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A Simple Explanation


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You don't need to be an expert in economics or math to take a critical look at the rumors and speculative comments flying around about the future value of the IQD. Just take things one step at a time.

Old news: http://www.rferl.org/content/Iraq_Planning_Currency_Redenomination/1950504.html

From the above article, I'm sure you've all read: "Salih added that in 1990 the value of banknotes in circulation was about 25 billion Iraqi dinars but is currently some 25 trillion dinars."

From the same article, USD to IQD exchange rate: 1 to 1167

Current value in of IQD in circulation in terms of USD based on the above: 25,000,000,000,000 / 1167 = $21,422,450,728.36 (A little over 21 Billion USD)

Scenario 1: IQD revalues with no lop at 1$ to 1 IQD

25,000,000,000,000 IQD = 25,000,000,000,000 USD

$25,000,000,000,000 - $21,422,450,728.36 = $24,978,577,549,271.64 (Over 24 trillion USD in wealth creation)

Current United States GDP: $14,256,000,000,000 (Approx 14 trillion USD) Source: http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mktp_cd&idim=country:USA&dl=en&hl=en&q=current+us+gdp

For comparison's sake, the next largest economy (whose figures can be reliably measured) is Japan, at 5.06 trillion USD.

Global GDP: 58.23 trillion USD

Just to refresh your memories, GDP stands for Gross Domestic Product. It can be measured in several different ways, but it is the final value of all goods and services produced within a country during a given period of time, in this case 1 year. For your verification of this, reference http://www.investopedia.com/terms/g/gdp.asp, or simply google "Gross Domestic Product."

Now does anyone seriously think that almost twice (24 trillion / 14 trillion = 1.71) the entire yearly productive value of the most productive country on the planet is going to be produced in wealth in an instantaneous, one-off event? That the equivalent of half (58 trillion / 24 trillion = 2.41) the productive capacity of the entire planet is going to suddenly coalesce out of nowhere? "Oil" isn't going to provide for this kind of wealth creation, no matter how bad anyone wants it to. There is no political or logical rationalization for how this could possibly occur.

Imagine the consequences for the global economy if the United States suddenly disappeared from the face of the planet. Obviously it would be a disaster. What few people seem to realize, however, is that if a new economy of the same size, let alone bigger, were to suddenly appear, it would be just as catastrophic. World inflation would spiral out of control, central banks would no longer have any control over their currencies at all, and every financial institution would collapse amid the staggering uncertainty which would surely follow.

Scenario 2: IQD revalues with no lop at 3$ to 1 IQD

Same as above x3 (roughly).

Scenario 3: IQD revalues with no lop at $.50 to 1 IQD

25 trillion IQD x $.50 = 12.5 Trillion USD - 21 Billion USD = 12.479 trillion, still quite ridiculous.

Scenario 4: IQD revalues with lop at 1$ to 1 IQD

I'm sure this has been covered many times, but for the sake of my argument I'll do it again.

Old IQD in circulation: 25,000,000,000,000 (25 trillion)

Old IQD to new IQD converstion ratio: 1000 to 1 ("lops" off three zeros)

Old IQD in terms of new IQD: 25,000,000,000,000 / 1,000 = 25,000,000,000 (25 billion)

As I calculated in the beginning of this post, at the current USD to IQD exchange rate of 1 to 1167, the value of old IQD in circulation in terms of USD was $21,422,450,728.36. As has been stated in many places, a "lop" has no effect on the exchange rate, so 1167 old IQD = 1 USD = 1.167 new IQD. So the value of the new IQD prior to the revaluation would remain unchanged at $21,422,450,728.36. Now the math can be conducted in the same way as above.

After revaluation: 25,000,000,000 IQD = 25,000,000,000 USD

$25,000,000,000 - $21,422,450,728.36 = $3,577,549,271.64 (3.5 billion USD in wealth creation)

In contrast to the previous scenarios, this is extremely plausible. 3 to 4 billion would be equivalent to the yearly production of a mid-cap firm. It would have an immeasurably small effect, if any, on the world economy.

