skeptic1138

31 tons of gold is about $1.5B USD worth. So a nice chunk for sure. But this says nothing about your previous claim that Iraqi gold production is set to eclipse oil production. This is just gold that the CBI has purchased, and the value of which is included in their $70B USD worth of reserves. Nor does this address the other things I pointed out (comparing the 70's exchange rate to today's without bringing in the money supply, and claiming economic growth (which clearly is happening) will lead to an exchange rate increase).

Reuters is a news agency. They may well have passed along the story a couple of years ago where some commentator was quoted saying the "second to oil" comment, but that does not give that comment any credibility. Again check my analysis, its just not possible. You say they set aside tons of dust, ok. Getting 1/2 oz of purified gold per ton would be huge (most mines are more like 1/3 oz per ton if producing really well, 5g per ton (about 1/5 oz) is about the break even point. So even if they set aside lots of dust, say 1,000 tons, and it was very rich in gold, this is only going to be at most 500 oz or about $750,000 USD worth. And was this reported by a mineral expert or geologist? no. Its CLEARLY just a guru fact. So if you blindly pass it on with no thought as to whether or not it COULD even be possible, what does that make you?

No worries. An excellent idea!

What more detail than I already posted do you want? Did you actually read what I posted or only jump to the end? If you disagree with the points I raised, please point out my errors. It seems pretty straight forward to me.

Still waiting for links to the BIS site showing their involvement in approving exchange rate changes.

Treat this as a reply to SWFG not ronscapa. I'm only going go comment on a few points so I won't repost the whole thing Because they have invested in various aspects of the growing Iraqi economy, not the Dinar. If you want to make money in Iraq investing in companies is where you have to be. That is very risky of course so using something like a mutual fund focused on Iraq might be something to look into. This is a common theme for gurus, to show positive things in the Iraqi economy, and than conclude that this indicates the dinar is a good investment. Its false logic. Oh come on. This again? It makes zero sense to compare different exchange rates at different times without also including the money supply at those times. A single resource based economy usually has (very roughly speaking) an M2 value that is in the neighborhood of 60% of GDP. So with a $3 dinar and a $8B GDP that would point to a money supply of around 1.5B dinar. Now there are 75T. Pump, pump, pump. Ok, now this has clearly crossed into guru/pumper territory. For Iraq's growing oil exports to become second to gold exports, they would have to be on their way to exporting something like $150B worth of gold. The entire planet produces at most (i.e. the max years) 2,500 metric tons of gold (scroll down a little to the green yearly production graph). So 2,500 metric tons * 35,274oz/metric ton * $1,500 per oz = $132B for the value of global annual gold output. SWFG is claiming that Iraq will surpass this on its own. Geologically it is unlikely in the extreme that half of the world supply (just to match it) would be in 0.3% of the land area while the other half is distributed all over the globe. If gold is so common in this one place than why has it not been found before since people have been living in this are for perhaps 10,000 years? Further even if there were significant gold finds in Iraq, a large gold mine is a huge operation that takes a long time to develop to the point of producing anything. This claim of vast gold finds is 100% bogus yet is passed around the dinar world as a fact (as SWFG has done here). SWFG lists many prestigious publications following his opinion, but does not tell us what information, if any, came from them. Frankly much of this post feels like it was pasted from somewhere else and is rather hard to make sense of if you think about it, but it sounds authoritative (often a bad sign). What conclusion is there from these points other than that SWFG's intention is to pump us up? He makes well informed sounding posts, then slips in obviously false and misleading statements. There was another thread a day or two ago about SWFG being called out as a pumper on another site and him defending and so on (I didn't follow it), but I regret to say that there looks to be justification for such claims, and the evidence is right here. I know that will upset some folks and that is not my intent, but the evidence says what it says.

It makes no sense to compare the murder rate of a city to that of a country. The murder rate overall in the US is about 4.8 per 100,000 of population. If Iraq keeps up at an average of 400 per month, they would be about 16 per 100,000 (with 30M inhabitants). The murder rate in Chicago is about 14 per 100,000.

They will continue to try and get the market rate closer to the official 1166, so none of the above.

Iraq may want to do this (thus all the talk about an RD back then) but its not a WTO requirement, as shown by South Korea who have been a member since 1995 and their currency has always had an exchange rate similar to Iraq's. Interestingly this is long after they were an export powerhouse, so one might ask why they didn't join earlier? The answer (according to the web so...) is that they had lots of trade disputes by then due precisely to their very fast export growth and thus needed the WTOs dispute resolution help, but did not it seems see the benefit prior to that. So exactly why Iraq wants to join might be interesting. Prestige? Is there a real economic reason?

