Pacster Post 14 March 2010 - Outside Site

[ronscarpa]

This is a very eye opening article written by Pacster and posted elsewhere. Any comments.

RON

* Pacster Post: 3/14/10

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March 14, 2010

[ronscarpa]

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#4 The BIG Kuwait RV…

Never happened. After Saddam invaded Kuwait the street value of the Kuwaiti dinar dropped to .10 cents. People bought them and when Saddam’s regime was removed and Kuwait banks reopened the value was still the same and the people who were fortunate enough to have bought them at the street price made a good deal of money, but nowhere close to what some claim you will make on Iraqi dinar. Kuwait then issued a new currency which they have done several times. They have also revalued the Kuwaiti dinar a couple of times but they were very small adjustments in value

http://en.wikipedia.org/wiki/Kuwaiti_dinar.

#5 Dinar dealers are certified agents of the Department of the treasury……

This is absolutely not true….They register with the DOT as money services businesses. Every 711 store in the country is registered the same way. The treasury does not endorse any part of their business. They are not agents of the CBI or the Treasury as some would have you believe……

http://www.irs.gov/businesses/small/article/0,,id=158384,00.html

#6 The IMF is the currency police and they are going to force Iraq to RV.

First of all I think we need to understand what the purpose of the IMF is.

The IMF works to foster global growth and economic stability. It provides policy advice and financing to members in economic difficulties and also works with developing nations to help them achieve macroeconomic stability and reduce poverty.

The IMF has 186 member countries. It is a specialized agency of the United Nations but has its own charter, governing structure, and finances. Its members are represented through a quota system broadly based on their relative size in the global economy

Through its economic surveillance, the IMF keeps track of the economic health of its member countries, alerting them to risks on the horizon and providing policy advice. It also lends to countries in difficulty, and provides technical assistance and training to help countries improve economic management. This work is backed by IMF research and statistics.

http://www.imf.org/external/about.htm

Transparency in economic policy and access to reliable data on economic and financial developments is critical for sound decision-making and for the smooth functioning of an economy. The IMF has policies in place to ensure that meaningful and timely information—both about its own role in the global economy and the economies of its member countries—is provided in real time to its global audiences.

http://www.imf.org/external/np/exr/facts/trans.htm

I think it is safe to conclude that the IMF is more concerned about the economic condition of its members and how that relates to their monetary policy, rather than just the value of its members currencies.

Transparency is a requirement of its members. The financial stats provided by the CBI on their website mirror the financial stats that they provide to the IMF. If you take the time to read the latest letter of intent to the IMF and take a look at table 1, you will see that the numbers I have used in previous posts are correct. I obtained those numbers from the key indicators on the CBI website. Here is the link to the letter of intent. I encourage you to read it in its entirety and get a much clearer perspective of Iraq’s economy. I have seen bits and pieces of this letter on some of the forums but none have posted it in its entirety for obvious reasons.

http://www.imf.org/external/np/loi/2010/irq/020810.pdf

There are 46+ TRILLION dinar in the M2 of Iraq. The idea that the IMF would force them to RV is absolutely ludicrous. Iraq is an impoverished nation. The only stable way to reduce poverty is to stimulate economic growth by production of revenue. Giving Iraq an unsustainable money supply would cripple them and destroy any progress they have made to this point. This is not an opinion, it is fact.

#7 Iraq has to have a recognized tradeable currency to make payments to the IMF, so they have to RV before the first payment date…..lol

Not true! Iraq can make payments with any hard currency(free floating, no peg) or gold.

http://www.imf.org/external/pubs/ft/aa/aa05.htm

#8 Iraq will use oil reserves to back an RV.

Not true. Not one currency in the world is backed by oil reserves still in the ground. It is solely based on production. Think of this……If their money was pegged to their reserves they would never pump any out of the ground. That’s like turning toothpaste into money, you would have a lot of people with really bad breath. Imagine what would happen if every country pegged their currency to their oil reserves……….lol, better learn to ride a bike again……….

I would love to provide a link, but you should be able to understand why there isn’t one.

[DgreenFSU66]

He makes some good points... but he is WAY off on the M2, it is counted in toliet paper... i mean Dinar. He takes stuff half read and twist it... kind of like a jail house lawyer...or a Baptist Preacher... take your pick.

