Thread: Iraq/Dinar News. 09/05 to 01/14/07

Zhou announced to the conference that China plans to diversify its $1 trillion in foreign exchange reserves across different currencies, including the euro and pound, and investment instruments, including emerging markets, reports Reuters.

"All central banks are trying to diversify," the People's Bank of China governor said at a conference in Frankfurt. "We have had a very clear diversification plan for several years."

Money News readers will recall that China on Tuesday reported that they have accumulated a record sum of $1 trillion in foreign reserves and reported a record-high trade surplus for October. The country said today that it expects its trade surplus for 2006 to total $150 billion.

Of China’s cash coffers, Money News wrote, "That’s significant because it means that if China decided to sell off any of its reserves by dumping say U.S. dollars on the market and buying gold instead, the dollar’s value would likely tumble."
And that’s exactly what’s happening: China is preparing to sell off some of its dollar reserves so that it can diversify into other currencies and investments.

"[Diversification] includes currencies, investment instruments, including emerging markets," he told Reuters.

The dollar tumbled to a two-month low on the remarks. Gold and other precious metals rallied. However, when Reuters asked if the diversification plan included gold, Zhou said, "That’s a separate thing."


This could be part of the reason the dinar is climbing in value against the dollar. If China goes through with this plan, and there is an abundance of dollars on the market this will hasten the increase in value of the dinar. Good for all of us in the short term, bad if you plan to convert all dinars into dollars. I for one have always planned to convert a protion of our dinars into Euros. If China dumps the dollar, the US economy will take a big hit. Hold on to your dinars after the reval, at least most of them, they could be worth far more than we think !!

Another point. Sorry if I bore you. One might asked, "Are not banks just tranferring excess cash to the central bank? Thats not how it works. A central bank is a banks bank. Meaning that the local banks have accounts at the central bank just like our national banks have accounts at the Federal Reserve Bank. So to remove excess cash (its done every day in the US) they would simply transfer the cash to the central bank and it would be deposited to their account. This procedure is removed from any daily auction exchange rate. What you have been seeing is an exchange, again exchanging dinar for USDs. Placing a large amount of USDs in the local banks for a reason. You have to ask yourself why?

Originally Posted by Wm.Knowles

Another point. Sorry if I bore you. One might asked, "Are not banks just tranferring excess cash to the central bank? Thats not how it works. A central bank is a banks bank. Meaning that the local banks have accounts at the central bank just like our national banks have accounts at the Federal Reserve Bank. So to remove excess cash (its done every day in the US) they would simply transfer the cash to the central bank and it would be deposited to their account. This procedure is removed from any daily auction exchange rate. What you have been seeing is an exchange, again exchanging dinar for USDs. Placing a large amount of USDs in the local banks for a reason. You have to ask yourself why?

This is based on the theory that the CBI functions like our Fed Reserve. We really don't have any idea how they really transfer and account for all the money in the Iraqi monetary system Thanks

Originally Posted by Wm.Knowles

Another point. Sorry if I bore you. One might asked, "Are not banks just tranferring excess cash to the central bank? Thats not how it works. A central bank is a banks bank. Meaning that the local banks have accounts at the central bank just like our national banks have accounts at the Federal Reserve Bank. So to remove excess cash (its done every day in the US) they would simply transfer the cash to the central bank and it would be deposited to their account. This procedure is removed from any daily auction exchange rate. What you have been seeing is an exchange, again exchanging dinar for USDs. Placing a large amount of USDs in the local banks for a reason. You have to ask yourself why?

Would the activity just recently at the CBI auctions be more unusual than previous weeks. Could it be a good clue to a possible reval, what else could it be if it wasnt a reval.

Originally Posted by Wm.Knowles

Another point. Sorry if I bore you. One might asked, "Are not banks just tranferring excess cash to the central bank? Thats not how it works. A central bank is a banks bank. Meaning that the local banks have accounts at the central bank just like our national banks have accounts at the Federal Reserve Bank. So to remove excess cash (its done every day in the US) they would simply transfer the cash to the central bank and it would be deposited to their account. This procedure is removed from any daily auction exchange rate. What you have been seeing is an exchange, again exchanging dinar for USDs. Placing a large amount of USDs in the local banks for a reason. You have to ask yourself why?

BORING US??? You are joking, right? I have hoped for hours that you would post. I have no idea who you are, but ever since you began posting here at Rolclub, I've been very impressed by your knowledge and level-headed approach.

You are basically over my head...therefore, I can't offer any intelligent comments...but I sense a great deal of intelligence in what you say.

Caroline

Warren Buffett is so convinced we'll see a steady downward spiral to the value of the dollar in 2006, he's placed a $16.5 billion dollar bet to back it up, putting his money where his mouth is! And I couldn't agree more. There's no doubt in my mind that the dollar will suffer this year and for many years to come.

In fact, last year's 14% dollar rally -- after three straight years of decline -- was a fluke ... smoke and mirrors ... artificially propped up by the Fed's steady rate increases designed to stimulate foreign investments in U.S. assets. And it worked! "Petrodollars" from foreign nations are being recycled back into the U.S. economy through the purchase of government bonds at a staggering clip, plugging the hole in the trade deficit.

Buffett ... billionaire financier George Soros ... and Microsoft head Bill Gates all bet against the dollar last year. They lost! A contagion of the world's largest banks in the currency market -- Deutsche Bank AG ... UBS AG ... and Citigroup Inc.-- all missed the dollar's rally in 2005. In fact, Buffett was so convinced of a dollar decline in 2005 that he lost almost $1 billion while bank analysts forecast the dollar would fall to an all-time low of $1.40 per euro. Instead it rose 14.4%.

