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Central bank: a plan to raise the exchange rate of the Iraqi dinar


yota691
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Time doesn't change the need to back a pegged currency.  They have added to their reserves over the amount needed to back their expanding money supply by maybe 1% for the past 5 years or so.  Lets say they can increase that overage to 5% per year.  Then to increase their reserves by 10x to be able to raise the rate by 10x (to a penny, whether all at once or little by little) that wold take 200 years.  Note that if you do want to slowly raise your countries exchange rate so you are telegraphing your intentions, you do want to do it very slowly so you do not attract speculators.  e.g. China has taken about 10 years to move 30% (if I recall correctly) under pressure from the rest of the world to raise their rate over balance of trade issues.  I'm guessing that sort of time scale is not what you had in mind.

10 years for 30%? No, probably not.... But long-term, they may continue to see gains. Those who fall for the quick-rich fiasco will only find themselves disappointed (unless of course some unusual method is used and is successful). Taking the time and understanding that this may be a long-term speculation is no big deal for the more grounded person. They have moved the rate up at a decent pace in the past, when the rates fluctuated frequently. Obviously the stability is not working for them as the market rate runs away from the official rate. Time will tell the end result, and it'll be interesting to watch. We may or may not see some interesting moves over this coming summer.

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Some understand what's economically possible.

 

yes some do ..

 

news_391933.jpg
May 11, 2013, 1:43 pm

Economic expert called on behalf of Jamil Antoine, on Saturday, the central bank to adopt oil and gas Kkhozan the reserves instead of gold and the dollar, stressing that the value of oil exports during the year twice all the gold reserves in the country.

Said Antoine told him the reporter, "news agency Iraqis," that: "reserves the central bank alone is not enough to maintain the stability of the Iraqi economy, where you must rely on reserve economist is the stock of oil and gas, because the reserves the central bank money and gold is not equal to the export of oil to one year . "

Noting that: "The principal reserve that is possible to protect Iraq's economy is the stock of oil and gas in the ground," and explained that "the statistics of the Ministry of Oil, suggests that the oil reserves reached about 150 billion barrels and 19 billion m3 of gas, up to the month of February of the year Current. "

Read more: http://dinarvets.com/forums/index.php?/topic/148518-economist-calls-for-the-adoption-of-the-oil-and-gas-reserve-of-the-central-bank-economist/#ixzz2UPql2H9y

 

 

then some dont have a clue whats economically possible

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With the JPY having a M2 of over 800 Trillioin, a M3 over 1 Quadrillion, and they seem to be fine operating off of a penny in comparison to the dollar.

Recent news also sounds like they'll be continuing to print money as well, a form of QE.

I'm not sure what point you are making.  Indeed the Japanese economy while in trouble is limping along with an exchange rate of about a penny.  The Japanese Yen floats, its not pegged so it isn't backed by reserves, the Yen is a reserve currency to some degree.  Their M2 is 230% of GDP (so with a GDP of 5.8T that would be an M2 of around 13T all converted to USD, your figures are in Yen of course) which is huge, but they are a developed country with a diverse economy and as you say have been printing money like crazy to try and get their economy going.

 

How is that instructive for what might happen in Iraq with respect to an exchange rate increase?

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Noting that: "The principal reserve that is possible to protect Iraq's economy is the stock of oil and gas in the ground," and explained that "the statistics of the Ministry of Oil, suggests that the oil reserves reached about 150 billion barrels and 19 billion m3 of gas, up to the month of February of the year Current. "

Read more: http://dinarvets.com/forums/index.php?/topic/149671-central-bank-a-plan-to-raise-the-exchange-rate-of-the-iraqi-dinar/page-6#ixzz2UPtID07v

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Noting that: "The principal reserve that is possible to protect Iraq's economy is the stock of oil and gas in the ground," and explained that "the statistics of the Ministry of Oil, suggests that the oil reserves reached about 150 billion barrels and 19 billion m3 of gas, up to the month of February of the year Current. "

Read more: http://dinarvets.com/forums/index.php?/topic/149671-central-bank-a-plan-to-raise-the-exchange-rate-of-the-iraqi-dinar/page-6#ixzz2UPtID07v

You beat me to it dontlop!  I was just copying and pasting this article!  This is one of those brilliant possibilities.  There was another article similar to this one wasn't there?