[ronscarpa]

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#9 All the countries holding dinar will put them in reserves after the RV and use them to buy oil………..

Are you kidding me? Not true….This would crumble the Iraq economy. All of their oil reserves would already be purchased. How could they sustain their own economy if they sell all their oil just to get their own currency back. Not to mention that oil is priced and payed in USD…………..Sorry, money really doesn’t grow on trees……..It is created by economic production. Currently Iraq produces 2.4 million barrels of oil a day. The US produces almost 4x that at 8.5 million barrels per day. If Iraq RV’d at 1 USD, they would have 4x more money than the US and the rest of the entire world combined….How does that work? If Iraq sold every barrel of oil they have in proven reserves of 115 billion barrels at a generous $100 per barrel. They would have $11.5 trillion dollars. That is less money than the US produces or makes per YEAR and at the current rate of production it would take them 133 years to get it out of the ground. If you still believe the IMF and World bank are going to allow Iraq to turn 46 trillion dinar into an equivalent value of $46 trillion USD then you certainly have more faith in your dinar than I do.

#10 The US will put dinar in our reserves after an RV to prop up the value of the USD.

For those that don’t understand currencies and reserve currencies, This will be educational…

Reserve currencies are considered hard currencies or free floating currency. These are the currencies of some of the most powerful and economically productive countries……………. A reserve currency, or anchor currency, is a currency which is held in significant quantities by many governments and institutions as part of their foreign exchange reserves. It also tends to be the international pricing currency for products traded on a global market, such as oil, gold, etc.

This permits the issuing country to purchase the commodities at a marginally lower rate than other nations, which must exchange their currency with each purchase and pay a transaction cost. For major currencies, this transaction cost is negligible with respect to the price of the commodity. It also permits the government issuing the currency to borrow money at a better rate, as there will always be a larger market for that currency than others.

The USD,EURO,YEN,MARK,FRANC etc….

http://store.businessmonitor.com/article/302185

A currency that is pegged to another currency is….

A fixed exchange rate, sometimes called a pegged exchange rate, is a type of exchange rate regime wherein a currency’s value is matched to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold.

A fixed exchange rate is usually used to stabilize the value of a currency, against the currency it is pegged to. This makes trade and investments between the two countries easier and more predictable, and is especially useful for small economies where external trade forms a large part of their GDP.

It can also be used as a means to control inflation. However, as the reference value rises and falls, so does the currency pegged to it. In addition, according to the Mundell-Fleming model, with perfect capital mobility, a fixed exchange rate prevents a government from using domestic monetary policy in order to achieve macroeconomic stability

BMI View: We expect the central bank to hold the dinar steady at around IQD1,170/US$ over the next five years. However, if oil exports disappoint and the large current account surpluses that we forecast do not materialise, or if inflation returns as a serious problem, the monetary authorities could be forced to abandon this de facto peg.

Since early 2009, the Central Bank of Iraq (CBI) has kept the exchange rate fixed at IQD1,170/US$, and we expect it to maintain the status quo throughout the five year forecast period. We hold this view despite the fact that the CBI has not officially declared that the dinar is now pegged to the dollar. However, keeping a fixed exchange rate would bring Iraq in line with five of the six GCC oil producers (Kuwait pegs its dinar to trade-weighted basket of currencies dominated by the dollar). Arguably, a dollar peg makes even more sense for Iraq than for these other states given that oil, priced in dollars, accounts for nearly all (around 99%) of Iraq’s goods exports.

http://store.businessmonitor.com/article/302185/

The CBI may not have announced that the IQD is pegged to the dollar but the IMF has done so for them…

95% of Iraq’s economy is oil production, so 95% or more of their economy is based on USD….It only makes sense that the IQD is pegged to the amount of USD they have in reserves……

Long story short……..The US is not going to put IQD in reserves to back the USD. That would be equivalent to putting more USD into our own reserves to back our own USD. That theory has some serious holes in it. If Iraq RV’d at 1 to 1, believe it or not it would send our own economy into hyper-inflation.

#11 A re-denomination is a good thing for us investors it means RV……….

Not! A re-denomination is a lop…so is lifting zeros or deleting zeros………

http://www.investopedia.com/terms/r/redenomination.asp

#12 Iraq doesn’t have inflation….