Scenario 5: IQD revalues with lop at 3$ to 1 IQD[/b]

New IQD after revaluation: 25,000,000,000 IQD x 3 USD = 75,000,000,000 USD

$75,000,000,000 - $21,422,450,728.36 = $53,577,549,271.64 (53 billion USD in wealth creation)

This, too, is plausible. 53 billion is equivalent to the yearly production of a large-cap firm. It would have a larger effect on the world economy than that of scenario 4, but still relatively small.

Obviously, 5 scenarios are not enough to cover every revaluation situation, and it is in these gaps that the irrationally exuberant will take issue with my argument. But as I feel the case is irrefutably proven for the scenarios I have presented, I can interpolate and extrapolate for scenarios which would fall in between, and the net result would be an increasing continuum of net wealth creation. Associated with any point on the continuum would be a corresponding probability of occurrence. As I've already said, because of the disastrous impact it would have on the world economy, 24 trillion USD has a probability of zero. Clearly amounts more than that must also have a probability of zero as well. 3 Billion USD has a very high probability, and amounts lower than that would be expected to have an equal, if not higher probability. Between 3 Billion and 24 trillion, the probability of occurrence must be decreasing, i. e. the higher the amount of wealth creation supposed, the lower the likelihood of occurrence. At what point, then, does probability first hit zero?

I don't know the answer to that, and neither does any "guru." But one can safely say that the amount of net wealth created by a revaluation will not and can not rival the yearly productive capacity of any industrialized economy. If it could, the only type of "production" any country would bother to engage in would be monetary engineering. Think about it; why would China muck about with all that manufacturing and natural resource extraction if it could produce more value by just revaluing its currency and taking the rest of the year off?

It doesn't matter what your religion or belief system may be, or how "good" you imagine an astronomical revaluation would be for the Iraqi people, the probability of an investment in IQD of less than $330,000 producing $1,000,000 in so extremely low that it may as well be zero. The probability of an investment of less than $3,000 producing $1,000,000 is absolutely zero.

All things considered, an investment in IQD is not a scam. It has a very good chance of producing some very respectable returns. I myself hold IQD, and I feel relatively confident that I will double my money, which would be better than I would have done by investing in the DJIA or S&P 500 15 years or so ago.

Does anyone dispute this?

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It doesnt appear your including 3 very important pieces in your analysis:

1- fractional banking in the US accounts for 97% of our money supply. So the reported money supply on our side is much more.

2- Yes, Iraq printed and even reportedly circulated 25T in dinars but their own finance ministers have reported they have pulled back 50-80% (no one really knows at this point the actual amount) through various mechanisms and programs.

3- Large countries, like the US, China, England, France, etc own and hold very large sums of the dinar that is for multiple reasons: an investment for a return, in place of forgiven Iraqi debt, to hold in a basket of currencies to support our and the other countries dollars, and also to purchase cheap oil in the future on credits.

I feel because of these and other reasons your analysis is inaccurate from the start.

Bottom line is Iraq's asset base is too strong to have such an undervalued currency on the world stage- which they will be involved in shortly. When this currency revalues to its correct level it will be much higher than the "double" your mentioning. No disrespect to you and your analysis as i am not an economist but if you were No. 1 or 2 in the world in oil reserves and your country was the cheapest to extract it out of the ground, and you were No. 1 in natural gas, and sulpher, and had tons of gold reserves, and tons of money and gold and such locked in foreign vaults that will be freed to you once your out of chapter 7 bankruptcy, and had tremendous potential to offer water and agriculture to the entire middle east....and you were attracting a tremendous influx of foreign capital from all over the world which will all spur internal economic development, you wouldnt have a currency that would undermine all of this. You would have a strong solid currency that could stand on its own on the world stage so you can offer your entire asset base, including the foreign investments, to the world stage. Watch for a much higher RV than a double.

