Guest views are now limited to 12 pages. If you get an "Error" message, just sign in! If you need to create an account, click here.

Jump to content
  • CRYPTO REWARDS!

    Full endorsement on this opportunity - but it's limited, so get in while you can!

rons article about rv'ing, thought the lop section would like a chance to comment


sonny1
 Share

Recommended Posts

I am glad Iraq is announcing in advance its 100,000% overnight RV. This way millions more people can buy as much dinar as possible so that instead of millions of millionares afterwards there will be 100s of millions. I am sure all of the worlds billionares are taking note and soon will become trillionares. How nice of Iraq to keep us informed.

Ok that was sarcasm. Seriously though they are simply saying they will slowly go to .001 before they RD. It makes sense for them to do this but what doesnt make sense is that they are telling us that they are going to do it. Billionares could make a killing here. The part about the rumors being wrong about 1000 dinars becoming worth 1 dollar is also strange. I am thinking that they mean after the RD (which is what deleting zeros means) that 1 dinar will be worth 1 dollar not 1000 dinar equal to 1 dollar even though it would. Seems they are talking about the new dinar.

Seems they are talking about the new dinar?: A country cannot have 2 currencies worth different amounts, all the articles about the co-existence of both for a span of time and the de-dollarization say's it all

Link to comment
Share on other sites

Seems they are talking about the new dinar?: A country cannot have 2 currencies worth different amounts, all the articles about the co-existence of both for a span of time and the de-dollarization say's it all

Countries that execute an RD ALWAYS have two currencies worth different amounts at the same time.
Link to comment
Share on other sites

Seems they are talking about the new dinar?: A country cannot have 2 currencies worth different amounts, all the articles about the co-existence of both for a span of time and the de-dollarization say's it all

All you have to do is look up the numerous redenominations that have been performed around the word to show your statement is false.

Link to comment
Share on other sites

May I ask one other question that is a little off topic? And please forgive me if this has been answered in previous posts. Why are all of the gurus anonymous? I purchased my dinars because I trusted the person who told me about it, and I was told I had to "do it now, or it would be too late." But this is something that has always sort of bothered me. Why the anonymity, and what qualifies them to be giving opinions and advice on an investment of this magnitude? I couldn't imagine anyone going to a doctor or hiring a lawyer that would not provide their name and/or credentials.

I hope no one thinks I'm trying to get anything started here, that's not my intent. I ask in all sincerity. Being new to this, it's something that's been on my mind a lot, and I think it to be a valid question. I'm sure there is a reasonable explanation, I would just like to know what it is.

That is exactly how I, and others, got into it as well. A trusted friend says .... and later we find they drank the Koolaid. oops. I should have known better but got sucked into the fantasy like so many others. I agree its amazing the credibility some give to anonymous gurus in the first place, let alone after they have been wrong over and over and ... . Its just a fact of human nature that dreams of wealth can generate brain chemistry that makes you feel good and do stupid things.
  • Upvote 1
Link to comment
Share on other sites

All you have to do is look up the numerous redenominations that have been performed around the word to show your statement is false.

I think it's a lost cause trying to breakthrough to some people here dinarck. The majority of the people here seem to have very credulous minds. Some people will continue to believe certain things in order to stay coddled to a fantasy no matter how much the evidence doesn't support their beliefs. To most objective and logical thinking people here, it's quite clear that Iraq is signaling an RD. I hope they don't but a duck is a duck.

  • Upvote 2
Link to comment
Share on other sites

That is exactly how I, and others, got into it as well. A trusted friend says .... and later we find they drank the Koolaid. oops. I should have known better but got sucked into the fantasy like so many others. I agree its amazing the credibility some give to anonymous gurus in the first place, let alone after they have been wrong over and over and ... . Its just a fact of human nature that dreams of wealth can generate brain chemistry that makes you feel good and do stupid things.

Agreed. At what point do people use their brain and "think?" I realized that in my 3rd or 4th week in this investment that the gurus were saying the exact same thing during the first week. Then I went back 6 months or so and they were saying the exact same thing then too. Wish I had done all of this research prior to investing like most normal people do. Oh well, maybe we're all wrong and they're right. I sure hope so anyway.

