SWFloridaGuy Thoughts On Currency Appreciations - 06/01/2013

[ronscarpa]

SWFloridaGuy Thoughts On Currency Appreciations - 06/01/2013

SWFG Post on D.Detectives - Taken from D.Recaps

SWFloridaGuy: I'd like to address a few recent events and both the positive and negative aspects of large currency appreciations; especially, when you consider the benefit of pursuing extensive foreign exchange interventions to smooth the appreciation of the domestic currency.

The consequences of strong currencies from both positions of realized large appreciations against those of smoothed appreciations via foreign exchange rate intervention tend to witness the strengthening of domestic currencies and export performances which also improve across economies. The benefits of these intervention measures on growth are significant.

The benefit of the fear of appreciation cannot be completely dismissed. Yet, the gain may arguably be too limited, via the trade channel only, to warrant or justify the cost of an asymmetrical exchange rate policy stance, such as in the form of quasi-fiscal costs and other possible distortions to the economy.

This may then signify that the fear of appreciation manifested in the form of large reserve purchases fulfilling more than just mercantilism considerations for these economies, but as previously recognized by the extant literature that account for what drives the recent large reserves accumulation in this part of the world, the desire for self-protection in times of crisis and liquidity may justify such behavior.

The CBI needs to identify separately the ‘extreme right-tail’ observations from the ordered distribution of the changes in the exchange rate and the ordered distribution of the changes in reserves since the incidence of large appreciations and large reserves purchases are determined and located in the right-tail of the distribution.

Although Iraq has the world’s second-largest oil reserves, they require a lot of the infrastructure rebuilding, along with their economic and social institutions if they wish promote an environment attractive to international investors keen to subsidize the additional funds necessary for completing a modernized technological banking system with the skills necessary to ensure a substratum foundation to build upon.

International investors are keen to subsidize the additional funds necessary for completing a modernized technological banking system that supports stability, promotes social institutions and international commerce skills that will ensure a substratum foundation to build upon. 

Thank goodness for the international support they've been receiving regarding their banking sector in particular because their progress thus far is imperceptibly lacking professionalism trending more toward procrastination and corruption.

So, in my opinion, the international intervention implies they have ulterior motives and are there to see a significant return on their investment (as are we). Which is a good sign for us. If those in power see potential in Iraq and are willing to invest in their future, why shouldn't we do the same?

Iraq’s huge oil reserves could, in principle, provide the revenues needed to finance the reconstruction, but strong institutions and a favorable business environment are needed to use these resources effectively. The longer-term outlook is strong as domestic and foreign investment in the hydrocarbon sector is bearing fruit. 

According to the Ministry of Oil, oil production averaged 3.1 million barrels per day of which 2.3 mbpd are exported, and extraction and exports are projected to increase considerably in the years ahead.

Nevertheless, Iraq’s economic prospects continue to be subject to significant risks. Deriving mainly from institutional and capacity constraints, oil price volatility, delays in the development of oil infrastructure, and an extremely fragile political and security environment.

The IMF is helping the authorities in their efforts to maintain macroeconomic stability as a key condition for economic growth and the generation of sustainable employment opportunities for Iraq’s large labor force. 

The IMF assists the Iraqi authorities in rebuilding essential economic institutions with its policy advice and technical expertise.

Macroeconomic stability is at the heart of the IMF programs and economic policy advice. With the support of four IMF programs, the macroeconomic situation of Iraq has improved substantially since 2003, despite extremely difficult security circumstances and periods of political uncertainty.

After experiencing inflation rates of 70 percent in 2007, the Central Bank of Iraq was successful in reducing inflation to the single digits, where it has remained since.

The economy is growing with the revival of the oil sector and the improvement in the security situation. And with the support of the international community, debt levels have been brought down to sustainable levels. 

IMF technical assistance has proven essential in helping the Iraqi authorities develop their institutional capacity and governance infrastructure. 

Although the IMF's role has changed over the past few years the staff will continue to support Iraq through surveillance and technical assistance.