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Very well thought out. I am by no means an economist, but my question would be, it reads as though you assume the US holds "ALL" the IQD, and in turn would receive all the windfall revenue, when in fact it would actually be disbursed throughout other counties. Maybe I misunderstood.

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Very well thought out. I am by no means an economist, but my question would be, it reads as though you assume the US holds "ALL" the IQD, and in turn would receive all the windfall revenue, when in fact it would actually be disbursed throughout other counties. Maybe I misunderstood.

i like how some people few iraq as a piggy bank :blink:

And some people seem to have missed this part of his post "Obviously, 5 scenarios are not enough to cover every revaluation situation"

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Mind blowing Negative Media Campaign continues...more on this from other posters soon.

Stay tuned to the LOP channel, the no-RV channel, the 2012 channel, and every other channel designed to discredit, disallusion, dissuade, and dismay the masses.

O No...I must sell all my IQD because their 1/10000th of a currency is going to increase to 1/100th....alas...dreams destroyed, hopes hindered, and smiles stymied. All because the richest nation on the planet doesn't have the resources to back a true currency value...sigh.

What to do, what to do, what to do?

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Mind blowing Negative Media Campaign continues...more on this from other posters soon.

Stay tuned to the LOP channel, the no-RV channel, the 2012 channel, and every other channel designed to discredit, disallusion, dissuade, and dismay the masses.

O No...I must sell all my IQD because their 1/10000th of a currency is going to increase to 1/100th....alas...dreams destroyed, hopes hindered, and smiles stymied. All because the richest nation on the planet doesn't have the resources to back a true currency value...sigh.

What to do, what to do, what to do?

Stay out of the L-O-P section?

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Makes perfect sense.

There has to be a LOP and RV done.....it will be two stages I think.

First all large notes need to be returned to Iraq so they can be destroyed we get offered .25 cents on the dollar or whatever rate you think then you have a month or two

or they expire worth toliet paper.

There will be a freeze on the purchase of the IQD durring this time so people won't be allowed to jump back in.

Once the two month or whatever time frame expires they do the second RV and then the IQD is open

for anybody to buy outside of Iraq.

We are going to make money no doubt but we aren't going to make a the huge % people think I sure hope I am wrong but

I just don't see how its possible.

If everybody in Iraq becomes milionares mostly who the heck will work there....again I hope I am wrong but thats my take.

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Guest Economist

Thanks for the responses. If I may, I'd like to address them.

GaryB

1- fractional banking in the US accounts for 97% of our money supply. So the reported money supply on our side is much more.

The money supply of the United States wasn't part of my analysis.

2- Yes, Iraq printed and even reportedly circulated 25T in dinars but their own finance ministers have reported they have pulled back 50-80% (no one really knows at this point the actual amount) through various mechanisms and programs.

The article I linked is from February 6th of this year. As Iraq is currently under a managed-float exchange rate regime, pulling back 50-80% of its currency in the last 9 months would have had an easily noticeable effect on the exchange rate, which has remained largely unchanged since that time. According to http://www.xe.com/currency/iqd-iraqi-dinar, the current exchange rate is still 1165 IQD to 1 USD. The only means by which a country can reduce its money supply and hold target exchange rates constant is under fixed-exchange rate regimes, which Iraq does not have.

However, assuming you're correct, the mathematics still do not make any sense. 25 trillion IQD x %50 = 12.5 trillion IQD. 12.5 trillion IQD / 1165 = $10,729,613,733.91 (10.7 Billion USD)

A non-lopping, 1 IQD to 1 USD revaluation would still yield: 12,500,000,000,000 IQD = 12,500,000,000,000 USD - 10,729,613,733.91 USD = 12,489,270,386,266.09 USD, over 12 trillion in new wealth creation

Using 80%, 25 trillion IQD x 20% = 5 trillion IQD. 5 trillion IQD / 1165 = $4,291,845,493.56 (4.3 billion USD).

A non-lopping, 1 IQD to 1 USD revaluation would still yield: 5,000,000,000,000 IQD = 5,000,000,000,000 USD - 4,291,845,493.56 USD = 4,995,708,154,506.44 USD, almost 5 trillion in new wealth creation.

