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Saturday, May 19, 2018


Kaperoni    What is the Balassa-Samuelson effect?

Kaperoni    When you search Wikipedia, you get an explanation for this as…”Balassa–Samuelson (BS) hypothesis implies that countries with rapidly expanding economies should tend to have more rapidly appreciating exchange rates.” In other words, the IMF themselves are acknowledging (by saying Balassa–Samuelson effect in this Article IV document) the dinar will rise rapidly.

Further research on Balassa-Samuelson effect brings us this…

‘“In 1964, academics Bela Balassa, a Hungarian economist, and Paul Samuelson, a Nobel-Laureate economist, independently observed that countries with higher levels of productivity growth experienced rapidly rising real wages and so appreciating real exchange rates.   
Academic studies since have suggested the picture is not as simple as Mr Balassa and Mr Samuelson first thought and that many other factors can also influence the model. However, many long term investors in emerging market currencies, for example, have been able to benefit from the appreciation of those currencies which is arguably due to the Balassa-Samuelson effect.”

Kaperoni    The key here is the last sentence… “many long term investors in emerging market currencies, for example, have been able to benefit from the appreciation of those currencies which is arguably due to the Balassa-Samuelson effect.”

In other words, this reference to the “Balassa-Samuelson effect” hypothesis which in essence is described as “a rapidly expanding economy creates a rapidly appreciating exchange rate” will give us an opportunity to benefit from that appreciation.

That can only mean free float. The word “rapid” only make sense in a free float. It also means the IMF knows and endorses the plan. It also means that the dinar we hold is legitimate and was sold with an intended purpose.

Zig  Kaperoni: Back for more??.....lol

Kaperoni    apparrently Tebow and Spectra know more than the IMF does. lmbo

Kaperoni   “14. The de facto fixed exchange rate has served Iraq well. The authorities agreed that a stable nominal exchange rate provides a valuable anchor for inflation expectations in an uncertain environment, and intend to continue implementing this policy for the foreseeable future. In the medium term, staff encouraged the authorities to consider creating the conditions which would make possible a move to a more flexible exchange rate policy.

Such flexibility could allow a predictable and gradual appreciation of the nominal exchange rate, triggered by strong oil revenues and the Balassa-Samuelson effect, to accommodate a possible real exchange rate appreciation while keeping domestic inflation low.”

Kaperoni    Such flexibility could allow a predictable and gradual appreciation of the nominal exchange rate, triggered by strong oil revenues and the Balassa-Samuelson effect, to accommodate a possible real exchange rate appreciation while keeping domestic inflation low.”

Kaperoni    Such flexibility could allow a predictable and gradual appreciation of the nominal exchange rate, triggered by strong oil revenues and the Balassa-Samuelson effect, to accommodate a possible real exchange rate appreciation while keeping domestic inflation low.”

NickNak    Kaperoni The IQD is not a stock you do know that right?

Kaperoni    oh but they will have an answer lol

Dave    So 999 fils for that coke instead of 1000....call that gradual rise in the value?

Zig    Kap loves this chat room!!.... :yes:

Kaperoni    what is ur question Dave?
Kaperoni    currencies float all over the world Dave

NickNak    Zig Ya it is free no fee LOL

Kaperoni    do they raise the price of a coke daily?

Dave     art 8 ...Lds out....999 fils for that coke?

Kaperoni     Iraq must float    that is the only option

Dave    instead of 1000.....call that a gradual rise?

Kaperoni    how fast it rises is not up to me    it could rise .10    or it could rise .20    or .01    who knows

NickNak    Kaperoni Tony LOL

Zig    Just do something I say!

Kaperoni    its all related to inflationary pressure created by investors/investment

Dave    I will give you that.....

Kaperoni    if investors come it could rise fast

Baxter    Kap.... does that 2% increase every 90 days effect the dinar rising in value..? someone asked that earlier... they fear the dinar could only increase 2% every 90 days.. so it would take at least 10 years to get to a dollar?

