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Thursday, January 7, 2016

STEVE Q & A WITH MEMBERS, 7 JAN

buck72801, said:  Government is moving toward raising the value of the dollar to 200 to cover the salaries of its employees.. Thread
 
1/5/2016 0 Comments   Picture   Tomorrow Press / Baghdad:
 
heading the Iraqi government, during the current year to raise the value of the dollar against the Iraqi dinar to 200 thousand dinars for every $ 100, instead of 120 thousand dinars, including an attempt to cover employees' salaries.
 
A source in the Finance Committee of the House of Representatives, who declined to reveal his name, in an interview for "tomorrow Press", "The central government has received proposals by some parliamentary bodies and a number of ministers, requires raising the value of the dollar to 200 thousand dinars per hundred dollars, in order to fill The cover staff salaries, which have become the government unable to pay in light of the continuing decline of oil prices.


"The source added that" the only aggrieved of this procedure is the employee, where the prices of goods will rise in full, as the Iraq imports simplest things from abroad because of the lack of local industries and the payment of such goods prices. "
SOURCE   http://alghadpress.com/ar/news/44197/%25D
 
Stevel:     Buck, first of all thank you for posting this article and you never ever should feel bad about posting news regardless of its content and meaning. This goes for all of you as long as it pertains to our investment.
 
Let me try and shed some more light on this article.
 
A few days ago one of our members "the assessor" posted this article: Zebari is likely not possible distribution of salaries in April
 
I have been talking to some of my contacts and so has Ray. All of us including our contacts are saying that Iraq has a dismal future under the current conditions. In order to change the value of their currency for the better, there has to be many laws in place.
 
All of the work in the "Monetary Reform Policies" are meaningless with the obvious. No country, or outside companies will come into Iraq and invest to help them develop their economy under the current circumstances. Matter fact, many have pulled out until major changes are made.
 
All of your replies are very good and are appreciated. You must keep an open mind here. I did talk to Ray last night and he confirmed the very same thing my guys are telling me, nothing will happen until this country is secure. Mosul is, according our sources, the the last major hurdle.
 
Because it is so close to the Syrian border that once that city is back in Iraqi control, then and only then will they attempt to close the border and activate a change in value.
 
Also, Iraq has been pushing to not use the dollar and wants their people to use only their currency. So, lets go make the dollar more valuable? What? Really? This makes no sense at all!
 
Just think about this, would it be fair for the county to change value of its currency when a major city cannot be included? I do not think so. Just will not happen.
 
Another factor, Mosul being in the Kurdistan region, do you really think Kurdistan whom is a major player in this would let the rest of the country move forward? Probably not, you decide.
 
I hope this helps you have a better understanding of what is going on and all of the articles coming out of Iraq. I do like to read the articles but do not put a lot of weight into them on how it will effect my day or attitude about this investment. I am here to the end with all the rest of you members.
 
Remember my motto: Look back and be grateful; look ahead and be hopeful; look up and be blessed.    Blessings,   Steve
 
Songbird, said:     Just a reminder of why we are here invested in pretty 000 notes:
  Future of Iraq    New State Department Releases on the "Future of Iraq" Project

http://nsarchive.gwu.edu/NSAEBB/NSAEBB198/

 Stevel:    Excellent!!!!!!!!!!!!!!!
 
 
Parliamentary finance: finance ministries will receive allocations after budg...Thread

buck72801 said:   Sooo if after the budget is recorded and the money is distributed is it still gonna be at 1182 etc
 
Stevel:     Yes. Until the country is secure, life goes on.
 
Parliamentary finance: finance ministries will receive allocations after budg...Thread

Analigizer Bunny said: Im almost afraid to ask, but I can't be the only one who wants to know. 
 
What happened to "the rate is in the budget" fact that we've been hearing for years?
 
Wouldn't the rate have to remain 1182 for the whole year of 2016 until a new budget is passed?
 
Are there any new confirmations ?
 
Stevel:    Why the negative on my comment? Sorry you did not appreciate the actual facts.
Where did you get this information? The rate has never been in the budget as a fixed number but rather factored into it. Please do not listen to all the garbage you are reading.  Thanks in advance.
 
Analigizer Bunny said:  Sorry, I wasn't trying plus or neg you. It was an accident while scrolling down on my phone. I didn't notice.
 
  This gets very confusing Steve, when you talk about actual facts and don't listen to the garbage.
 
 You posted a picture of the budget a few years ago with $3.42 as the rate. So the answer to that question is, On PD , the only dinar site I have been on.  So how could they have factored in $3.42 back then without an RV?
 
Stevel:     If I had the rest of the day and evening I would be more than happy to review and explain what has changed from the past to present. I promise to find some time in the next few months to explain. Have a safe one.
 
Parliamentary finance: finance ministries will receive allocations after budg... Thread

Wasco said:     Steve, you spoke before about Iraq needing to secure Mosul, before there will be any opportunity for an increase in value to the Dinar.  When both you, and Ray spoke to your friends and contacts in Iraq, was there any mention of a possible time table when Abadi was hoping to have Iraq secure (the taking of Mosul, Fallujah, etc.) ?  Thanks in advance for taking my question..............
 
Stevel:    No time table set in stone. I would imagine as quickly as possible. Iraq does not what this anymore than we want it.
 
vinman33 said:   Analigizer Bunny said: You posted a picture of the budget a few year ago with $3.42 as the rate. So the answer to that question is, On PD , the only dinar site have been on.  So how could they have factored in $3.42 back then without an RV?
 
Vinman33:    That's a good question, and I will humbly try to answer that, again, not speaking for Steve. I didn't see a picture of the budget with $3.42 printed in it so it may well have happened before my time or I just missed it. This is a long answer but I'll try to be brief.
 
The value and exchange rate of a country's currency is determined by several factors and I won't bore anyone with the details other than to say that once the "value" of a country's economy  is determined (including GDP (Gross Domestic Product, which for Iraq right now is almost exclusively oil), projected growth, comparisons to other countries, notes outstanding etc.), then that's what it is. 

A  country does its budget in its own currency and the exchange rate would show how much something would cost using another country's currency.
 
That's why in the past it could've said (for example) the budget was "90 Trillion dinars ($77.19B)" where the value  is given in dinars and then also reported in USD (divide 90T by 1166 (which was the exchange rate) to get the value in USD).
 
 Because of Iraq's situation and having an exchange rate imposed on them, and because their currency is not recognizeable and tradeable with other countries, they had to first figure their budget in dollars - an internationally recognized and tradeable currency (as well as the fact that the USD is a RESERVE currency), then convert it back to dinars.
 
If Iraq were to increase the exchange rate and have their currency become internationally recognized, the reported numbers could go down dramatically. For example, if the exchange rate to the USD was changed to .33, that means that 1 dollar is worth .33 dinars, or conversely, that 1 dinar would be worth 3 USD.
 
Doing the same math above, then each 3 dollars would equal 1 dinar. Therefore, $77.19B USD, divided by 3 is 25.73B IQD. WAAAY down from 90T.  And all the math is completed (and budget figures updated) by changing the exchange rate in the spreadsheet. Bingo, done.
 
That's the easy part.  The hard part is determining the exchange rate, which is based on the several factors that go into that process, some of which I noted above.
 Good question AB!   More Tylenol and Popcorn!   :D    (opposing opinions always welcome!)
 
Stevel:     Excellent job again Sir. You actually said it much better than I would have. Thanks

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