IRAQI'S WILL BENEFIT FROM RV

[steve999]

Some people can not grasp how an RV will actually benefit Iraq and how Iraq will make money. This adds fuel to the lop theory. So let me describe the process with this example. I will use a revalue rate of 1 dollar to keep the numbers simple.

The first thing to consider is the spread. The CBI has a spread. They have a buy rate, and a sell rate. Let us say that the RV happened and the buy rate is $1.00 and the sell rate is $1.10. Our rate for trading in the dinar would be the buy rate of the Iraqi central bank. (CBI) So now people who hold dinar begin to trade in their big 25,000 notes. CBI gives them a dollar for each dinar. CBI then sells the dinar traded in at 1.10 and instead of releasing 25,000 notes they release lower denominations. They are now making money on the spread. 10 cents per dinar. (if they do a lop they cut their wealth potential)

At this point sanctions are lifted, the dinar is traded globally, and demand for the dinar begins to rise. All of a sudden investors that have not seen a reason to buy dinar begin to invest. More people have turned in dinar and even more people are buying dinar. Forex determines a floating rate that rises and falls based on demand.

CBI begins to raise the rate to keep up with the global demand on Forex and even more people turn in dinar and more people buy dinar. If CBI raises the buy rate to two dollars and the sell rate two 2.20, that means the dinar they paid 1.00 for will give them back 1.20. They make money on the float!! 1 dollar for the float and 20 cents for the spread. If millions of dinar change hands then the CBI will make a huge prophet and at the same time remove all the higher notes out of circulation. If they lop then they will reduce their wealth, and the wealth of all dinar holders. This is a lose-lose situation. The dinar holders will also pull their investment capital, cut their losses, and go somewhere else to invest.

Now ask yourself this question. You probably already asked this question before. What will be the new buy rate after the RV? Or What will be the RV rate? If it is too low then people will hold on to their dinar and they will not trade it in. If it is too high then everyone will trade in and there will not be enough people buying dinar so CBI will not make a prophet. So there has got to be a balance. Not to low, and not to high, but right in the middle.

[rroadrunner]

Thanks Steve for your post, excellent explanation..

[dee77]

I would be pleasantly happy at a dollar....IM going into my third year with this investment

thx for your opinion

[Jimblue]

Thanks, awesome explanation!!

[cgbrown]

So if the low rate is $1.00 and the high rate is $16.00 (i believe that is the highest numbe i've seen reported on here). Then that makes the middle some where around $8.00. Man , I'd do cartwheels all the way to the bank with that rate.

Now before you starting thinking I'd done become one of the LOGICAL1 on here, I will be the first one to STRS (set the record straight) and tell you I don't belive in that high rate one bit. And I could live with the low rate with no fussing about it.;

My mamma says it's a sign of GREED, when you just keep reaching for the next level. She says, that's why gammblers eventully loose their take. They are never satisfied with the 'little' ..... they have to go for the 'big'.

But she don't know I got dinars..... and i ain't gonna tell her till its time to take her shopping for the new BLUE FLOWERED DRESS she wants. Sonny1 says, i may be soon taking that shopping trip...... while we are out.... I think i will just pick up one of those turkeys in the store for THANKSGIVING. Cause it is shure to be one of the best THANKSGIVING.......ever. Why i probably will just give turkeys to the whole neighborhood (if-n I had one).

[Earnit3]

Thanks for the post.

[METEMARLO]

great explanantion even a 3rd grader could understand now go and talk some sense into those ignorant iraqi parliment

[rwharnden]

Great Info THANKS!

[pourit]

THANKS STEVE...APPRECIATE YOUR POST. POURITFORWARD

[Ninjaturbo02]

Well put post.

[j.p.]

good point plus 1

[eileen]

Thank you, that was very well put!! Go RI/RV!! Any day now, come on.

[awayfromthesun]

Awesome post Steve!!!!! EZ reading makes great sense!!

[geoyachtsus]

Thanks Steve999.

[mrparrot]

You seem to be forgetting one thing.

The politicians are already living good.

They don't need an rv.