Dave    many ifs yes...

NickNak    Kaperoni IQD does not act like a stock does it?

Kaperoni    not the same thing

Baxter    Ok.. thx

Kaperoni    baxter two diferent subjects

Dave    Baxter that's managed float ...he is talking free float

Kaperoni    the 2% spread is related to the market rate

Baxter    Ok.. there was some concern in here after you left before

Kaperoni    keeping the street rate/market rate below 1214 to $1

Dave    Kaperoni true

Baxter    do you know...how all of a sudden... they came within compliance... did the IMF help them do that?\

Kaperoni    not the same subject as the float of the dinar once they get off the peg

NickNak    Kaperoni Spread is always in all currencies

 Kaperoni    Baxter yes  the IMF and UST helped them

Baxter    Ok.. thx

Kaperoni    nick not the same subject    again ur confused
there are different types of spreads   this is a IMF requirement   fact   then must   conform

NickNak    So float like crypto currencies    Which is how stocks act

Dave    free float economic suicide

Kaperoni    There is no options

Kaperoni    they must get off the peg when they move to article VIII    and the only option is to float

Dave    let foreign counties determine the value of the IQD

Kaperoni    http://www.imf.org/external/pubs/ft/wp/2004/wp04126.pdf

Kaperoni    http://www.imf.org/external/pubs/ft/wp/2004/wp04188.pdf

Kaperoni    http://www.imf.org/external/pubs/ft/issues/issues38/ei38.pdf

Kaperoni    Here is the IMF 2% Rule

Kaperoni    http://dinaralert.webs.com/apps/forums/topics/show/13476628-classification-of-exchange-rate-arrangements-and-monetary-policy-frameworks

Kaperoni    and it also documented in the IMF Article IV

Spectra    Choosing Exchange Regimes  in the Middle East and North Africa   Abdelali Jbili and Vitali Kramarenko

Dave    Kaperoni yes and.... buy vs selling of currencey

Kaperoni    Here is the answer on the IMF helping Iraq with the spread...

Kaperoni    To address concerns that foreign exchange sales by the CBI would finance terrorism or money laundering of illegal activities, the CBI has been strengthening its procedures to allocate foreign exchange with the technical assistance of the U.S. Treasury and the Federal Reserve Board and with recourse to external auditors.

The CBI has also requested the technical assistance of the IMF Legal and Monetary and Capital Markets Department to analyze the reasons behind the rise of the exchange rate spread between the official rate of the CBI foreign exchange sales and the parallel market rate since the end of 2015, and to make recommendations to reduce the spread.

 Kaperoni    The MCP arises from the official action to limit the purchase of foreign exchange, with no mechanism to ensure that exchange rates in the official and parallel markets do not deviate from IRAQ each other by more than 2 percent.

Dave    like that here too.....
Dave    Iraq was beyond that yes and not compliant

Kaperoni     "25. The government will gradually remove remaining exchange restrictions and a multiple currency practice (MCP) with a view to eliminating exchange rate distortions.

Such a move towards acceptance of the obligations under Article VIII of the IMF’s Articles of Agreement will send a positive signal to the investor community that Iraq is committed to maintain an exchange system that is free of MCPs and restrictions for current international transactions and thus facilitate creation of a favorable business climate.

Spectra    here's a couple of floaters...Independent floaters ....Yemen Somalia3, 5 for example these countries???