But they all know the Fed can't run a large current-account deficit for long. So, the dollar bears are sticking to their predictions -- saying they weren't wrong ... JUST EARLY!

It's a sign that the people who have the money have a fairly good idea about what's to come. The dinar will rise in value against the dollar if only because the dollar could be in a steady decline. This will put more and more pressure on the Iraqi's to reval their currency. With their dependance on the value of their dollar reserves to help keep their economy going, and with a deccline in the value of those reserves, they would have to reval their currency.

Originally Posted by Wm.Knowles

The key to the problem will be the auction in the am. Keep in mind that the CBIs behavior has been very strange for the last couple of weeks. They have placed 350Million USD into the local banks in the last five auctions and removed around 700Billion dinar from the sysyem. Just the behavior you would expect in anticipation of an increase in demand for the dollar. i.e.RV. Today was a sweep the floor, i.e. to remove the rest of the available dinar from the local banks. In the am, i expect either no auction or a very small exchange like today. (maybe other news). What other reason would they place that much USD in the local banks? I for one do not place much confidence in the political statements. After all I originated from Arkansas and I have heard political statements from the best, i.e. B.Clinton. The central Banks behavior is the key and their behavior in the last few weeks and especially the last five auctions suggest they are placing themselves in a position to handle a large demand for USD in their local banks, remove large amounts of currency from circulation (reducing inflation and the available currency they will have to buy at a higher level, and begginning to remove the larger denominations from circulation. Your comments are appreciated.

Thank you so much for posting...I watch for your posts. I have read your posts recently and it really made sense...I can usually dig up info but that doesn't mean I know what I have found. Thank you for making it seem logical and clear everyone on this forum is a great asset and we all seem to compliment each others strong features. I also believe the last 5 auctions are the key to the reval...I believe this so much that I have been keeping a running log in my siggy....Thanks again to everybody.

Caroline.....I would have to agree with you 100%. Wm's explaination makes the a lot of since. Some of these explainations are way way over my head and I have read so many articles that I can't even read anymore, but his explaination is clear and concise.

Thanks Wm. Knowles....whoever you are.....by the way, I'm from Arkansas too.

Sorry Admin....won't happen again.

Amanda

The president of the republic confirms Iraq's desire to strengthen

(Voice of Iraq) - 11 - 13-2006
This issue was sent to a friend


The president of the republic confirms Iraq's desire to strengthen bilateral relations with China and receive a formal invitation to visit

PUKmedia : His Excellency the President of the Republic met with Mr. Jalal Talabani yesterday evening Saturday at its headquarters in Sulaymaniyah and special delegation from the Chinese Communist Party led by Mu Wen Bo, Deputy Minister of Relations Service. During a meeting attended by a number of officials of the Patriotic Union of Kurdistan, head of the delegation informed the guest greetings of Mr. Hu Jintao of the People's Republic of China to His Excellency President Talabani, As the price of the role of His Excellency in the process of national reconciliation, expressing concern the Chinese Communist Party to strengthen bilateral relations with the Patriotic Union of Kurdistan.

The delegation also values highly the efforts of the Patriotic Union of Kurdistan, in order to achieve the rights of the Kurdish people, pointing out that Iraq under the leadership of President Talabani can be expected to play its role regionally and internationally, The formal invitation to His Excellency from the leadership of the Chinese Communist Party to visit China. In turn, His Excellency President Talabani expressed his satisfaction with the strong relations between the Chinese Communist Party and the Patriotic Union of Kurdistan and Iraq and China. He emphasized that he is working on strengthening these relations because it is in the service of peace and reconstruction in the region. and on the official invitation received by His Excellency to visit China President Talabani expressed hope that the visit during the next year. On another matter of the meeting discussed the developments of the situation on the Iraqi arena, in this regard, His Excellency said : Iraq was being subjected to occupation by international terrorism and to confront the occupation needs to help all countries, including China.
The delegation also called on His Excellency the guest to encourage Chinese companies to invest in Kurdistan and then in all parts of Iraq, pointing out that the official policy of the Iraqi government is willing to consolidate relations with China in the political, economic, cultural and historical.
A delegation of the Chinese Communist Party had arrived Saturday evening 11 / 11 to Sulaymaniyah International Airport, He was welcomed by Messrs. Omar Fatah Vice President of the government of the Kurdistan region and Arslan Baez and Azad Jendiani. The Chinese delegation composed of Messrs. Mao Wen Bo, Deputy Minister of Relations Service-head of the delegation and Tian-Duanhoui Deputy General Director of the Department of West Asia and North Africa and Wei Pao Kai First Secretary and Deputy Head of the Department of Management Agency and Ms. Joan Lee Hu First Secretary and Vice-Chairman U Hallén Section Lovo Kuo Hui secretary to the Deputy Minister.

The Chinese Communist Party delegation visiting the National Museum and the University of Sulaymaniyah and IX of the martyrs memorial in June

Within the framework of his visit to the city of Sulaymaniyah, the delegation visited the Chinese Communist Party Sunday morning both building maintenance and the University of Sulaymaniyah and the National Museum (so to Annsahm) in the security of the Baathist regime in the city of Sulaymaniyah. They received in the Office maintained by Dana Ahmed Majid governor of Sulaymaniyah. And then the delegation visited the University of Sulaymaniyah and met with the President of the University and a number of university professors to discuss the strengthening of relations between universities of China and the University of Sulaymaniyah and the opening of training courses for teachers and students of the University of Sulaymaniyah. And then the delegation visited the National Museum (so to Annsahm), and then the delegation visited martyrs memorial June 9, which shows the brutality of the Baathist regime.

i think swiss francs may be the safest bet instead of euros. If chaos breaks
out in the middle east and europe because of the manics i think the usd will
rebound sharply. Is this okay ?