doesn't it? Idk, thinking out loud, while drinking at that
Jdinar I hear you OWHN, just trying to see if what was said made any sense. Although, the poster did mention the QI cards for salaries and such....which I will assume this stimulus to the banks will infuse part paper / part paperless currency. ( QI cards.)...
Now the question is will the rate change from 1166 and some lower paper dinar denoms surface, or will the rate stay the same and infuse some the new 10k and 25k notes into the market. Hope for the former... Makes sense Mally...
Flyboy I've scratched my head so much with this investment...it hurts...lol They say one thing today...next day something else... I'm wth KJ...We wait...
Tlar Here is another way everyone might think about what the CBI may or may not be doing.
What we do know is through an earlier requirement demanded by the CBI in order for independent banks to sell USD, the CBI de-voided all participating banks of their dinars requiring these banks to deposit their dinars with the CBI. .
That means the CBI has cleaned out and continues to clean out these banks of dinars. So one can safely assume these banks selling dollars have virtually only the dinars they collected today through USD sales that have not yet been sent to the CBI.
I think we can also safely assume that if they do an RV at an attractive enough rate, people using USD will come flooding into the bank to change their dollars out for dinars thereby causing the effect of de-dollarization, a goal of the CBI. These banks better have dinar on hand both to swap and to loan, which before these loans they do not have.
I also find an interesting parity in that the loans to these banks from the CBI is 5 trillion in dinar, not USD, which is the same amount as what the CBI printed around August of 2013 introducing the new currency (the 10,000) in January 2014.
We know that the printing was to cover the 2.7 billion USD equivalency in dinars that were circulating in August of 2013. We also know that they have continued to dollarize since then.
We know they intend to de-dollarize, so it would make sense that the banks will need these dinars to buy back the USD they have been selling.
The dollars that they buy back could ultimately pay these loans off as both the banks and the citizens de-dollarize. All participating banks will make a commission to sell dinar just as they did with the dollars.
The CBI will also make both interest and a fee by supplying these dinars for swap out. You have to have a way to get the dinar to the banks first to make this program work, so dinar has to go to the banks first and be made ready to start buying the dollars back.
This is just a thought and I realize there is plenty of room for more interpretations and views, but this is exactly what I would do just prior to an RV made attractive enough to start the citizens selling their dollars back for dinars. This for all practical purposes could be just one of many necessary preparations for the start of this event. tlar
Tlar To follow-up this thought process and assuming the above hypothesis is correct, these banks will need to sell as much dinar as there is dollars circulating in order to complete the process.
I would suspect there is many times 2.7 billion dollars circulating in Iraq at present because Iraq is predominantly a cash society, so I would also expect the auctions to reverse and begin selling dinar for dollars as they start this process.
As the banks start to accumulate dollars through dinar sales, they would continue participating in the auctions reversing the buys and sells, using those dollars to start buying dinar which is then resold to citizens raising more dollars.
Much of the dinar will end up in accounts not leaving the banks, which is another stated goal of the CBI for this project. The idea being that this will juice the banks and get Iraqi's to start using the banks again (another Shabibi goal). This too will create an environment for the banks of raising capital to loan as deposits go up.
So it will effectively result in achieving the vision that Shabibi had stated as far back as 2010. Its a win win for everyone and will go a long way in juicing not just the banks but the economy by providing fresh money to loan to small and medium size ventures.
It has to start with dinar already in the banks ready to go, so that when they do pull the trigger they can service this new business on day one. I also find it interesting reading all the recent articles encouraging the independent banks to participate in the economy by encouraging them to make loans to businesses.
Then we see this article whereby the CBI is loaning them 5 trillion dinars. Coincidence? tlar
Jdinar Good thoughts tlar. if they unleash these dinars, they better raise the rate first or citizens may just hang onto their dollars, otherwise what is the incentive with bank fees, etc. Of course, some of this stimulus is for the infrastructure and businesses to kick start the economy.
Oldwazhisname If the currency auctions, where IQD is "traded" for USD, is dropping in volume so precipitously, one has to wonder why, now? We think it is because there isn't enough liquidity in the market, or so we are told.
I haven't seen any one speculate about this, but perhaps the citizens are beginning to sense a change in currency value is in the wind and they are holding onto their IQD and not putting it back into the banking system?
Does anyone remember back when we heard about a run on the banks for IQD over a year ago, did the auctions drop off then, too?
DreamWeaver Really good speculation, OWHN. Appreciate your thoughts in this thread.
Interested to see how Skylimit, Mally, Tlar weigh in on your post, as it seems to be all of ya'lls forte.
OWHN, as someone familiar with banking field--albeit USA--could CBI loan dinars to banks with agreement to accept dollars as part of loan repay, which simultaneously de-dollarizes while putting liquidity into market?
G-Lin With the lack of liquidity, the central Alnkadih..alpennek recorded a significant drop in sales of the dollar Tuesday, 27 January 2 / January 2015 12:38
[Baghdad-whereCentral bank sales declined in the auction for the sale of foreign currencies on Tuesday to $ 69 million after yesterday reached 77 million and 907 000 dollars.
According to a statement of the bank received by all of Iraq [where] a copy of the "amount sold by the bank the size of today's auction at the price of the dollar stood at 69 million and 593 000 dollars at the exchange rate in 1166 dinars to the dollar and with the participation of 12 banks."
He pointed out that "the quantity sold in cash amounted to 21 million and 780 thousand dollars, and the quantity sold Khawwalat amounted to 47 million and 813 thousand dollars."
The statement said that "the Iraqi Central Bank to continue buying and selling dollars at 1166 dinars," adding that "the sale of remittances price 1187 JD / dollar, including the commission of the Central Bank of 21 dinars per dollar, with total cash sales price of $ 1190 JD / dollar, including the commission Bank Central of 24 dinars per dollar. "
It was noted a reduction in central bank sales index in the past few days, where no more than $ 200 million as in the past, and that 17 of the current month since with the exception of January 20, reaching sales of $ 224 million.
The reason for this decline and whether it is due to the popularity of the auction or not known yet reduce the amount of supply of the dollar.
This decline also may come to coincide with the passage of Iraq in financial distress and a lack of liquidity due to reduced imports because of falling world oil prices and the government's efforts in austerity to meet the shortfall in the budget of 2015's rate of 25 trillion dinars.
The statistical interview [where] about central bank sales of the dollar last year 2014 amounted to 49 billion, 579 million and 738 000 Dolar.
http://www.alliraqnews.com/2014-06-14-07-34-14/164811-2015-01-27-09-38-29.html
Jeff19 Today's CBI Update (Press release) in line with the central bank's tasks and responsibilities in supporting the development and stimulate the Iraqi economy, and in light of the financial challenges faced by the country, the Department of the Central Bank Council approved the proposals made by the inter bank's board.
01/27/2015 [url=http://www.cbi.iq/documents/press for-e 27-1-2015.pdf]http://www.cbi.iq/documents/press%20for-e%2027-1-2015.pdf[/url]
(Press release) The Board of the Central Bank of Iraq Directors discussed the special day 25/01/2015 financial situation in Iraq, and the large budget deficit.
01/27/2015 [url=http://www.cbi.iq/documents/press for 27-1-2015.pdf]http://www.cbi.iq/documents/press%20for%2027-1-2015.pdf[/url]
OLdwazhisname Okay, let me take a stab at this to further the discussion. We have seen a number of articles of recent where the CBI and other economic advisor/parliamentarian-types have talked about increasing liquidity and taking steps to improve the value of the dinar.
This is exactly what the CBI is telling us that they are going to do. Taking our clues from other Central Banks in other countries, those countries support liquidity in their private banks by lending to them on a “temporary” basis.
In the this country, banks have the ability to raise funds from lots of sources, so we have a phrase that describes the role that our Fed plays. It’s called “the lender of last resort”.
In other words, when banks need quick funds or in the event of an emergency, a bank can turn to the Fed and get liquidity to carry it through its need. I would estimate that Iraqui banks don’t have a lot of sources for funding.
Deposits are probably hard to come by, correspondent banks don’t function there, public funds are dried up. The banking system needs support from the Central Bank to get things going, hence the announcement that the CBI is going to make loans to banks totaling 5 trillion dinars (say 5 billion USD).