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I'm not sure what point you are making.  Indeed the Japanese economy while in trouble is limping along with an exchange rate of about a penny.  The Japanese Yen floats, its not pegged so it isn't backed by reserves, the Yen is a reserve currency to some degree.  Their M2 is 230% of GDP (so with a GDP of 5.8T that would be an M2 of around 13T all converted to USD, your figures are in Yen of course) which is huge, but they are a developed country with a diverse economy and as you say have been printing money like crazy to try and get their economy going.

 

How is that instructive for what might happen in Iraq with respect to an exchange rate increase?

 

The point being made is that a Penny value may exist with a Large M2! (The M2 that is being reference is 10 times that of Iraq)

Granted we are comparing Apples & Oranges based upon the economy of Japan & their monetary policy compared to Iraq, but the point of the matter is as follows:

 

At the given monetary policy, yes, a $0.01 R/V is nearly impossible. But nothing is set in stone and exchange regimes can change.

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WHERE IS

THE

 

Wealth

of

 

NATIONS?

THE WORLD BANK

Washington, D.C.

Measuring Capital for the 21st Century

http://siteresources...0748034/All.pdf

Energy and Mineral Resources

In this section, the methodology used in the estimation of the value
of nonrenewable resources is described. At least three reasons lie
behind the diffi culties in such calculations. First, the importance of the
inclusion of natural resources in the national accounting systems has been
recognized only in the last decades, and although efforts to broaden the
national accounts are being made, they are mostly limited to international
organizations (such as the UN or the World Bank).
Second, there are no
private markets for subsoil resource deposits to convey information on the
value of these stocks. Third, the stock size is defi ned in economic terms—
reserves are “that part of the reserve base which could be economically
extracted or produced at the time of determination”—and, therefore, it is
dependent on the prevalent economic conditions, namely technology and
prices.6

Despite all these diffi culties, dollar values were assigned to the stocks
of the main energy resources (oil, gas, and coal7) and to the stocks of
10 metals and minerals (bauxite, copper, gold, iron ore, lead, nickel,
phosphate rock, silver, tin, and zinc) for all the countries that have
production figures
.
 

 

 

Do Changes in Wealth Matter for
the Generation of Well-Being?


Natural resources are special economic goods because they are not
produced. As a consequence, natural resources will yield economic
profi ts—rents—if properly managed. These rents can be an important
source of development fi nance, and countries like Botswana and Malaysia
have successfully used natural resources in this way. There are no
sustainable diamond mines, but there are sustainable diamond-mining
countries
.
Behind this statement is an assumption that it is possible to
transform one form of wealth—diamonds in the ground—into other
forms of wealth such as buildings, machines, and
human capital.

Read more: http://dinarvets.com/forums/index.php?/topic/148518-economist-calls-for-the-adoption-of-the-oil-and-gas-reserve-of-the-central-bank-economist/#ixzz2UPvhJhOK

Edited by dontlop
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Noting that: "The principal reserve that is possible to protect Iraq's economy is the stock of oil and gas in the ground," and explained that "the statistics of the Ministry of Oil, suggests that the oil reserves reached about 150 billion barrels and 19 billion m3 of gas, up to the month of February of the year Current. "

Read more: http://dinarvets.com/forums/index.php?/topic/149671-central-bank-a-plan-to-raise-the-exchange-rate-of-the-iraqi-dinar/page-6#ixzz2UPtID07v

Is this incerpt trying to make the claim or idea that the gas and crude will back their economy on a monetary basis?

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As flb1618 says they don't have the reserves to RV to a penny (which would be roughly a 10x increase).  But suppose somehow they get the 750B USD that would require.  How does "retiring" larger notes change anything?   The value (and hence liability against reserves) of 1000 250 IQD notes (if such a denomination exists) is exactly the same 10 25,000 IQD notes.  Think about the money you have in the bank, is it listed by the number of notes or just the number of dollars?

And yet the world uses dollars, These dollars are backed by what? Confidence?

Most Iraqis do not use banks. Think about it, most here hold the currency and its not in a bank.

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iraq had less than 2 billion in reserves since 1985 ..yet the dinars value was $3.22 in 1990 ..



its the external debt of a nation that destroys its currency ,, nothing else ..



its got to be paid in  foriegn currency or goods and services .. all external debt . domestic debt can simply be paid out in dinars backed by  nothing  but goods and services just like every other country

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So how would this work?  Are they going to peg the IQD to a barrel of oil (which is pretty volatile), and even if that is possible how do they exchange to USD or Euros etc for imports?  BMW does not want some sort of IOU X barrels of oil for its cars they want Euros.