The IMF mission met with the Acting Minister of Finance, the Acting Governor of the Central Bank Turki and other Iraqi officials from the ministries of finance, planning, and oil, and representatives from the Central Bank and the Board of Supreme Audit. The team also met with representatives from the Iraqi banking and business community.

At the conclusion of the mission, Mr. Sdralevich made the following statement: “Following the recent expiration of the Stand-By Arrangement with Iraq approved in 2010, the IMF is committed to continue close collaboration with Iraq to support its development and help the government improve the social conditions and employment opportunities of Iraqi citizens.”

If you would like to contact the IMF Public Relationship Dept. concerning any question you may have here is their contact information:

IMF EXTERNAL RELATIONS DEPARTMENT: 

E-mail: publicaffairs@imf.org 

Fax: 202-623-6220 

Phone: 202-623-7100 

Despite a difficult security and political environment, Iraq managed to maintain macroeconomic stability over the past two years. On the back of rising oil production and robust non-oil activity, economic growth has remained strong at about 8 percent in 2012. 

We expect activity to accelerate further to 9 percent in 2013, as oil production increases from just under 3 million barrels per day (mbpd) in 2012 to 3.3 mbpd in 2013.

In 2012, inflation was contained at 6 percent, and we project it to decline slightly next year. On account of strong oil proceeds, CBI reserves reached US$70 billion at the end of 2012, while the Development Fund for Iraq (DFI) rose to US $18 billion.

While we welcome the achievement of a budget surplus of about 4 percent of GDP in 2012, largely due higher-than expected oil revenues, the execution of the 2013 budget should be aligned with available financing and provide for the accumulation of adequate fiscal buffers in the DFI, which suggests to target a budget surplus in 2013.

Public financial management should be strengthened, notably by phasing out off-budgetary spending practices and reliance on state-owned bank financing to support public enterprises. Approval of additional spending commitments during the fiscal year should also be avoided.

Financial sector policies are improving, but more remains to be done. The CBI’s ongoing efforts to refine monetary policy instruments, strengthen banking supervision, and accelerate the restructuring of the banking system are crucial.

In this respect, the recent steps toclean up the balance sheets of Rasheed and Rafidain in preparation for their restructuring and recapitalization are key. 

The CBI should also take measures to gradually liberalize the provision of foreign exchange through its auctions, with the objective of avoiding in future the turbulence experienced by the market in the past year.

For Iraq to succeed they must address serious medium-term challenges in order to be able to create the conditions for high and sustainable growth that is necessary to improve the living standards of its people.

The economy continues to suffer from severe structural weaknesses such as a small nonoil sector, high unemployment, public sector dominance, and a weak business environment. In this context, we discussed the role of economic policies in leveraging Iraq’s potential and creating an enabling environment.

The budget must be managed carefully to maintain macroeconomic stability, meet Iraq’s large social and investment needs while continuing to accumulate buffers to address oil market volatility, and ensure medium-term fiscal sustainability. 

At the same time, Iraq needs to strengthen fiscal institutions and public financial management to make sure that the large oil revenues are used effectively and transparently.

This may be wishful thinking or require a new government or continued protests that produce progress the current GOI must develop a stronger financial sector development will require moving away from the current model in which weak state-owned banks dominate the financial sector and enjoy favorable treatment vis-a-vis private banks. 

A solid banking system that can support growth and employment will require the full financial and operational restructuring of state-owned banks and creating a level playing field for both private and public banks. We know oil-growth and foreign investment (possibly their currency) will continue to increase over the coming years.

However, private sector growth will need a long-term government strategy centered on improving the business environment and opening up opportunities for the private sector.

Iraq has the fifth largest proven crude oil reserves in the world, and it passed Iran as the second largest producer of crude oil in OPEC at the end of 2012. Iraq is the 8th largest producer of total petroleum liquids, a statistic that has been increasing and it has the world’s largest proven petroleum reserves.

