SWFloridaGuy (Friday the 13th)

[SWFloridaGuy]

7-13-2012 SWFloridaGuy: It's no secret that the IQD's current rate was government imposed and is grossly undervalued but that doesn't mean we should down-play the significance of what we believe they are trying to accomplish. To put things in perspective; for Iraq to revalue to even a fraction of what we expect (on par with USD/100,000% appreciation) would make this currency reform project a singularity and considered an extremely ambitious economic phenomenon even to Heterodox economists who take "power" and the global elite more into consideration. My goal in writing this post is to credit this historic opportunity with the respect it deserves rather than simplify it with baseless rumors, misinformation and contemptible hype. I will continue to promulgate the theory that the Iraqi dinar will revalue, while also recognizing the challenges it presents.

So, let's look at some historical FACTS: Countries must choose between capital mobility, monetary policy autonomy and exchange-rate stability. Nominal appreciation must lead to sustained real appreciation. The definition of a "large exchange rate event" comprises a 10% (or larger) appreciation of the nominal effective exchange rate over a two-year window (or less), leading to sustained real effective appreciation. In the past 52 years there have been 25 episodes of large nominal real appreciations and revaluations. There were 14 cases of "appreciation shocks" that occurred not as a result of discretionary policy action, but were linked to the appreciation of the anchor currency under pegged exchange rates. There are a few examples that I've found to be duplicates so I won't name them all but here are a few contributing factors (with corresponding countries & percentages) to these appreciations throughout history: Being pegged to a basket of currencies with a large U.S. dollar weight when the USD strengthens (Algeria 17.2). The depreciation of the USD when a currency is pegged to the GBP (Australia 10.2%). When a country's exchange rate is stabilized against another whose appreciation triggers it (Malaysia 20%). Appreciation on a trade-weighted basis as a consequence of the appreciation of the anchor currency (French Franc) against the USD (Cameroon 11.8% & Ivory Coast 27%). Appreciation as a function of strength of the main anchor currency (Singapore 12%). European currencies appreciate against the USD (Spain 13.4). Revalued under the Bretton Woods system (Germany 10.7%). Multiple revaluations after the demise of a monetary system (Switzerland 10.2 & 22.4%). Central Bank manages the appreciation (Japan 14.7%). Exchange rate regime was changed towards a more market determined rate (Taiwan 13.9%). Central Bank revalues the central parity of the currency (Chile 29.8% & Colombia 11.2%). New exchange rate framework with a crawling band and Central Bank interventions (Czech Republic 11.2%). As you can see there are many different mechanisms that lead country's currency to appreciate and all would pale in comparison (both numerically and strategically) to what we believe is on the horizon for the Iraqi dinar.

We believe the goal for the IQD is to increase purchasing power, maintain long-term stability and to be a globally traded currency. Although after decades of war there is still much work to be done, the CBI, Finance Committee and IMF have worked to improve the fiscal and political outlook by collaborating with Iraqi Parliament, financial experts along with their international counterparts. The value in the IQD is still there. Just two days ago Bloomberg reported that Iraq’s crude production overtook Iran's for the first time in more than two decades. Last month alone Iraq pumped 2.984 million barrels a day, outpacing Iran’s 2.963 million. Now just as they didn't get to their current value alone, I also don't believe they can recover alone. I believe this is all part of a well-orchestrated plan and while the IQD will not be the world's savior by any means, it does present a unique opportunity for the Central Banks to rebalance the system and use this currency as an adjustment tool or stimulus during this global financial crisis. In this respect, a significant revaluation somewhere on par with the USD gains a bit more tenability. If all the reports out of the CBI lately are true, one way or another Iraq will be added to the history books in 2012 and my research has led me to believe that it will be a VERY "large exchange rate event." This is just my opinion, which may or may not be correct.

Edited July 13, 2012 by SWFloridaGuy

[Firedawg]

I sure hope your opinion is correct! Happy Friday the 13th.

[Unitedrich]

"This is just my opinion, which may or may not be correct."

True, however it is well researched with plenty of supporting data to back it up.

As always, thanks for the post SWFG.

[RAGARCIA62]

thank for the read. sounds good to me. i can only hope that we see the rv before 2013. have fun in florida, your lucky to be there. i lived in sarasota for a few years.

[caz1104]

Nice read,thanks SWFG.

[TonyDownTheShore]

VERY "large exchange rate event."

I'll take it, thanks SWFG

[doctor robbins]

It wasn't government imposed and it's not undervalued. Iraq was experiencing hyperinflation nearly twenty years ago. The dinar's current value is a result of hyperinflation. It's no more undervalued than South Korea's currency is.