As I stated in my post, the next largest economy after the United States is Japan, at 4.91 trillion USD. Even if most of the currency has been taken out of circulation, this one time event, based on your figures, would rival the productive capacity of the second largest economy on Earth.

3- Large countries, like the US, China, England, France, etc own and hold very large sums of the dinar that is for multiple reasons: an investment for a return, in place of forgiven Iraqi debt, to hold in a basket of currencies to support our and the other countries dollars, and also to purchase cheap oil in the future on credits

Yes, you're correct. But under what circumstance would a doubling or triple of initial investment be considered an undesirable result? Assuming the United States is invested in the IQD to the tune of billions of USD, a %100 to %200 return would be a rather large windfall, in my opinion anyhow.

Chapcl

This is well thought out, with one major flaw. You have compared money supply (M2) to GDP. They are two entirely different concepts. The explanations as to why this cannot be the case is found dispersed throughout the site.

I'm sorry if my analysis wasn't clear, but I haven't compared money supply to GDP. I've compared the wealth effect that a revaluation would produce for IQD currently in circulation, which most certainly can be the case. The reasoning behind this is that money in "circulation" is money being traded for goods and services, and does not include money being held by a central bank. If the holders of a currency suddenly find that it can now buy more goods and services than it previously could, it is the same as increasing the holder's wealth. As GDP is commonly thought of as a measure of a country's wealth, it can appropriately be compared with wealth effects. Moreover, the revenues produced by investment banks and stock brokerages, which include currency speculation activities, are included in the measurement of GDP and are considered "productive" activities.

Dflake

Very well thought out. I am by no means an economist, but my question would be, it reads as though you assume the US holds "ALL" the IQD, and in turn would receive all the windfall revenue, when in fact it would actually be disbursed throughout other counties. Maybe I misunderstood.

Again, I apologize if this wasn't made clear, but I was not making the assumption that the United States would be holding all the IQD. I expressed the total wealth effect to the diverse holders of IQD in USD. It doesn't affect the argument whether the effect size is measured in Euro, Pounds Sterling, or Thai Baht. The fact that IQD holders are dispersed throughout the world is only marginally relevant, as sprinkling trillions of dollars across the planet would have the same effect on global inflation as at some point the currency will be competing with itself to purchase goods/services.

Joe P

Mind blowing Negative Media Campaign continues...more on this from other posters soon.

Stay tuned to the LOP channel, the no-RV channel, the 2012 channel, and every other channel designed to discredit, disallusion, dissuade, and dismay the masses.

O No...I must sell all my IQD because their 1/10000th of a currency is going to increase to 1/100th....alas...dreams destroyed, hopes hindered, and smiles stymied. All because the richest nation on the planet doesn't have the resources to back a true currency value...sigh.

What to do, what to do, what to do?

I'm not part of any organized media services, nor do I have any professional affiliations with any websites, currency dealers, or governments, apart from being an American citizen. Nowhere in my post did I suggest that anyone should sell their IQD prior to a revaluation. On the contrary, I said that I thought a %100 to %200 return was very likely. Wall Street hedge fund managers, investment bankers, and stockbrokers are paid millions of dollars a year to produce returns much smaller than that. Under what circumstances would a %100 to %200 return be considered bad? If anything, such a situation should logically encourage more IQD purchases, as the reasoning would suggest that a larger initial investment would be required to reap significant rewards.

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You don't need to be an expert in economics or math to take a critical look at the rumors and speculative comments flying around about the future value of the IQD. Just take things one step at a time.

In order to analyze the situation correctly, you *do* however have to have a firm command of how the fiat fractional-reserve world monetary system actually works, and that is something that is not taught in any academic economics program, or otherwise discussed in polite society.

