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

Originally Posted by Elfwizard

If you talking abou the rate getting better, I think that is great Im not saying that that has been normal. My point was about them PULLING DINAR from circulation, Theres no proof of that.

Wheres the Proof? They have been buying dinar for 3 years!!

Then where is the Dinar that they are buying with dollars going????

Originally Posted by Elfwizard

Exactly what I am saying, this is nothing new.

THEY, CBI, ARE BUYING DINARS FROM THE BANKS AND NOT SELLING THEM. THEY ARE KEEPING THEM. THE DINARS ARE BEING REMOVED FROM CIRCULATION TO INCREASE THE VALUE OF THE DINAR.
Sorry, didn't mean to yell. There have hundreds of posts explaining this over the last few weeks.

Originally Posted by Mike5200

This is Wm Knowles post from Nov. 9th



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There seems to be a disagreement over what the auction results mean. As I see it there are two options.

#1 They are buying dinars and placing USDs in the local banks. This reduces the amount of dinar in the economy and if I read the numbers right, they have bought close to 340B USD of dinar in the last four auctions. A very large amount.

#2 They are buying dollars and placing an additional large amount of dinar into the economy.

Option #1 is my choice. This is consistent with reducing inflation and since they have large currency reserves and oil income, they are reducing the quanity of money in the economy that is consistent with inflation being too much money chasing too few goods. Quantity money theory has been around since the 1970s and was advocated by Milton Friedman the economist as a result of the double digit inflationary period in the US in the 1970s. If they were following option #2, then they would be flooding the economy with dinar, and to keep this policy up they would reduce the value of the money and eventually it would be worthless (even more than now). Placing USDs in the local banks is consistent with an eventual RV. It anticipates local demand for USDs if the currency RVs, reduces the quantity of money in the economy and maybe is the first step towards removing the large denominations from the economy. "Printing money" is a sure sign of an impending economic disaster. I think when the IMF stated that monetary controls needed to be in place was talking about this very issue. Reducing the amount of money in circulation is just like a company using its profits and buying its stock back to decrease the amount of stock in circulation resulting in a higher value for the stock in circulation. Buying dinars is also consistent with a slowly rising exchange rate. If they were flooding the economy with dinars, you would expect the exchange rate to move the other direction. So I am optimistic.

I believe what Mr. K is saying is that even he cannot say for certain how to interpret these auction listings.

I think everyone has agreed that they are selling dollars to take dinars out of circulation.'

But one could interpret the auction listings completely the opposite.

Probably a result of translation from Arabic to English like all the news stories...a simple translation mistake can mean two totally different things.

We'd need a representative from the CBI to directly tell us what is going on and how to interpret the auction listings IMHO.

Thanks everyone for trying to clear this up....
Bottom line is the jury is still out until an official from the CBI makes a statement.....(Or the damn thing just revals!!!)

Go Dinar!!

Originally Posted by webinvestor

What's different now?

For starters they are taking Dinar in and not giving more to the other local banks. Second, the rate is lowering even when they are pulling Dinar out of circulation. Both of these are unlike auctions i witnessed in the past.

The rate is improving BECAUSE they are pulling the dinar out of circulation - it's' a supply and demand thing. The less dinar that is available, the more valuable the remaining dinar becomes. If they continue this until the end of the month and pull another trillion or so out of circulation, the rate will continue to improve each day, even without a RV.

Originally Posted by Ranger III

If the amount actually in circulation (as distinguished from the amount
printed) at the beginning of this buy-back was 4.5 trillion dinar, as reports have indicated, then the circulation supply available has in effect been reduced by approximately 22% in just twelve auctions. At this rate they could possibly have the supply under two trillion in circulation by the end of the year.

That kind of limited and contained supply was the key to Kuwait's currency revaluation and may well wind up being the key to the Iraqi dinar's revaluation.

Would someone confirm for me what a trillion dinars looks like in zeros please,

Originally Posted by Mike5200

Then where is the Dinar that they are buying with dollars going????

Answer

Originally Posted by Elfwizard

Thats False info, Have you looked back at the Auction sheets? They always sold dollars for dinars. They have rarely sold Dinars at Auction. Most of the dinar goes back out of the CBI to pay government projects and employees.

Like I stated earlier, I also heard this but I don't know if it's true with the CBI being separate from the government.

Wm Knowles post from 11/13



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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.

Will there be any advantage to having the lower denomination notes over the higher 25k notes? I'm fixing to buy a M or so, and I doubt there'll be any problem w/ having the 25k notes in the future after the r/v, but just wanted to see if you folks thought the same thing, dinar is dinar no matter the denomination of the note.

Originally Posted by Dinar Duchess

Would someone confirm for me what a trillion dinars looks like in zeros please,

1,000,000,000,000 = 1 trillion

Originally Posted by Dinar Duchess

Would someone confirm for me what a trillion dinars looks like in zeros please,

1,000,000,000,000