These loan will come with conditions most likely, especially what they have to do with those funds (support the private sector).
They also announced that they will lend to the GOI 6 trillion dinar (say 6 billion USD). As seen, it helps make up the budget shortfall, but just as importantly, it appears to be kickstarting into gear a more “normal” operating Central Bank.
It should signal to us, as Tlar pointed out, that we are at the starting gate (whatever the roll-out is, I don’t know but we’ll probably see it more clearly shortly).
In this country, we call this type of action “stimulus” by the Fed. Flooding USD (hopefully not dinar) into the economy. Why do I say that?
Again using our own observed experience with the Fed, Stimulus drives down the value of the currency in question. More dollars chasing the same amount of goods. Inflation is stimulated (meaning a “cheaper” currency).
A secondary benefit (and maybe the primary reason for doing this), is it signals the targeted financial stimulus into a given situation and encourages others to follow. The astute investor types will see this support and follow suit. The CBI is signaling its intentions to commit a particular way and “the herd” follows.
hi-five Here is a link - compliments ofDinarVets and Butifldrm. It is nine pages and spells out the new CBI monetary policy instruments.
http://www.cbi.iq/documents/monetary_policy_en_f.pdf
Looks like Iraq is now ready to open up the private sector!!
DreamWeaver Great explanation. Appreciate, it. Had a question about this point: "A secondary benefit (and maybe the primary reason for doing this), is it signals the targeted financial stimulus into a given situation and encourages others to follow.
The astute investor types will see this support and follow suit. The CBI is signaling its intentions to commit a particular way and “the herd” follows."
OWHN, does this mean that by "targeting" the stimulus into banks to pass on to private sector it will attract private investors to Iraq?
Would appreciate you spelling it out a little for those of us (me) who are very challenged when it comes to grasping economics.
Thanks in advance for your patience and please keep these type of posts coming. IMO it really helps us understand this side of the investment. Best thoughts ~ DW
Oldwazhisname By "targeted", what I mean is that a very common investment strategy is follow "the big money" in your personal investing. I'm sure analysts are/will be evaluating what effect this stimulus will have on individual industries, geograhpic areas and segments of the local economy.
Wih that cue, investors will naturally hop on board for the ride. From the CBI's perspective, it becomes a self-fulfilling prophecy that their stimulus works to prime-the-pump for the economy begins to multiply as goods and services cycle around as the money supply becomes a multiplier of activity.
BTW, imagine trying to ramp up an economy when there is no money (meaning physical currency) to use in the market place.
Not only does the CBI and Saleh talk about increasing liquidity but I'm thinking that the currency auctions are drying up due to the lack of physical currency in the marketplace. Someone else might want to comment on that phenomenon.
Rockstar “Not only does the CBI and Saleh talk about increasing liquidity but I'm thinking that the currency auctions are drying up due to the lack of physical currency in the marketplace." That sounds reasonable to me thanks for posting!
DreamWeaver Thanks, OWHN. So, guess it makes sense that before initiating their stimulus package, they would either RV or do bank loans in USD?
Oldwazhisname Not sure if an RV is a necessary requisite. What I mentioned earlier is an absolute truth as we recently saw with Euro and several years back with a trend in the comparative (and absolute) value of the USD.
Recently, the European Central Banka announced the intent to do a massive stimulus in Europe to help stave off recessionary pressures.
The consequence was that the Euro dropped relative to other currencies (and a prime reason that the Swiss CHF disengaged from being pegged to the Euro, which caused an overnight upward increase in the value of the CHF of like 30% relative to the Euro).
When the Fed did its long series of stimulus, the value of the USD dropped, especially compared to commodities like Gold and Silver.
Not so much relative to other currencies because those country's Central Banks were doing the exact same thing, creating stimulus in their own countries. Most all currencies sort fo all sunk together.
My concerns are that a stimulus effort by the CBI, where they put out more IQD, will actually cause the same effect in Iraq, exactly the opposite of what we want to see.
That's what makes this such a queer announcement at this time, as the mere announcement of doing something like this will likely have counter-increase effects in the marketplace...
hence, making me wonder if this is truly a pre-RV event or more driven by the longer term goal of getting the private, local economy up and running for a period of time before an increase in value can be realistically established???
In any event, we should know more as this actually gets applied into the marketplace. As always, we wait and see and try to interpret the tea leaves.
Mike Agreed, OWHN, it's definitely a weird announcement. I would imagine that Iraq plans on using the dinar in this stimulus and I would agree that this will push down the value of the dinar and possibly affect inflation numbers as well.
Couple that with today's news about capping the auctions and it gets weirder still. It's going to handcuff the CBI, it's one of the few tools they have to maintain the dinar. Like you said, we'll see.
" We are all born ignorant, but one must work hard to remain stupid " Benjamin Franklin
Schiz I sotra expected this to happen around the time the bonds would start, another tool, eventually stopping the fraudulent auctions altogether.
But who knows, Iraq never stops confusing me. If they can do it backwards, they will and do.
So easy in my head of what they need to do to simplify their currency regime.
Skylimit This might be a case where you watch what they actually do, not what's in the articles. If they try and stimulate using dinars at the current value we're all screwed.
They have spent years dollarizing and not paying anyone to dry up the supply of dinars and now to turn around with this makes no sense. My guess is they will increase the dinar's value within days if they're actually going to implement this strategy.
Kimberly I must admit this topic is not my strong suit.... Tim724, on Bondlady this morning was all happy and seems to think this means they are de-dollarizing also.......
For me de-dollarizing is Not what I want to see unless, they are trading in their 1 to 1 rated dinars for dollars...... I'm not sure I'm liking this.......What am I missing?
DreamWeaver Just couldn't reconcile what they've spent years doing with what they say they plan to do--as I'm easily confused by economics. Got it now, thanks to you guys. It doesn't compute.
So, I'm with OWHN, Mike, Skylimit. Need to see how they act as it only makes sense that IF they plan a stimulus they may well be planning to RV beforehand. Or not ... All I know is I'm going to leave all the pondering on this topic to those, like you guys, more savy. Appreciate you guys and your posts ~ DW
DreamWeaver Really laughing over here as I got a mental image of my Iraqi counterpart--struggling to understand this stuff--giving a press release about how they plan to do a stimulus.
Could these type of articles be authored by ill-informed MPs--much like those articles where they try to explain delete the zeros and monkey up the works? Possibly.
Skylimit Kimberley, lending the banks money when everyone is short of cash is OK and not necessrily dilutive because they can call for the payment back on those loans. We're talking about adding additional dinars while de-dollarizing at 1166, Mike said it best, it's too weird.
Jdinar It's weird to me too... Could this kick start stimulus (liqudity) from the CBI basically be funding or better yet support the backing of the new budget? Since paper currency is supposely scarce this infusion will drive the market. I saw this comment from someone today and wondered...
"...if they open the budget today with an 1166 rate the country of Iraq will automatically be insolvent in the financial sector. Why?
Cause there is no paper currency in circulation to back it up. Remember they collected all the old 3 zero notes, or almost all of them and certainly not enough to back this sizable budget."
KJWayne Just a reminder , IRAQ is very good at deception and false articles to confuse the world. I'll wait!
Oldwazhisname jdinar, I saw that comment, too. It makes no sense to me what that poster was saying. The budget puts currency out and is not dependent upon currency in the marketplace. The fact that there is a shortage in the marketplace, to me, doesn't matter.
The budget can be spent with electronic currency into people's and business' accounts. Think about the last time your government ever gave you cash. I shrugged this off as one of those stupid guru comments designed to mislead people.
Mally I agree it doesn't ad up that they are telling us this now. Could this be the cbi telling their banks that they have their back so they can start making loans and acting like any other bank in an open country.
They have been telling us about kick starting the private sector which takes banks lending which takes a lot more liquidity doesn't it. It makes sense if they are about to change their economy to an open market hell bent on growth doesn't it? Idk, thinking out loud, while drinking at that
Jdinar I hear you OWHN, just trying to see if what was said made any sense. Although, the poster did mention the QI cards for salaries and such....which I will assume this stimulus to the banks will infuse part paper / part paperless currency. ( QI cards.)...