[easyrider]

Thanks SWF for the post, dont worry about the haters

[mrmcwhipit]

Thanks SWFG, Glad your with us.

[Carrello]

It wasn't government imposed and it's not undervalued. Iraq was experiencing hyperinflation nearly twenty years ago. The dinar's current value is a result of hyperinflation. It's no more undervalued than South Korea's currency is.

I hid your rock. Now where will you take a nap?

[leanonme]

Wow! I am sure you put hours of your personal time in gathering this information as with all your posts. We all owe you a sincere THANK YOU for all your efforts. Another great post from SWFLORIDA GUY!

[DAME1]

Morning Sunshine

I have said, all along, that they (whomever they are) purposefully devalued their currency.

They will purposefully revalue it... IMO..

On another note, I saw on National news where Hilarious, aka Hillarious, was in Viet Nam yesterday.. She left Bill at home to look after the dong!! :lol:

Things that make you go hmmmmmmm.

Dame

[JayLee202]

7-13-2012 SWFloridaGuy: It's no secret that the IQD's current rate was government imposed and is grossly undervalued but that doesn't mean we should down-play the significance of what we believe they are trying to accomplish. To put things in perspective; for Iraq to revalue to even a fraction of what we expect (on par with USD/100,000% appreciation) would make this currency reform project a singularity and considered an extremely ambitious economic phenomenon even to Heterodox economists who take "power" and the global elite more into consideration. My goal in writing this post is to credit this historic opportunity with the respect it deserves rather than simplify it with baseless rumors, misinformation and contemptible hype. I will continue to promulgate the theory that the Iraqi dinar will revalue, while also recognizing the challenges it presents.

So, let's look at some historical FACTS: Countries must choose between capital mobility, monetary policy autonomy and exchange-rate stability. Nominal appreciation must lead to sustained real appreciation. The definition of a "large exchange rate event" comprises a 10% (or larger) appreciation of the nominal effective exchange rate over a two-year window (or less), leading to sustained real effective appreciation. In the past 52 years there have been 25 episodes of large nominal real appreciations and revaluations. There were 14 cases of "appreciation shocks" that occurred not as a result of discretionary policy action, but were linked to the appreciation of the anchor currency under pegged exchange rates. There are a few examples that I've found to be duplicates so I won't name them all but here are a few contributing factors (with corresponding countries & percentages) to these appreciations throughout history: Being pegged to a basket of currencies with a large U.S. dollar weight when the USD strengthens (Algeria 17.2). The depreciation of the USD when a currency is pegged to the GBP (Australia 10.2%). When a country's exchange rate is stabilized against another whose appreciation triggers it (Malaysia 20%). Appreciation on a trade-weighted basis as a consequence of the appreciation of the anchor currency (French Franc) against the USD (Cameroon 11.8% & Ivory Coast 27%). Appreciation as a function of strength of the main anchor currency (Singapore 12%). European currencies appreciate against the USD (Spain 13.4). Revalued under the Bretton Woods system (Germany 10.7%). Multiple revaluations after the demise of a monetary system (Switzerland 10.2 & 22.4%). Central Bank manages the appreciation (Japan 14.7%). Exchange rate regime was changed towards a more market determined rate (Taiwan 13.9%). Central Bank revalues the central parity of the currency (Chile 29.8% & Colombia 11.2%). New exchange rate framework with a crawling band and Central Bank interventions (Czech Republic 11.2%). As you can see there are many different mechanisms that lead country's currency to appreciate and all would pale in comparison (both numerically and strategically) to what we believe is on the horizon for the Iraqi dinar.

We believe the goal for the IQD is to increase purchasing power, maintain long-term stability and to be a globally traded currency. Although after decades of war there is still much work to be done, the CBI, Finance Committee and IMF have worked to improve the fiscal and political outlook by collaborating with Iraqi Parliament, financial experts along with their international counterparts. The value in the IQD is still there. Just two days ago Bloomberg reported that Iraq’s crude production overtook Iran's for the first time in more than two decades. Last month alone Iraq pumped 2.984 million barrels a day, outpacing Iran’s 2.963 million. Now just as they didn't get to their current value alone, I also don't believe they can recover alone. I believe this is all part of a well-orchestrated plan and while the IQD will not be the world's savior by any means, it does present a unique opportunity for the Central Banks to rebalance the system and use this currency as an adjustment tool or stimulus during this global financial crisis. In this respect, a significant revaluation somewhere on par with the USD gains a bit more tenability. If all the reports out of the CBI lately are true, one way or another Iraq will be added to the history books in 2012 and my research has led me to believe that it will be a VERY "large exchange rate event." This is just my opinion, which may or may not be correct.