Link to comment
Share on other sites

That is exactly how I, and others, got into it as well. A trusted friend says .... and later we find they drank the Koolaid. oops. I should have known better but got sucked into the fantasy like so many others. I agree its amazing the credibility some give to anonymous gurus in the first place, let alone after they have been wrong over and over and ... . Its just a fact of human nature that dreams of wealth can generate brain chemistry that makes you feel good and do stupid things.

Well that makes me feel better as I got sucked in by spectacular cleavage and a homemade meatloaf dinner..

Link to comment
Share on other sites

Ok, but when you said There is only a "gap" that needs to be filled if you are comparing GDP per person to M1 per person, so isn't that just what you were dong? Maybe I didn't understand what your were saying here.

The bottom line here for me is that the Iraqi economy is working, even the IMF is estimating 12% growth this year and inflate is 5% or so. That is all pretty good for a war torn country. So the supply of dinars and dollars are working to lubricate the economy, trade is happening, the market is functioning. The RD puts the new-dinar on par with the dollar so maybe at that point the dollar portion of the money supply will start to convert to new-dinars. But you don't encourage that by increasing the value of the dinar by even 10x (to just under a penny). Note that doing so would put M1 about 3x larger than GDP, which would be a disaster. The price of everything would go up as demand wildly outstripped supply and with the CBI not being able to come close to meeting the foreign currency needs of importers (even ignoring the exchange demands of speculators). And that is only going to 0.01 (or just under).

Yes, it is absurd yet that is what the go-RVers are claiming will happen (well some only to 0.10 instead of 3.00 but the same principle applies).

I was making a comparison between the two, nothing more really. The comparison was simply to help provide a visual. The majority of their growth is because of their natural resources which is sold in.... USD.

USD plays a big role in helping them grow. Trade is happening & the market is functioning with the help of the US dollar.

I am also confused on why everyone here thinks the IQD needs to be on par with the dollar. The dollar is not the only currency that is liquid and can purchase imported goods. The dollar will likely some day within the future lose its #1 reserve status. So would it be wise to maintain a monetary policy where the national currency is pegged to the dollar? What if oil was no longer sold in the petro dollar?

Oh, how would you know if demand would outstrip supply? In a given moment of any actual R/V, yes... But in a short-time I am sure supply could accommodate the new demand. For a country that is relying on imports, one would imagine it to be possible.

Everyone thinks that all citizens are sitting on loads of dinar. Some are quite poor, some use only USD, and some are stuck with ration cards. I am sure many spend as quickly as they receive any form of currency.

But, if you a speculator here has blinders on and only uses data that is seen in the news without accounting for numerous variable factors, than yes, they would likely see that a R/D is the only solution. R/D or R/V, I would likely argue variable factors are there and play a role in the outcome. What I mean by variable factors, is simply information we are perceiving wrong, calculating wrong, etc. For example, many find their own conclusions based upon the CBI laws and how the value is determined.. What if that changes? It opens up a whole new ball game.

So for another example: If everything we have seen & read in the news is 100% factual with no intent of changing, yes a R/D is likely to occur. We do not have to remain narrow minded on this, as options are available. If a R/D was the 'only' option and would work to be such a great thing, wouldn't you think it would have been done by now? Even if they do R/D, many still stand a chance to receive profits.

Link to comment
Share on other sites

Oh, how would you know if demand would outstrip supply? In a given moment of any actual R/V, yes... But in a short-time I am sure supply could accommodate the new demand. For a country that is relying on imports, one would imagine it to be possible.

Its not that suppliers would not be most happy to sell, its that the CBi would not have the foreign currency to exchange to allow the purchase. GE wants Dollars for its turbine generators, BMW wants Euros for its cars. If spendable savings goes up by 100x let alone 1000x that will vastly outstrip the CBIs foreign reserves even if only a fraction of it is spent.

Everyone thinks that all citizens are sitting on loads of dinar. Some are quite poor, some use only USD, and some are stuck with ration cards. I am sure many spend as quickly as they receive any form of currency.