Now the question is will the rate change from 1166 and some lower paper dinar denoms surface, or will the rate stay the same and infuse some the new 10k and 25k notes into the market. Hope for the former... Makes sense Mally...
Flyboy I've scratched my head so much with this investment...it hurts...lol They say one thing today...next day something else... I'm wth KJ...We wait...
Tlar Here is another way everyone might think about what the CBI may or may not be doing.
What we do know is through an earlier requirement demanded by the CBI in order for independent banks to sell USD, the CBI de-voided all participating banks of their dinars requiring these banks to deposit their dinars with the CBI. .
That means the CBI has cleaned out and continues to clean out these banks of dinars. So one can safely assume these banks selling dollars have virtually only the dinars they collected today through USD sales that have not yet been sent to the CBI.
I think we can also safely assume that if they do an RV at an attractive enough rate, people using USD will come flooding into the bank to change their dollars out for dinars thereby causing the effect of de-dollarization, a goal of the CBI. These banks better have dinar on hand both to swap and to loan, which before these loans they do not have.
I also find an interesting parity in that the loans to these banks from the CBI is 5 trillion in dinar, not USD, which is the same amount as what the CBI printed around August of 2013 introducing the new currency (the 10,000) in January 2014.
We know that the printing was to cover the 2.7 billion USD equivalency in dinars that were circulating in August of 2013. We also know that they have continued to dollarize since then.
We know they intend to de-dollarize, so it would make sense that the banks will need these dinars to buy back the USD they have been selling.
The dollars that they buy back could ultimately pay these loans off as both the banks and the citizens de-dollarize. All participating banks will make a commission to sell dinar just as they did with the dollars.
The CBI will also make both interest and a fee by supplying these dinars for swap out. You have to have a way to get the dinar to the banks first to make this program work, so dinar has to go to the banks first and be made ready to start buying the dollars back.
This is just a thought and I realize there is plenty of room for more interpretations and views, but this is exactly what I would do just prior to an RV made attractive enough to start the citizens selling their dollars back for dinars. This for all practical purposes could be just one of many necessary preparations for the start of this event. tlar
Tlar To follow-up this thought process and assuming the above hypothesis is correct, these banks will need to sell as much dinar as there is dollars circulating in order to complete the process.
I would suspect there is many times 2.7 billion dollars circulating in Iraq at present because Iraq is predominantly a cash society, so I would also expect the auctions to reverse and begin selling dinar for dollars as they start this process.
As the banks start to accumulate dollars through dinar sales, they would continue participating in the auctions reversing the buys and sells, using those dollars to start buying dinar which is then resold to citizens raising more dollars.
Much of the dinar will end up in accounts not leaving the banks, which is another stated goal of the CBI for this project. The idea being that this will juice the banks and get Iraqi's to start using the banks again (another Shabibi goal). This too will create an environment for the banks of raising capital to loan as deposits go up.
So it will effectively result in achieving the vision that Shabibi had stated as far back as 2010. Its a win win for everyone and will go a long way in juicing not just the banks but the economy by providing fresh money to loan to small and medium size ventures.
It has to start with dinar already in the banks ready to go, so that when they do pull the trigger they can service this new business on day one. I also find it interesting reading all the recent articles encouraging the independent banks to participate in the economy by encouraging them to make loans to businesses.
Then we see this article whereby the CBI is loaning them 5 trillion dinars. Coincidence? tlar
Jdinar Good thoughts tlar. if they unleash these dinars, they better raise the rate first or citizens may just hang onto their dollars, otherwise what is the incentive with bank fees, etc. Of course, some of this stimulus is for the infrastructure and businesses to kick start the economy.
Oldwazhisname If the currency auctions, where IQD is "traded" for USD, is dropping in volume so precipitously, one has to wonder why, now? We think it is because there isn't enough liquidity in the market, or so we are told.
I haven't seen any one speculate about this, but perhaps the citizens are beginning to sense a change in currency value is in the wind and they are holding onto their IQD and not putting it back into the banking system?
Does anyone remember back when we heard about a run on the banks for IQD over a year ago, did the auctions drop off then, too?
DreamWeaver Really good speculation, OWHN. Appreciate your thoughts in this thread.
Interested to see how Skylimit, Mally, Tlar weigh in on your post, as it seems to be all of ya'lls forte.
OWHN, as someone familiar with banking field--albeit USA--could CBI loan dinars to banks with agreement to accept dollars as part of loan repay, which simultaneously de-dollarizes while putting liquidity into market?
Tlar OWHN, I don't remember if the auctions driopped off during the run on the banks in Dec 2013-Jan 2014, but if they did, that would be a very interesting observation. Remember everything today is stated at 1166 dinars per dollar because the dinar is paired with the dollar and that is todays exchange rate.
So the actual number of dinars both in the budget and the loan to the banks is stated as trillions. We know for a fact that if they change the exchange rate then these numbers of dinars will be reduced to reflect the new value.
For instance a rate of 1 to 1 will be restated as 4.2 billion DINARS loaned which would be what the CBI would loan to the independent banks.
If this is true then the process would starting and de-dollarization would be seen as beginning.
I don't think that these loans have been made yet, just proposed both to cover the deficit and to juice the banks who like banks here in the US, would need Treasury support and preparation time for us to exchange.
This could be a veiled preparation by the CBI in terms of this project or just a hair brained thought by me Either way it is very interesting as to both its timing, (just before the budget vote), and its potential for releasing the smalls to these banks to disseminate in the way of a swap and any new loans.
The loans would be quickly and easily repaid because the USD bought would be sent probably daily to the CBI. The only thing we can safely assume is that the smalls must be on location at the banks at the very least, a few days before they pull the trigger as to facilitate a more smoother change over.
We all think we know the coins are already there as we know they were minted a while back and disseminated to the same banks participating in the auctions by way of a special auction announced by the CBI a month or so back. It is interesting. Tlar
Brule Tlar, did you get a chance to read the article stating Tamini is "suggesting" a cap on the auctions of $75 m a day?
Preacher Man Currency Auctions Announcement No. (2876)
The latest daily currency auction was held in the Central Bank of Iraq on the 29-1-2015 results were as follows: DETAILS NOTES
Number of banks 20
Auction price selling dinar / US$ 1166 :(
Auction price buying dinar / US$ -----
Amount sold at auction price (US$) 98,234,000
Amount purchased at Auction price (US$) -----
Total offers for buying (US$) 98,234,000
Total offers for selling (US$) -----
Exchange rates
Tlar Brule, that would fall more in line with a new exchange rate and the disappearance through obsolescence of remittances. Remittances would no longer be necessary with the dinar going international.
They have been an integral part of the auctions because the dinar was not accepted internationally. With bank connectivity and an international currency, trade could and most likely would be conducted by the local bank by-passing this process for good just as it is here in our banks.
Remittances sales in the auction process has always dwarfed currency sales. So putting a cap on the auctions would have no material effect. Also remember that once Iraq is dollarized, their usefulness (the auctions themselves) would be essentially over. tlar
Mike OWHN, I checked and the auctions were running full blast in December 2013 through January 2014. I contend there wasn't a "run on the banks" during this period, that story came about because Maliki had stopped paying the Kurd's and they had run out of cash to use.
I know we talked about this a couple of weeks ago and a call was put out for anyone who had an article stating that all of Iraq was storming the banks for cash, to please bring it forward.
I haven't seen one and I looked as well. I'm not trying to pick a fight with Tlar, I just want to make sure we're using facts when we draw suppositions on what's happening with the CBI and Iraq.
Again, if someone can find an article that states Iraqi's were making a run on banks and closing out their accounts, bring it on over.
For me, the auctions have slowed down because there's not enough dinar's in circulation to buy the dollars with. There's been no budget for 13 months and there are many citizens who aren't getting paid.
Combine that with ISIL now occupying Iraq and the poor economic condition of the country and it all spells out as cash flow problems. I think that's why the CBI is pumping liquidity into the market, they have to. Without it, Iraq will slowly decline until even more drastic measures are needed.
Tlar Preacher. to get to the bottom of OWHN question we need to see the cash sales part of the auctions to determine if they were lower during this period.