OK, here you go. Rather than quoting everything I'll just put my answers in blue. Yeah skeptic their oil and gold and gems will never be worth that much combined huh? guess you didnt see saddams pile of gold he had hiding in his palace I did and somewhere they have a pic of it in this forum.whats a few semi rigs of gold bars worth since you like doing the math. If they sucked in half that amount in IQD I guess they just couldnt cover the spread at 1to 1 get real man you must think their country is flat broke. No I don't think Iraq is broke, but their income is not presently enough to fund their budget so they do have to borrow a bit. But nothing wrong with that. When their economy picks up that perhaps can end. But to RV to even 1 penny they would need about 650B USD, there is no chance of having that much gold. The gurus like to talk about Iraq soon producing more revenue in gold than oil. As I said above the entire world only produces about $140B of gold (at $1,600/oz) a year. So that would mean Iraq would be producing as much gold as the entire planet is today, yet that's likely. Not only is that nonsense geologically, but people have been living in this area for perhaps 10,000 years and if gold is so common as to have that much why have they only now found it? Same with the BS about gems. Its all just guru stories to get you to buy more dinar. Can you tell me how the war pays for itself? if they lop you cant can you?I am not bashing you just curious how you figure they are broke. Again more guru trash. The bush administration did not say the war would pay for itself but that Iraq would pay for its on reconstruction, which they are. Also even if the Bush administration had said that why would we believe it? is Sec of Defense Rumsfeld claiming the war will only cost $50B USD. Obviously Bush and Co. didn't have a clue about the costs or time frame of what they got us into.can you tell me how much each country has purchased including the usa?and why did they buy it? I wonder how much china has you got that figure to?and why buy a worthless currency I am just curious is all. I have seen no evidence that other countries have purchased IQD at all, let alone massive quantities. The UST has stated they maintain a small amount for travel exchange etc. It would be illegal for the UST to buy currency for an investment. The Fed might be able to do it, but they are not part of the US government, but largely run by it so we'd know anyway. So just more guru pumper lies. I guess you own IQD so why buy it just maybe just maybe you think it will gain a little value I know I have'nt lost I got mine for 400.00 a million even if they lop I win so does hailburton and good ole bush JR.they are the only reason I bought into it. If you bought at $400 per 1M IQD, you indeed are in the black. Nice going! Too bad you didn't sell a couple of years ago when you could get $1000 for it. Once they RD (next year, or next or...) the price you get will likely go down to perhaps $700. So keep that in mind. How much oil would they have to give us to pay for the war all of it? I am no finacial genious like you so let er rip I can take it.Do you think they will trash this currency like they did saddams?Or will the US government poke us hard at a real low rate and give us a small window to cash in so they can bag out big in a few years?as a reserve currency traded for oil.They owe us a couple of trillion dollars for saving their country and yer buddy bush said the war would pay for itself so how does it pay for itself and get their country back in working order if they lop the currency.So far no one can answer this question but you alone. Again Bush did not say this, and he thought the war would only cost $50B initially. By 2008 the direct costs was up to $500B and estimates of the total were already up to $2T, though Bush did not accept that. In reality its likely closer to $3T or maybe more. If Iraq just gave us oil for free, they are producing about $100B per year so that would be 20 or 30 years worth. But Iraq is not going to pay us for the cost of the war. No way no how. The US has nothing to do with Iraq's currency. If someday the RD they might only allow in-country exchanges, then holders will be in trouble, but I doubt that. There likely will be plenty of time to exchange through the dealers and they will have some new BS story about how its still a good investment you seem to have the answers,with due respect I ask you.I do respect your post my friend. I certainly do not have all the answers, but am pretty good with arithmetic, and thanks for the compliment. I know what I saw now tell me what do you see happening Please.with respect no joking. No joking. The bottom line is that they might or might not LOP (or RD), but they can not RV. I don't know what you saw, but in 2004 there was only 5T (physical) IQD (in Jan, 7T by Dec, they still had a bit of an inflation problem) in the whole country. A container holds at least 1T, so if you are right pretty much ALL of the iQD in country was bought by Bush (and he's not my buddy, I'm sure he's a nice guy, but he was a horrible president) and Haliburton. No way. do you think they would tell the world what they actually have in total currency even the US lies about that. I wonder how much they have destroyed since then in IQD that would bring the value up right? things that make you go Hmmm to me.They dont give you figures like that or do they?If they told the truth that would be ringing the dinner bell to the rich if their trying to raise the value. I know what it says on the CBI site and I dont believe it either same as the USA.I cant hack into any world bank its a closed loop system same as the CBI.I'm willing to bet they have destroyed at least 25trillion in the past 12 years Youve also seen the coins that they have that were never used how many did they make?it doesnt tell you that either.All in their possesion.somethings gotta give. I would have to say that maybe 2% of americans own IQD so wheres the problem? I think that the CBI has more IQD in posession than the whole world has in its possesion. Yes No maybe how do you know? How much IQD the CBI has doesn't matter as they are the ones that issue it. They can destroy it or print it as they see fit (physically or digitally). Yes I think the CBI's figures are basically correct. First they are being watched by pretty much everyone, the UN, WTO, WB, UST, Fed, major banks etc. If some giant lie is going on about their money supply it could not be kept a secret. Plus more than anything they want to be a world player, to be respected as a country and not seen as some backwater corrupt farse of a country. Cooking your books to the extent needed to have a big RV is not the way to do that. But more importantly they money supply reflects GDP which for Iraq is all oil exports. The rest of the world is buying that oil so we know how much it is. If their money supply was 10x less, then oil exports would have to be 10x less, the GOI's budget would have to be 10x less, but the CBIs reserves would have to be as stated. It just can't be. Their economy is working pretty well and growing at around 9%. So the CBIs figures must be pretty close and that is all we need to know. Do you think they like having infidel money in their pockets NO they hate it.this is a wild ride how do they get their own money back and pay everyone off that they owe which is trillions and save their own economy to boot.You dont have to have physical currency to RV as long as the assests add up right? I dont know thats why I am asking.Your not just trying to be a stick in the mud are you for fun?with respect skeptic with respect.Ole Keep had some good answers and some of it makes since but I highly doubt they will lop it doesnt add up if they do.If I wanted to buy the whole country of Iraq for fun what would the price tag be including all assests? thats a math problem I would love to solve.CAN YOU?I can solve any electronic question that can be thrown at me but when it comes to economic questions I am dumb. hammer away my friend hammer away.Oh GO RV and to hell with the LOP The assets of a country do not play a role in the exchange rate. Even the assets of the GOI are distinct from the foreign reserves of the CBI. Even more so for private assets. Iraq does not owe much. They are not going to pay us the $2T or $3T or maybe $4t the war is going to cost us in the end. Most debts have been forgiven so its just some to Kuwait I think and the more recent loans they have gotten and few bonds they have sold. They might or might not RD (LOP). They don't have to. South Korea has done very well with excellent growth for 50 years with an exchange rate very much like Iraq's. So really the reason to RD is just emotional, to get the currency (a new currency) back to near 1 USD. The only impact of that to IQD holders is that it will put an end to the fantasy that a 1000:1 RV is possible, which it never was. (too bad, but that is reality). Hope that was useful. Have a good one.

