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

Jump to content
Sign in to follow this  
rockfl9

Oil in the ground is NOT an ASSET

Recommended Posts

It has no value on the international stage until it is transported.   It is the same with gold ore , unmined diamonds ETC.  Until a buyer can take possession it has no current value.  Iraq could sell future contracts for oil but the best they would get is a retainer fee but they would be obligated to ship the oil at some discounted price. At best it is a band aide. This may be the five year deal they announced with China!

Iraq is on  the ropes.  They  have to sell as much oil as they can at any price because they cant store it. They need the dollars because the dinar has no value in the world market.  They need food and medical supplies or many will die.  They will get limited humanitarian aide  but may have to agree to restrictions and oversight.

They could RV But I dont know what good it would do. It would messup the internal economy but no one outside of the country is now or will be buying dinar. In the FOREX market it is the law of Demand.not supply.  It is not possible to buy anything of consequence with dinar but you can buy anything  with USD.   

  • Upvote 1

Share this post


Link to post
Share on other sites

I think Allen Greenspan always referred to "deep storage gold" as a line item, meaning gold that was still in the ground... Interesting.

  • Upvote 1

Share this post


Link to post
Share on other sites
On 4/8/2020 at 4:17 PM, MEP01 said:

I think Allen Greenspan always referred to "deep storage gold" as a line item, meaning gold that was still in the ground... Interesting.

A line item for what ? INCOME from a resource ( oil, gold or iron ore ) is money in the bank . In the ground only future income recognized when sold. As a currency investor it would be the gamble that it will eventually become income and reflect some future profit.

What is that risk?  Will the country be able to capitalize on that resource ? Will it expand the production ? How long will it take ? 

Iraq is on the brink.  Government is not functioning. Income has fallen to just enough to pay salaries , nothing left to fight Coronavirus.. 

There have been no regular auctions because at least the MOF knows it needs to stockup on dollars .   There  must already be food and medicine  shortages prices are rising (inflation).  If they stop paying their first-responders will they take the risk and continue to serve?

We may be looking at a different Iraq next year.

  • Upvote 1

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.



×
×
  • Create New...

Important Information

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