Just a fraction of Iraq’s known fields are in development, and Iraq may be one of the few places left where much of its known hydrocarbon resources has not been fully exploited.

Iraq has begun to develop its oil and natural gas reserves after years of sanctions and wars, but it will need to develop its infrastructure in order to reach its production potential. 

According to estimates by Iraq’s Deputy Prime Minister for Energy, capital expenditures of $30 billion per year in Iraqi energy infrastructure are required to meet Iraq’s production targets.

If there was ever a country which was a good candidate for a revaluation it's Iraq. We will never be able to prove that a revaluation is coming, just like the Romanians couldn't. But it makes sense for a lot of different reasons and has only increased in value since I've had it. So, I will continue to wait and hope for the best possible outcome.

Unfortunately, increases in oil production have fallen behind ambitious targets because of infrastructure constraints and political disputes. Iraq has five super-giant fields that account for 60 percent of the country’s proven oil reserves. Attributing to the conflict with the Kurds.

The IEA estimated that the KRG area contained 4 billion barrels of proven reserves. However, this region is now being actively explored, and the KRG stated that this region could contain 45 billion barrels of unproven oil resources. If true this could bring about some significant economic and political bifurcations.

Iraqi crude oil production averaged 3 million barrels per day and passed Iran as OPEC’s second largest crude oil producer at the end of the year. About three-fourths of Iraq’s crude oil production comes from the southern fields. Iraq has begun an ambitious program to develop its oil fields and to increase its oil production.

HCL passage would provide a legal framework for investment in the hydrocarbon sector and remains a main policy objective. Despite the absence of the HCL, the Iraqi Ministry of Oil signed long-term contracts between November 2008 and May 2010 with international oil companies.

The importance of these phases are as follows: Phase 1 - Major companies further develop giant oil fields. Phase Two - Contracts were signed to develop oil fields that were already explored but not fully developed or producing commercially. 

If these fields were developed as initially planned, they would increase total Iraqi production capacity to almost 12 million bbl/d, or about 9 million bbl/d above 2012 production levels. 

The contracts call for Iraq to reach this production target by 2017. However, these contracts are being re-negotiated to more modest levels, and Iraq is revising its production targets to 9.5 million bbl/d by 2017. However, even these revised targets may be overly optimistic, given delays in developing its energy infrastructure.

Iraq has since held a third bidding round for natural gas fields, and a fourth round (with few bids submitted) for fields that contain predominantly crude oil. A fifth round has been scheduled in 2013 for the development of the 4-billion-barrel Nasiriya oil field in Thi-Qar province, together with the construction and operation of a new 300,000-bbl/d refinery.

Progress has also been slow because of political disputes between the central government and the Kurdistan Regional Government. Iraq also has disagreements regarding shared oil fields with Kuwait and Iran.

Production increases of the scale planned will also require substantial increases in natural gas and/or water injection to maintain oil reservoir pressure and boost oil production. 

Iraq has associated gas that could be used. According to a report issued by the U.S. National Oceanic and Atmospheric Administration (NOAA), Iraq was a leading natural gas flaring country.

Iraq’s oil and gas industry is the largest industrial customer of electricity in Iraq but significant upgrades to this sector would be needed to supply additional power. Although over 20 gigawatts of new generating capacity are planned by 2015, delays in meeting projected targets would mean insufficient supply to meet the projected demands of the oil sector.

However, considering the gravity of the situation there have been several unconfirmed reports of outside aid willing to support the shortage.

While Iraq is clearly still on the path to recovery there is much to be encouraged by. Iraq's proven natural gas reserves as of January 1, 2013 were the 12th largest in the world at 112 trillion cubic feet according to the Oil and Gas Journal. 

After years of power shortages, Iraqi efforts to increase generating capacity are moving forward. Iraq plans to triple generating capacity to 27 gigawatts by the end of 2015.

We know oil growth and foreign investment (possibly their currency) will continue to increase over the coming years. However, private sector growth will need a long-term government strategy centered on improving the business environment and opening up opportunities for the private sector.