 

They could of course sell oil futures, but the farther in the future you sell contracts and the more uncertain the supplier (i.e. Iraq's instability) the lower the price goes, plus flooding the market with futures would of course lower the price just due to supply and demand.  All that would mean that to raise say 750B USD to be able to RV to 1 penny they likely would have to sell at least double that amount, so perhaps 10 years worth of production.  Which means after doing that deal they would then get no income for the next 10 years, since they pre-sold it all at essentially a bargain price.  They would be leveraging their future for the present in order to RV.  Why would they want to do such a thing?  

The point being made is that a Penny value may exist with a Large M2! (The M2 that is being reference is 10 times that of Iraq)

Granted we are comparing Apples & Oranges based upon the economy of Japan & their monetary policy compared to Iraq, but the point of the matter is as follows:

 

At the given monetary policy, yes, a $0.01 R/V is nearly impossible. But nothing is set in stone and exchange regimes can change.

Sure it can, but again the Yen floats, its not pegged.  People have great confidence in the the long term future of Japan. 

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after 1990 .. when saddam invaded  kuwait .. iraq dinar took an instant drop to one tenth its value to around 32 cents .. because all its debtors called in their debt .. which destroyed the dinar so saddam had no finances to fight any long drawn out war .. he surrendered .. end of story .. except he didnt  live up to the cease fore agreement he signed and would not comply with   the ....un-restricted ...weapons inspections ..he restricted those inspections and was ultimatly removed  from the picture .. 85% of its debt was forgiven by the paris club .. and iraq is now economically sound ..



So how would this work?  Are they going to peg the IQD to a barrel of oil (which is pretty volatile), and even if that is possible how do they exchange to USD or Euros etc for imports?  BMW does not want some sort of IOU X barrels of oil for its cars they want Euros.

 

They could of course sell oil futures, but the farther in the future you sell contracts and the more uncertain the supplier (i.e. Iraq's instability) the lower the price goes, plus flooding the market with futures would of course lower the price just due to supply and demand.  All that would mean that to raise say 750B USD to be able to RV to 1 penny they likely would have to sell at least double that amount, so perhaps 10 years worth of production.  Which means after doing that deal they would then get no income for the next 10 years, since they pre-sold it all at essentially a bargain price.  They would be leveraging their future for the present in order to RV.  Why would they want to do such a thing?  



Sure it can, but again the Yen floats, its not pegged.  People have great confidence in the the long term future of Japan. 

i dont know why dont you go ask anyone  who takes out a loan .... why is the us  selling bonds .. why does anyone do that .. go read up on it .



it seems your in need of alot of reading ..

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obama should of told general motors to go save up the money .. and asked them why they would want to finance their future ..

 

go ask congress next time the debt ceiling  is up ..



Where are the links to that show reserves, rate, and money supply figures?  Without knowing all 3 its meaningless.

you can find them on the net .. no wonder your a skeptic .. you dont know nothing .. your one of those low information  people  who have internet  but dont know how to use it

Edited by dontlop
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i dont know why dont you go ask anyone who takes out a loan .... why is the us selling bonds .. why does anyone do that .. go read up on it .

it seems your in need of alot of reading ..

If you are so knowledgable just answer my question, how would it work?

You think they can get a loan for an RV? Ok, lets continue to use the 1 penny so they need 750B USD. Even assuming anyone would loan them that much, that would put their debt at about 500% of GDP. The world has been in crisis mode due to many countries getting to 200% of GDP, many are worried about the US even at 100% of GDP. Given Iraq's risk they likely are going to have to pay at last 7% if not 10% so that means 40-50% of their annual oil income will go just to pay interest. Were they to use that money to finance projects in Iraq that might pay off one day, maybe you could argue it would work, but to RV with it would not produce any return in the future. It would be economic suicide.

obama should of told general motors to go save up the money .. and asked them why they would want to finance their future ..

go ask congress next time the debt ceiling is up ..

you can find them on the net .. no wonder your a skeptic .. you dont know nothing .. your one of those low information people who have internet but dont know how to use it

I believe the policy here is to backup your assertions. Just insulting me (or attempting to, its "don't know anything") is not an answer. Edited by skeptic1138
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i put information .. if you dont believe it then you  look it up and educate yourself .. i am under no obligation to follow orders from you ..or the likes of anyone like you .. ill make a deal with you .. i will put up the information that proves  what i posted to be fact .. under one condition ... you leave this site and never come back ..

