Making Sense of the Numbers - No LOP!

[MrRich]

From DD per kingcamera82's request ...

All,

From the moment I’ve been in this investment even until now, the debate of LOP versus RV has been raging. That very argument is what drove me and thousands of others AWAY from Investors Iraq (IIF), as it appeared it was absolutely overrun by those who felt it was their mission to squash the hopes and dreams of other investors. I am sharing this with the permission of those who have helped bring me to the light, from a legitimate economist’s perspective, to understand this dilemma.

I don’t know about you, but I’ve been told time and again by those who are absolutely in a position to know that this will NOT be a LOP, but will be a straight-up RV, yet I found myself not being able to refute the arguments of those who brought only “part of the truth” forward, using the “numbers” to their advantage through logical focus on that which was clearly understood. This post of mine is dedicated to explaining how an RV will happen.

CONCEPT EXPLAINED:

First off, I’ll use the exchange of a 10,000 IQD note as my example. To help explain the economics of this cash-in example, I will use a 1:1 cash-in ratio between the USD and IQD, that is given a two-tier payout, and a 2% bank spread.

What You Will Receive:

If you were to cash in your 10,000 IQD note with a bank that charges you a 2% spread, you would personally receive a net take-home of $9,800 credited to your bank account.

What Your Bank Will Receive:

Your Bank will receive a $10,000 credit to its Federal Reserve Account. They will also be able to add the $200 profit to their “capital account”.

If you don’t understand the “Fractional Banking“ concept that runs our country, you may want to, as that is what this is based on, and is what is behind this entire concept and plan. To learn more about this concept, I suggest you click HERE, and go to a video post I brought to the forum previously, and posted in my “Tidbits“ section.

Ultimately, the bank wins because they are able to gain $2,000 in lending power under the 10% “Fractional Banking“ model.

What the US Treasury Will Receive:

First off, the US Treasury will receive $3,500 in estimated taxes in the quarter after the exchange, because you are now in the “rich” category and get to enjoy the 35% tax bracket. This lowers the “net cost” of the IQD exchange to the US financial system to $6,500 USD (i.e. $10,000 out – $3,500 in). Furthermore, the US Treasury’s rate is higher than the banking rate (we will use in this example 1.25), thereby further reducing their “net cost” from $6,500 to $4,000.

Oil Now Enters the Picture:

At some point, a Fed-appointed agent orders $12,500 worth of oil from Iraq. Payment will consist of a 12,500 transfer from the Fed’s foreign currency reserve IQD account to the IRAQ Oil payment account at the CBI otherwise known as PetroDollars/PetroDinar. Even though the world spot price of oil is defined in terms of USD, the actual transaction may take place in any internationally recognized currency agreed to by the parties. For example, Iran only accepts Yen from Japan for their oil orders, because they don’t want USD in their foreign currency reserves.

How the CBI “RECAPTURES” the Money:

The $12,500 order is filled with 250 barrels of oil based on the spot price on the date of the sale (for this example we used a $50 USD spot price). What does it cost Iraq to produce the oil to fill this order? Well they have negotiated productions agreements for approximately $1.50 USD/barrel. From that price $.50 USD goes to the national Iraqi oil company who is the partner in the field the oil came from. Out of the remaining $1.00 the other oil field partners have to pay the Iraq government a profit tax of $.35 USD (35%). The net cost to Iraq to produce a barrel of oil used in this scenario is $.65 USD. (i.e. $1.50 – .50 – .35)

What does all that mean? It cost Iraq $.65 to bring back a 10,000 IQD note! Can they afford that? I think so! So, instead of paying out $12,500 for a 10,000 IQD note, they only pay $.65! That doesn’t add to the money supply much at all does it! They receive their IQD back and place it in the CBI, or destroy it. The initial value went from .0001 to a net payout of $.65… not too far of a stretch right?!

The transaction is completed with the Federal Reserve exchanging foreign reserve credits which are equal to 12,500 IQD (which had a net acquisition cost of $4,000 USD for the US) for 250 barrels of oil (which has a TOTAL COST to produce of $130 USD for Iraq.

More completely explained, and simply put, it cost Iraq $130 USD from their foreign currency reserve accounts to redeem the value of 10,000 IQD, which goes into their operating accounts. At the same time the US got $12,500 worth of oil for a net cost of $4,000. That’s how it was originally planned for Iraq to RV at 1 IQD = 1 USD, with the variable being the political element (i.e. UN Sanctions, GOI actions, IMF actions, World Bank actions etc.)

Other Factors that Strengthen Iraq’s Position and Ability to RV:

* DFI Funds Returned & Other Assets: $280+ Billion USD, plus other frozen assets (estimated at $100 billion) will be returned back to Iraq and added to their foreign currency reserve, bringing it up to $430+ billion USD.

* CBI IQD Reserve Requirement Adjustment: The CBI will change the current fractional IQD reserve requirements from 100% to 15% at the appropriate time. As a result, the the total potential money supply will be raised in value to $2.8 Trillion (430 billion/15), while at the same time, the total physical IQD in circulation will be reduced by removing the large bills with the 3 zeros over a period of 2 years, as they have indicated.