Iraq has the fifth largest proven crude oil reserves in the world, and it passed Iran as the second largest producer of crude oil in OPEC at the end of 2012. 

Iraq is the 8th largest producer of total petroleum liquids, a statistic that has been increasing and it has the world’s largest proven petroleum reserves. Just a fraction of Iraq’s known fields are in development, and Iraq may be one of the few places left where much of its known hydrocarbon resources has not been fully exploited.

Iraq has begun to develop its oil and natural gas reserves after years of sanctions and wars, but it will need to develop its infrastructure in order to reach its production potential. 

According to estimates by Iraq’s Deputy Prime Minister for Energy, capital expenditures of $30 billion per year in Iraqi energy infrastructure are required to meet Iraq’s production targets.

Progress has been hampered by political disputes and the lack of the HCL. The proposed HCL, which would govern contracting and regulation, has been under review in the Council of Ministers but has not received final passage. 

However, there have been several very encouraging reports that this issue will be resolved shortly. 

Although I'm a skeptic by nature I remain very confident that Iraq is headed in the right direction and one day we will profit from this endeavor due to, in part, some of the reasons listed below.

1. Excluding the oil sector the economy is expected to grow by at least 9.4%.

2. The latest report to US Congress forecasts Iraq's GDP growth 3x that of the next strongest MENA economy.

3. In the 70s when Iraq's currency held a much higher value GDP only ranged from $2 billion - $8 billion.

4. Oil is quickly becoming second in Iraq to gold.

5. The CBI has stated they have significant plans for economic integration. They are currently the premier emerging market, not only in the Middle East, but the world. Iraq has positioned itself to make a significant impact on the oil and energy industry.

6. The U.N. is fully supporting Iraq's release from Chapter VII, although I tend to think that will take some time.

7. The HCL/Article 140 are finally being finalized.

8. The CBI/Financing committee is saying they are going to return the value of the IQD to "previous" levels!!

Iraq is clearly on a path to recovery, one that although promising does have certain obstacles that they must overcome to regain their well-deserved international standing. We recognize the GOI's ascendancy and corruption have convoluted matters and possibly delayed reforms.

As usual, these are just my opinions, which may or may not be correct.

References: 

• Arab Oil and Gas 

• Bloomberg News 

• Central Intelligence Agency, The World Factbook 

• International Energy Agency 

• Iraq Ministry of Oil 

• Lloyd's List Intelligence - APEX database 

• Middle East Economic Survey 

• The Oil and Gas Journal 

• Reuters 

• U.S. Energy Information Administration 

• U.S. National Oceanic and Atmospheric Administration (NOAA)

 

[millionaire in training]

GREAT RESEARCH.  You are definitely on top of it all.

 

Thank you for all your work.   

[skeptic1138]

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

....
So, in my opinion, the international intervention implies they have ulterior motives and are there to see a significant return on their investment (as are we). Which is a good sign for us. If those in power see potential in Iraq and are willing to invest in their future, why shouldn't we do the same?

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.
 

.....
Although I'm a skeptic by nature I remain very confident that Iraq is headed in the right direction and one day we will profit from this endeavor due to, in part, some of the reasons listed below.

1. Excluding the oil sector the economy is expected to grow by at least 9.4%.

2. The latest report to US Congress forecasts Iraq's GDP growth 3x that of the next strongest MENA economy.

3. In the 70s when Iraq's currency held a much higher value GDP only ranged from $2 billion - $8 billion.

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.
 

4. Oil is quickly becoming second in Iraq to gold.

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.

[jmw2]

Lots of good news...keep in mind that in the 70's when the dinar was worth much more...their money supply was much less...in the billions not trillions.

[fib1618]

Lots of good news...keep in mind that in the 70's when the dinar was worth much more...their money supply was much less...in the billions not trillions.

But Kaperoni told me that money supply doesn't matter??????

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.

