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Economist RV Explanation Part I and II


carlablum
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C-BOLT: I don't think carlablum was trying to take credit for this post. Part one is posted twice, because carlablum realized it should have been titled differently as some could not tell it was part one. However, in the very first post at the top it says "I had to share this!" and when I saw that I could tell that carlablum was just passing someone else's post on to us. Perhaps a better job of clarifying could have been done in the other part or the re-post, but really, I didn't get the impression that carlablum was trying to take the credit for the post. That's just my take.

I agree, I don't think carlablum is trying to take credit either!

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Thank you FDyer,

Also wrote "Had to share this!" I truly learned alot from this and thought it would be nice to pass on what I found. I could care less about any credit for anything I just found it, I'm not that kind of gal. Sure was shocked at how C-BOLT attacked me and do appologize if I didn't explain more. I also didn't think I should post where I found it becouse I like this site and did'nt want to say another sites name with respect to Adam.

How should I have explained it?

So sorry

C-BOLT: I don't think carlablum was trying to take credit for this post. Part one is posted twice, because carlablum realized it should have been titled differently as some could not tell it was part one. However, in the very first post at the top it says "I had to share this!" and when I saw that I could tell that carlablum was just passing someone else's post on to us. Perhaps a better job of clarifying could have been done in the other part or the re-post, but really, I didn't get the impression that carlablum was trying to take the credit for the post. That's just my take.
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(3) We then moved to the removal of big bills (the ones with the 3 zeros on them) and he said that this activity was always built into the plan. The activity was to begin as soon as Iraq had implemented a modern digital financial system (i.e. bank branches, credit/debit cards, ATM’s, direct wire transfers etc.). The removal of the large bills in-country would be the reverse of the process that was used to remove the pre-2003 currency with Saddams picture on it. The example was a 25,000 IQD=$25USD/pre-rv note would be brought into the bank and exchanged for a 25 IQD note=$25 USD post/rv. The 25,000 IQD note would then be destroyed removing it from the currency in circulation account. I told him a lot of people would call that a LOP and he laughed, saying they are partially right, because 25,000 IQD was being lopped from the currency in circulation account, but the only reason for this process was to improve money handling ability at all organization levels, and reduce the actual physical currency in use in all areas of the Iraq economy.

maybe im slow but how does this say 1usd=1iqd

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They talked about 1usd=1iqd in part 2.

(3) We then moved to the removal of big bills (the ones with the 3 zeros on them) and he said that this activity was always built into the plan. The activity was to begin as soon as Iraq had implemented a modern digital financial system (i.e. bank branches, credit/debit cards, ATM’s, direct wire transfers etc.). The removal of the large bills in-country would be the reverse of the process that was used to remove the pre-2003 currency with Saddams picture on it. The example was a 25,000 IQD=$25USD/pre-rv note would be brought into the bank and exchanged for a 25 IQD note=$25 USD post/rv. The 25,000 IQD note would then be destroyed removing it from the currency in circulation account. I told him a lot of people would call that a LOP and he laughed, saying they are partially right, because 25,000 IQD was being lopped from the currency in circulation account, but the only reason for this process was to improve money handling ability at all organization levels, and reduce the actual physical currency in use in all areas of the Iraq economy.

maybe im slow but how does this say 1usd=1iqd

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Thanks for the post, it makes this whole rv thing seem more real. drox had a good question though ...What are the chances that they will float a low rate to start with then raise it after most of the big bills are drawn out, and will there be a time limit to cash out?

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C-BOLT: I don't think carlablum was trying to take credit for this post. Part one is posted twice, because carlablum realized it should have been titled differently as some could not tell it was part one. However, in the very first post at the top it says "I had to share this!" and when I saw that I could tell that carlablum was just passing someone else's post on to us. Perhaps a better job of clarifying could have been done in the other part or the re-post, but really, I didn't get the impression that carlablum was trying to take the credit for the post. That's just my take.

I agree with everything

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Economist Explains How The Plan To Have The IQD RV at 1 IQD = $1 USD Should Work!

Had to share this! Part 1

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In our 40+ year career as a Retirement Consultant we have been blessed to meet some very talented professionals. One of them is a retired State Dept. economist who introduced us to the IQD investmentin 2005. He had worked on the original plan to install a new monetary system for Iraq after the 2003 invasion.

He had originally indicated that the plan was for the IQD to achievefinancial parity with the USD over a 7-10 year period from the introduction of the new system. At that time the USD

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(1) IQD is released internationally with an exchange rate of $1 USD = 1 IQD

(2) IQD is exchanged by Mr. & Mrs. X at Bank Y. Their exchange value is credited to their designated financial account,Bank Y forwards the IQD currency to the Federal Reserve and Bank Y’s account is credited at the bank private exchange rate. Yes, the banks will have a private rate and then they will add their profit spread to come up with their public rate. By law this bank spread could be as high as 8%, but it will be a competitive marketplace and the banks know investors will shop around. There is a possibility that there might even be a three rate structure (i.e. Treasury Rate – Bank Private Rate – Bank Public Rate) imposed, but he had no input on that subject.