* Oil Production Increased: Iraq will also execute the plan they announced to increase oil production from 2+ million barrels/day to 10 million barrels/day with the resulting revenues flowing directly to the Iraq treasury.

* Oil Futures & Forex Contracts Added: To further stir the pot, the CBI will continue to use it’s sales window to market oil futures and forex contracts. They have shown they can generate significant cash flow in the private market. Think of their impact in public markets.

There, my friends, is how this plan will be enacted and made possible. Taking NOTHING, and turning it into SOMETHING, then bringing it back to a “manageable and reasonable something” that is accepted and supported by seeming endless supplies of oil. This is how the world’s ENTIRE NEW MONETARY SYSTEM will be regenerated and supported and backed, given, in essence, a re-birth and renewed for most governments and economic regions… even by “Black Gold”.

[kingcamera82]

thx rich....whats your take on this?

[MrRich]

thx rich....whats your take on this?

Well it sounds similar to the Economist thread about the plan to make the dinar equal to a dollar with a few variations. I'm not real clear on the $.65 to retrieve a 10,000 dinar note but I'm sure we'll have plenty of commentary on that over the next day or so. I'll be the first to admit I'm not totally sold on the whole RV scenario. I've read arguments on both sides and they both make good points. It's still a bit of a gamble in my opinion.

[kingcamera82]

Well it sounds similar to the Economist thread about the plan to make the dinar equal to a dollar with a few variations. I'm not real clear on the $.65 to retrieve a 10,000 dinar note but I'm sure we'll have plenty of commentary on that over the next day or so. I'll be the first to admit I'm not totally sold on the whole RV scenario. I've read arguments on both sides and they both make good points. It's still a bit of a gamble in my opinion.

i agree...also i dont like when some say no a lop cant and will not happen....we should all be prepared for it to lop...trust me i do not want it to lop at all but i know its a possibility and iraq will do whats best for them...can they survive a straight up rv...i think so because of the research by scooter but im prepared for the worst and hoping for the best.

[BANE]

If they do lop then the U.S. as we know it is in serious trouble. What is it like now over there? 10% unemployment or is it more now? Imagine a year from now.

[quadraph0nic]

i agree...also i dont like when some say no a lop cant and will not happen....we should all be prepared for it to lop...trust me i do not want it to lop at all but i know its a possibility and iraq will do whats best for them...can they survive a straight up rv...i think so because of the research by scooter but im prepared for the worst and hoping for the best.

That's a good way to be king camera. Hope for the best but also be prepared. I couldn't agree with you more.

[Puff]

Thanks for the post...as always a lot to think about. A blueprint w/o footprints

[dweave69]

thanks for the post.

Go RV now.

[keepmwlknfny]

i agree...also i dont like when some say no a lop cant and will not happen....we should all be prepared for it to lop...trust me i do not want it to lop at all but i know its a possibility and iraq will do whats best for them...can they survive a straight up rv...i think so because of the research by scooter but im prepared for the worst and hoping for the best.

Exactly......we are not out of the woods yet.....it is still ALWAYS a possibility of that happening.....no matter how you can explain numbers or talk till your blue in the face about how this is set up as a global stimulus package, Iraq can very well redenominate leaving us breaking even or a very small profit from this.....we must never forget that fact and must keep our blinders off so that we are prepared for whatever is thrown our way......this is still a lotto ticket and should treated as such.....NOTHING EVER in the history of the world has happened like this way for this situation so it is still a long shot.....however I do think its unlikely and we should see a tremendous gain from our investment in the dinar but I am prepared for the worst and keeping all fingers, toes, and eyes crossed for the best!!

If they do lop then the U.S. as we know it is in serious trouble. What is it like now over there? 10% unemployment or is it more now? Imagine a year from now.

A LOP or RV will not change unemployment no matter how you look at it.....the US will always be in trouble because of other factors that our govt and congress are doing NOTHING about.......besides our national debt, you cannot overlook the HUGE trade deficit we are adding too every single year due to outsourcing jobs.....they are NOT doing anything to protect our jobs and employment here in the states.....even programs such as food stamps, cash assistance, and things of that nature that are run by each individual state are hiring people overseas to answer your calls because of how cheap it is....not all states are doing this but I believe the number is close to 40.....manufacturing jobs, customer service, computer programming and software design, ANYTHING that can be done from a computer, and even some healthcare systems are using outsourcing to cut down on operating costs.....and even though these are american companies, when they leave the physical country they dont even have to pay taxes!!!! And you wonder why taxes are steadily rising year after year.....its cause our govt is not making any money and are losing out big time.....thats why we, as citizens need to invest back into this country....especially when this RV happens....quit trying to run and hide and figure out everyway possible to get around paying taxes off our profits.....do yourselves and our country a favor and just pay up.........STAY THIRSTY!!!!

[Eddinar]

Great post Scooby Doo...

[MrRich]

Dustin, they're not my numbers. I took them from DD. I don't know enough about this crap to debate either one of you.