Tlar & CC Members Discussion On Budget / Rate / Stability & More Part 1 of 3
Rockstar: XXXX, how much do you want to bet that when we see the budget that there still will be no RV?? I bet there is zero chance the RV is in the budget! Guru Lojak is gone and as you can see Tlar is back to analyzing and research and learned his lesson, they were questioned heavily about their Intel that was never correct and decided to disappear instead of man up per say!
So no the one liners will not fly unless you are ready to back them up IMO. No one knows the date or rate on any forum period!!! The CBI will not and cannot RV this currency without the GOI being on board and that is WHY we have not seen the RV yet not because of the budget that every guru out their calls for every year sorry to be the bearer of bad news!
Yes we do have some major banking and investment laws to be completed etc, and yes when the time is right most of these will be completed very quickly or in the basket as discussed. Until that time is right we All wait patiently IMO.
Mally: They haven't really been pushing it and pushing it. It only seems that way to people who follow the gurus or people who use the articles as word banks to construe whatever they want and then claim its "in ink". They are going through the budget process at record speed.
I admit I was disappointed in dec and thought there was maybe some chance they were going to be able to break from constitutional procedures for the rv but that was unrealistic.
All the articles in dec about passing the budget that month were in regards to the council of ministers passing it, which they did. Then they have to by law allow time between each reading which is when the finance committee makes adjustments.
The second reading was stretched a few days but still really good by there past standards. Now the vote day is set for next Tuesday and may get pushed but by the way they are going I'd be surprised if it's pushed much. If it was just up to the cbi and everything was just fine and dandy on their end January 1 would of been the date wouldn't it?
Rissas Dad: XXXX ..." Just an example... why the hell have we not seen the budget yet???? Why do they keep pushing it and pushing it?"
I believe its because they are following procedure. Articles have said this over and over. Its read and commented on and sent back to committee to hash out revisions. Its read again and it repeats.
The time between readings is due to the committe's work. Its a process and has been spelled out. Its not becuase it just hasnt "shown" due to the rate not showing yet. Thats just my opinion but its backed up by articles.
Mike: There's really no surprise in the debate surrounding the budget, heck, Iraq went a whole year without one because of discord and sectarianism. Why should anyone be surprised that it's taking the whole month of January to get this deal done?
I agree, Rockstar, there won't be a rate in the budget, that's not the hold up. We've seen multiple articles where they express the budget in both dollars and dinars, and it's always at the 1166 rate.
Iraq still needs security and stablity. Will they hold the budget until ISIL is out of Mosul and the laws are changed to protect investors? I just don't think they can wait that long. In the end, this is all acedemic, we'll know the answer to this question in a few weeks, at most.
I have no doubts though, this exact same topic will come up again next year when the budget is being worked on, it's been the same for years now.
KJWayne: I have no doubts though, this exact same topic will come up again next year when the budget is being worked on, it's been the same for years now.
I completely agree with that Mike. That has happened every year that I have been in this ****!
The budget can be amended quick after an rv or any kind of rate adjustment.
IMO ,the government,Abadi< wants more of the corrouption gone before the CBI says "lets do it". It will take the CBI and GOVERNMENT together to know when to flip that switch or push the pretty button.
We, here in the US, will get up one morning and notice that the rate on CBI has changed. That is all the warning we will get. No one will be right or first because IT will have already happened!
I like this SITE. Yes ,I've been to many sites in the last five years and I call THIS SITE my HOME! Thank You Currency Chatter Owners for letting me be a member.
Mike: Sager, will you help me with the rate in the budget deal? I'm not trying to pick a fight, I'm just trying to understand what you're saying.
You mentioned that the budget needs a rate to be funded. All of the articles I've read have spoken to how difficult the budget has been to compose because they've had to adjust the budget based on 3.4 mbpd at $60 per barrel.
Additional articles have stated they would borrow money from the WB and IMF to make up the shortfall. Also, they've spoke about austerity measures like removing gas and other subsidies and enacting a forced savings program for government employess, all to get to a budget that is based on revenue from oil sales.
All of these things are being done so that Iraq can have a budget that's based on projected incomes from oil sales.
You say they need a rate to fund the budget, I thought the budget was based on the revenue from oil sales. Will Iraq have enough money from oil revenue to rebuild the infrastructure and other things?
