Tlar & Members More Buzz About The Budget Part 2 (Part 1 Link at End)
IvoryTickler I agree with Aloha Alex. So many times we've gotten excited when something appears in the Gazette and but then no implementation follows. That was one of Maliki's principle games.
I do want opinions on something: Do you think an internationally recognized currency will aid or deter the defeat of ISIS in Iraq? Thanks in advance for your responses.
DreamWeaver Thanks, Tlar, for your post. Have a question for you. Apologize in advance if this was spelled out previously--either in discussion or by you--but, I'm just not connecting the dots here.
Why make it public, with an article, that they are sending a plane load of dinar to Anbar? Is it because people are expecting payment and they are assuming it is large notes?
DreamWeaver Continues: Why on earth would they be sending large notes when they spent an eon pulling the notes from the market--when they can pay funds electronicially?
Likewise, if it is lower denoms, why draw attention to it? None of this makes any sense unless they are shipping lower denoms as part of preparation for RV.
Appreciate your thoughts as I've missed something here. Best ~ DW
2dambeasy Tlar why is it you say if the budget comes out at 1166 which it probably will why till next year? Thanks
Rissas Dad I had the same question for Tlar. I'm assuming (and he mentioned it) that since they dont have 119 trillion dinar in existence, which is the budget amount, they intend to go on in 2015 using dollars. Would definately like to hear Tlar's reasoning behind his thinking too. Not sure I share that belief.
Mike I think this is the banking system slowly moving back into recaptured western areas. The banks were either robbed or the money slowly ran out and these banks needed new physical currency to get started again. There was no real reason for anything other than normal security involved because this happens all the time in Iraq and other countries.
AlBundy Appreciate all you bring TLAR. Thank you for your analysis and for sharing what you know. My question is if they fund the budget monthly, could they get away with no revalue on a larger scale...but not dollarize IRAQ by using electronic cards?
I really have no idea and see them being counterproductive by not revaluing, but they seem to find ways around everything!!
Geezer Hey Tlar - You are obviously of the opinion that monetary reform can occur with the presecnce of ISIS controlling over 20% of Iraq, correct?
I tend to agree with Schiz - ISIS needs to be eradicated before anything too exciting happens with our investment....of course I hope differently.
Would welcome your perspective on the "security" requirement that the CBI has stated. Thanks for all you bring Tlar and everyone else...
T.Jefferson THANK YOU, TLAR
Schiz I don't think anything will happen Sunday but I hope i'm wrong and I hope it activates economic reform. I just can't see it though with isis still a big problem.
Maybe they will be sly and only show in the budget the parts they can activate, not all of the budget. can they do that?
T.Jefferson THANKS, FLYBOY !
T.Jefferson hi-five at February 19, 2015 at 3:02 PM My challenge is to stay grounded for the next couple of days.
I, too, believe we will know next week whether or not we are done with this, or have to go another year.
Out of self preservation, I'm prepping for another year, but what's difficult about that is it defies logic.
If we go another year, then nothing Abadi, parliament and the CBI have done these last few months makes any sense. (See Tlar's last post for a partial list.)
So, I continue with one bun on the edge of my chair, the other bun in the recliner!
I Understand. It's a real nail-biter !
Rockstar I have the exact same question for Tlar as a few here! As much as I really can't stand the gurus calling the RV every week I too really can't stand it when someone says that if it doesn't happen at this specific budget event than we are all waiting another year!!!
I am not calling you guru TLar I am just making a point.
Your statement has zero basis in fact by saying that it won't happen this year! An RV does not have to happen on Jan 1st either as you obviously have believed that can it happen next week and said it could happen many times last year.
Now just so everyone is clear if they dispurse the funds at the 1166 rate that means absolutely nothing.
They will not be dispersing 119 trillion dinar no matter what the current exchange rate is, they will be dispersing US dollars.
The 1166 rate means nothing seriously if they do send money to the ministries next week than the following week they will still disperse more funds even if they RV that following week.
It is a SIMPLE line item adjustment if they were to RV at say a dollar the following week.
So please everyone just stop and think when someone says something like this that makes no sense or has no basis in fact.
The RV is not in the budget and they will disperse the operational side of the budget at 1166 if that is the current exchange rate. It is a very simple process to change that rate if the do RV after and NO they don't have to wait until next year to do it.
What that means is either more laws have to be passed or ISIS is still an issue and they are not ready to do it.