At 10x or 100x or 1000x it doesn't have to be "loads". A person holding even a single 25k note that goes from being worth $21 to $2,100 or $21,000 is certainly going to want to spend a big chunk of that to improve their life. Multiple that times 30M and you see the problem. Edited by dvforumuser
  • Upvote 1
Link to comment
Share on other sites

Its not that suppliers would not be most happy to sell, its that the CBi would not have the foreign currency to exchange to allow the purchase. GE wants Dollars for its turbine generators, BMW wants Euros for its cars. If spendable savings goes up by 100x let alone 1000x that will vastly outstrip the CBIs foreign reserves even if only a fraction of it is spent.

At 10x or 100x or 1000x it doesn't have to be "loads". A person holding even a single 25k note that goes from being worth $21 to $2,100 or $21,000 is certainly going to want to spend a big chunk of that to improve their life. Multiple that times 30M and you see the problem.

If the IQD becomes liquid - than GE, BMW, etc. may be accepting of IQD as a form of payment. (Another example of a variable factor not considered)...

Multiplying by 30M - not everyone has IQD, not everyone will wildly spend, and some may put it into banks. Consider those that spend as quickly as they receive cash will not really benefit. Those who simply only use USD will not benefit.

What if it came out at $0.01, would that be to far-fetched to perceive possible? Many of the current notes may still simply be usable in the market. A 25,000 would simply be worth nearly $250 instead of $25

Now, think if they were to R/V to $0.01 and the market caught up, stabilized, and they let it rise again. Maybe this time to $0.05, after 1 or 2 years.. Simply rising the value over a long period of time, with significant increases, but not really substantial. Than they simply introduce lower denominations that the market feels the need for. At $0.01, it may include a 25 note, (0.25), 10 note, (0.10) and a 5 note (0.05)...

I like to view all possibilities, from a value-neutral r/d, a really low r/v, a slow progressing rise in value, a moderate r/v (0.01), a significant r/v (0.10), and a substantial r/v (1:1).

  • Upvote 1
Link to comment
Share on other sites

If the IQD becomes liquid - than GE, BMW, etc. may be accepting of IQD as a form of payment. (Another example of a variable factor not considered)...

Multiplying by 30M - not everyone has IQD, not everyone will wildly spend, and some may put it into banks. Consider those that spend as quickly as they receive cash will not really benefit. Those who simply only use USD will not benefit.

What if it came out at $0.01, would that be to far-fetched to perceive possible? Many of the current notes may still simply be usable in the market. A 25,000 would simply be worth nearly $250 instead of $25

Now, think if they were to R/V to $0.01 and the market caught up, stabilized, and they let it rise again. Maybe this time to $0.05, after 1 or 2 years.. Simply rising the value over a long period of time, with significant increases, but not really substantial. Than they simply introduce lower denominations that the market feels the need for. At $0.01, it may include a 25 note, (0.25), 10 note, (0.10) and a 5 note (0.05)...

I like to view all possibilities, from a value-neutral r/d, a really low r/v, a slow progressing rise in value, a moderate r/v (0.01), a significant r/v (0.10), and a substantial r/v (1:1).

Why would BMW or GE want IQD? They dont want Turkish Lira, Saudi Riyal, Syria Pound, or Iraqi Dinar. They want to be paid in USD. Period. Even if it slowly raised to .01 it would still be a pegged currency from an unstable region. Nobody wants payment in that.

I too want the RD to be shot down and Iraq to bring their CURRENT currency to a more reasonable value but to think that international companies are going to be accepting it as payment is a stretch. Even if they did it wouldnt matter. The CBI would still have to back it up in their reserves. So every billion that is paid to GE in dinar the CBI has to either add a billion USD to their reserves or use a billion dinar from what is already in circulation. Until they have grown to a size that their currency could float they are limited on what they can do.

  • Upvote 2
Link to comment
Share on other sites

If the IQD becomes liquid - than GE, BMW, etc. may be accepting of IQD as a form of payment. (Another example of a variable factor not considered)...

Of course its not considered, as it isn't done. BMW doesn't accept dollars for their cars either (I'm not talking about individuals but the entity that actually buys them from BMW in germany, that might not even be the dealers). Oil is the one exception to the rule that you pay in the currency of manufacture when buying direct from the manufacturer.

Why would that change at the present time? What is there that Iraq can sell to the world (i.e. and hence get dinars for)? Oil is all they are exporting and it is bought in dollars and Iraq desperately needs those dollars.