LOL……….Prior to the gulf war they had 25 billion dinar, now they have 46 trillion.

Prior to the war it took 1 dinar to buy a loaf of bread, now it takes 3000…….What would you call that?

I could spend the next 3 days listing all the misleading information out there, but I don’t really want to and I believe this gives you the gist of it.

I am not saying that the dinar is a scam….I do own dinar and I am not getting rid of them. However, I do believe how the dinar has been marketed has been very misleading. I believe in Capitalism and our free market. That’s what made this a great country. I do not believe in capitalizing on peoples hopes and dreams by giving them misleading information to sell a product.

A lot of these posts I read for entertainment purposes only..But its much like listening to the same joke more than once. It gets old. I am just bringing this out to encourage these Gurus to find some new material…….lol.

I also encourage anyone who has or can find information that proves mine wrong to step forward with it and provide a link please. I have never wanted to be so wrong in my life. I don’t share the info because I like being a negative nilly or a naysayer…..If providing real information is a bad thing then I would really like to go back to the planet I came from.lol

God Bless……..

[DgreenFSU66]

http://dinarvets.com/forums/showthread.php?14264-Questions-about-Pacsters-Post-on-DDT-SERVING-LOPSTER

this thread debunks half of what he posted...

[ronscarpa]

http://dinarvets.com/forums/showthread.php?14264-Questions-about-Pacsters-Post-on-DDT-SERVING-LOPSTER

this thread debunks half of what he posted...

DgreenFSU66,

Thanks - I read your post and like your logic - However, there are MANY other points he makes that really need to be addressed. I'm stunned by several of them. So, the entire post is open for DISCUSSION - best done one-by-one. I'm all eyes and ears - I want to learn...!

RON

[DgreenFSU66]

Ron i agree... he does have some strong arguements..... BTW, i see your a Blues fan??? Im in Pensacola, you should get down here and see these guys at practice.. they practice Tues and Weds mornings... they put on a show... You can get front row and it is unreal!!! Great guys.. real class act.

My personal opinion, I feel that they wouldnt print more currency than what they could cover... they seem to be fiscally "tight". Plus they are milking us dry for as long as they can... they are smarter than we give them credit for.

[armondtoth]

Note ~ NOT A LOP ~

The following statements mentioned in the following articles are indirectly saying that all Iraqi Dinars with 3 0's will be Removed from Circulation. That would mean that the 25,000, 10,000, 5,000 and 1,000 dinar notes will, over time (gradually), be taken out of circulation. This is Not a lop. Time will be given to trade in the higher notes for smaller notes and eventually the higher notes will no longer be used and will be Phased out Completly.

Pacster is an idiot, this is from the same article he referenced where he states it is a lop. Kelly blog is for morons

[DgreenFSU66]

hahaha never been to that site... i am glad, seems that it wouldnt be too hard to READ a report and then digest it, and have a sense of understanding. M2 for Iraq is CLEARLY stated in DINAR.

[avenger380]

after reading this thread, I would suspect that this would be Ronscarpa's last post and that he would be selling all his dinar. Why in the world would you continue to hold dinar and waste your time with this if all that were true?

[zoomzoom]

Why would you indeed? Who is he trying to convince and why? All I know is that the dinar is greatly undervalued and at some point will need to be revalued. When it was worth over $3, how would all the above arguments apply. Iraq was stripped of its wealth at the time of the war for strategic reasons, not because it lacked wealth. Its people need to get access to that wealth for their own wellbeing.

[tommy17]

When Iraq revalues their currency i wonder if he will have the guts to post that he was wrong? One of the wealthest countrys in world, and with one of ther lowest inflaution rates in the world will not LOPP.

[DgreenFSU66]

READ, he is stating that pacster made some good points, however, it was shown that pacster also twisted info and spewed a bunch of rubbish out to support the majority of his statements. Ron posted this for discussion, if you have an issue then take up some research and debunk what pacster wrote.