I believe what you have shown us is the gross sales which includes remittances. Auctions have two parts, remittances and actual cash sales.
The only number that has ever been important to us in determining how much is going out is USD cash sales as this number represents the amount of cash being purchased by the independent banks to sell to the citizenry on a daily bases.
In other words how much USD is going out daily to dollarize Iraq and the inverse number of how many dinars are coming in. Remittances are a swap of dinars for dollars to pay outside trade and have nothing to do with dollarization or circulating currency. Remittances don't circulate in Iraq.. tlar
~~~
DreamWeaver CBI loaning money to banks is perfect way to effectively control in-flow of new dinars (small denoms) into the marketplace and outflow (de-dollarization) of dollars back to CBI.
When framed in that light, it is easy to see how all of the following can be smoothly achieved—not only for monetary reform but also for stimulation of the Iraq economy:
1) CBI would loan banks Iraqi dinar
2) banks would exchange US dollars brought into bank for Iraqi dinars
3) dinars exchanged would be new small denominations and coins
4) bankers could set up new bank accounts for Iraqis exchanging dollars for dinar
5) bankers could activate new bank clients’ Smart cards for receipt of monthly retirement or government salaries
6) new dinars (small denoms) wouldn't flood market with new money--as it's just orderly exchange of money already circulating in marketplace.
7) banks loaning money (dinar) to new bank clients for automobiles and businesses will stimulate the economy rather than, as OWHN pointed out in his excellent posts yesterday: “
drive down the value of the currency” because “... more dollars chasing the same amount of goods” with “ … inflation stimulated (meaning a “cheaper” currency).”
Thus, the positives OWHN pointed out would occur: “… a secondary benefit (and maybe the primary reason for doing this), is it signals the targeted financial stimulus into a given situation and encourages others to follow. The astute investor types will see this support and follow suit.”
8 ) process is smooth, centralized way of helping to rapidly de-dollarize Iraq in compliance with Article VIII, as exchanged dollars will be sent to CBI as repayment for loan
9) process allows banks and CBI to profit through fees
10) these loans could be temporary measure as discussed by OWHN: “… taking our clues from other Central Banks in other countries, those countries support liquidity in their private banks by lending to them on a “temporary” basis."
Of course, these points goe hand-in-hand with RV. I'll definitely be watching articles. Sure is exciting stuff. Blessings ~ DW
DreamWeaver GM, Tlar. Think you meant to say "4.2 million" dinars instead of billions for 1-to-1 rate. If CBI loaning 5 billion dinars, then 5 billion divided by 1166 = 4.288 million.
Don't think your thoughts are hair brained at all. I've been hung up on exactly HOW CBI would accomplish all of what they intend smoothly and efficiently. Loan seems perfect way to me as in two moves: Loan dinars; RV currency CBI could create monetary reform while stimulating economy.
Investors would take it from there. Just have to see how it plays out, but you've filled the gap on this one. IMO pieces fall perfectly into place and seems like something Shabibi would design. Best ~ DW.
Tlar DW, It is exciting. The way you explained it is better than the way I did. It is straight to the though process. You did a great job. This could be the introduction of the smalls to the banks.
I will be disappointed if they commence these loans at 1166 just as I will be disappointed if the pass and "open" the budget at 1166. I personally hope we are on the cusp of an RV and all these numbers will be expressed in the new exchange rate.
I for can not see them passing this opportunity and going through 2015 with business as usual and 1166 as their exchange rate, so I tend to see and read into things as if it is getting ready to happen.
That is why I was fascinated by the banks involvement in supporting the budget and in making these loans for liquidity at this time.
I know there are other possibilities and purposes that are stated and it can be looked at in those lights, but I have to feel that if we are on the right path and that they really are going to RV this year, these could also be looked at as veiled necessary steps to in advance of the program.
It is fun to speculate. Also if anyone could find articles pertaining to the runs on the banks that took place in December 2013 and January 2014 for Mike, I too would appreciate it.
I know how frustrating looking for articles is as I used to spend hours trying to find something that I know I read and many times I would just say screw it and move on. I used to send out the important articles to support my emails when I was putting out emails.
I would think I would have sent out supporting articles on the bank runs. I lost my ability to even look for these when my computer crashed along with my email lists so I can't even check there.
Anyone who can help Mike get some of these articles, please help him. Mike, again I am sorry that I can't get these for you. In the area of research, I feel like a bad student who has been banned from the library because this and dinar daddy are the only sites I am welcome on and unlike Weatherford, who registrars multiple identities on every site because he expects to be banned, I only have the one identity.
Sorry NWA or Parksutton. I am sure you won't take this personally because of course we both know you couldn't possibly be Weatherford. Tlar
Mike Here's what I don't understand. If the CBI gives the private banks dinar for loans and then they loan that same dinar out to businesses, how will they bring in USD?
Say Achmed has a great idea to start a cleaning business. He creates a business plan, submits it to the bank and they give him a loan of 50 million dinars to get it off the ground.
He gets a couple of contracts, starts cleaning and receives payment in dinars. Slowly, over time, he repays the loans, in dinars. Nowhere in this example is there any dollars being pulled off the market, the dinar is used exclusively and won't effect de-dollarization.
In fact, the CBI has just injected 50 million dinars back into the economy, yes it helps with liquidity but in the end, they're still pumping dinar back into the economy, which will cause the dinar to depreciate and possibly effect the inflation.
I agree, DW, definitely exciting times. Today the street rate is 1227, the dinar is already depreciating without the stimulus package even being implemented. lol, no worries, Tlar.
Oldwazhisname DW, great post above. You put some real meat on those bones. Having a number of people looking at this from different perspectives really helps. But as we all know, no one knows if this is really what's coming down at this time, but it's a good exercise to work through such scenarios.
Tlar is right, if this opportunity passes without some kind of break through, we ought to be rethinking how this could come to pass.
Mike, your comment about a depreciating dinar without even implementing (but having announced their intentions), is exactly what you would expect.
People react to announcements knowing what will certainly happen tomorrow (or when its implemented) and start moving in that direction. Inflation (depreciation of the iQD) is to be expected if this is a stimulous package in the traditional sense.
I think several others implied this in their explanations, but if indeed the IQD does start to gain value relative to the USD (USD loses relative value) and the citizens speculate that this trend will continue, then people will jump to hold IQD instead of USD because it relative value is going up and the USD is going down. That might be an obvious statement but I throw it out there for what its worth.
Hi-Five Here is a link that shows the split between cash sales and remittances for December 2013. I would bring it over, but it is a chart and messes up if I try to copy it over here. Go to page 74. The cash sales column is second to last. http://cbi.iq/documents/CBI_FOREIGN_EXCHANGE_AUCTIONS.pdf
Mike Thanks, guys, great thread. Maybe I'm thick headed, but I still don't see how this benefits us, outside of an RV occurring soon after the budget.
OWHN, the spread between the street rate and the official rate has been relatively the same now for over a year, for instance, today the street rate is 1227 and the official rate (plus commissions) is 1179.
For me, that means folks are willing to give more dinar to get at the almighty dollar. The value of the dinar has dropped and remained low now because no one wants it, they'd prefer to do business in the dollar. Now, flood the market with 5 or 6 trillion dinars and what's going to happen?
The spread between the dinar and the dollar will increase because now there's more dinar chasing the same amount of dollar. The same thing will occur with products, there will be more dinar chasing the same amount of products.
Now compound that with Tamimi's statement about capping the auctions of the dollar, and the problem magnifies because now you have more dinar chasing a limited amount of dollars at auction, this would naturally erode the value of the dinar.
With the economy where itr's at today, and the plans of the CBI as far as injecting stimulus money into the economy, I don't see how the dinar will gain value.
Once a domestic economy is created and growing, then I think we'll see a slowly appreciating dinar, but in the meantime, it will probably continue to drop.
Blue, I'm assuming your response is also predicated on the dinar RV'ing as well. Right now the citizens are paid in dinars on their smart cards, not dollars.
So, they take those dinars on their cards and buy dollars with them, which further contributes to the decline of the dinar because of the reasons listed above.
When the citizens get the jobs that the stimulus provides they will be paid in dinars, not dollars, because that's the currency the CBI will use to fund their businesses.