Multiplying by 30M - not everyone has IQD, not everyone will wildly spend, and some may put it into banks. Consider those that spend as quickly as they receive cash will not really benefit. Those who simply only use USD will not benefit.

Oh come on, you're' saying on average an Iraqi citizen doesn't even have 25k dianrs, $21 dollars worth in their entire savings? Even someone living hand to mouth is likely to have that if you catch them after they get paid but before they go to the store.

What if it came out at $0.01, would that be to far-fetched to perceive possible? Many of the current notes may still simply be usable in the market. A 25,000 would simply be worth nearly $250 instead of $25

Not unless the CBI has been under reporting its reserves by a factor of 10 (that they really have $600B dollars) to back it and that seems extremely unlikely to say the least! Edited by dvforumuser
  • Upvote 1
Link to comment
Share on other sites

Of course its not considered, as it isn't done. BMW doesn't accept dollars for their cars either (I'm not talking about individuals but the entity that actually buys them from BMW in germany, that might not even be the dealers). Oil is the one exception to the rule that you pay in the currency of manufacture when buying direct from the manufacturer.

Why would that change at the present time? What is there that Iraq can sell to the world (i.e. and hence get dinars for)? Oil is all they are exporting and it is bought in dollars and Iraq desperately needs those dollars.

Oh come on, you're' saying on average an Iraqi citizen doesn't even have 25k dianrs, $21 dollars worth in their entire savings? Even someone living hand to mouth is likely to have that if you catch them after they get paid but before they go to the store.

Not unless the CBI has been under reporting its reserves by a factor of 10 (that they really have $600B dollars) to back it and that seems extremely unlikely to say the least!

The CBI could easily be overstating IQD, but another concept not commonly considered is what they could truly have as liquid assets to back it.

Why would they desire to rush to apply liquid assets to back a currency? What if they could simply & quickly change that factor by 10?

Maybe the CBI has funds in a different account that is intended to back the currency but not at the given time. Another factor not considered.

  • Upvote 1
Link to comment
Share on other sites

The CBI could easily be overstating IQD, but another concept not commonly considered is what they could truly have as liquid assets to back it.

Actually what their reserves are IS just what I mentioned. Bascially the ratio of reserves / (IQD expressed in their USD worth) has to be 10x larger then we think it is. So double the reserves and 5 times fewer IQD, or the other way around or about 3x more reserves and 3x fewer IQD etc. And that is just to get to an RV of 0.01 .

Why would they desire to rush to apply liquid assets to back a currency? What if they could simply & quickly change that factor by 10?

Maybe the CBI has funds in a different account that is intended to back the currency but not at the given time. Another factor not considered.

So you think the CBI is just hiding $600B USD worth of assets from the IMF, the UST, the WTO, the auditors etc. Where would they have gotten it from? And why haven't they used it already? Its not considered as its just fantasyland.
Link to comment
Share on other sites

Actually what their reserves are IS just what I mentioned. Bascially the ratio of reserves / (IQD expressed in their USD worth) has to be 10x larger then we think it is. So double the reserves and 5 times fewer IQD, or the other way around or about 3x more reserves and 3x fewer IQD etc. And that is just to get to an RV of 0.01 .

So you think the CBI is just hiding $600B USD worth of assets from the IMF, the UST, the WTO, the auditors etc. Where would they have gotten it from? And why haven't they used it already? Its not considered as its just fantasyland.

It may simply not be hidden from the 3-letter agencies you mentioned above, but simply put into an account that does not back the currency.

A prime example would be a stabilization fund:

To save you time and reference, check: http://en.wikipedia.org/wiki/Stabilization_fund

Interesting tidbit, IIRC, it is either Qatar or UAE that holds a stabilization fund that if it were to be included as foreign reserves would actually put them in the #3 spot in the globe behind Japan & China.

If you wish to view the reserve totals on a global scale, check the following link: http://en.wikipedia.org/wiki/List_of_countries_by_foreign-exchange_reserves

It must be UAE, because they have a huge SWF fund - http://www.emirates247.com/business/economy-finance/uae-has-richest-wealth-fund-2012-03-14-1.448434

SWF (Sovereign Wealth Fund)

I can't remember which M.E. oil producing country held the stabilization fund that exceeded a US value of 1 trillion, but it was not accounted for in their reserves.