I'd agree with you but I'm afraid Florida guy might threaten to put me in a headlock and beat my azz. Lol

[JJ7]

4. Oil is quickly becoming second in Iraq to gold.

You really need to stop saying this, it's completely false.

[fib1618]

You really need to stop saying this, it's completely false.

[quadkidd1]

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.
WoW !!!
So you are calling SWFG a pumper now?????????
Now YOU have ZERO credibility!

Edited June 1, 2013 by quadkidd1

[zigmeister]

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.

Okay.  So you disagree and stretch your pencil neck out as far as to accuse SWFG as a pumper.  hmmmm.......well post your specs up here you disagree with then.

[fib1618]

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.

WoW !!!

So you are calling SWFG a pumper now?????????

Now YOU have ZERO credibility!

He's not the only one my friend.

[skeptic1138]

Okay.  So you disagree and stretch your pencil neck out as far as to accuse SWFG as a pumper.  hmmmm.......well post your specs up here you disagree with then.

What more detail than I already posted do you want?  Did you actually read what I posted or only jump to the end?

WoW !!!

So you are calling SWFG a pumper now?????????

Now YOU have ZERO credibility!

If you disagree with the points I raised, please point out my errors.  It seems pretty straight forward to me.

[Dinar Buddy]

Come on its Saturday... everyone grab a beer and let's wait for OAKIE DOAKIE and BLUWOLF to throw up the real BS no one believes.  SWFloridaguy is giving opinion.  I might be easier for us to follow is only one opinion was posted at a time... and not jumping and dragging everyone into so many holes that the message seems questionable.

 

Again, let's all drink some beer this weekend.

[zigmeister]

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.

Your right I did not read your response carefully.  My apologies.

[skeptic1138]

Your right I did not read your response carefully.  My apologies.

No worries.

Again, let's all drink some beer this weekend.

An excellent idea!

[SWFloridaGuy]

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.

 

You may wish to speak to Reuters because they are the ones who said oil is slowly becoming 2nd to gold. 

Edited June 1, 2013 by SWFloridaGuy

[fib1618]

You may wish to speak to Reuters because they are the ones who said oil is slowly becoming 2nd to gold.

Would you happen to have the link available?

[SWFloridaGuy]

"Continue drilling operations in the area of luxury Aldajh populated eastern Baghdad after the discovery of the existence of huge quantities of atoms of gold metal in the soil. Was raised thousands of tons of dust, which set aside in order to purification and extraction of gold atoms."

 

"We did not know the reasons that push to drill here or there but we were surprised during the past two years to begin drilling operations is a natural and extends for several meters deep in the earth except for drilling longitudinal spanning more than ten kilometers, and then to hear from people that the subject matter related to the discovery of gold."

 

"And Iraq is full of large quantities of petroleum which Aistvid from the Iraqi people which are exported huge quantities of it to global markets and money returns do not prepare for the Allens and countless citizen any of them, while there are other minerals in smaller quantities."

 

"However, the discovery of gold in the luxury and commercial quantities could turn Iraq into a producer of gold more than oil, and pay the Western countries to re-occupation of as usual through the centuries passed his time, dusty, and is expected to increase the prices of real estate in this neighborhood modest start with the influx of job seekers Gold."

Would you happen to have the link available?

 

There were about 3 articles all saying the same thing.  Actually, it's been a constant progression of news on this topic since last year.  I have these quotes all saved in my archives.  Gimme a sec and I'll try to find the links.  Thanks.

Come on its Saturday... everyone grab a beer and let's wait for OAKIE DOAKIE and BLUWOLF to throw up the real BS no one believes.  SWFloridaguy is giving opinion.  I might be easier for us to follow is only one opinion was posted at a time... and not jumping and dragging everyone into so many holes that the message seems questionable.

 

Again, let's all drink some beer this weekend.

 

That's the best thing anyone has said in this entire thread.  Rock on. 