(3) The Federal Reserve adds the value of the exchanged IQD to their foreign currency reserve accounts and destroys the actual physical currency under agreement with the CBI, which serves to reduce the total IQD physical currency in circulation. This build up of the foreign currency reserve accounts serves to strengthen the USD in the marketplace, because heretofore the US has never held significant foreign currency reserves, because there wasn’t any country whose currency was perceived as being equal to or stronger than the USD. The IQD with it’s commodity (oil+others) base, potential for agriculture growth and aggressive private development growth, has the capability to become the most valuable currency in the world in the 10 years after it’s revaluation and approval as an internationally recognized currency. Other countries have lots of oil, but they can’t feed themselves, they operate under a monarchy or religious tribunal and they have no private development system in place.

(4) Mr. & Mrs. X tithe to their church, local charity etc. which stimulates activity in that sector. They pay off their debts, making currency available for re-lending by their creditors. They buy a new house and car which stimulates their local economy and set up a conservative investment portfolio which adds capital to the investment markets. They also pay their estimated taxes which increases the cash flow to the US Treasury.

(5) The Federal Reserve under a controlled redemption plan supervised by the IMF, will use it’s foreign currency reserve IQD account to buy oil for the national strategic reserve, DOD reserves, other country reserves as part of international support agreements or resell it to private oil companies etc.

This gives the Federal Reserve a powerful market force capability to control the supply/price of imported oil which has far-reaching economic and national security implications.

The economics of this scenario look like this, using the exchange of a 10,000 IQD Note with a two-tier 2% bank exchange spread as an example:

(1) Mr. & Mrs. X get $9,800 credited to their non-interest bearing checking account.

(2) Bank Y gets a $10,000 credit to its Federal Reserve account, and by adding the $200 profit to their capital account, allows them to increase their lending cap by $2,000 under the 10% fractional banking model.

(3) The Treasury gets $3,500 in estimated taxes in the quarter after the exchange, because Mr. & Mrs. X are now in the “rich” category and get to enjoy the 35% tax bracket. This lowers the net cost of the IQD exchange to the US financial system to $6,500 USD (i.e. $10,000 out – $3,500 in).

(4) The Fed’s designated agent, at some point, orders $10,000 worth of oil from Iraq. Payment will consist of a 10,000 transfer from the Fed’s foreign currency reserve IQD account to the IRAQ Oil payment account at the CBI. Even though the world spot price of oil is defined in terms of USD, the actual transaction may take place in any internationally recognized currency agreed to by the parties. For example, Iran only accepts Yen from Japan for their oil orders, because they don’t want USD in their foreign currency reserves.

(5) The $10,000 order is filled with 200 barrels of oil based on the spot price on the date of the sale (for this example we used a $50 USD spot price). What does it cost Iraq to produce the oil to fill this order? Well they have negotiated productions agreements for $1.50 USD/barrel. From that price $.50 USD goes to the national Iraqi oil company who is the partner in the field the oil came from. Out of the remaining $1.00 the other oil field partners have to pay the Iraq government a profit tax of $.35 USD (35%). The net cost to Iraq to produce a barrel of oil used in this scenario is $.65 USD. (i.e. $1.50 – .50 – .35)

(6) The transaction is completed with the Federal Reserve exchanging foreign reserve credits which are equal to 10,000 IQD (which had a net acquisition cost of $6,500 USD) for 200 barrels of oil (which has a net cost to produce of $130 USD.

Simply put, it cost Iraq $130 USD from their foreign currency reserve accounts to redeem the value of 10,000 IQD, which goes into their operating accounts. At the same time the US got $10,000 worth of oil for a net cost of $6,500. That’s how it was originally planned for Iraq to RV at 1 IQD = 1 USD, with the variable being the political element (i.e. UN Sanctions, GOI actions, IMF actions, World Bank actions etc.)

Now let’s really stir the pot by:

(a) Having the DFI ($280+ Billion USD) plus other frozen assets (estimated at $100 billion) turned back to Iraq and added to their foreign currency reserve, bringing it up to $430+ billion USD.

(B) Then change the current fractional IQD reserve requirements of 100% to 15%. That just raised the total potential money supply value to $2.8 Trillion (430 billion/ 15), while at the same time the total physical IQD in circulation is being reduced by removing the large bills with the 3 zeros.

© Also execute the plan Iraq announced to increase oil production from 2+ million barrels/day to 10 million barrels/day with the resulting revenues flowing directly to the Iraq treasury.

(d) To add a little more intrigue have the CBI continue to use it’s sales window to market oil futures and forex contracts. They have shown they can generate significant cash flow in the private market, think of their impact in public markets.

We leave it to your analytical ability to determine how high of an RV exchange rate IRAQ can really support. There is strong political pressure to set the initial rate at $3.22 USD = 1 IQD, so it can be proclaimed that IRAQ has moved back into the International community of nations and has re-established it’s currency at the internationally traded rate in effect before Saddam invaded Kuwait in 1990.

Frank26 zip code is $3.21+ as I remember, which is suggested is the same exchange rates cabinet ministers reportedly used to project the 2010 budget.

VERY INTERESTING! You have to love it when a plan comes together.

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Thanks for the post K98nights:

This is absolutely the best explanation of how the mechanics of the RV will work.

Everyone else who has explained it was always clear up to the point of "how can they really afford to do it?".

And then their explanations got very hazy. Thus adding crediblility to the LOP and then RV at $3.22 crew.

If their currency in circulation is currently backed up 100% by their reserves and it RV's at $1.00, that would take the reserve percentage to 1/10 of one percent (.1%). This was never believable to me and so I was going on faith with the gurus.

Now my eyes have been opened.

Thanks Woody.

I saw this before. But thanks for posting it again.

It makes so much sense I can't believe they haven't pulled the trigger yet.

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