There's no dollars being provided by the CBI to these businesses, they're going to use the dinar because it's their countries currency, and all the CBI has to do is print more money, which is exactly what the Fed did with all of the QE we've been through.
If an Iraqi starts to do well, meaning full time employement and a steady salary, what's he going to do with his new found wealth? Heck, he's going to head out and buy himself a new pickup, and that's going to take dollars because he can't buy anything with the dinar in Article XIV.
Maybe he could pay in dinars to the dealership, but the dealership is still going to have to go through the process of the auctions to get that truck in dollars. So, the cycle continues, more dinars are needed to purchase that truck because there's more of it in their economy.
The only way I can see this work is if they RV the currency before the CBI puts out this stimulus package. Otherwise, the dinar will continue decline. If they don't, then Skylimit is right, we're all screwed.
Thanks for bringing that link over, hi-five, it clearly shows that the auction amounts remained relatively the same over the last couple months of 2013 and early months of 2014.
The CBI was trucking right along selling dollars, the problem with cash flow was because Maliki wouldn't send the Kurd's their money from the sale of oil.
I should say, this is all just my opinion. Without an RV, how will this stimulus package and the capping of the auctions help the dinar appreciate?
" We are all born ignorant, but one must work hard to remain stupid " Benjamin Franklin
Tlar I believe you are correct Mike and like Skylimit has said as well we are all screwed if they do this at the current rate of 1166. So let's hope they actually do have plans to drop the artificial rate to something of substance before doing this so called stimulus package! Also the article could just be all bs to begin with who knows...lol
Tlar By the way, I did mean to say 4.2 billion dinars. My math was figured on the CBI loaning 5 trillion to the banks. If you divide 5 trillion by the currenct exchange rate you get 4.2 billion. tlar
Mike Thanks, Blue. My hopes are that they RV (obviously ) I don't want this stimulus package unless they do. As far as the budget containing the rate or the rate following immediately after, I won't argue that point. A week or so will tell us if this budget was the same as all the others, or if the rate is in it.
JDinar yes great thread, Perhaps this passing of the budget ( hopefully) completed today, creates a new window ( days? weeks? ) before allowing it to be fully implemented ( or opened ) and shown in the official gazette.
Passed budget > RV > stimulus > official implementation and entered in the gazette. Nothing is perfect with Iraq but would be nice.
Tlar Mike you are a sharp guy. I agree with you. None of what they are doing will enhance the value of the dinar or lend itself to de-dollarization unless their intentions are to change the playing field itself and the rules.
In fact as you pointed out these moves could be construed to be counter productive to their stated goals.
Then not only does the liquidity issue have purpose but so does a cap on the auctions.
Things like Iraqi's using the banks again, capitalizing those independent banks through deposits, de-dollarization of Iraq, etc. etc. will not be affected unless they also change the exchange rate and make that rate attractive enough as an incentive for Iraqi's to sell their dollars for dinars.
These are just some off the stated goals Shabibi had in mind when he designed this poroject in 2006. Tlar
Mally Who knows. Theres still a big deficit to over come in this budget. Id like to hear more about a move to strengthen the private sector and liberate the economy. One thing we know now is the budget wasnt waiting for the rate.
Oldwazhisname I tried to post a separate discussion and it wouldn't post, but this will work in here just as well. -- World Bank donates to Iraq for 6-trillion budget
BAGHDAD / ... revealed an economic expert peace Sumaisem, Wednesday, for the World Bank donated $ 6 trillion dinars to Iraq in order to reduce the projected deficit in the federal budget for 2015.
Sumaisem said, in a statement to "Ein Iraq News", "The final report of the budget must be under certain controls, which reduce the deficit first, and reduce overhead by and increase overall revenues by the last second," indicating that "the World Bank donated 6 trillion in order to reduce the deficit in the Iraqi budget. "
She Sumaisem that "if implemented new standards for the unification of the salary scale on the one hand and the reduction of social benefits expenses, which amounted to 200% then it is possible that these measures indicate a sign of optimism for the Iraqi people,"
she asked, "Do you reduce the minimum functional degrees granted three presidencies?, And classification of peace Do you include a new salary scale for each unified state employees?, how much will the salaries of special grades? "./ ended 13 http://aynaliraqnews.com/index.php?aa=news&id22=30380
This is an interesting article because it appears to be matching funds for what the CBI committed to. It certainly signals that the financial world is starting to get on board with Iraq.
There are several points to this. This should signal that the security situation in Iraq has reached a stage where money people are willing to put up some serious capital.
It also might be a signal that the political situation in Iraq has reached a tipping point in our favor that Iraq will stand on its own two feet and not be a puppet of regional players. I find this very encouraging when paired with what the CBI has annnounced it intends to do.
Mike Good stuff, thanks posters. Blue, I don't believe in Kap's theory of a float from 1166, I think the dinar will go through a "correction" of sorts and then float like most currencies do today. Here's hoping they do this deal soon, I'm ready for a vacation.
Tlar Mally, it is my persal belief that we are watching it happen today with this budget being passed. Tlar
Mally Well its the start of their weekend and they have a budget done. Now would be a logical time to hear from the cbi if they plan to do anything this year. Fingers crossed.
FlyBoy I agree, Tlar and Mally... It is a long weekend..I do not think this budget was passed in a vacuum...plans are and were in place for the next step...just sayin
Tlar Agreed mally. What a great disappointment if they don't. IMO they will have let one of the greatest opportunities go by. Both us and their citizens would have to question their motives.
Anyone knowledgeable about economic investments knows that half of the success of a given investment is timing. I would be surprised if they ignore the timing altogether and go back to business as usual.
Just as the Abadi government’s credibility was at stake in getting this budget passed, I believe the CBI's credibility is now at stake on their program to delete the zeros. Do it or shut up about the deletion of the zero program.
Their citizens have to be more tired than we are hearing, hearing and then hearing again about a future better life and bringing purchasing power to their currency.
Somewhere this has got to come to fruition and the timing says that's now. Timing is everything. To drag this out another year would kill the momentum they have achieved IMO. tlar
When framed in that light, it is easy to see how all of the following can be smoothly achieved—not only for monetary reform but also for stimulation of the Iraq economy:
1) CBI would loan banks Iraqi dinar
2) banks would exchange US dollars brought into bank for Iraqi dinars
3) dinars exchanged would be new small denominations and coins
4) bankers could set up new bank accounts for Iraqis exchanging dollars for dinar
5) bankers could activate new bank clients’ Smart cards for receipt of monthly retirement or government salaries
6) new dinars (small denoms) wouldn't flood market with new money--as it's just orderly exchange of money already circulating in marketplace.
7) banks loaning money (dinar) to new bank clients for automobiles and businesses will stimulate the economy rather than, as OWHN pointed out in his excellent posts yesterday: “
drive down the value of the currency” because “... more dollars chasing the same amount of goods” with “ … inflation stimulated (meaning a “cheaper” currency).”
Thus, the positives OWHN pointed out would occur: “… a secondary benefit (and maybe the primary reason for doing this), is it signals the targeted financial stimulus into a given situation and encourages others to follow. The astute investor types will see this support and follow suit.”
8 ) process is smooth, centralized way of helping to rapidly de-dollarize Iraq in compliance with Article VIII, as exchanged dollars will be sent to CBI as repayment for loan
9) process allows banks and CBI to profit through fees
10) these loans could be temporary measure as discussed by OWHN: “… taking our clues from other Central Banks in other countries, those countries support liquidity in their private banks by lending to them on a “temporary” basis."
Of course, these points goe hand-in-hand with RV. I'll definitely be watching articles. Sure is exciting stuff. Blessings ~ DW
DreamWeaver GM, Tlar. Think you meant to say "4.2 million" dinars instead of billions for 1-to-1 rate. If CBI loaning 5 billion dinars, then 5 billion divided by 1166 = 4.288 million.
Don't think your thoughts are hair brained at all. I've been hung up on exactly HOW CBI would accomplish all of what they intend smoothly and efficiently. Loan seems perfect way to me as in two moves: Loan dinars; RV currency CBI could create monetary reform while stimulating economy.