Now does anyone seriously think that almost twice (24 trillion / 14 trillion = 1.71) the entire yearly productive value of the most productive country on the planet is going to be produced in wealth in an instantaneous, one-off event? That the equivalent of half (58 trillion / 24 trillion = 2.41) the productive capacity of the entire planet is going to suddenly coalesce out of nowhere? "Oil" isn't going to provide for this kind of wealth creation, no matter how bad anyone wants it to. There is no political or logical rationalization for how this could possibly occur.

There are several errors and fallacies with this statement. First, chop 70% off of the U.S. GDP, given that that is the percentage of GDP attributable to "consumption". Then, remove the large chunk of the remaining 30% "produced" in the financial sector. Now, realistically, the U.S. is NOT the most productive country on the planet.

Imagine the consequences for the global economy if the United States suddenly disappeared from the face of the planet. Obviously it would be a disaster.

From an economic point of view, *would* it?? If the "consumer of last resort", trading worthless Federal Reserve Tokens and floating fraudulent paper in exchange for actually valuable goods and services disappeared, the rest of the world would simply have to trade with each other in terms of actually valuable goods.

What few people seem to realize, however, is that if a new economy of the same size, let alone bigger, were to suddenly appear, it would be just as catastrophic. World inflation would spiral out of control, central banks would no longer have any control over their currencies at all, and every financial institution would collapse amid the staggering uncertainty which would surely follow.

A new economy with a Gross Product of the same size IS NOT being "created" suddenly ex nihilo. That would require instantaneous creation of that much annual *wealth-producing capacity*, and at a very robust growth rate of 5%, that would imply an instantaneously mature capital investment twenty times larger -- and at a more likely rate, way more than 20 times larger.

All that is happening is that Iraq's oil is being monetized, in much the same way that the Federal Reserve Token (i.e. "petrodollar") has been monetized for the last 39 years by virtue (and I use the term loosely) of the fact that oil is only traded in New York and London, and only in USD. And this only after the U.S. defaulted on its obligation to redeem USD under the Bretton Woods agreement.

Obviously, 5 scenarios are not enough to cover every revaluation situation, and it is in these gaps that the irrationally exuberant will take issue with my argument. But as I feel the case is irrefutably proven for the scenarios I have presented, I can interpolate and extrapolate for scenarios which would fall in between, and the net result would be an increasing continuum of net wealth creation.

It is not in those gaps that I have taken issue, but with the fundamentally flawed premises and logic. Then again, perhaps I'm just not "irrationally exuberant". In any case, interpolation and extrapolation from incorrect data merely produce more incorrect data.

Associated with any point on the continuum would be a corresponding probability of occurrence. As I've already said, because of the disastrous impact it would have on the world economy, 24 trillion USD has a probability of zero. Clearly amounts more than that must also have a probability of zero as well. 3 Billion USD has a very high probability, and amounts lower than that would be expected to have an equal, if not higher probability. Between 3 Billion and 24 trillion, the probability of occurrence must be decreasing, i. e. the higher the amount of wealth creation supposed, the lower the likelihood of occurrence. At what point, then, does probability first hit zero?

Probability applies to electrons and bomb damage analysis. Occam's razor does not apply to humans, especially diabolical sneaky humans with the power to create Very Large Amounts of currency through fractional-reserve and central banking, and the willingness to do things with it that people would NEVER agree to if it actually had to come out of their own pocket.

I don't know the answer to that, and neither does any "guru." But one can safely say that the amount of net wealth created by a revaluation will not and can not rival the yearly productive capacity of any industrialized economy. If it could, the only type of "production" any country would bother to engage in would be monetary engineering. Think about it; why would China muck about with all that manufacturing and natural resource extraction if it could produce more value by just revaluing its currency and taking the rest of the year off?

The U.S. is no longer an industrialized economy, and the entirety of the "production" that the U.S. has engaged in for the last 15 years *is* monetary engineering. No "wealth" is being created here by monetizing Iraq's oil any more than "wealth" was created when the U.S. duped the rest of the world into buying trillions worth of bogus mortgages and their attendant derivatives, or when people monetized their resultant artificially overpriced houses to buy scads of pointless, non-wealth-storing or -producing crap.