[robo5288]

None of this means that there is going to be an RV of the Iraqi dinar. In fact, I would be completely surprised if the dinar ever RV's to the extent that some are expecting. And I would wager right now that there will be no significant change in the value of the dinar for 2 years or more. They're simply not ready. And it could be five or six years, or even longer. And I have good reason to believe what I am posting. Have a great day. 

[SWFloridaGuy]

"Drowning of citizens and the injury beams health prompted families to remove the elderly from the area and transferred to the suburbs beyond, especially with asthma and shortness of breath."

 

"We did not know the reasons that push to drill here or there but we were surprised during the past two years to begin drilling operations is a natural and extends for several meters deep in the earth except for drilling longitudinal spanning more than ten kilometers, and then to hear from people that topic related to the discovery of gold."

 

"And full of Iraq amounts frightening of oil exporting huge quantities of it to global markets and back with money do not prepare and countless while there are other minerals in smaller quantities, but the discovery of gold in the luxury and commercial quantities could turn Iraq into a producer of gold more than oil, and is expected to increase the prices of real estate in this modest neighborhood with the start of the influx of gold seekers."

None of this means that there is going to be an RV of the Iraqi dinar. In fact, I would be completely surprised if the dinar ever RV's to the extent that some are expecting. And I would wager right now that there will be no significant change in the value of the dinar for 2 years or more. They're simply not ready. And it could be five or six years, or even longer. And I have good reason to believe what I am posting. Have a great day. 

 

We all know there is nothing that means Iraq will or must RV.  Common sense but have a great day yourself sir.

 

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.
WoW !!!
So you are calling SWFG a pumper now?????????
Now YOU have ZERO credibility!

 

 

"So you are calling SWFG a pumper now?????????  Now YOU have ZERO credibility!"   Thanks Quadkidd1.

[skeptic1138]

You may wish to speak to Reuters because they are the ones who said oil is slowly becoming 2nd to gold. 

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?

[dog53]

Come on its Saturday... everyone grab a beer and let's wait for OAKIE DOAKIE and BLUWOLF to throw up the real BS no one believes.  SWFloridaguy is giving opinion.  I might be easier for us to follow is only one opinion was posted at a time... and not jumping and dragging everyone into so many holes that the message seems questionable.

 

Again, let's all drink some beer this weekend.

 

Beer sounds good.

Makes more sense to me then what im reading. 

and if you drink enough of them you might even believe half the crap you read on here. (well I guess iv never really been that looped but ill do my best)

 

a pump is a pump is a pump. 

If it looks like a pump sounds like a pump hahahahah  it must be a pump

TO pump or not to pump that is the question.

A pump by any other name is still a pump.

a pump in the hand is worth two in the bush

 

 

 

[rockfl9]

SWFG::: Reuters is a new service so it would only report statements. It is not ,on its own, an authority. If there were working gold mines it should not be a national secret. To claim the value would exceed the proved oil reserves is a to-good -to be true statement. I will agree with Skeptic that your input , while very articulate , are slanted.

PS: They are also much too long.. Start with an executive summary, Then we can decide to read more... Also as my ex-boss said give the bad news first..

[SWFloridaGuy]

 

1-7-13 Iraq Central Bank Boosts Gold Reserves. 

 

The monthly statistical report of the International Monetary Fund stated that over the three months between August and October of last year, Iraq’s gold holdings quadrupled to 31 tons, the first time something like this has happened in years. The value of gold as a strategic reserve has grown over the past few years due to the continued instability of the U.S. dollar exchange rate.

 

International banks perceive gold as having long-lasting value that is not affected by rapid economic development. Gold can be used to compensate for insufficient cash reserves in the wake of political or economic crisis. In that context, Iraq is probably the country that is most in need of a great deal of gold reserves given its succession of political and economic crises.

 

“Gold is the first shelter for countries in times of crisis,” said the Iraqi economic analyst Majid al-Suwari.. According to Parliamentary Economic and Investment Committee member Abdul Abass Shiyah, “it is normal for the public not to read between the lines of sharp increases in gold reserves.”