Compliments to Highlander for offering the link, if we look at Turkey, lets look at an account line they have on their balance sheets:

http://www.tcmb.gov.tr/research/yillik/04ing/sectionV1.pdf

Line # 13 shows a line called re-valuation

The Turkey Central bank defines it as:

This item consists of unrealized losses arising from the revaluation of gold and

foreign exchange on both the assets and liabilities sides, pursuant to Article 61 of

the CBRT Law as amended by Law No. 4651 on April 25, 2001. The year-end

balance of this account is TL 2,032,526,096 million.

Now this affects both sides of a balance sheet, but as we have seen a lot of Iraq's debt being wiped clean - I wonder how it affects their assets side? If value is on the rise (especially gold) that helps increase liquidity of assets to back a currency.

Also, if I recall correctly, not all gold held by the CBI is considered liquid at this time. It is more of a non-liquid asset but still holds value.

Link to comment
Share on other sites

It may simply not be hidden from the 3-letter agencies you mentioned above, but simply put into an account that does not back the currency.

A prime example would be a stabilization fund:

To save you time and reference, check: http://en.wikipedia.org/wiki/Stabilization_fund

Interesting tidbit, IIRC, it is either Qatar or UAE that holds a stabilization fund that if it were to be included as foreign reserves would actually put them in the #3 spot in the globe behind Japan & China.

If you wish to view the reserve totals on a global scale, check the following link: http://en.wikipedia.org/wiki/List_of_countries_by_foreign-exchange_reserves

It must be UAE, because they have a huge SWF fund - http://www.emirates247.com/business/economy-finance/uae-has-richest-wealth-fund-2012-03-14-1.448434

SWF (Sovereign Wealth Fund)

I can't remember which M.E. oil producing country held the stabilization fund that exceeded a US value of 1 trillion, but it was not accounted for in their reserves.

Compliments to Highlander for offering the link, if we look at Turkey, lets look at an account line they have on their balance sheets:

http://www.tcmb.gov.tr/research/yillik/04ing/sectionV1.pdf

Line # 13 shows a line called re-valuation

The Turkey Central bank defines it as:

This item consists of unrealized losses arising from the revaluation of gold and

foreign exchange on both the assets and liabilities sides, pursuant to Article 61 of

the CBRT Law as amended by Law No. 4651 on April 25, 2001. The year-end

balance of this account is TL 2,032,526,096 million.

Now this affects both sides of a balance sheet, but as we have seen a lot of Iraq's debt being wiped clean - I wonder how it affects their assets side? If value is on the rise (especially gold) that helps increase liquidity of assets to back a currency.

Also, if I recall correctly, not all gold held by the CBI is considered liquid at this time. It is more of a non-liquid asset but still holds value.

Thanks for the links, but there are a few problems with this idea

1) Where would Iraq have gotten such a huge fund? Do you think Saddam was putting money away for decades and that its all been maintained? Seems pretty nonsensical to me. Since Saddam was pulled from his hole in 2003/4 we know what has been going on in Iraq and there is nothing that could have generated $600B dollars.

2) Such funds have a liability against them, that is what they are for. e.g. the Norway fund (the one that had the most info of those that I looked at) is their pension fund (e.g. social security) so in their case it can not be counted as foreign reserves since it can not be spent as would foreign reserves. It is a great example of the power of compound interest and saving (for 45 years in Norway's case) for the future, a model the US could certainly learn from.

3) Gold. Iraq currently produces more oil revenue then the entire global production of gold. So for gold production to even double their revenue stream from its present state, they would have to out produce the entire rest of the world. If you look at maps of gold discoveries, the ME is pretty much empty, and its not due to not looking. So even if gold mining becomes significant for Iraq (which is doubtful) it can not possibly double their overall revenue or wealth, let alone increase by 10x.

Basically you seem to be looking for the proverbial rabbit to pull out of the Iraqi hat, but such things are illusions.

Again thanks for the interesting links.

  • Upvote 1
Link to comment
Share on other sites

Guest
This topic is now closed to further replies.
 Share

  • Recently Browsing   0 members

    • No registered users viewing this page.



  • Testing the Rocker Badge!

  • Live Exchange Rate

×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.