Dave    so what does that have to do with the price of tea in China

Spectra    https://www.imf.org/external/pubs/ft/med/2003/eng/jbili/jbili.htm#tab1

Dave    Spectra sanctioned cesspools

Spectra    Dave exactly
Spectra    if you look at that link it shows who is floating and who is not

Kaperoni    28 more day to go to meet compliance with that IMF directive
Dave    notice those countries not on the Forex....ALL the Sanctioned countries about

Kaperoni    then i expect a letter to the IMF requesting Article VIII

larrykn    http://www.rudaw.net/english/middleeast/iraq/180520181

Kaperoni    They could wait, but to much as risk  need to end the auctions  need investors

Spectra    Egypt3  Iran Pakistan Afghanistan Algeria4 Iraq5
Mauritania Managed float with no preannounced path for exchange rates As of April 2001)

Kaperoni    dont want to risk coming out of compliance and having to start again

Dave    Kaperoni yes.....

Spectra    Kaperoni please

larrykn    investor are already ready to come in , just waiting on Iraq to do the reforms

Spectra    jeez lol

Kaperoni    we will see larry

Spectra:    ??

Kaperoni    hope so

larrykn    that has already been told to us

Kaperoni    I want them to rush in

larrykn    article say they are right after the Kuwait conference

Baxter    Im sure investors will come into Iraq... lots of money to be made there...

larrykn    but they need to get it going before they lose all of them
larrykn    hence they need to get this party started

Dave    why are folks giving you the gears ....

Kaperoni    zig there is good reading material there
Kaperoni    see ya

Baxter    thx Kap

Kaperoni    bash away   lol

Baxter    not I

Spectra    Kirk H. Sowell  ‏@UticaRisk  OK, so here is the full video of that IHEC presser just posted. So now we can watch it at leisure & get an accurate count. I still can't believe I am having to do this at 2:40AM. https://twitter.com/UticaRisk/status/997622749404303362

DaveI hear what he is saying.....no problems here

larrykn    I think Kap is right about the float , that is not a problem , where it starts is another question :)

Baxter    I agree larry
Baxter    I would think it would have to be around 1-1....

Dave    in the realms of possibities...free float I doubt...Iraq wants to come in as an asset based nation ,not a free for all for foreign investors

larry    knit is not like Iraq is a new country with no income coming in, they have and had oil for every , that will count for something when they change the rate

larrykn    yes they need investor to grow their economy but oil will get them start higher then were they are now, IMO

Dave    larrykn under free float could come in at.0086 but change to a dollar over night

Baxter    very possible

larrykn    Dave imo yes

Dave    so why are we riding Kap...?

Kaperoni    Its not a free for all...The CBI controls the monetary policy and liquidity of the dinar.
Kaperoni    are other countries that float a free for all? no

Larrykn    they talk about bring out the LD's how can they when it .0086

Kaperoni    gradually

Dave    Kaperoni AN asset based nation Managed float no free float ...cant do both

Kaperoni    as the dinar rises in value

larrykn    as you say Kap , we will see

Kaperoni    rather than guess read those docs links you all will learn how this all works

Dave    Kaperoni Can they go from a free float to a managed float overnight ? I doubt that

larrykn    if they were doing what you said they wouldn't have to print those ld's for at least another year or two, they sure wouldn't have them in the banks

larrykn    gee kap you think your the only one that reads those article really

Kaperoni    dave i expect them to get off the peg and float. The CBI can change exchange rate regimes anytime

Kaperoni    well larry very few do    and most dont comprehend ​
Spectra    The whole thing is already been gradual....in my opinion......14 or more years later......how much gragual do they need ...?

Kaperoni    they would rather believe Tony or Frank or those other **

larrykn    I'm agreeing with you on the float , I'm sure they will, were it starts is where I don't agree with you

Dave    Kaperoni I believe those countries that free float....are those poor ones

Kaperoni    the CBI raised the value over 1000 dinar in 2004 in 6 monthsi    so is that fast enough?


Kaperoni    is the US poor Dave?

Dave    Bankrupt from what I hear

Spectra    Dave ;Thud

Kaperoni    mod no

Dave    22 trillion

Kaperoni    i dont know how to do pm's

Dave    fort knox empty....

Kaperoni    well im done for one day lol
Dave    What was their deficit 22 trillion.....?

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