Getting the exchange rate to (near) 1 to 1 is easily done with a redenomination. That actually undoes the hyper inflation Saddam imposed on the country. What they have not said is that soon everyone will be rich beyond their wildest dreams.

Lots of questions! I have to get to work, but will answer all of them (some might be "I don't know"), this evening. As for gold Iraq can not have enough to change anything. The total mined annually on the entire planet is only around $140B USD. I don't think Iraq had a couple of semi's worth of gold bars (even if a semi could haul that much weight). The pic I saw on this site was just a small stack of bars (even if real), a few million worth I'd guess so sweet for any person, but not much for a country Later.

Yep, lots of waste and expense. The 4-5T is higher than I have heard, by about 2x, but its possible (that of course includes the cost of medical care for vets etc, which you have to included to be realistic). What a mess. Iraq has a long way to go, Afghanistan even longer, and they seem more at risk to not make progress while Iraq I think is going in a good direction for Iraq. It remains that you claim there were shipping containers stuffed full of dinar I didn't say it was on pallets, I just used that to estimate the amount of dinar a container could hold (not on pallets it would be even more, I was just estimating a minimum). Why hook up power to a container full of paper anyway? Why would either Bush or Halliburton put their name on them, when if this actually occurred they most likely would have been shipped to front companies. I still don't believe it. As to your service and sacrifice, that is another matter and I thank you for that, and am sorry your were injured. Have a great day yourself!

Again, why? The more Iraq expands into other industries the more pressure there will be to keep the rate stable or even lower it. Low inflation and stable rates is the goal of the CBI. There are a number of papers out (google for something like economic growth and exchange rate, though not being an economics I found them hard reading) showing a correlation (they think a causal one) between a low rate and economic growth (look at China). The slow appreciation over years idea is not impossible of course (like the RV is), but I think it is very unlikely.