Investors would take it from there. Just have to see how it plays out, but you've filled the gap on this one. IMO pieces fall perfectly into place and seems like something Shabibi would design. Best ~ DW.
Tlar DW, It is exciting. The way you explained it is better than the way I did. It is straight to the though process. You did a great job. This could be the introduction of the smalls to the banks.
I will be disappointed if they commence these loans at 1166 just as I will be disappointed if the pass and "open" the budget at 1166. I personally hope we are on the cusp of an RV and all these numbers will be expressed in the new exchange rate.
I for can not see them passing this opportunity and going through 2015 with business as usual and 1166 as their exchange rate, so I tend to see and read into things as if it is getting ready to happen.
That is why I was fascinated by the banks involvement in supporting the budget and in making these loans for liquidity at this time.
I know there are other possibilities and purposes that are stated and it can be looked at in those lights, but I have to feel that if we are on the right path and that they really are going to RV this year, these could also be looked at as veiled necessary steps to in advance of the program.
It is fun to speculate. Also if anyone could find articles pertaining to the runs on the banks that took place in December 2013 and January 2014 for Mike, I too would appreciate it.
I know how frustrating looking for articles is as I used to spend hours trying to find something that I know I read and many times I would just say screw it and move on. I used to send out the important articles to support my emails when I was putting out emails.
I would think I would have sent out supporting articles on the bank runs. I lost my ability to even look for these when my computer crashed along with my email lists so I can't even check there.
Anyone who can help Mike get some of these articles, please help him. Mike, again I am sorry that I can't get these for you. In the area of research, I feel like a bad student who has been banned from the library because this and dinar daddy are the only sites I am welcome on and unlike Weatherford, who registrars multiple identities on every site because he expects to be banned, I only have the one identity.
Sorry NWA or Parksutton. I am sure you won't take this personally because of course we both know you couldn't possibly be Weatherford. Tlar
Mike Here's what I don't understand. If the CBI gives the private banks dinar for loans and then they loan that same dinar out to businesses, how will they bring in USD?
Say Achmed has a great idea to start a cleaning business. He creates a business plan, submits it to the bank and they give him a loan of 50 million dinars to get it off the ground.
He gets a couple of contracts, starts cleaning and receives payment in dinars. Slowly, over time, he repays the loans, in dinars. Nowhere in this example is there any dollars being pulled off the market, the dinar is used exclusively and won't effect de-dollarization.
In fact, the CBI has just injected 50 million dinars back into the economy, yes it helps with liquidity but in the end, they're still pumping dinar back into the economy, which will cause the dinar to depreciate and possibly effect the inflation.
I agree, DW, definitely exciting times. Today the street rate is 1227, the dinar is already depreciating without the stimulus package even being implemented. lol, no worries, Tlar.
Oldwazhisname DW, great post above. You put some real meat on those bones. Having a number of people looking at this from different perspectives really helps. But as we all know, no one knows if this is really what's coming down at this time, but it's a good exercise to work through such scenarios.
Tlar is right, if this opportunity passes without some kind of break through, we ought to be rethinking how this could come to pass.
Mike, your comment about a depreciating dinar without even implementing (but having announced their intentions), is exactly what you would expect.
People react to announcements knowing what will certainly happen tomorrow (or when its implemented) and start moving in that direction. Inflation (depreciation of the iQD) is to be expected if this is a stimulous package in the traditional sense.
I think several others implied this in their explanations, but if indeed the IQD does start to gain value relative to the USD (USD loses relative value) and the citizens speculate that this trend will continue, then people will jump to hold IQD instead of USD because it relative value is going up and the USD is going down. That might be an obvious statement but I throw it out there for what its worth.
Hi-Five Here is a link that shows the split between cash sales and remittances for December 2013. I would bring it over, but it is a chart and messes up if I try to copy it over here. Go to page 74. The cash sales column is second to last. http://cbi.iq/documents/CBI_FOREIGN_EXCHANGE_AUCTIONS.pdf
Mike Thanks, guys, great thread. Maybe I'm thick headed, but I still don't see how this benefits us, outside of an RV occurring soon after the budget.
OWHN, the spread between the street rate and the official rate has been relatively the same now for over a year, for instance, today the street rate is 1227 and the official rate (plus commissions) is 1179.
For me, that means folks are willing to give more dinar to get at the almighty dollar. The value of the dinar has dropped and remained low now because no one wants it, they'd prefer to do business in the dollar. Now, flood the market with 5 or 6 trillion dinars and what's going to happen?
The spread between the dinar and the dollar will increase because now there's more dinar chasing the same amount of dollar. The same thing will occur with products, there will be more dinar chasing the same amount of products.
Now compound that with Tamimi's statement about capping the auctions of the dollar, and the problem magnifies because now you have more dinar chasing a limited amount of dollars at auction, this would naturally erode the value of the dinar.
With the economy where itr's at today, and the plans of the CBI as far as injecting stimulus money into the economy, I don't see how the dinar will gain value.
Once a domestic economy is created and growing, then I think we'll see a slowly appreciating dinar, but in the meantime, it will probably continue to drop.
Blue, I'm assuming your response is also predicated on the dinar RV'ing as well. Right now the citizens are paid in dinars on their smart cards, not dollars.
So, they take those dinars on their cards and buy dollars with them, which further contributes to the decline of the dinar because of the reasons listed above.
When the citizens get the jobs that the stimulus provides they will be paid in dinars, not dollars, because that's the currency the CBI will use to fund their businesses.
There's no dollars being provided by the CBI to these businesses, they're going to use the dinar because it's their countries currency, and all the CBI has to do is print more money, which is exactly what the Fed did with all of the QE we've been through.
If an Iraqi starts to do well, meaning full time employement and a steady salary, what's he going to do with his new found wealth? Heck, he's going to head out and buy himself a new pickup, and that's going to take dollars because he can't buy anything with the dinar in Article XIV.
Maybe he could pay in dinars to the dealership, but the dealership is still going to have to go through the process of the auctions to get that truck in dollars. So, the cycle continues, more dinars are needed to purchase that truck because there's more of it in their economy.
The only way I can see this work is if they RV the currency before the CBI puts out this stimulus package. Otherwise, the dinar will continue decline. If they don't, then Skylimit is right, we're all screwed.
Thanks for bringing that link over, hi-five, it clearly shows that the auction amounts remained relatively the same over the last couple months of 2013 and early months of 2014.
The CBI was trucking right along selling dollars, the problem with cash flow was because Maliki wouldn't send the Kurd's their money from the sale of oil.
I should say, this is all just my opinion. Without an RV, how will this stimulus package and the capping of the auctions help the dinar appreciate?
" We are all born ignorant, but one must work hard to remain stupid " Benjamin Franklin
Tlar I believe you are correct Mike and like Skylimit has said as well we are all screwed if they do this at the current rate of 1166. So let's hope they actually do have plans to drop the artificial rate to something of substance before doing this so called stimulus package! Also the article could just be all bs to begin with who knows...lol
Tlar By the way, I did mean to say 4.2 billion dinars. My math was figured on the CBI loaning 5 trillion to the banks. If you divide 5 trillion by the currenct exchange rate you get 4.2 billion. tlar
Mike Thanks, Blue. My hopes are that they RV (obviously ) I don't want this stimulus package unless they do. As far as the budget containing the rate or the rate following immediately after, I won't argue that point. A week or so will tell us if this budget was the same as all the others, or if the rate is in it.
JDinar yes great thread, Perhaps this passing of the budget ( hopefully) completed today, creates a new window ( days? weeks? ) before allowing it to be fully implemented ( or opened ) and shown in the official gazette.
Passed budget > RV > stimulus > official implementation and entered in the gazette. Nothing is perfect with Iraq but would be nice.
Tlar Mike you are a sharp guy. I agree with you. None of what they are doing will enhance the value of the dinar or lend itself to de-dollarization unless their intentions are to change the playing field itself and the rules.
In fact as you pointed out these moves could be construed to be counter productive to their stated goals.
Then not only does the liquidity issue have purpose but so does a cap on the auctions.
Things like Iraqi's using the banks again, capitalizing those independent banks through deposits, de-dollarization of Iraq, etc. etc. will not be affected unless they also change the exchange rate and make that rate attractive enough as an incentive for Iraqi's to sell their dollars for dinars.