It doesn't matter what your religion or belief system may be, or how "good" you imagine an astronomical revaluation would be for the Iraqi people, the probability of an investment in IQD of less than $330,000 producing $1,000,000 in so extremely low that it may as well be zero. The probability of an investment of less than $3,000 producing $1,000,000 is absolutely zero.

Again, this fails utterly to take into account the way central banking actually works, and ignores the obvious contradictory data point of Kuwait. And again, probability is meaningless where complex systems of clever humans are involved.

All things considered, an investment in IQD is not a scam. It has a very good chance of producing some very respectable returns. I myself hold IQD, and I feel relatively confident that I will double my money, which would be better than I would have done by investing in the DJIA or S&P 500 15 years or so ago.

No disagreement on this point, and some have already doubled their money.

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You people just don't get it.

Iraq will soon be one of the weathiest countries

in the world and you people can't grasp the fact their

currency valuation should and will represent it.

You and all the other self proclaimed economists try to make predictions

without first knowing the real figures or facts which in turn produce

flawed results, and then you try to defend those results.

First you need to find out how much currency was removed from circulation

before you can even start to determine your results.

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You people just don't get it.

Iraq will soon be one of the weathiest countries

in the world and you people can't grasp the fact their

currency valuation should and will represent it.

You and all the other self proclaimed economists try to make predictions

without first knowing the real figures or facts which in turn produce

flawed results, and then you try to defend those results.

First you need to find out how much currency was removed from circulation

before you can even start to determine your results.

I agree, maybe these guys work for the CBI and are trying to fool everyone!!! GOOD TRY!!!!!!!!! GO RV!!!!!!!!!!!!

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I agree, maybe these guys work for the CBI and are trying to fool everyone!!! GOOD TRY!!!!!!!!! GO RV!!!!!!!!!!!!

No not working with CBI lol

Only way I heard about this investment was because of my sister working as a teller at a third federal bank branch.....she did say the people buying the dinars seemed a little

crazy but I looked into I only got into the investment because the risk reward was ok with me.

I would love to see it RV at 3 or something I can retire at 32 :) but usually when something sounds to good to be true it usually is.

I think we will find out in a few months

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Newbie here (I know, collective groan) but not new to forums in general. I have read, read, read around this site and briefly on a couple of others.

IMO the Iraquis CAN redenominate if they so choose and it seems they do intend to remove the larger denominations from their currency, the question is will they and when. There is nothing to prevent them from declaring that the larger bills now represent 1/1000 of their stated face value and that we have a grace period to exchange them or they become worthless. That would bring the larger bills in. At that time it seems reasonable that they would revalue or reinstate. So if they did RD the 3 zeros and RV or RI to $3.22 we all have tripled our investment. Not really what I and most others here are looking for but the movers and shakers probably are not that concerned with us.

They are concerned with the Iraqui in the streets and for their population an RD and RV to ~$3.22 would triple the amount of VALUE in their pockets. Not a bad thing. If the US tripled the value in my pocket and bank accounts then I would be at least pleased.

BTW, why is it always 3 zeros and not 2?

A better scenario is for them to RV, pull in the big bills and then remove them from circulation without RD first. Again IMO it would have to be reasonable and that's where the disagreements begin about RV amount. From lurking and reading there have been a lot of estimations and theories but generally:

The sum 25 TRILLION Dinars (value of 25 BILLION) has surfaced quite a bit. The way I understand it that amount is drastically reduced because Iraq has already taken out of circulation a sizeable portion (I have seen estimates of 20% to 70%) so for arguments sake lets take out 50% and now there are 12.5 TRILLION (value of 12.5 BILLION) that would still be out here. Foreign governments would have most of that and I have read there are just over 1 TRILLION Dinars (value of 1 BILLION) owned by private investors. The US govt supposedly has 4 to 5 TRILLION Dinars (value of 4 to 5 BILLION) which seems like chump change the way our government spends money.