Until the politicians start to suffer like the

regular citizens, there's no reason for any

of them to care about the rest of the country.

[MrRich]

Some people can not grasp how an RV will actually benefit Iraq and how Iraq will make money. This adds fuel to the lop theory. So let me describe the process with this example. I will use a revalue rate of 1 dollar to keep the numbers simple.

The first thing to consider is the spread. The CBI has a spread. They have a buy rate, and a sell rate. Let us say that the RV happened and the buy rate is $1.00 and the sell rate is $1.10. Our rate for trading in the dinar would be the buy rate of the Iraqi central bank. (CBI) So now people who hold dinar begin to trade in their big 25,000 notes. CBI gives them a dollar for each dinar. CBI then sells the dinar traded in at 1.10 and instead of releasing 25,000 notes they release lower denominations. They are now making money on the spread. 10 cents per dinar. (if they do a lop they cut their wealth potential)

At this point sanctions are lifted, the dinar is traded globally, and demand for the dinar begins to rise. All of a sudden investors that have not seen a reason to buy dinar begin to invest. More people have turned in dinar and even more people are buying dinar. Forex determines a floating rate that rises and falls based on demand.

CBI begins to raise the rate to keep up with the global demand on Forex and even more people turn in dinar and more people buy dinar. If CBI raises the buy rate to two dollars and the sell rate two 2.20, that means the dinar they paid 1.00 for will give them back 1.20. They make money on the float!! 1 dollar for the float and 20 cents for the spread. If millions of dinar change hands then the CBI will make a huge prophet and at the same time remove all the higher notes out of circulation. If they lop then they will reduce their wealth, and the wealth of all dinar holders. This is a lose-lose situation. The dinar holders will also pull their investment capital, cut their losses, and go somewhere else to invest.

Now ask yourself this question. You probably already asked this question before. What will be the new buy rate after the RV? Or What will be the RV rate? If it is too low then people will hold on to their dinar and they will not trade it in. If it is too high then everyone will trade in and there will not be enough people buying dinar so CBI will not make a prophet. So there has got to be a balance. Not to low, and not to high, but right in the middle.

This was taken from Marcus Curtis' blog Iraq Currency Watch. These are not the words of steve999.

[msm2137]

Right now I would except almost anything I would just like to see some movement.

[jbbdolphins]

Thank you for the explanation...a copy should be sent to CBI, the parliament and the courts just so they are all on the same page. Money is definitely no problem, especially if they can pay their power heads money for doing nothing...I don't believe Iraq even knows how an RV will help them. I have heard some big enterprises being excepted, but have not heard how they will back them up financially. Would like to know why they don't feel it would benefit them to RV. Things could go so much smoother with this out of the way.

[umbertino]

I would be pleasantly happy at a dollar....IM going into my third year with this investment

thx for your opinion

I'll be up in the sky with 1:1 myself. I'll be stinkin' rich infact.......Going into my 6th year with this.

So if the low rate is $1.00 and the high rate is $16.00 (i believe that is the highest numbe i've seen reported on here). Then that makes the middle some where around $8.00. Man , I'd do cartwheels all the way to the bank with that rate.

Now before you starting thinking I'd done become one of the LOGICAL1 on here, I will be the first one to STRS (set the record straight) and tell you I don't belive in that high rate one bit. And I could live with the low rate with no fussing about it.;

My mamma says it's a sign of GREED, when you just keep reaching for the next level. She says, that's why gammblers eventully loose their take. They are never satisfied with the 'little' ..... they have to go for the 'big'.

But she don't know I got dinars..... and i ain't gonna tell her till its time to take her shopping for the new BLUE FLOWERED DRESS she wants. Sonny1 says, i may be soon taking that shopping trip...... while we are out.... I think i will just pick up one of those turkeys in the store for THANKSGIVING. Cause it is shure to be one of the best THANKSGIVING.......ever. Why i probably will just give turkeys to the whole neighborhood (if-n I had one).

my personal range of RV expectation is: minimum 0.25 - max.about 2.80

Edited November 6, 2010 by umbertino