 

other wise use your search engine like i did ..

 

your skepitisim leads me to not be interested in chatting with you ..

Edited by dontlop
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Parliamentary Finance calls for the central bank to set controls to support the Iraqi dinar against the dollar :eyebrows: 

 

26 May, 2013 08:04:00

 

A member of the Finance Committee stressed parliamentary Abdul Hussein al-Yasiri the need for the central bank to keep the exchange rate of the dinar against the dollar and puts controls and processors of currency inflation.
Yasiri said that the reasons for the high price of the dollar against the dinar is that the central bank was selling dollars to anyone who wants and without controls, which kept the exchange rate of the dollar in the past but what happened is that the new controls prompted buyers of dollars to buy dollar from ordinary people and speculators than led to the high exchange rate of the dinar against the dollar. 
Edited by yota691
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i put information .. if you dont believe it then you  look it up and educate yourself .. i am under no obligation to follow orders from you ..or the likes of anyone like you .. ill make a deal with you .. i will put up the information that proves  what i posted to be fact .. under one condition ... you leave this site and never come back ..

 

other wise use your search engine like i did ..

 

your skepitisim leads me to not be interested in chatting with you ..

Again making assertions about facts without showing support for them is meaningless and I think against the usual practice here.  All the more so for facts which are hard to substantiate like financial data from Saddam's tenure.  If you got the info from a search engine, then why not just post the links?

 

If you do not want to chat with me, then by all means refrain from doing so. I am free to comment on your posts in any case.

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Speaking of  High Exchange rate...are you aware that to get one $20 dollar bill US, it cost 45,000 IQD in Iraq..  :eyebrows: almost 2 to 1..That sucking in the IQD, and at the same time sacrificing the US Dollar...

Edited by yota691
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I have always liked this post of Adam's.   Have at it lopsters.

 

Adam Montana's Analysis Of Potential Rate - Emailed To Recaps
12/31/2012

0 Comments

 

There’s a lot of speculation on the Iraqi Dinar, and one of the most confusing and uncertain aspects of the final outcome is: The Rate. We constantly hear people making predictions and taking guesses… but what is the Iraqi Dinar rate actually going to be?!

Hi Everyone. I’m Adam Montana, and I’m going to do something I have largely avoided for the past few years… I’m going to give you my analysis of a potential rate on the future (and pending!) ReValuation of the Iraqi Dinar.

There are plenty of theories on what the rate of the revalued Iraqi Dinar will be, and they honestly range from pennies to dollars… my friends, that is a HUGE difference in ROI if you hold several million Dinar!

Why, if the rate is several dollars, then your holdings could equal several million USD! If the rate is in the pennies, then your investment is potentially worth several tens of thousands of dollars… BIG swing there, right?

I’m going to list a couple of speculated rates and the reasons behind them, then I’ll tell you what I think is most likely.
 
Based on Kuwaiti Dinar.

It’s been said that the rate must equal their neighboring Kuwaiti Dinar rate, which would put the Dinar at $3+. Many people speculate that the Iraqi’s are a prideful people, and it would be a slap in the face to have a revalued currency be less than Kuwaits.

Based on dropping the 0′s

It’s mentioned many times in the news that the 0′s could be dropped, which would mean one of two things:

1. The 0′s are dropped from the bills, which essentially puts most investors at a break even return. Nothing gained, nothing lost.

2. The 0′s are dropped from the exchange rate, which is currently .00086 (Dinars are worth about 1170 IQD per 1USD, or an exchange of .00086). This means your dinars are worth .86USD per Dinar – in other words, a 10,000 IQD note is exchanged for $8,600 minus spread and bank fees.

Based on “equal to the USD”

We see articles all the time that reference the US Dollar, stating that the CBI wants the IQD to be equal to the USD. An easy assumption is to simply RV at 1:1, making a 10,000IQD note worth $10,000.

Based on “they can’t RV low or investors will buy too much!”

Some people state they will not cash in for anything less than $1. They state that Iraq would be foolish to RV at a low rate, because then big money will come in and buy up a ton of Dinar before it can go higher. (I intend to prove this theory wrong, FYI.)