These are just some off the stated goals Shabibi had in mind when he designed this poroject in 2006. Tlar
Mally Who knows. Theres still a big deficit to over come in this budget. Id like to hear more about a move to strengthen the private sector and liberate the economy. One thing we know now is the budget wasnt waiting for the rate.
Oldwazhisname I tried to post a separate discussion and it wouldn't post, but this will work in here just as well. -- World Bank donates to Iraq for 6-trillion budget
BAGHDAD / ... revealed an economic expert peace Sumaisem, Wednesday, for the World Bank donated $ 6 trillion dinars to Iraq in order to reduce the projected deficit in the federal budget for 2015.
Sumaisem said, in a statement to "Ein Iraq News", "The final report of the budget must be under certain controls, which reduce the deficit first, and reduce overhead by and increase overall revenues by the last second," indicating that "the World Bank donated 6 trillion in order to reduce the deficit in the Iraqi budget. "
She Sumaisem that "if implemented new standards for the unification of the salary scale on the one hand and the reduction of social benefits expenses, which amounted to 200% then it is possible that these measures indicate a sign of optimism for the Iraqi people,"
she asked, "Do you reduce the minimum functional degrees granted three presidencies?, And classification of peace Do you include a new salary scale for each unified state employees?, how much will the salaries of special grades? "./ ended 13 http://aynaliraqnews.com/index.php?aa=news&id22=30380
This is an interesting article because it appears to be matching funds for what the CBI committed to. It certainly signals that the financial world is starting to get on board with Iraq.
There are several points to this. This should signal that the security situation in Iraq has reached a stage where money people are willing to put up some serious capital.
It also might be a signal that the political situation in Iraq has reached a tipping point in our favor that Iraq will stand on its own two feet and not be a puppet of regional players. I find this very encouraging when paired with what the CBI has annnounced it intends to do.
Mike Good stuff, thanks posters. Blue, I don't believe in Kap's theory of a float from 1166, I think the dinar will go through a "correction" of sorts and then float like most currencies do today. Here's hoping they do this deal soon, I'm ready for a vacation.
Tlar Mally, it is my persal belief that we are watching it happen today with this budget being passed. Tlar
Mally Well its the start of their weekend and they have a budget done. Now would be a logical time to hear from the cbi if they plan to do anything this year. Fingers crossed.
FlyBoy I agree, Tlar and Mally... It is a long weekend..I do not think this budget was passed in a vacuum...plans are and were in place for the next step...just sayin
Tlar Agreed mally. What a great disappointment if they don't. IMO they will have let one of the greatest opportunities go by. Both us and their citizens would have to question their motives.
Anyone knowledgeable about economic investments knows that half of the success of a given investment is timing. I would be surprised if they ignore the timing altogether and go back to business as usual.
Just as the Abadi government’s credibility was at stake in getting this budget passed, I believe the CBI's credibility is now at stake on their program to delete the zeros. Do it or shut up about the deletion of the zero program.
Their citizens have to be more tired than we are hearing, hearing and then hearing again about a future better life and bringing purchasing power to their currency.
Somewhere this has got to come to fruition and the timing says that's now. Timing is everything. To drag this out another year would kill the momentum they have achieved IMO. tlar
Hi-five Here is a short take from the New Central Banks Policy Instruments from the link I posted earlier.
New Central Bank policy instruments Summary
At its August 26 meeting, the Board of the Central Bank of Iraq (CBI) adopted a new Reserve Requirement regulation and a new Banking Facilities regulation. These regulations are attached.
This Communiqué sets out the broad features of the new regulations and explains the reasons for adopting them in the context of strengthening the CBI’s conduct of monetary policy and supporting the Ministry of Finance’s (MOF’s) new government securities issue program. The CBI will soon issue draft instructions for implementing the new regulations.
. . . . . . . . . . . . . . . .
Deposit facility
The CBI will open a standing deposit facility, which will accept overnight deposits from banks with excess reserves. Funds will not be placed in the facility unless explicitly ordered by a bank.
The interest rate on these deposits will be set below the CBI Policy Rate. Initially the rate will be set at 2 percentage points below the Policy Rate.
The facility will provide a floor to very short-term interest rates, which will help bring some stability to bank expectations about interest rates. Moreover, until a t-bill market develops in which the CBI can conduct its open market operations, the deposit facility can“automatically” drain excess liquidity from the banking sector.
The Policy Rate
The monetary policy of the CBI expresses itself, in part, in the short-term money market interest rates that it brings about. That market is now very undeveloped and thus cannot yet be relied on to reflect the central bank’s policy stance.
Until that market, or the secondary market in very short-term MOF securities is adequately developed, the CBI will signal its target for over night, interbank interest rates by setting a bench mark reference rate. It calls this interest rate its Policy Rate.
Banks are free to set their own interest rates and to deal with each other and others in the market at any mutually agreed interest rate.
The Policy Rate is the bench mark rate from which the Primary Credit, Secondary Credit, Lender of Last Resort credit, and Overnight Deposit rates are set.
It is the rate the CBI thinks is appropriate to maintain price stability and that its monetary policy will attempt to achieve (by keeping bank liquidity at levels consistent with the Policy Rate).
Open Market Operations
The CBI can influence bank liquidity (excess reserves) and thus short term interest rates by buying and selling government securities.
Selling such securities to the market from the CBI’s own holding would drain liquidity from the banking system (by reducing bank’s balances in their reserve accounts with the CBI). Buying them from the public would increase banks’ liquidity (i.e., their reserve account balances).
Such open market operations (OMO) would provide an important second instrument (along with the foreign exchange auctions) of active liquidity management.
Various strategies for the use of OMO are possible. The CBI might, for example, choose to provide for desired long-term monetary growth through the accumulation of foreign exchange reserves.
The monetary effect of higher or lower rates of foreign exchange reserve growth resulting from interventions to stabilize the exchange rate could be sterilized with OMO.
Otherwise OMO would be limited to stabilizing bank liquidity and keeping short-term money market interest rates within the tunnel of the CBI’ Credit and Deposit facility rates.
OMO will generally by undertaken on an auction bases with banks. Such auctions will look very much like the foreign exchange auctions now being conducted.
Oldwazhisname Hi-Five, Thanks for this. I don't know if the commentary is yours or some part of the press release that went along with the article but it is a perfect synopsis of what those mechanisms are and what they intend to accomplish.
Its exactly like our Fed works so we see the CBI in an aggressive way bringing their monetary policy up to world standards and making attempts to get it to function like they want it to. I especially like the commentary of where they are and what they are/will do. Really good post.
Rockstar From Recaps regarding the budget from Trillion to Billion!!! Just food for thought.
If the budget is 424 Billion Dinar and we used the original amount of $125 Billion USD, we have a rate of 3.40 dinar to $1 USD.....probably higher than that of they lowered the original budget from $125 billion USD.
And another calculation:
Original budget was 125T at a rate of 1166 = 107B USD
The budget now of 484B / 107B = 4.52 USD rate
The article talking about billions was talking about that line item or section in the budget. I believe it was the parliaments overhead or something, it wasnt the entire budget.
hi-five OWHN - Yes - the policies are in lock step with the Fed. Check out the complete policy - - here is the link again:
I didn't comment, I only highlighted. I wanted to highlight the whole document, though!!
http://www.cbi.iq/documents/monetary_policy_en_f.pdf
Mike The budget today was for 119 trillion dinar, roughly 120 billion dollars.
--" We are all born ignorant, but one must work hard to remain stupid " Benjamin Franklin
G-Lin I POSTED THE ENTIRE ART. ON THE OTHER THREAD SAYING BUDGET WILL BE IN GAZETTE 1/31/2015. THAT IS WHAT ART. 59 IS ABOUT. THAT IS MUCH FASTER THAN I EXPECTED. HERE IS THE LINK: http://wwww.alforatnews.com/modules/news/article.php?storyid=75624
RDiddy Thank you for bringing the most exciting news of the day, G-Lin! Or maybe it's the icing on the cake -mrs d
Preacher Mally, JMO, but I think in reverse, the rate was waiting on the budget, and I think I love Mountain Goat.