Probably not. But, from everything I can tell, they're basing their budget on the 1166 rate and what estimated revenue will be from the sale of oil, which makes up 96% of Iraq's revenue. Why would Iraq need a higher rate to fund the budget? Thanks in advance for your help!
Schiz: Don't get me started on this one LOL! :lol: The rv doesn't make Iraq richer within iraq because they give it a higher value. not gunna rant, just stating the facts of this event :P
And agree Mike, the budget won't be passed until isil are under control imo because the bydget is based on economic reform and they can't exactly do that while fighting a war.....imo and i hope i'm wrong, the budget can will just continue to get kicked down the road until such a time the stability is enough to impliment it.
But yes, the rv doesn't create money out of nothing, it only adds value to what they have, they will have more purchasing power outside of iraq but inside of iraq everything will change with the new rate. Everything
Rockstar: Absolutely agree with you Mike and Schiz on this issue! The budget does not need a rate to fund it Sager, the budget is funded by their current revenues of oil sales, gas sales etc. raising the value of the dinar does absolutely zero to paying their bills! However, my ears are open to hear why you think an RV will be able to create more money out of the air?
The only way to explain it simply is, inside of Iraq a dinar will be a dinar...outside of iraq it will be whatever that country deems the exchange rate to be, so in the us for example a dinar will be $2.66.............in the uk summin different, in spain summin different and so on and so forth. If all Iraqs debts are external they are laughing :)
If they owe the kurds 1billion dinar, they will owe them 1 billion dinar after the rate change. Nothing changes inside of iraq, well that a lie, cos everything changes,
everything that has a price will be adjusted to match the new value...wages...internal debt....food items...gas....ciggies....sweets.. .taxes... electricity ...water....well you get my point lol
Basically iraq will have exactly the same amount of money as they have now. it will just be of higher value and have a ton more purchasing power outside of iraq.
Schiz: Now, if they have the cash reserves in a bank outside of iraq, they will get richer in a sense but only if they spend that money outside of iraq. if they transferred it to an iraqi bank they would then have exactly the same amount as they had before.
It's hard to grasp but the exchange rate does not come into place within iraq.
It's like me going to the bank and asking what the exchange rate of the pound is, them telling me and me goin ok i can only afford to take 50 out cos the exchange rate is horrible............a pound is a bloody pound in england. a dollar is a dollar in the us. a dinar is a dinar in iraq.
High-Five: Imports will be less expensive because their dinar will buy more. They will need a lot of imported goods to build their private sector
Mally: Imports will be less expensive because their dinar will buy more. They will need a lot of imported goods to build their private sector
Mike: Ditto, Mally, you can't have a digital lop. 80% of Iraqi's don't use a bank outside of currency exchange. The first lesson the citizens will learn is that it's better to hold onto your money than deposit it in a bank.
Mally: It's more then just poor Iraqis with an eye on this. Did you hear the outrage from investors on the Swiss simply because they made a rule that their currency would not exceed 1.2 euros and then one day said never mind.
Any money is a contract with that country, to arbitrarily say we will honor this contract (our paper money) but not not that one (our electronic money) would be suicide, and illegal I believe.
I'm with you that there may be a law, will need to be a law, that spells out debt in usd equivalence but a different exchange rate in country vs out or in bank vs paper can't happen. All of course in my opinion. Keep the opinions coming though, thanks blue.
Mike: I'm guessing. But, Iraq is going to have to encourage Iraqi's to engage the banks and begin to invest and save their money. Saddam stole their money 20 years ago, they don't trust Iraqi banks. This would only make it worse
Quote: mally at January 16, 2015 at 9:00 PM You can't treat a class of currency different paper or electronic. If they tried to be the first country to do something like that it would kill any international business interest, Iraq would become an economic wasteland. jmo but I like hearing the different theories
Tlar: Mally, They can and IMO they will. This is an issue I have argued over and over for years now. Its an acedemic argument that really does not affect but very few of us but interesting to think about.
Using the dollar as the basis (pairing) for everything will allow Iraq to quickly configure values. Using Blues example of a three zero RV or 86 cents, the stock market will have to be adjusted as each clients stock account will be reduced by by the same three zeros.
In other words an account with 50,000 shares today becomes an account worth 50 shares on d-day. We know that the ISX was/is worried because folks who have stock accounts may be confused at first thinking a mistake has been made. We have seen articles of their concern.