If they RD (3 zeros) and RV (~$3.22) then the VALUE of private investors would only be $3 BILLION and the US govt would only have $12 to $15 BILLION dollars worth of VALUE (again, chump change) and the total VALUE of Dinars out there using the 50% still in their vaults example would be ~$40 BILLION. This seems like a possibility and fairly easy for them to do and they would look good with a $3.22/Dinar exchange. Still chump change on the world market and compared to the value of their resources, but a starting place. 3x our investment.

If they RV but at a lower rate like $0.27 without an RD the ROI goes up. The VALUE of the 4 to 5 TRILLION Dinars the US govt holds would be $1 to $1.5 TRILLION and the amount of VALUE owned by private investors would go to ~$300 BILLION US dollars. 300x our investment and entirely possible given the value of their resources.

If they RV sans RD at ~$3.22 we all have our dreams come true. But the VALUE of the Dinars in the US Treasury is then $12 to $15 TRILLION Dollars and the VALUE of private holdings adds on another $3 to $4 TRILLION Dollars. Add in all the other holders of Dinars like foreign govts and it gets crazy. I know, they don't actually have to fork over the cash and intend to pay with oil but that's a lot of "bubbling crude". 3000x our investment.

Like I said, I think they will think first about their people first. For example an Iraqi businessman has been working hard and has earned and saved ~$50,000 US dollars worth of Dinars (50 MILLION Dinars); an RD & RV to ~$3.22 would mean that he now is worth $150,000, an RV to ~$0.30 would mean he is worth $1.5 MILLION (US Dollars) and an RV to $3.22 would mean he is worth $15 MILLION (US Dollars)!

Ramblings from a newbie, be kind!

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It doesnt appear your including 3 very important pieces in your analysis:

1- fractional banking in the US accounts for 97% of our money supply. So the reported money supply on our side is much more.

2- Yes, Iraq printed and even reportedly circulated 25T in dinars but their own finance ministers have reported they have pulled back 50-80% (no one really knows at this point the actual amount) through various mechanisms and programs.

3- Large countries, like the US, China, England, France, etc own and hold very large sums of the dinar that is for multiple reasons: an investment for a return, in place of forgiven Iraqi debt, to hold in a basket of currencies to support our and the other countries dollars, and also to purchase cheap oil in the future on credits.

I feel because of these and other reasons your analysis is inaccurate from the start.

Bottom line is Iraq's asset base is too strong to have such an undervalued currency on the world stage- which they will be involved in shortly. When this currency revalues to its correct level it will be much higher than the "double" your mentioning. No disrespect to you and your analysis as i am not an economist but if you were No. 1 or 2 in the world in oil reserves and your country was the cheapest to extract it out of the ground, and you were No. 1 in natural gas, and sulpher, and had tons of gold reserves, and tons of money and gold and such locked in foreign vaults that will be freed to you once your out of chapter 7 bankruptcy, and had tremendous potential to offer water and agriculture to the entire middle east....and you were attracting a tremendous influx of foreign capital from all over the world which will all spur internal economic development, you wouldnt have a currency that would undermine all of this. You would have a strong solid currency that could stand on its own on the world stage so you can offer your entire asset base, including the foreign investments, to the world stage. Watch for a much higher RV than a double.

Would the small notes that have been held back be a big % still not released as well . I read somewhere that the figure is like 10 trillion in small notes that were not released so the figure is more like 15 trillion out there which makes for a different math equation . Not sure if I am right about this however it goes without saying that if certain notes were not released and only a certain amount were printed , then the math is off . Have a nice day, just my 2 dinars on the subject

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Morning all... thanks for the above debate guys. Good thing I made the coffee extra thick today!! Gary, in your scenarios how would you account for the discussion of Iraq being able to monetizing its oil and natural gas products? And fractional banking of Iraq? Or the removal/forgiveness of Iraqi debt? HOw does these fit into your cases? Just a few question while I get some more coffee. Again good discussion on a sat morning, while everyone is waiting, waiting, waiting.. :)

Regards,

Dennis

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