Rockstar Yes G-Lin that is more HUGE news seriously if they get it done that fast, let's hope so for their people!
Phillyman From Randy Koonce: How you Makin it Phillyman?
Randy is out of town and asked that his information be passed on in order to keep his phone and e-mail from exploding.
The Iraq budget was passed today but, that does not mean that they will RV their currency tomorrow or the next day. It is another pressure point being put on those causing the delay of the RV.
It was a necessary step before completing the RV but, Iraq has had budgets passed in later years and still did not revalue their currency. Things are still looking good , just remember to ……….. BREATHE......
Check www.cbi.iq every day to see if it has changed… do not take a guru or a post about in country RV or any thing else do not be fooled just check the CBI
Do not let your emotions get to you BREATHE....... BREATHE...............
New Central Bank policy instruments Summary
At its August 26 meeting, the Board of the Central Bank of Iraq (CBI) adopted a new Reserve Requirement regulation and a new Banking Facilities regulation. These regulations are attached.
This Communiqué sets out the broad features of the new regulations and explains the reasons for adopting them in the context of strengthening the CBI’s conduct of monetary policy and supporting the Ministry of Finance’s (MOF’s) new government securities issue program. The CBI will soon issue draft instructions for implementing the new regulations.
. . . . . . . . . . . . . . . .
Deposit facility
The CBI will open a standing deposit facility, which will accept overnight deposits from banks with excess reserves. Funds will not be placed in the facility unless explicitly ordered by a bank.
The interest rate on these deposits will be set below the CBI Policy Rate. Initially the rate will be set at 2 percentage points below the Policy Rate.
The facility will provide a floor to very short-term interest rates, which will help bring some stability to bank expectations about interest rates. Moreover, until a t-bill market develops in which the CBI can conduct its open market operations, the deposit facility can“automatically” drain excess liquidity from the banking sector.
The Policy Rate
The monetary policy of the CBI expresses itself, in part, in the short-term money market interest rates that it brings about. That market is now very undeveloped and thus cannot yet be relied on to reflect the central bank’s policy stance.
Until that market, or the secondary market in very short-term MOF securities is adequately developed, the CBI will signal its target for over night, interbank interest rates by setting a bench mark reference rate. It calls this interest rate its Policy Rate.
Banks are free to set their own interest rates and to deal with each other and others in the market at any mutually agreed interest rate.
The Policy Rate is the bench mark rate from which the Primary Credit, Secondary Credit, Lender of Last Resort credit, and Overnight Deposit rates are set.
It is the rate the CBI thinks is appropriate to maintain price stability and that its monetary policy will attempt to achieve (by keeping bank liquidity at levels consistent with the Policy Rate).
Open Market Operations
The CBI can influence bank liquidity (excess reserves) and thus short term interest rates by buying and selling government securities.
Selling such securities to the market from the CBI’s own holding would drain liquidity from the banking system (by reducing bank’s balances in their reserve accounts with the CBI). Buying them from the public would increase banks’ liquidity (i.e., their reserve account balances).
Such open market operations (OMO) would provide an important second instrument (along with the foreign exchange auctions) of active liquidity management.
Various strategies for the use of OMO are possible. The CBI might, for example, choose to provide for desired long-term monetary growth through the accumulation of foreign exchange reserves.
The monetary effect of higher or lower rates of foreign exchange reserve growth resulting from interventions to stabilize the exchange rate could be sterilized with OMO.
Otherwise OMO would be limited to stabilizing bank liquidity and keeping short-term money market interest rates within the tunnel of the CBI’ Credit and Deposit facility rates.
OMO will generally by undertaken on an auction bases with banks. Such auctions will look very much like the foreign exchange auctions now being conducted.
Oldwazhisname Hi-Five, Thanks for this. I don't know if the commentary is yours or some part of the press release that went along with the article but it is a perfect synopsis of what those mechanisms are and what they intend to accomplish.
Its exactly like our Fed works so we see the CBI in an aggressive way bringing their monetary policy up to world standards and making attempts to get it to function like they want it to. I especially like the commentary of where they are and what they are/will do. Really good post.
Rockstar From Recaps regarding the budget from Trillion to Billion!!! Just food for thought.
If the budget is 424 Billion Dinar and we used the original amount of $125 Billion USD, we have a rate of 3.40 dinar to $1 USD.....probably higher than that of they lowered the original budget from $125 billion USD.
And another calculation:
Original budget was 125T at a rate of 1166 = 107B USD
The budget now of 484B / 107B = 4.52 USD rate
The article talking about billions was talking about that line item or section in the budget. I believe it was the parliaments overhead or something, it wasnt the entire budget.
hi-five OWHN - Yes - the policies are in lock step with the Fed. Check out the complete policy - - here is the link again:
I didn't comment, I only highlighted. I wanted to highlight the whole document, though!!
http://www.cbi.iq/documents/monetary_policy_en_f.pdf
Mike The budget today was for 119 trillion dinar, roughly 120 billion dollars.
--" We are all born ignorant, but one must work hard to remain stupid " Benjamin Franklin
G-Lin I POSTED THE ENTIRE ART. ON THE OTHER THREAD SAYING BUDGET WILL BE IN GAZETTE 1/31/2015. THAT IS WHAT ART. 59 IS ABOUT. THAT IS MUCH FASTER THAN I EXPECTED. HERE IS THE LINK: http://wwww.alforatnews.com/modules/news/article.php?storyid=75624
RDiddy Thank you for bringing the most exciting news of the day, G-Lin! Or maybe it's the icing on the cake -mrs d
Preacher Mally, JMO, but I think in reverse, the rate was waiting on the budget, and I think I love Mountain Goat.
Rockstar Yes G-Lin that is more HUGE news seriously if they get it done that fast, let's hope so for their people!
Phillyman From Randy Koonce: How you Makin it Phillyman?
Randy is out of town and asked that his information be passed on in order to keep his phone and e-mail from exploding.
The Iraq budget was passed today but, that does not mean that they will RV their currency tomorrow or the next day. It is another pressure point being put on those causing the delay of the RV.
It was a necessary step before completing the RV but, Iraq has had budgets passed in later years and still did not revalue their currency. Things are still looking good , just remember to ……….. BREATHE......
Check www.cbi.iq every day to see if it has changed… do not take a guru or a post about in country RV or any thing else do not be fooled just check the CBI
Do not let your emotions get to you BREATHE....... BREATHE...............
Last edited by Ponee on Fri Jan 30, 2015 9:54 am; edited 1 time in total
Ponee- Admin
- Posts : 38267
Join date : 2011-08-09
Re: TLAR says this all has to come to fruition
SHORT VERSION --
Tlar Anyone knowledgeable about economic investments knows that half of the success of a given investment is timing. I would be surprised if they ignore the timing altogether and go back to business as usual. Just as the Abadi government’s credibility was at stake in getting this budget passed, I believe the CBI's credibility is now at stake on their program to delete the zeros. Do it or shut up about the deletion of the zero program. Their citizens have to be more tired than we are hearing, hearing and then hearing again about a future better life and bringing purchasing power to their currency. Somewhere this has got to come to fruition and the timing says that's now. Timing is everything. To drag this out another year would kill the momentum they have achieved IMO.
Tlar Anyone knowledgeable about economic investments knows that half of the success of a given investment is timing. I would be surprised if they ignore the timing altogether and go back to business as usual. Just as the Abadi government’s credibility was at stake in getting this budget passed, I believe the CBI's credibility is now at stake on their program to delete the zeros. Do it or shut up about the deletion of the zero program. Their citizens have to be more tired than we are hearing, hearing and then hearing again about a future better life and bringing purchasing power to their currency. Somewhere this has got to come to fruition and the timing says that's now. Timing is everything. To drag this out another year would kill the momentum they have achieved IMO.
Ponee- Admin
- Posts : 38267
Join date : 2011-08-09
Re: TLAR says this all has to come to fruition
IMO you are wound up about nothing, blind men speculating about something you can not see, feel or hear. I see no compelling reason for them to move at this time.
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"Rejoice always, pray without ceasing, in everything give thanks; for this is the will of God in Christ Jesus for you."1 Thessalonians 5:14–18
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