[brookie]

OK that all comes off like sound logic,but you would have to be able to explain away that the dinar was at 3+ dollars from 1932 till 1990.It is the same place and they have more goods to sell than the countrys around once they are up and running.There is no reason out side of the current state to beleave the Iraqi Dinar is not worth as much or more that the other dinar in the area.Maybe not just as much right now because the are busted up from years of war.At least 1:1 with the dollar it would not cripple the place there 35 other countrys just throwing money at Iraq.It is not out of human kindness.The U.S. would not just give 35 billion dollars .We want something for our dollar.We have China up our butt telling us to keep it together.So the wizard is up to something in OZ.

[ktking1968]

I don't understand why would a person (pacster) invest so much personal effort and time to prove or disapprove what others believe may happen with this currency. Why doesn't he debunk global warming or something. It's all personal opinion and interpretation. I realize this event is much bigger than my petty selfish financial dreams but I didnt invest my hard earned money just to break even and for those who think they will just break even just cash in now. Why wait?

[seastallion]

Then just sell, go outside the wire and buy a bunch of sandwiches for everyone. If this whole thing is a lie, why are you still here?

[DgreenFSU66]

When the NY Times came out with the article from the Senior Bush advisor to the CBI, who stated that the Dinar is backed 'Dollar for Dollar" that was all i needed to hear. Even that liberal Henry Waxman stated on the floor of Congress, words to the effect of: "Who in their right mind flies in 360 tons of US Cash into a war torn region".... hmmm indeed.

[john1025]

90% of this I agree with. There will be a r/d. I believe it will occur before the end of the year, around September and they will r/v at the same time. If you choose to continue down the garden path it is up to you. When they do r/d/rv you will not lose but will break even. If you hold and wait you may see an increase in the value, which is why I'll hold and wait, but you will not be instant millionairs. You may make a few thousand dollars on your investment if you hold many many dinar. This is my opinion and like yours, I have a right to it.

I like the people here and enjoy the chat, but it truly sadens me when I see how desperate some are for this to occur. You will not get out of debt, unless you owe very little, you will not be able to buy that new house, unless you have a good job and good credit and a good down payment already in the bank.

If these so called Guru's have been right about anything it is that they were right about people being so naive they would believe every word they say, there by making them millionairs not you! I don't want to be your dream smasher, I just want you to think! Every date, every rate, every article with translation made by a guru has been made with a motive in mind and the motive is you buying more dinar.

The one thing I will say is that Adam so far has been fair and has not said a date or rate, in fact he is going on information he recieves from his sources, however, I don't think he should not share much of that because in the end it has the same affect as what the guru's are doing.

Many of you will be angry at my opinion and will start screaming at me, Why are you here?, sell your dinar if you don't believe! That's ok with me, I know why I'm here and seeing this thing play out is one reason, enjoying the chat, is another and the final reason is that I'll be happy making a few thousand and at worst breaking even.

see you chat!

[CaptainJack]

I'm beginning to feel more and more we aren't going to see a big, bold RV .... rather a progression of the currency being tradeable and SLOWLY increase in value as Iraq gets out from Ch. 7, builds its infrastructure and generates revenue. Not as flashy as it coming out at $0.86, $1.47 or $3.00 as the self-proclaimed experts state, but then again I'm not benefitting from the sale of dinar.

[northeastdinar]

This is all opinion. I have a degree in internation business and a masters in economics. He is flat out wrong and his opinion is obtuse. Btw, my neighbor cashed in on Kuwait for $4 million. He is posting propaganda.

[The Watcher]

The price of bread that was mentioned caught my eye. The post states that prior to the Gulf War bread was 1 dinar and it is now 3000 dinar. I think that may be directly related to the current value of the currency. The GOI has stated the intent to remove large denominations from circulation and have it done by the end of 2010. Without an RV, it will take a wheel barrow load of dinar to buy that same loaf of bread at 3000 dinar per. So something has to give. If no RV, then there is absolutely no reason to issue small denominations. Then again we are dealing with Iraqis, so who knows what they will do.

[ronscarpa]

after reading this thread, I would suspect that this would be Ronscarpa's last post and that he would be selling all his dinar. Why in the world would you continue to hold dinar and waste your time with this if all that were true?