Good Job buddy, I hope you're right because I'll be down in Florida too

[Captjohn]

The mere fact that Iraq is already outpacing Iran in oil production should speak to the vast reserves, both proven and under exploration, that Iraq has. If the value of the dinar is to ultimately reflect the sum total of the country's underlying asset values (oil, gold, natural resources, etc.), then it might well be an anomaly in terms of historic national currency revaluations. IMO, your conclusions are right on.

[Mxmann]

Thanks for all your input SWF, I have so much to learn!

I do have a question thought. What is the significance with surpassing Iran's oil, when their currency, is only 12,250.00 IRR to 1USD, or 1 IRR = 0.0000816327 USD.

[Tubbs]

If all the reports out of the CBI lately are true, one way or another Iraq will be added to the history books in 2012 and my research has led me to believe that it will be a VERY "large exchange rate event." This is just my opinion, which may or may not be correct.

I do appreciate your research and take on this currency

I hope you like to fish? (Belize)

Go RV B)

[powerpager]

Great Post, Lets Go !!!

[sandstorm]

It wasn't government imposed and it's not undervalued. Iraq was experiencing hyperinflation nearly twenty years ago. The dinar's current value is a result of hyperinflation. It's no more undervalued than South Korea's currency is.

Your wasting your time. its about hope of change. no one here wants facts or historical precedence. my advice, stay true to your research and what you believe and keep it silent or within a section of like minded people. there will be no growth of knowledge, or decent conversation or debate about the dinar here. within a matter of minutes, itwill turn to personal attacks or questioning of yyour motives. just let them say and believe whatever makes them happy.

[GameChanger]

I believe this is all part of a well-orchestrated plan and while the IQD will not be the world's savior by any means, it does present a unique opportunity for the Central Banks to rebalance the system and use this currency as an adjustment tool or stimulus during this global financial crisis.

Read more:

Sounds great. Problem is as it has always been... we (the world) got in this mess due to greed and poor management. As does history so shall this repeat... even if the world is reset or rebalanced... the greed continues and in another 30-60 years we'll be right back here. Guess I shouldn't care because I'll be long gone but I fear for my children etc. JMHO.

Good summation though SWFG!

[okane]

Wow! Great read SWFG. I totally agreed, Iraq should take the cake. I like where we are.

[easyrider]

Your wasting your time. its about hope of change. no one here wants facts or historical precedence. my advice, stay true to your research and what you believe and keep it silent or within a section of like minded people. there will be no growth of knowledge, or decent conversation or debate about the dinar here. within a matter of minutes, itwill turn to personal attacks or questioning of yyour motives. just let them say and believe whatever makes them happy.

Well.. im glad you feel that way and maybe you and some others here should go start your own Dinar "Facts" site and talk amongst yourselves since your wasting your time with us and leave us all alone.

Edited July 13, 2012 by easyrider

[MrOptimistic]

It wasn't government imposed and it's not undervalued. Iraq was experiencing hyperinflation nearly twenty years ago. The dinar's current value is a result of hyperinflation. It's no more undervalued than South Korea's currency is.

You've got more studying to do. You just compared apples to oranges.

Nice read swfg

[katie45]

Here is something to think about. Who owns the CBI and who owns many of the Central Banks? Yup, the Rothchilds. Therefore, I don't see them screwing themselves, but making themselves richer. GO RV!

TY SWFG, a lap dance may be in your future. lol

[sandstorm]

Well.. im glad you feel that way and maybe you and some others here should go start your own Dinar "Facts" site and talk amongst yourselves since your wasting your time with us and leave us all alone.

My advice was to leave you alone, swfloridaguy, etc..

The idea of talking with people who are open minded and are willing to sort through all the information presented to us, sounds nice.

This is swfloridaguys topic, so i will keep silent and move about my day. enjoy yours.

[Tripphood]

Well.. im glad you feel that way and maybe you and some others here should go start your own Dinar "Facts" site and talk amongst yourselves since your wasting your time with us and leave us all alone.

AMEN EASY!!!!!!! These guys need to just stay in the LOP section. I don't want to hear there negativity, they are obviously holding Dinar if they are here but I think they just should sell it and move on and LEAVE US ALONE! I'm sick of hearing their crap! Not gonna listen to it! Correction, IM NOT LISTENING to it.

GO RV!

Kinda sickening to think that when it does RV that they will also prosper. Doesn't seem right, they should be PENALIZED for all the grief they've been doling out.