If you want to talk about things being reset to a past level, its meaningless if you don't include the size of the money supply. It was likely only a few billion back then, now its in the high 10s of trillions. That is why the rate is so low, the value is spread over a vast number of dinars. The value of the money supply of all the countries of the world combined is only about 50T USD worth and Iraq (ranking 57th or so by GDP among those countries) has 75T IQD in their money supply. Do the math.

Why? The things you and Darin mention are all about Iraq's economy improving. More oil, other industries, more employment, more trade, etc. At some point it seems very likely that they will get full WTO membership. All that seems very likely over the coming years, perhaps with some bumps and setbacks along the way but that's normal. None of that points to a higher exchange rate.

How easy it is to denigrate and form judgements about characteristics which you can not possibly know, for those whose viewpoint is opposed to your own.

Yes its dramatic but is it accurate? The problem with such presentation is that as a layman we don't know what has been left out, whether the presentation makes any sense or not. The sort of statement about how many zillions of spacial orientations are possible for a bunch of atoms making up a protein for example ignores basic chemistry about how these things "snap" together, and thus its conclusion about it taking 100s of billions of years if not directed, is completely false. You won't find this sort of claim in any scientific journal, why is that? Because its simply wrong and doesn't pass peer review. But, I don't want to derail the thread either! That does not mean it isn't a fun movie of course! (he did the exorcist too).

Indeed, that is what the term "scientific" means doesn't it? The methodology of science is what we use to determine what is so in the world when it matters (will this plane fly, is this drug safe, how to build a bridge, etc.). Many folks (and I don't know if you are among them or not) chose to use some other methodology concerning things like evolution, or global warming, or other issues that they do not think has a direct bearing on their day to day lives, but intersects their belief system. I do not agree with that and apply science when ever possible as the most reasonable proven means of finding things out (not that it isn't flawed of course).

Thanks. Take you time, I'm in no hurry.

Perhaps you could point out where on the bis.org site it says anything about the BIS approving an exchange rate change for a pegged currency. I could not find anything of the sort and the site is pretty detailed about their activities. Are you claiming that the 4 IQD change from 1170 to 1166 went through this process, or that the many tiny changes China has made over the last 9 or 10 years has done so? Of the subcommittees listed for Banking and Financial stability The committees are: the Basel Committee on Banking Supervision the Committee on the Global Financial System the Committee on Payment and Settlement Systems the Markets Committee the Central Bank Governance Forum the Irving Fisher Committee on Central Bank Statistics None lists approval of exchange rates in their activities. The sites states the BIS's role as In broad outline, the BIS pursues its mission by: promoting discussion and facilitating collaboration among central banks; supporting dialogue with other authorities that are responsible for promoting financial stability; conducting research on policy issues confronting central banks and financial supervisory authorities; acting as a prime counterparty for central banks in their financial transactions; and serving as an agent or trustee in connection with international financial operations. They do not have authority over any central bank. As far as I can tell, Iraq can set any rate that they can sustain, since the CBI is the one that will have to provide whatever exchange they set (which presently limits them to a max of around 1000 IQD to 1 USD). I seem to recall that the CBI's charter gives them total control over the exchange rate as well not needing executive or legislative approval (but am not sure about that). I stand ready to be shown my thinking is in error, but you'll have to show me some support for your claims.

I'm skeptical of claims that are not well supported, all the more so when there is clear support for their falsehood. There is no doubt that the earth is round(ish! :-). He "misinterpret" seeing a container full of 25,000 IQD notes with George Bush (whose name by the way does not include a Jr) on the manifest. Please, the guy is just telling whoppers Negative or positive is all in the view of the reader. You view what I have to say as negative as you are under the illusion that you will make big money on IQD. For someone that reads what I have to say and declines to invest, the result would be positive. That search didn't find anything under that exact name. I'm guessing the biggest looter of Iraq was Saddam and his cronies but corporations likely got away with a lot too.

A reasonable case can be made that they don't have to back M2, just M1 like Kuwait does (at least last time I checked). Problem is that in Iraq M1 is 65T, so not much different than M2. As GDP grows and broadens out (other industries besides oil) the money supply (M0, M1, and M2) will all grow. The issue is that for a pegged currency at least M1 has to be backed by reserves, so that limits what they can do to the exchange rate.

Yea right, you're a funny guy! So a std pallet can hold a million notes, or 25B IQD in 25,000s. A std 8'x8'x40' container can hold 10 sets of 2x2 pallets (with room to spare)= 40 pallets * 25B IQD = 1T IQD = (a bit less than) 1B USD. So you want us to believe that George Bush and Halliburton are spending a few billion dollars on dinars and then are so careless with it that they mistakenly let some mechanic open them up. Yea right, sure. There is zero chance of this being true.