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G-Lin: [I’M NOT CLEAR ON WHAT THIS IS SAYING] OPINIONS?

Released Cash Is Used To Bridge The Fiscal Deficit

10/18/2015 0:00   BAGHDAD – Imad emirate  is the return of the cash release of important issues that have a lot of implications of an economic, political and institutional significance, and there is disagreement about how to measure it and receiving it and how it is distributed.

In general, it is significantly associated purpose of carrying out the version that is monopolized by the government or monetary authority according to the legal and political conditions prevailing.

In this context, the economic expert Dr. said. Falah Thuwaini :. The majority of economists agree that the return on cash release is one of the ways in which the government uses to finance its budget deficit.
There are few who believe that the political, institutional and economic reasons that explain this return.

So economic studies aimed at verifying the determinants of return on the cash version by using multiple gauges.

He Thuwaini the importance of this return by economic Keynes say: (that the government can behave and choose this method when you do not find a way or another way, a tax form in which it deems the most public cruelty so that they can not evade, and even the weakest governments can be imposed when they are not able to impose something else).

He said that governments need money to be spent, and have some of these expenses allocated for the purchase of goods and services and others to finance transfer payments.

The government financed its expenditures based on three ways:

The first is to increase revenues through taxes.

The second way is to borrow from the public through the sale of government bonds,

and the last by the possibility of printing money.

The revenue that comes through printing money known as the (return cash release) which is achieved in two ways namely return cash release and high rates of inflation.

He Thuwaini, Practically that the actual way for issuing currency is through the purchase of government debt by the central bank and the payment of the value of that debt by issuing influence to finance this debt, which is called b (monetizing the debt).

It can return cash release definition in general (as the yield which combines by the relevant government sovereignty of monopoly cash release) or process (as the sum of all revenues generated from the feature of monopoly to issue money), as monetary issuance is known (as a control on social resources or purchasing power generated through the issuance of money).

and between Thuwaini that the transition from a barter system to use the money source to provide resources and large gains, these gains could fall within the concept of return on cash release, which included a significant reduction in the cost of the information contained compare the relative prices of goods and services in all aspects of the economy.

In the past, the return of cash release represents the difference between the cost of the alloy and the nominal value of the coins minted.

Some economists still believe at the present time a yield of monetary issuance but upheld a fee or tax to pay for the government minted or printed money.

It should be noted that some people go so far as to assume that the government uses revenue from issuing money to purchase goods and give aid to some countries, free of charge and (economic) for political purposes. He d. Thuwaini, there are those who believe that the process of issuing coins are similar to the real production process.

http://www.alsabaah.iq/ArticleShow.aspx?ID=102517

hi-five:     I’d be really surprised if Iraq printed money in order to balance their budget and pay down debt.  I doubt the IMF would be on board with a decision like this.     At least, I personally would not agree to it!!  😀

G-Lin:    Thanks hi-five. I was curious about this statement.

as monetary issuance is known (as a control on social resources or purchasing power generated through the issuance of money).

G-Lin:  It sounds as though purchasing power would increase due to the issuance of money. That wouldn’t happen if the money released would be at the current rate. Maybe I’m reading it wrong.. sure would not be the first time.

GorWell:  Really don’t understand this article But all I can think about is what DreamWeaver said about the New 50 Notes being used as a Bridge Currency. So…could this be about bringing out the lower denoms and coins? I could be way off base, but thought I would see what others think. Mrs. G

Brule:    “He Thuwaini the importance of this return by economic Keynes say: (that the government can behave and choose this method when you do not find a way or another way, a tax form in which it deems the most public cruelty so that they can not evade, and even the weakest governments can be imposed when they are not able to impose something else).

He said that governments need money to be spent, and have some of these expenses allocated for the purchase of goods and services and others to finance transfer payments”

Keynesian Economics

A theory stating that government intervention is necessary to ensure an active and vibrant economy. According to this theory, government should stimulate demand for goods and services in order to encourage economic growth.

It thus recommends tax cuts and increased government spending during recessions to reinvigorate growth; likewise, it recommends tax increases and spending cuts during economic expansion in order to combat inflation.

Many economists believe that Keynesian economic theory is more efficient than supply-side economics, though critics point to the theory’s inability to explain stagflation in the United States during the 1970s.

G-Lin:   Thanks Brule… I don’t think tax cuts or increases is the answer. They need a different intervention.  😀 JMO..

Mike:   From my understanding, cash release programs are related to how budget expenditures are released.  Here’s a link with a flow chart that explains how budgets are funded:

http://budgetngbayan.com/budget-101/budget-execution/

Iraq’s budget for 2015 was dead on arrival, the $25 billion deficit was grossly underestimated, oil prices dropped lower than expected and the optimistic pumping figures never materialized,

Payroll has been sporadic, the ministries aren’t fully funded and service/infrastructure projects have lost almost all funding.  It looks like Iraq is trying to formalize the process of budget payments to insure a fair distribution of whatever is available to the individual ministries.

The second part is the three ways Iraq plans on making up the shortfall in the budget:

The government financed its expenditures based on three ways:

The first is to increase revenues through taxes.

The second way is to borrow from the public through the sale of government bonds,

The last by the possibility of printing money.

 

Mike:  We know the that taxes won’t work, the people simply can’t afford it.  Additionally, Basra won’t allow Baghdad to implement them, they’ve threatened to strike and stop all imports if Baghdad insists.

Bonds won’t work either, the sovereign bond program was scrapped for several reasons and the domestic bond program, where they hoped to raise $2 billion, is receiving a tepid response from the Iraqi people, the CBI has extended the deadline twice because of slow activity.

That leads us to printing money. This is the most troubling part of the article:

He Thuwaini, Practically that the actual way for issuing currency is through the purchase of government debt by the central bank and the payment of the value of that debt by issuing influence to finance this debt, which is called b (monetizing the debt).

Mike:  The last thing I want to see is the CBI buying Iraqi debt with the reserves.  I’ve always felt that the 50/100K notes were about “printing” money.  In lieu of raising the value of the dinar and stopping the auctions, this is a viable option to some in the GOI.

Monetary and economic policy absolutely escapes many of the powerful political figures in control of the country, to them, this sounds like a great idea.

We’ve read several articles that talk about lowering the rate of the dinar to 1500-$1 and articles like this dovetail with those who advocate this plan.  It lowers the cost of paying the people and props up the failing economic model.

The real losers will be the Iraqi people who will lose purchasing power and incur the burden of inflation.  I’m hoping this isn’t the plan for the future of Iraq.

http://www.currencychatter.com/apps/forums/topics/show/13262281-released-cash-is-used-to-bridge-the-fiscal-deficit​​

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