Economist RV Explanation Part I and II

[ronscarpa]

Thanks again INMARC & CARLA. - You've helped many of us with understanding & peace of mind..!

Easter Blessings to Everyone -

RON

[Kent]

Inmark, Sorry, with a busy Easter weekend I haven't been on the computer much, so didn't see your reply. Thanks so much for taking the time to answer questions FROM A HOSPITAL BED! I'd love to ask more, but you need rest. In the last year I've had 2 family members in and out of the hospital for the same thing. You are in my prayers.

BTW, we probably have some common friends in the DFW area (since I received your post in email form).

[carlablum]

Thanks again INMARC & CARLA. - You've helped many of us with understanding & peace of mind..!

Easter Blessings to Everyone -

RON

Please don't thank me. Inmark is the most amaizing person and has enlightend us all. I just could'nt help myself when I read his great post so I had to pass it on! Hope you are doing better Inmark. You are in my prayers. Happy Easter

[zuni616]

Hi, Yes, in this senario that is correct - - there could also be "state tax" added to this.

[dinarmama]

Great! Thanks so much for posting this.

[bahamaboater]

wow best post yet. Call me stupid but carl, can you explain how the exchange would work with the zeros taken away. I have 20 million in 10000 and 20000 notes. can you walk me through that process at $3.22

[DesertEagle]

This was taken from another site from a day or two ago

[GOIQD]

Thank you This puts a great foundation under our feet. Now we have HAPPY FEET

[hopkins_311]

thanks for the info

[ronberta]

Wow,what a post,best yet,sure hope that is how it all goes down.It really makes alot of sence.Great job!!!

[mvrocky]

Wow....I have been trying to understand what this RV is about. Your breakdown actually helps me to make sense of it. Thanks for your post!!

[rttlsnake]

Great job on breaking this down. For those of us not to sure at all how the process works , this post was great ,thanks again

[c1_650]

Pretty good post thanx!

[Eagle502]

I found this interesting

[Racer X]

I appreciate your post. If this is the plan for the IQD RV, then please allow me to examine this using your figures.

If there are 25T IQD outstanding, and most of that is in country, please allow me to use a ratio of 60% in country and 40% out. That gives us 10T IQD outstanding worldwide through central banks, individuals, institutions, etc. According to your source, it will cost Iraq 200 bbl of oil to retire a 10K IQD note. At this rate to retire 10T would costs 200M barrels of oil; Irag has proven reserves of only 115M barrels. For this plan to work, the price of oil would have to skyrocket and stay there while Iraq sucks its' oil wells dry. For oil to skyrocket and stay there has never happened, since other countries will increase production to maximize their own oil sales while prices are high.

Maybe my ratios are wrong; let's say there's only 5T IQD that are out there, and that somehow Iraq and Iraqis have managed to hold on to 80% of their Dinar. Even at $100 per barrel oil, it would cost Iraq 50B bbl of oil, roughly half of what it has, to retire foreign debt.

And still this does not address the additional 15T IQD in iraq. The world is not just going to sit by and allow another country to RV its' currency to the point where they have more net worth than all other countries combined; world markets will not sustain such a value.

Sorry, but as far as I can see the math doesn't work.

[bahtman]

I appreciate your post. If this is the plan for the IQD RV, then please allow me to examine this using your figures.

If there are 25T IQD outstanding, and most of that is in country, please allow me to use a ratio of 60% in country and 40% out. That gives us 10T IQD outstanding worldwide through central banks, individuals, institutions, etc. According to your source, it will cost Iraq 200 bbl of oil to retire a 10K IQD note. At this rate to retire 10T would costs 200M barrels of oil; Irag has proven reserves of only 115M barrels. For this plan to work, the price of oil would have to skyrocket and stay there while Iraq sucks its' oil wells dry. For oil to skyrocket and stay there has never happened, since other countries will increase production to maximize their own oil sales while prices are high.

Maybe my ratios are wrong; let's say there's only 5T IQD that are out there, and that somehow Iraq and Iraqis have managed to hold on to 80% of their Dinar. Even at $100 per barrel oil, it would cost Iraq 50B bbl of oil, roughly half of what it has, to retire foreign debt.

And still this does not address the additional 15T IQD in iraq. The world is not just going to sit by and allow another country to RV its' currency to the point where they have more net worth than all other countries combined; world markets will not sustain such a value.

Sorry, but as far as I can see the math doesn't work.

Racer X

First off, your numbers won't ever work if they are incorrect to begin with.

The proven oil reserves in Iraq are the third largest in the world at 115 BILLION barrels, not million barrels.

This throws your analysis off by about 1000 times.

Using your Analysis, the 200M barrels of oil it would cost is about 3 months of oil at current rates of production.

It seems a small price to pay.

I suggest you start celebrating your good fortune.

[Pat]

Thanks so much for the imformative post it ..........GO RV..............

[callaisrc]

good post, has alot of good information

[LynnMarie]

Thank you carla, very good read:)

[Racer X]

Racer X

First off, your numbers won't ever work if they are incorrect to begin with.

The proven oil reserves in Iraq are the third largest in the world at 115 BILLION barrels, not million barrels.

