Flashing: "Time To Be Positive, Encouraged And Alert"

Date: Sunday, July 31, 2016
Subject: from flashing ....
To: dinarrecaps@gmail.com
 
 
Hello, this is XXX XXX .. sending a post from flashing. It's been a long time. I'm just the sender     Thank you
 
TIME TO BE POSITIVE, ENCOURAGED AND ALERT
 
Hi. I have been quiet for long time seeing how people have become discouraged and frustrated.
 
There is no banker holding up the rv, there is no Obama, Hillary, Bush, or Trump hold up. 

The rv is not being held up until the elections. These are stories we have heard for years and they do not justify predictions that have come and gone.
 
Now is the time to be encouraged and alert.
 
Iraq has been doing a lot of things that call for an appreciation on their currency (rv).
There is a big increase in exports expected during q3 with a slight increase in imports. Just this is enough to expect a currency appreciation along with the policies and procedures they have already approved and implemented.
 
The fact that a country has gold, oil and other precious minerals is not enough to have a currency appreciation. It needs among other things the development of sound financial, fiscal and operating policies and procedures.

It is a simple as this: you may have a have a million dollars today and next month- nothing… because you didn’t establish a budget to control your expenditures. So the appreciation of a currency is a complex and slow process. That’s why it has taken so many years.
 
Unfortunately, some have provided unrealistic conjecture.
 
With that said, I am not calling the rv, but I am highly expectant any time now because if Iraq wants to show a high increase in their q3 export figure and a positive trade balance as forecasted, they need to do something asap.
 
IRAQ’S 2016 FORECASTED FIGURES ARE AS FOLLOWS:

Exports figures
83981.   Previous
99600.   Q3 Forecasted
102000. Q4 Forecasted

Import figures
45200.   Previous
45500.   Q3 Forecasted
43900.   Q4 Forecasted
 
So in my opinion, we should be very positive and encouraged. ~~~flashing
 
Below are some causes for a currency appreciation from a very good analogy.
 
Please read them and determine which currencies are just about to explode.
What Causes an Appreciation in the Exchange Rate?
 
Let’s use the Pound Sterling in the following illustration.
 
An appreciation means the exchange rate (£) becomes stronger (worth more) against a basket of currencies.
 
Pound Sterling will become stronger if there is higher demand for Sterling, or lower supply of Sterling.
 
Reasons for an appreciation in the Exchange Rate
 
1. Increase in Interest Rates.
 
Higher interest rates make it more attractive to save in the UK (there is a better rate of return on saving accounts). Therefore, there will be an inflow of hot money (people holding currency in UK saving accounts). This increase in demand for sterling causes the appreciation.
 
2. Lower Inflation.
 
If the UK has relatively lower inflation than other countries, this makes UK goods more competitive against foreign goods. Therefore, there will be more demand for British goods and hence sterling. This is a long term factor which will cause an appreciation in the value of the exchange rate.
 
3. Increased Competitiveness of UK goods.
 
Increased productivity and greater competitiveness will make British goods more attractive.
 
4. Expectations
 
Speculation plays an increasing role in the determination of exchange rates. If investors feel a currency is likely to appreciate in the future they will buy now and actually make it occur. E.g. if people expect interest rates to rise the currency will rise.
 
5. Surplus on Current Account.
 
This causes an inflow of foreign exchange into the economy. Typically, a large current account surplus will cause an appreciation in the exchange rate (unless there is a similarly large outflow on financial and capital account)
 
6. Higher Economic Growth.
 
Stronger economic growth tends to cause an appreciation in the exchange rate. This is because with higher economic growth, the country is likely to see an increase in interest rates. Also higher economic growth tends to cause greater confidence in the economy.
 
However, it depends on the type of economic growth. If the growth is led by higher consumer spending, this will cause a rise in imports which could lower the exchange rate. If growth is export led, the currency should rise.
 
7. Buying Domestic Currency
 
If China sold its US dollar assets and bought Chinese assets, there would be an appreciation in the value of the Yuan
 
The following is another explanation of exchange rate determination:
 
Determinants of Exchange Rates
 
Numerous factors determine exchange rates, and all are related to the trading relationship between two countries. Remember, exchange rates are relative, and are expressed as a comparison of the currencies of two countries. The following are some of the principal determinants of the exchange rate between two countries.
 
Note that these factors are in no particular order; like many aspects of economics, the relative importance of these factors is subject to much debate.
 
1. Differentials in Inflation
2. Differentials in Interest Rates
3. Current-Account Deficits
4. Public Debt
5. Terms of Trade
6. Political Stability and Economic Performance 

The Bottom Line
 
The exchange rate of the currency in which a portfolio holds the bulk of its investments determines that portfolio's real return. A declining exchange rate obviously decreases the purchasing power of income and capital gains derived from any returns.
 
Moreover, the exchange rate influences other income factors such as interest rates, inflation and even capital gains from domestic securities.

While exchange rates are determined by numerous complex factors that often leave even the most experienced economists flummoxed, investors should still have some understanding of how currency values and exchange rates play an important role in the rate of return on their investments.
 
For an in depth look at the 6 factors, read more at:
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