Lastly for TLAR to actually post something like this saying if it doesn't happen after the budget is in the Gazette and they disperse at their current rate of 1166 tells me that he has contradicted himself in saying that his Intel just yesterday regarding the lower denoms being distributed and trusting that source is good!
I am in agreement with Schiz as well that an RV doesn't create magic money out of thin air!
They already have to have earned the money to be able to distribute funds to the ministries.
It makes absolutely zero difference what their exchange rate is until an Iraqi actually leaves their country and say comes to America. Their purchasing power will increase inside their country also but again it has nothing to do with the GOI budget...IMO
Mally There is a bunch of changes to their economy in their budget this year from what I can tell. Its not like a budget we make for ourselves to just track spending.
If they start loaning money, flooding Iraq with more dinars again, allowing money to flow in and out internationally to every bank in Iraq, take loans from the world bank to increase liquidity, jack up taxes and tariffs, sell bonds and on and on at the current rate then I agree we arent seeing it soon if at all.
I agree with Tlar and the reasons are numerous imo. Just my opinion and this is all wild speculation so take it for what its worth.
Tlar My thought on it holding until 2016 is because if they don't do it now it indicates to me that Saleh who has Abdi's ear and suggested they wait until then, has won the argument.
I don't believe he did but for sure he has lobbied to hold until 2016 or it was just snow to misdirect. As for not enough dinar, my thoughts were pretty well stated in another post.
At most the CBI only has 3 trillion of the new uncounterfeitable dinars left having spent since January 2014 replacing them for the counterfeitable notes.
At a rate of 1166 per USD that only accounts for 2.5 billion USD equivalence in dinars with which to work with.
Iraq is aspiring to be an electronic society but that is the goal and they are in the infant stages.
Iraq is still predominantly a cash society and my though is you cannot run their society of 30+ million on 3 trillion dinars without continuing on selling dollars which is continuing dollarization.
They have stated they want to stop and reverse the process in order to dedollarize the society and that they want to use the dinar solely in country.
Even if they were to entice everyone to sell their dollars to convert over to dinars, they don't have enough uncounterfietable dinars to do it.
There is way more than three billion US dollars floating around in Iraq. Iraq's budget is 119 trillion dinars at present. That means even if they fund it with the 3 trillion uncounterfeitable dinars the CBI might have left after they have replaced the existing counterfietable dinars, they don't have enough dinars to fund the budget one month let alone month two and on.
They only printed in total 5 trillion of the new replacement notes in total before they have been replacing the existing notes.
My thoughts are this. Iraq has a liquidity problem. Not enough dinars to go forward.
They either print more, or continue on dollarizing, or they must RV. The new dinars are the smalls.
They are sitting and waiting release. The choice to me is clear because releasing the smalls with a higher rate dedollarizes the country, allows them to start using the own currency and instantly solves their liquidity problem.
I may be FOS but that's the only option to me that makes sense. tlar Sorry for grammatical and spelling. No time now to proof. tlar
Flyboy You're welcome, G-lin/TJ Even a blind squirrel find a nut once in a while...lol..Great thread group...thanks to all... Here I tend to agree on most points with Tlar...
although all on this thread add very good points as well... I really don't care who is right or wrong... I like all of you want this thing to happen...now...just sayin
KJWayne IMO, Iraq has came to far to start over. At some point they have to implement the delete the three zeros plan etc. They can't keep kicking the can down the road or there will be no can!
Skylimit Rockstar, with an international currency and the hard assets that Iraq possesses the amount of credit available will explode allowing for a supercharged economic expansion. Money flowing freely in and out of productive enterprises and between nations is what creates the wealth.
hi-five From Rockstar - - The RV is not in the budget and they will disperse the operational side of the budget at 1166 if that is the current exchange rate. It is a very simple process to change that rate if the do RV after and NO they don't have to wait until next year to do it. What that means is either more laws have to be passed or ISIS is still an issue and they are not ready to do it.
You are right Rockstar - -they could open the "operational" side of the budget and get by. But, if Iraq plans to open the "investment" budget items, then I think they would have to change their monetary policy.
The question is - - Are they going International, or not? Building the private sector has been Abadi's drum beat. Economists, the WB and the IMF have all stressed the importance of developing the non-oil sector. I just don't see how they can effectively do that without going international.
If the CBI, or Investment Laws are not ready, could Iraq open the budget and just spend money domestically for a few months until they are ready to launch internationally, and then RV (without waiting another year)? I guess so. It won't be long before we have most, if not all, of our questions answered!
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