Groovgal chat: Dinar Speculator 6/24/10 @ 10:00pm

[automag]

My thought has always been it was going o be pegged to the dollar. It was that way because that is what it is pegged to right now. GG has always maintained it would be pegged to a currency basket aka the Kuwaiti Dinar. That actually makes perfect sense. But I have always worried about inflationary pressures on the Iraqi economy and the one question I can't seem to reconcile is how will all this affect the average Iraqi.

It would not make sense to turn huge amounts of people into millionaires overnight and not expect some kind of wild inflationary problems. I do see a way that it could be done but it really is nothing more than just a guess. My understanding of the economics is too simplistic to put forth an educated guess. GG however is far beyond my understanding and she sees it higher. Based on that I have to defer to her expertise because I just don't know if I am even beginning to comprehend how that higher rate could affect the domestic economy and and the average Iraqi. I do see how any RV will be handled world wide through the Central Banking system. I can see how it will be used and how it can be represented internationally. But the effects on the domestic economy are not clear to me. However. If an RV occurs it will have various effects on people differently. I have seen all kinds of reports that say high and low. CIA world report, UN feasibility studies, IMF assessments and other reports from other institutions and they cover a wide range of rates. But which one should I believe? IDK.

You could find that you have created a complete economy with all the differing classes of people. Rich, middle income, and poor. It has been my observation that in order to have a healthy capitalist based economy you have to have these differences as the motor that drives that economy. I have always thought that they would RV right before a payday when the average guy was getting tight on money thus reducing what that guy has on hand. Plus if the average Iraqi is living on an estimated 37 dollars a month that should be no problem for the GOI to handle and it also reduce those inflationary pressures I spoke of. The economy is a socialistic type due to the fact that oil pays for it all and as such the private sector adds so little to the mix it is the GOI that provides the money to the average guy.

The GOI and every economist connected to this has repeatedly said that a revitalized private sector will shape the future and it will allow the GOI to shed the masses from the dole that it pays out. It would be counter productive and not conducive to have everybody with loads of money because who are they going to get to sweep up the streets after a bombing. Who is going to get up every morning to sell veggies in the market at the risk of their very lives if they have 300k in the bank or hidden under their camel. Why go to work everyday and risk being blown the hell up by some nut when you can stay home and count your money and hear about it on the news. May be a simple question but thats my lack of knowledge about the domestic situation. Plus if they all have big bucks what will be the cost of a loaf of bread? 10 dollars a loaf? I just really don't know enough to consider it all but I do keep asking questions and trying to find the answers. Plus it won't help change their economy to a vibrant capitalist system. They want and need that change. They don't want a Kuwaiti or Saudi model because in effect those populations are wards of the state money wise. They want to rebuild the country's infrastructure and they are gonna need ditch diggers. Not wealthy people who won't work.

Sorry for such a long answer but as I have said before, when it comes to anything connected with this investment or the politics and economy.....there ain't no simple answers. Hope I was a help and if I can find out anything more I will share what I learn. If anybody reading this has thoughts on it please feel free to share because thats all we want.....To learn and learn it correctly....Thanks.

[Trimark]

Excellent automag. Thanks for the post.

I had the same questions you do about how it could RV so high because of the effect on the average Iraqi. The average Iraqi would then be a millionaire and as you said no one is going to do any grunt work if that's the case. In my first post on DV I compared the average income for various Mid East countries to Iraq's current rate and how the various RV rates would alter the average income.

One comment on the boards that made sense to me - sorry I can't remember who said it or where - was something along the lines of: the average iraqi citizen will not cash in his dinars for dollars. He will do what he has always done which is to use the dinars for purchases of items he needs to live and/or wants. His dinars will be worth more so he can buy more items and increase his quality of life but on a basic everyday living life level the change won't make him a millionaire. He will have the same amount of dinars he has always had but he will be able to buy more with those dinars.

I don't know if that's accurate or not but it makes sense to me when I compare that to how people in the US are. Here in the US most people care how much the US dollar is trading for against the other countries' currencies. We may hear that the dollar is up or down but really does that affect us on the everyday level? Yes, but not in ways that we notice. It's at a much higher level. We get the trickle down part of it - if the dollar is up then US companies that buy overseas items have to pay less for the goods so because of competition we consumers pay less for the item. If the dollar is down then we pay more at the checkout.

We may notice that prices go up or down but we don't run out and cash in all our dollars for Euros if we can get 3 Euros for every dollar or whatever the case may be. I suspect it will be the same in Iraq. They will have a better quality of life and their standard of living will improve because of the increased exchange rate but most won't see 'millionaire' status any more than having a super exchange rate would cause the majority of Americans to cash all of their dollars into Euros if the Euro was suddenly very strong.

That's my non-economist, average every day person take on it anyway.

[automag]

Well that is very interesting because I have heard this explanation 3 or 4 time in various ways and that seems to be the most logical explanation so far. Plus we have an historic perspective to relate that explanation too. The United States. After the Viet Nam war this country was suffering from high inflation and a really weak economy. One day President Nixon announced a price freeze on prices and wages. They would be frozen until this country could address the problems that caused the inflation and effected the economy. The public was only told a price freeze. It was a revaluation. That RV led this economy of ours to staggering heights of prosperity and so much so the dollar became the reserve currency of the entire world. We are the largest economy in the world for now and that was the reason as far as I can understand it.