This throws your analysis off by about 1000 times.

Using your Analysis, the 200M barrels of oil it would cost is about 3 months of oil at current rates of production.

It seems a small price to pay.

I suggest you start celebrating your good fortune.

Bahtman, when you're wrong, you're wrong and I can certainly admit when I am. As you very correctly stated above, I was looking at the bbl reserve at a vastly understated ratio. I thank you for correcting me! Have a great day.

[inmarc]

Racer X

First off, your numbers won't ever work if they are incorrect to begin with.

The proven oil reserves in Iraq are the third largest in the world at 115 BILLION barrels, not million barrels.

This throws your analysis off by about 1000 times.

Using your Analysis, the 200M barrels of oil it would cost is about 3 months of oil at current rates of production.

It seems a small price to pay.

I suggest you start celebrating your good fortune.

bahtman,

Thanks for taking some of your valuable time to answer Racer X's question. I apologize for not being in the forum much to answer questions about our post. We were hospitalized for awhile with Atrial Fibrillation and are still battling with an elevated pulse. Then came tax crunch time and our day job got to be 24/7. After April 15th passed we have been spending most of our time building the Wealth Management Group Forum which is designed to assist the affluent (5 million+IQD) investor maximize the investment opportunity presented by what has been described as "the perfect economic storm."

We also want to thank the nice folks here for their many get well wishes, believe me "we felt the love."

Here's an article that has been in our research stack for some time, please note the comments at the bottom. Because we can't verify the original, it has to be labeled interesting rumor:

Iraq Minister Of Planning Estimates The Exchange Rate Of The IQD For The 5 Year Plan (Released in 2010)!

The Exchange Rate of Foreign Currency in Economic Feasibility Studies

Below are the central controls related to the exchange rate of the foreign currency to convert the project inputs and outputs from foreign currency to its equivalent in the local currency, and that is by calculating the net discounted present value standard and the internal return on investments in economic analysis that governs investment projects that costs excess one million dinars.

Estimate the shadow price of foreign currency:

1. It is necessary to put central controls to amend the official exchange rate* to reflect the shadow price of the foreign currency, and that is considered one of the necessary requirements to implement the net discounted present value standard and the internal return rate on investment in the economic calculation stated in the instructions, paragraph nine.

The central controls for adjusting market prices distinguished a group of outputs and inputs traded internationally, where the projects production or usage of them is reflected on the abundance of foreign currency in the economy and thus project outputs or inputs used of such are considered purely foreign currency outputs or inputs.

* What is meant by exchange rate: the number of units of foreign currency, expressed in dollar per one dinar. In particular the following outputs and inputs of foreign currency were distinguished:

* Export-outputs

* Outputs marketed locally that substitute imports.

* Imported inputs.

* Inputs produced locally that usually go to exports.

* Foreign labor.

According to the pricing rules, the value of the output and input (traded) is calculated using export prices (FOB) and import prices (CIF), according to what is listed in the pricing rules.

In other words the pricing rules calculate what the project produces from foreign currency (quantity of exports multiplied by the export price (FOB) in foreign currency or the quantity of substitute imports multiplied by the import price (CIF) in foreign currency, as well as what the project uses from foreign currency and imported inputs multiplied by the import price (CIF) in foreign currency .... etc.).

In a later step, project outputs and inputs must be converted from the foreign currency to its equivalent in local currency (dinars) by using a specific exchange rate for the foreign currency.

2. Justifications for exchange-rate adjustment: there are a number of important and powerful arguments which support the view that the official exchange rate reduces the real value of foreign currency for purposes of calculating the economic national profitability for investment projects and hence for the purposes of investment planning. It is demonstrated in this context to call for assessing the dinar for less than (3.208) dollar (official exchange rate) when assessing project outputs and inputs of traded goods of exports, substitute imports and imports... etc.

The justifications to call for the use of an exchange rate that is lower than the official exchange rate are:

[carlablum]

inmarc,

I have been worried about you! So glad to see you are doing better.

Do you think the RI will take place when the 2010 budget is released?

WE NEED YOU!!!!!!!!! and MISS YOU!!!!!!!!!

I have been praying for you!

Blessings!

[inmarc]

carlablum,

Thank you for your well wishes and especially your prayers. My grandson had his bible study class pray for me too, since he said it worked when his dog Diesel was sick. Obviously you guys have some pull with "the boss." I don't think it will be an RI since that means re-establishing the $3.208 rate, but there will be an RV within the $.86 - $1.17 range. This will have to happen just before or at the same time the 2010 budget is released. The overriding question, which nobody I know really has the answer to, is when will that be?

[carlablum]

inmarc,

You are very welcome!

I just have one more queston, is there a deadline for the release of the budget. Before we know it, it will be 2011 and I don't understand how this can be witheld much longer.

Thak you for your help!

Carla:hug:

[bahtman]

Inmarc,

I hope that you are back to full health very shortly.

And thank you so much for your insight into this RV merry-go-round.

Your 3 posts, The Economist Part I & Part II, and this last document are easily the best bits of information presented on any Dinar website anywhere.

You have my thanks AND my prayers.