 

“The Iraqi dinar exchange rate is based on the amount of cash reserves, which include not only money but gold as well,” said Shiyah, a member of the Dawlat al-Kanoun parliamentary bloc led by Prime Minister Nouri al-Maliki.

 

Gold is the most stable component of official reserves. It will result "in the stability and possibly the improvement of dinar exchange rates," he added.  http://www.al-monitor.com/pulse/originals/2013/01/iraq-central-bank-gold.html

 

Shiyah reiterated that the public will sense indirectly the impact of the increase in gold reserves. “When the value of imported goods decreases following the increase in the value of the dinar, which directly correlates to the increase of cash reserves, the public will remember the steps the state took to boost gold reserves,” Shiyah added.

 

The Central Bank of Iraq announced in August of last year that cash reserves had reached $67 billion, which is a first in the country that relies entirely on oil exports to finance its budget.

“The Iraqi reserve is figuratively described as ‘cash,’ but in fact it has multiple components. Iraq owns U.S. dollars, euros, pounds, gold and different types of securities,” said Shiyah.

 

He added, "The central bank uses a part of its huge reserve to fund major governmental projects. Even though a part of this reserve is disseminated between international banks and benefits Iraq financially, the central bank ought to fund some weighty governmental activities.”

 

Since 2003, Iraq has had an insignificant cash reserve. Some sources state that those who were in charge of the Iraqi economy during the first months following Saddam Hussein's toppling converted a ton of gold, which was the only reserve held by the central bank, into cash.

 

Economic Analyst Majid Suwari said that Iraq's reserves amounted to $39 billion in 1979; however, Saddam’s policies squandered that fortune. In 2003, Iraq's debts reached $125 billion.

“The central bank policy is currently based on the diversification of reserves. However, if the policy of purchasing gold had been adopted two years ago when the value of one ounce was about $500 to $600, Iraq would have quadrupled its investment gains,” he added.

 

He concluded that “this initiative started late, but not too late.” Suwari expects the central bank to pursue the policy of increasing gold reserves amid the government's spending tendencies.

He clarified that the Iraqi government needs the dinar to cover its huge expenses. The central bank provides it with the necessary Iraqi dinars in exchange for U.S. dollars obtained through the oil trade. Afterwards, the central bank converts dollars to gold.   http://www.al-monitor.com/pulse/originals/2013/01/iraq-central-bank-gold.html

SWFG::: Reuters is a new service so it would only report statements. It is not ,on its own, an authority. If there were working gold mines it should not be a national secret. To claim the value would exceed the proved oil reserves is a to-good -to be true statement. I will agree with Skeptic that your input , while very articulate , are slanted.
PS: They are also much too long.. Start with an executive summary, Then we can decide to read more... Also as my ex-boss said give the bad news first..

 

I'm sorry if my posts are too long but would you prefer one paragraph where I state that our gifts come now, there was just an in-country RV then wrap it up with some vague analogy about airplanes?  No one's forcing you to read them but I understand that I do tend to ramble on a bit. 

Edited June 1, 2013 by SWFloridaGuy

[doctor robbins]

"However, the discovery of gold in the luxury and commercial quantities could turn Iraq into a producer of gold more than oil, and pay the Western countries to re-occupation of as usual through the centuries passed his time, dusty, and is expected to increase the prices of real estate in this neighborhood modest start with the influx of job seekers Gold."

I see this as speculation of what could happen if large enough quantities of gold are discovered in Iraq rather than a statement of fact that they have already been discovered. They're certainly not a large producer at this time.

Edited June 1, 2013 by doctor robbins

[SWFloridaGuy]

I see this as speculation of what could happen if large enough quantities of gold are discovered in Iraq rather than a statement of fact that they have already been discovered. They're certainly not a large producer at this time.

 

That is not what has been reported by other sources.  In fact, the quite opposite has been reported.  I simply look at this as a positive vestige for Iraq in a general sense. Do you disagree with that?