Avenger,

Did you read any of MY remarks at all...? I simply stated that this was written by Pacster and Posted for "comments & Discussion" - that it had some "Interesting & Eye Opening" statements. This is a RUMOR SITE and all things are posted here are for information and discussion. I'm not an economist, and i am very open to learn - as I stated. DgreenFSU66 and others have made good posts and expressed opinions and insights that have added to our understanding. WHAT DO YOU HAVE TO ADD...? I own almost 40 million IQD and am still buying more - what do you own...? I'm a believer in the IQD and Iraq as an investment, and I put my money where my mouth is. Pacster's post was a bit alarming to me - so I posted it here for comments.

I hope this explains things for you, and the purpose of posting it on this site. Do you have anything positive or constructive to add to our discussion?

Thanks,

RON ;)

[drox]

This is all opinion. I have a degree in internation business and a masters in economics. He is flat out wrong and his opinion is obtuse. Btw, my neighbor cashed in on Kuwait for $4 million. He is posting propaganda.

Pacster has had many intelligent posts. I cannot verify his inner knowledge or education on this subject anymore than I can verify yours. I do see that he put out a concerted effort with many links to get his point across. I find it refreshing that he argues another point and preaches caution in this investment. Too many are blinded by self-proclaimed analysts and rely on that one point of view instead of taking in all the information to interrupt the data for themselves. Too much erroneous and twisted information has been manipulated to support egoic intentions. A lot of people are continually hurt by the mis-information.

I would like to see someone with your background post an intelligent counter point versus a drive-by unsubstantiated accusation. Surely you have more insight with a masters degree in economics and experience in international business. Thanks for your consideration of doing just that. I am really not bashing you just trying to encourage you to put forth something to prove why he is wrong to help the argument. Dgreenfsu66 has been making good points in his effort.

[ronscarpa]

Posted by KENT in Reference to DgreenFSU66's post on Pacster's Article - for information...!

Dgreen, If you are looking for the actual data, the most updated and credible source seems to be the CBI:

http://www.cbi.iq/xl&wr/key%20financial.xls (You have to click thru a few yes' to get there but it will open.) It shows M2 at 46Trillion Dinar. I don't believe Packster's point was that the current reserves (your reference to $39Billion Dollar conversion) is inadequate. His point is that a 1:1 RV would convert that to $46 Trillion DOLLARS. Then he was comparing the expense of an RV to relying upon oil reserves and increased oil production to fund that currency revaluation.

FYI, The closest I can find for M0 (although in my opinion it is a useless figure for discussion) is line 73 on the same chart "Currency Outside Banks" which seems to be the exact definition of M0. That amount is shy of 22Trillion Dinar. Since either an RV or a LOP would involve cash in bank accounts, I don't think it is the correct figure to use for discussions relating to the cost or reserve adequacy of CBI - but there it is and here is a site with a summary of simplified definitions of different money supply figures: http://dollardaze.org/blog/?post_id=00565

That same site has information about consolidated M2 for 138 countries making up 98.4% of global GDP and his figure is $50Trillion Dollars in 2009. http://dollardaze.org/blog/?page_id=00023

My understanding is that IMF wants about a 25% currency reserve. The CBI indicates (line 74 in the first link) just shy of 21Trillion Dinar.

Those are the best facts I can find related to your post. Questions I don't have the answers to:

25% of which Money Supply figure?

Will that requirement even apply if we assume chapter VII released?

How high can Iraq trade their currency based on optomism (independent of reserves if no reserve requirement applies)? Enorrset used to talk about a 10% reserve guideline I believe.

I will leave othes to work these numbers and consider what Iraq can afford.

Kent

[ronscarpa]

Pacster has had many intelligent posts. I cannot verify his inner knowledge or education on this subject anymore than I can verify yours. I do see that he put out a concerted effort with many links to get his point across. I find it refreshing that he argues another point and preaches caution in this investment. Too many are blinded by self-proclaimed analysts and rely on that one point of view instead of taking in all the information to interrupt the data for themselves. Too much erroneous and twisted information has been manipulated to support egoic intentions. A lot of people are continually hurt by the mis-information.

I would like to see someone with your background post an intelligent counter point versus a drive-by unsubstantiated accusation. Surely you have more insight with a masters degree in economics and experience in international business. Thanks for your consideration of doing just that. I am really not bashing you just trying to encourage you to put forth something to prove why he is wrong to help the argument. Dgreenfsu66 has been making good points in his effort.

Drox - Thank You,

Your remarks are very well stated - Amen...!

RON