Tlar & Member Discussion On "Will Delete Zeros 2015" Part 3 of 3
Tlar Very interesting posts guys. First let me say that if Iraq does it this year and I believe they have to, then they are more than ready to take the currency forward.
Abadi probably made a mistake or whoever wrote his speech made the mistake. It is not uncommon because most including me have made a similar mistake when converting trillions to millions or billions.
This is a common problem with dealing in trillions and it is the exact problem they hope to resolve in the program "deleting the zeros."
It is my opinion that Abadi had no intention of revealing anything about value other than his intentions to earmark a portion of the budget to the problems facing Iraqi citizens.
So I think trying to figure this out by what he said is futile. What do we really know.
Tlar Continues: We know as of August 2013 that there were less than 5 trillion dinars circulating. How much is anybody’s best guess.
We also know all the dinars were sucked out of the banks in January 2014, by the CBI's requirement in order for these banks to sell USD. At the same time during this period (Aug 2013 - Jan 2014) ------
We know that the CBI maintained an intense effort to dollarize Iraq which they are continued until today. Recently moves have been made to suggest that phase may be coming to a close
So it is safe to assume that Iraq has way less than 5 trillion even if they don't supply the actual numbers for us to work from. Zen attempted to do the impossible by putting together the number of notes still circulating. Anyone who thinks this goes beyond circulating notes is wrong.
Saleh suggested in January-ish of 2012 that only 4 trillion dinars were circulating in Iraq, long before they confiscated all the dinars in the banks and before they continued the next two years dollarizing through the auctions.
So we don't really have a handle on what's left but that is exactly where the CBI wants all of us, including Iraqi's to be. This has been a number that they have shown they don't want released.
It is my personal belief that they have broken the one trillion mark of the dinar left in circulation, but I can't prove it either way.
So at best its just speculation on my part based on the run rate over the last two years of the auctions and the fact that the independent banks that are selling dollars, have no dinars other than what they sold in USD today.
I am assuming that the CBI would continue to suck the dinars out of the independent banks on a regular schedule because to me it would make no sense to require them to turn over all their dinars and then allow them to re-accumulate them again.
I also think the proposed loan of 5 trillion dinars to these same banks is part of the plan to switch the currency to lower denoms being hidden under the guise of liquidity as most of you know. It is part of the plan.
I think more important than trying to find a number of how many dinars are still left out there, is the following.
1. Iraq is shooting for March 1st to implement taxes and tariffs. We know it is punitive with a change in the value of the dinar.
2. Abadi has been seeking to open Iraq for investment and has finally set a reasonable time limit on this of sometime next week.
3. Companies are lining up to invest bringing gobs of money into Iraq. 17 majors so far have committed potentially bringing in billions.
4. Economist agree with you and I that it is time and they also see all the changes should be supported by a realistic value to the currency. They are lobbying the CBI to start to delete the zeros now.
5. The budget is done even if it has not been out in the Gazette yet. It offers us a backstop because when they start to dispense the funds, they will have RV's before or it most like will be 2016.
6. Countries are working with Iraq to help them meet this years obligations. Egypt, and Kuwait have either worked out or put their obligations on hold. The World bank has offered loans etc as has the CBI. Support is materializing across the board.. etc.
7. We know the banks are sitting on the fils (coins) and it is my belief that the lower denoms is what is being offered in the 5 trillion loan by the CBI. None of which makes sense without a rate change.
8. Abadi has stated twice that the laws are in place to open the economy and that next week will see the new economic reality in Iraq. Both the government and the CBI independently have stated they are ready.
9. The CBI, Finance Ministry and the Economic committee has now stated they want to see Iraq de-dollarized and that to continue to dollarize as they have been doing since April of 2011, is now anti-dinar.
Their collective view is that from here its a detriment and will hurt the value of the dinar. I would like to know how they are going to de-dollarize when it takes a wheel barrow full of dinars to buy anything especially since most of the big notes have already been pulled.
So what do we know really?
We know they have not published nor have they opened the budget. So every number we see until then, will be stated in today's value (1166).
We also know that the ATM's are being readied for operation and that the ATM's are preset to a standard size. So a 1 is the same physical size as is a 20.
We know they can not turn these machines on without a standard size and we know it is only in the lower denoms that they have standardized the size.
(I think this was intentionally done by our treasury for just this reason. Why would anyone print this many different sizes which is inconvenient).
We also know that the government and all involved ministries have been meeting with the CBI and the CBI appears to be making all the proper moves coordinating with the independent banks to modernize both their systems and the functionality.
We know when they state the foreign currency reserves are 65 billion that they told us sometime last year that their gold reserves are more than their foreign currency reserves. This was close to the time they told us the foriegn currency reserves had broken 100 million.
We also know that BIS has additional billion on deposit from Iraq. How much has never been disclosed but just before BIS said they would accept dinar in Dec of 2013, it was reported that Iraq was earmarked to get 82 billion from the accounts in the US that had been frozen here in the US banks.
So again, who knows this number. Only the CBI and it to along with circulating currency seems to be a closely guarded secret. I think for obvious reasons.
10. Both government banks are being privatized and restructured again. Interesting timing?
So as we can see, Iraq having admitted that they can back all the dinar ever let out 1.5 times, even the dinar you and I hold which is not circulating, by itself is amazing.
I think they are not telling the whole truth on their numbers, neither the reserves nor the circulating currency. There are many smart people in dinarland. If they ever did disclose these figures, many would be able to calculate a possible RV number.
In June of 2008, that number was 1.13 to 1 as determined by experts that did a strategic study.
By the end of 2009 Forexes started to show the dinar at $1.49 until Shabibi stopped it and reversed it.
That means by the end of 2009 the dinar had increased .36 based on the reserves and oil production increases. That was essentially deleting the 3 zeros but by 2009 it had grown.
As the years have rolled by we see more oil production with a great future, we see an economy ready to open like a flower and less dinar circulating than in 2008.
So please understand the name delete the zeros still applies. It means only that the 3 zeros will be gone.
That is the term they are still using today. But IMO it only means that from .86 up it is descriptive of the program, but does not give us any indication of the new rate.
Anything above .86, the term deleting the zeros still applies. So at $3 + the zeros are still deleted so the description of deleting the zeros tells us very little about the potential for the rate.
Hang in folks this is getting exciting and IMO is almost over. Sorry for any typos or grammar. I did not have time to proof. tlar
10. We know banks were just told to have a processing center and are undergoing a final check to make sure they can determine good bills from bad bills.
Aaanth on the topic of millionaires/billionaires buying dinar, it wasn't that far back, maybe 3/4 years ago when it became known that D.Trump had purchased 30 million dollars of IQD.
it's staggering to realize what his return might be. who knows how many less known but even richer individuals, firms, corporations etc. are holding? i feel Tlar's analisys above is great but for me the real key is PROFIT. when the PROFIT margin is 'correct' this will explode. it always works that way.
rich people just keep getting richer that way. we, most of us any way, are just lucky "little people" who are destined to just be along for the ride. they need us though, so they don't or won't stand out that much when the time comes!
Rockstar TLar there sure was a lot of "we knows" in your synopsis but there is one thing that I do know and that is wow that sure was a great analysis, well done and thank you sir! The time and energy you put forth is very much appreciated with that level of analysis!
KJWayne Aaanth, Don't forget all of the US Senators and such that have flown to Iraq on so called business. Even Hillary has made trips to Iraq. Did they buy Dinar, I don't know but they are not stupid people! IMO they have dinar TOO! :D Randy,s Senator has said as much in the past. So be it, I'm looking to cash in as soon as it hits $3 +.