My Thoughts:

Keep in mind that I’m trying to keep this as simple as possible. I am going to use hypothetical figures, and I’m going to make my point as quickly as possible… we all have better things to do than listen to an old guy like me ramble on for days, right? wink.gif

I agree with a few of the speculations above. I think the Iraqi Dinar should have a higher value, and I think we are simply waiting on the HCL or Chapter 7 to be finalized… then it will be “GO” time! But my opinion of the rate goes a little deeper… it includes a “business sense analysis” that I think everyone should be prepared to accept.

Iraq is a business – and the business is natural reserves. Iraq holds a majority of the worlds natural gas and also black gold, also known as “oil”. When Iraq is released from Chapter 7 and the HCL has been settled, they will begin operating their business using the same principals any other successful company uses – the goals being profit, sustainability, and success!

Did I mention profit? Yes indeed, friends!

PROFIT.

The most important concept to understand today is this: The CBI makes money on every auction, and they will continue to do so forever. When the Dinar changes value, the CBI buys it at a lower rate, and then sells it at a higher rate.

The CBI will ALWAYS choose the path that makes them the most money. Keep that in mind as we continue with this paper!

Let’s move forward a few steps and talk about a ReValued dinar. I agree that a lower rate than Kuwait will be a blow to the ego’s of the Iraqis. I agree that it should be on par with the USD, or even higher. I agree that the rate WILL get there… eventually.

When the Iraqi Dinar is ReValued to a higher rate, it will become more desirable to do business in Iraq. Many people will be less hesitant to sign contracts and invest in Iraq. The current Iraqi Stock Exchange (ISX) should see some major movement… and the CBI (Central Bank of Iraq) is going to make tons of money on the exchanges!

I believe that Iraq can sustain a very stable currency at a rate of $3 or higher, but I don’t think they will immediately jump to that rate even if they ultimately desire it to be so.

Here’s why:

An instantaneous RV to $3.00 will create a ton of wealth – coincidentally, probably about the same amount of wealth that they lost when Saddam Hussein was taken out of power and the value of the Iraqi Dinar plummeted to mere pennies! What’s done is done, though, and we have to look at the situation for what it is today – not what it could have been or should have been.

When the Dinar rises in value and people are ready to “Cash In”, there is only one place that will ultimately buy the Dinar: The CBI.

Since they control the rate and they are the top of the chain, they can set their spread (the fees they charge for cashing in your Dinar) to any rate they want. I’m of the opinion that they will jack that rate up as high as possible in the beginning… and who’s going to say no? The CBI has a monopoly on this market and it is theirs to do with as they please.

A normal foreign currency exchange carries a “spread” of 2-6%. This means if you exchange $1000 worth of a foreign currency, you can expect to receive approximately $940 after the spread is taken out. Those numbers in the middle aren’t important; the only important thing is what you walk away with.

Since the CBI has complete control on the spread, which trickles down through every single banking institution that handles the Dinar, we are at their mercy. Don’t miss this next line:

If the CBI won’t buy your dinar, then you will not be able to cash in.

Take a hypothetical rate of $3.

The CBI can (and probably will) put a hefty spread their buy price – I’ve heard it will be at least 25% if they RV high. This means they will sell the Dinar for $3, but they will buy it for $2.25

Personally, I’d be grateful and overjoyed to see a 25% spread on a $3 RV! Most likely, we will only see about $2.00 per Dinar at a $3 RV by the time it gets in our hands (every party involved will take a little chunk, unless you are physically able to go to the CBI. And you can’t do that. So, just accept it – you’re going to pay a spread.)

Once again, the extra numbers aren’t important right now – the only number that’s important is the $3 and the $2.25, because that’s what the CBI is worried about.

Let’s say there is a billion USD worth of Dinar out there right now, or 1 trillion IQD. The CBI pays $2.25 for every $3 worth of Dinar, then resells it the next day for $3. That’s a profit of $75 billion just on the spread. Not bad, right?

The problem is it cost them 225 billion to do that… and that 225 billion goes right into the “debt” column.

My friends, Iraq isn’t about to go into debt so we can get rich. Therefore, a $3 RV isn’t the answer, and we must look at another possibility.

Take a hypothetical rate of $0.10 (ten cents)

Again, using the same numbers we have 1 Trillion IQD that needs to be changed out to smaller denominations. The CBI announces the rate at ten cents and also announces that your large notes will be worthless in 90 days.