BTW Trimark you just signed on to Medics explanation as well. I have always sought consensus when trying to figure out stuff I don't know about and this explanation, your explanation is what I have been counting on. We here in the US never knew a thing about our currency RVing and at the time nothing seemed to change for the average citizen and it probably won't for them either. The one caveat about it is the size of the bills. We in the states never had a 25k note available to us but the Iraqis do. Even so I agree in principle with you and hope that is what allows you and I and everybody else connected to the IQD to make our fortunes. Now all we can do is just sit back and wait and watch.

Let's hope you are right. I think you are. I know Medic thinks he is...

Edited June 27, 2010 by automag

[Niko]

Lets all just hope it happens soon!

[Trimark]

Interesting Automag. I didn't know that Medic thought the same way but as far as that explanation goes ... I like the way that man thinks.

Thanks too for the tidbit about the 1970's. I didn't know that and had not heard that anywhere else. Very interesting - both that it happened and the effect it had on our economy.

I'm not sure I agree with Medic on the low rate he seems to believe it will RV at. I hope that it RV's higher, obviously, so I don't know if that is clouding my judgment but I really like GG's explanations as they make sense to me and her analysis seems so logical. They are also in opposition to Med's belief on the rate.

Plus, a part of me thinks if it's such a low number why wouldn't they have just RV'd already? Also, RV'ng low wouldn't get rid of the large bills that they currently have. As I posted in another thread if the dinar RV's at the penny rate then the 25,000 dinar notes would still need to be used.

I don't know what the rate will be but I sure hope it's announced soon.

[brichards513]

Trimark and Automag - This is my first post to the website - so I am as green as can be - but I have been coming to the DV site now for quite some time. It is interesting to read your comments back and forth regarding the RV and what level you both expect it to finally settle on. I tend to agree with both of you that gg's posts are very well thought out and it seems that she has her facts together. But the person who has gotten my attention lately has been Scooter with his in depth and thorough research. Not only does he do his research - but he posts EVERYTHING that he researches and provided links to documents etc. And from his chat earlier today - his number according to the documents he has researched is a value of $3.208 - which is according to the documents from the Ministry of Finance I think that he said. Also, he is holding on to the date of October 2010. I am all for the sooner the better the higher the better - but like most - it is time this roller-coaster ride is over so we can get the party started!!!!!!!

Thanks to you both for all of your posts and your insights. I am enjoying reading and learning about this investment or ours!

[Trimark]

brichards - thanks for the kind words and for joining in the conversation.

I think Scooter is wonderful too for the same reasons you do. I like that he backs up what he is saying with the actual documents plus his analysis always seems logical to me. I have more faith in chats like that than those that provide all their information without any backup except "intel" or "because my source says so."

One thing that's interesting is that both Scooter and GG are in the same general vicinity for the RV rate. I really hope they are right.

Edited June 28, 2010 by Trimark

[automag]

brichards513 you are so very correct when you say scooter is impressive with his research. There is no doubt that fellow has gone research crazy and is giving all a show and believe me I read and re-read his posts. He is very much showing me information that I have never seen anywhere else. I really wouldn't know what kind of title we should give him either.. I'd never insult him with the title guru. He works hard researching obscure information that we should all be finding and then he breaks it down for all to understand. Senior Researcher sounds good!! I just call him Mr. Scooter when I talk to my little circle, Mr. goes pretty good around a bunch of Texans.

His work is stellar there is no doubt of that. I just can't say enough about the guy. GG on the other hand has her position by doing the same hard work. She has been doing it for a long time but what she does have is contacts that are serious. She does her stuff but adds what she hears from those contacts and believe it or not these two people are walking down the same path. They are coming to similar conclusions and that is very encouraging.. I just spent a goodly amount of time reading scooter's latest post and then referencing against GG's and they are the same but getting close in conclusions. My head hurts.

Yeah I had my opinion about the rate because of the peg to the dollar. That is in direct contradiction of both GG and scooter and tell you the truth I hope and pray,pray,pray they are right. Shoot I don't know as much as these guys. I used to dig like scooter but I have reached my limit with it and I still look around but I have read so much and thought it should have RV'ed before now only to realize the politicians are the hold up. Nothing I hate worse than a bunch of self serving politicians screw their people over like these guys. Those people are in such a desperate way and our country has paid such a high price and to watch these jokers do what they do drives me crazy. So I kinda backed up on researching cause I just needed a break. My opinions are probably a bit dated but WTH I still know a thing or two!!

Well again I thank you for the kind words and if Trimark reads this I bet he/she will do so as well. We are all in this together and I know my motivations are to help folks understand as best I can. So if I can ever be of service ...just holler!! I'll be around! If I can't answer a question then we'll go bug scooter cause he'll know! He's really smart.

[brichards513]

Trimark & Automag - I appreciate the warm reception. Just trying to be informed about this little investment of ours! Thanks again for all of your hard work and posts. As a side note - it looks like Scooter has been at it again. He has posted another set of items - this time from the IMF that goes into some detail about how the "election factor" was taken into account by the IMF in their future plans for restructuring the economy and banking system in Iraq. You can't help but be impressed with the amount of work and research he is putting in for everyone's benefit. Thanks again goes to Scooter!