No mistake will have been made. The accounts value will remain the same before and after the change even while the number of shares will have been reduced. Now lets look at a man with bank account be it savings or checking who also has a loan at the same bank.
Assuming all these are in dinars, he will not lose any value these accounts will just be stated at the new rate. The reason all electronic accounts have to be restated at the new rate is you can't have a loan of 1,000,000 dinars restated as 1000 dinars equal to $1000 USD while his savings account with 50,000 dinars worth today about 50 dollars, benefit and is restated now as 50,000 dollars in value.
The banking institutions could not handle this as this kind of a change IMO, has to universally affect both sides of the balance statement at the same time.
Logically both sides of the balance statement have to be in sync in my opinion.
EVERYTHING IN IRAQ WILL BE AFFECTED BY THIS RATE CHANGE INCLUDING THE CASH, WHICH MEANS AS THE VALUE OF THE CASH INCREASES 1000 TIMES EVERYTHING else (whether in Iraq or not in Iraq) WILL BE DECREASED 1000 TIMES.
Following this logic, IMO the only people to benefit by this will be the people holding any cash just as you and I are. This is a hard argument for some to understand because guys like Adam early on had his followers set up accounts in Iraq with dinars.
It is my belief they will not benefit from the change in value if their dinars are sitting in an account at a bank. They won't lose money as value will remain constant before and after.
The CBI has given us a heads up on the change in the currency value when they suggested to banks to take their time when addressing the population as they come into the bank to change out the big notes left in circulation.
The CBI told the banks to set up checking and savings accounts and give them walk around money. This tells us that the currency should have significantly higher value.
What they have not dealt with in articles is bank accounts and IMO for good reason. It would kill the system if the people thought there was a difference in the way an electronic dinar would be handled.
They would run the banks at the first inkling that the RV was imminent as they did in January 2014 converting all dinars to cash. It truly makes no difference whether anyone believes me or not .
Logically IMO this has to be the only way for this to work. But I am always interested in hearing any argument or view different than this. tlar
Mally: Really appreciate your perspective tlar. I don't agree with it though. The law of indebtedness is complete dinar land speculation as far as what it is or what it can be. im no international finance wiz but from reading dinar blogs and doing some research for five years now I believe there's certain things they can and can't do.
I believe it would be illegal according to the imf to perform an electronic revenue neutral redenomination while honoring a different value for paper currency.
Debt in the form of loans or ownership in the form of stocks may be another story but I don't think there's ambiguous wiggle room to be creative like that with currency. Maybe since the dinar is still not a true currency anything is possible but I highly doubt that scenario. Would love to find out I'm wrong tomorrow lol
mekim6: I'm with tlar on this one
Aloha Alex: Politicians and Banksters don't care about the ciitizens. Look what happened in Cyprus. A homeless person in America treats his dog better than Iraqis treat each other.
Rockstar: Sorry but they will NOT treat the dinar that is deposited any different than the dinar that an Iraqi holds in his hand at the time of an RV!!! That is an incorrect conclusion and absolutely not right.
That would also go against the reasoning done here recently on the long discussion of what constitutes "circulated currency vs non circulated currency" where Iraq is only responsible for counting the circulated currency In Country when determining value and not what we hold outside of Iraq! Circulated currency includes everything held inside an Iraqi bank.
They will not give two values in country just because TLar says they will sorry not going to happen! I hope everyone can see how wrong that conclusion actually is?? Seriously two values in country for a one time monetary change really...lol
mekim6: Time will tell Rockstar. You talk in absolutes when in fact they can do pretty much what they want. Hopefully we will know soon. Not going to effect me as I don't hold any IQD in an Iraqi bank.
Schiz: Its gunna suck for the Iraqis that's for sure. Me and tlar seem to be of the same thinking on this one. No rv for these folks.
Only for folks holding dinar outside of Iraq where an exchange rate comes into play.
Feel bad for the Iraqis but they ain't gunna just make the population millionaires and certainly not in a country like Iraq...think about it. Plus what is the job of government? Yeh to keep its people poor and dependant on it.
I haven't looked into the law of indebtness but off the top of my head I would say it is to protect the value of a debt. Especially a debt owed to Iraq.
It will cone with the rate imo and will let people know that because they owed one million dinar before that they still owe that and not the six trillion they had to pay before because of the crappy exchange rate.
Comments may be made at the end of Part 3 Thank You Part 2