Every investor would love to hold out for a higher rate, but in this situation you have no choice… you cash out. The CBI will likely use the same spread, so they will buy 1 trillion Dinar at a rate of .10, minus 25% spread, which gives us about $750 for every 10,000IQD note we have… and the CBI makes 250 million in the first 90 days at an expense of only 1 billion. This puts their debt on this transaction at only 750 million… a far cry from the 225 billion in the $3 RV!!!

However, this is only the first step. Now I’ll show you how Iraq can easily wipe that debt out by ReValuing the Dinar at a lower rate initially, then making money as the Dinar increases in value over a relatively short period of time.

What about all the other investors that will now come in to buy up the lower denomination notes, speculating that the Dinar will continue to rise?

I completely agree that this will happen! And the CBI will continue to make money on it. In the above situation, the Dinar is being sold by the CBI at .10USD per 1IQD. After all of the large notes are brought in, it is reasonable to assume twice as much money will be poured back into Dinar by speculators, at .10.

Now the CBI is able to sell 2 billion at 10 cents, and they can move the peg on the Dinar up a bit – say, to 15 cents. Investors will cash in for a profit, allowing the CBI to resell at the higher rate and once again make profit.

Of course, not all investors will cash in at 15 cents. For the sake of argument, let’s say half of the investors sell out at that point. The CBI pays 0.1125USD per dinar (A profit of 12.5% for the investors!!!) and resells that billion for 15 cents – securing a profit of 375 million.

The CBI’s “debt” on the original RV is now down to 375 million… do you see how this is working? The CBI is able to make up the “loss” on the original RV simply by continuing to hold auctions and allowing more and more people to profit on the increasing value.

At this point, in our hypothetical situation of a 10 cent RV, the CBI has covered half of it’s loss with only one “repeg”. They can continue to profit all the way up to the final rate of $1, $2, $3, or higher – as long as investors are willing to buy the Dinar, they can keep moving it up.

And the way things are going over there… why wouldn’t we keep buying? I know I plan on doing so!

In conclusion, I want to caution everyone to be careful with this investment. As good as things look, we never know when some hairbrained Arab is going to pull the pin on a grenade or something silly like that. Only buy what you can afford to lose, and always consult a professional before making investment decisions. I hope you found this article to be helpful!

Best regards and WARMEST RV wishes, - Adam Montana


Read more: http://dinarvets.com/forums/index.php?/topic/137772-adam-montana/#ixzz2GftECfDq
 

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So how would this work? Are they going to peg the IQD to a barrel of oil (which is pretty volatile), and even if that is possible how do they exchange to USD or Euros etc for imports? BMW does not want some sort of IOU X barrels of oil for its cars they want Euros.

They could of course sell oil futures, but the farther in the future you sell contracts and the more uncertain the supplier (i.e. Iraq's instability) the lower the price goes, plus flooding the market with futures would of course lower the price just due to supply and demand. All that would mean that to raise say 750B USD to be able to RV to 1 penny they likely would have to sell at least double that amount, so perhaps 10 years worth of production. Which means after doing that deal they would then get no income for the next 10 years, since they pre-sold it all at essentially a bargain price. They would be leveraging their future for the present in order to RV. Why would they want to do such a thing?

Sure it can, but again the Yen floats, its not pegged. People have great confidence in the the long term future of Japan.

We Dont Know The Future Of Iqd Policied... Many Bought Dinars With Great Confidence In Iraq By Entities Involved. PolicieS Can Easily Change, Cant Predict The Future.

Edited by Darin
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I have always liked Adams scenario.

I see many problems with it, but am rather hesitant to criticize my host.  So I'll just make one comment, concerning a common mis-statement of history in the Dinar world.

An instantaneous RV to $3.00 will create a ton of wealth – coincidentally, probably about the same amount of wealth that they lost when Saddam Hussein was taken out of power and the value of the Iraqi Dinar plummeted to mere pennies!.

The CBI history page says the rate was at 3000 to 1 by 1995 (oanda.com shows it getting there in July 2001).  We ousted Saddam in late 2003.  After the Bremers were issued (so we knew how much was actually out), the rate was improved to 1500 to 1 in June 2004.  So removing Saddam in fact improved the rate.  During periods of hyper-inflation wealth is only lost if your wealth is in cash instead of other assets.  People living payday to payday quickly learn to take their pay and run to the stores and buy things that will always be in demand (food, gas, guns, car parts, clothes, etc).  Its a huge strain on everyone but is not overall a loss of wealth.

Edited by skeptic1138
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