A problem I've had about the Dinar investment

[Migkillertwo]

I dont know about your last statement. I myself dont tend to "run the pump dry" every time I visit the gas station. In fact, I dont know anyone that does. There's always more left when my demand has been met. This might not be the case in developing countries.

Your demand is strongly influenced by your income and by how much gas you can actually buy. I assume you buy gas only when you need it and not when it is merely convenient yes? Have you ever driven across town to find a better deal on gas? This wouldn't be the case if all the oil in the world was pumped out and sold on market.

Oh and BTW, I actually found a source for the money supply in Iraq.

Scroll down to "key financial indicators"

In that document, you will find the M1 and M2 of Iraq since 2003, with the monthly m1 and m2 reported since 2008. This is the money supply. As you can see, the money supply (issued dinars) in iraq is almost 60 trillion dinars. It hasn't been 27 trillion dinars since 2008

[AudiS4]

No I dont drive across town to find a better deal. the $.03 you save per gallon for 10 gallons is $.30, which is less than 10% of a gallon. If you get 20 mpg you burn up your savings by driving an extra 2 miles.

Besides, I need 93 octane and only one place in town has it. However, this is somewhat of a choice as I could change this if I wanted to.

[dng4462]

Some time ago it was stated in a post that many countries agreed to cash in over a 2 yr period allowing for a higher rv now - need to search past post

[Migkillertwo]

Some time ago it was stated in a post that many countries agreed to cash in over a 2 yr period allowing for a higher rv now - need to search past post

that is, at best, a theory as to how this could work. But it's not plausible in the least because, as CBI figures have shown, most dinars are in iraq. Otherwise the difference in m1 and m2 would be vastly different. So they'd have to somehow keep iraqis from cashing out their dinars. So...dont let iraqi citizens (the people you're looking out for) cash in, but let foreign speculators cash in

Not very likely, not very likely at all (unless we presuppose a massive conspiracy of foreign governments)

If they want to RV(which is unlikely because they've issued 100k dinar notes), they can do what poland, venezuela, russia, or mexico do, a reverse-currency split; Exchange old dinars for new dinars.

[dvision]

What about the value of Iraq's huge supply (world's largest?) of natural gas? How does that figure into their future income and ability to support their currency?

[In Iraq]

I have always had a lump in my throat when referring the Dinar as an investment. In truth it is hard-core speculation. If you are having too much trouble excepting risk, then maybe you should just buy mutual funds with the small rewards / risk ratio. Not picking a fight just saying.

This is the truth. As far as the rest of the posts, this was a very nice informative debate except for the one person who got mad. I am impressed and was not bored, thanks!

[jericho]

Search posts made by MarcusCurtis here on DV. I forget the title, but his explanation of Fractional Reserve Banking answers your question. I understand your point about massive simultaneous cashouts effecting the value negatively. However, I would expect an initial RV to be at a number where not all speculative investors will cash out. Some will wait to see what the rate does. I think the rate will be good for those who cash out early while still attracting new investors. If it comes out at a dollar and it used to be $3.22, people will still buy in. Also remember that speculative investors are a small percentage of the total Dinar holders.

If you read the right post by MarcusCurtis, you will see that a $10 dollar investment pre-rv could not only bring the investor a good return, but also create additonal wealth. In his example (which assumes a given rate), would turn $10 into $10,000 for the investor, but when you follow that dinar all the home to iraq, it has created $24,000 worth of wealth.

It does add up. It can happen.

[imgesing]

I hope that me posting the link below is ok with ADAM but it is the BEST example of how it all works.

I believe that when this happens that there will be a RUSH to BUY DINAR after it RVs. Which will make the number or value go up for a short period of time.

Demand goes up, the worth or value goes up. So, even if we all rush to cash out others who hear of this will all of a sudden buy Dinar in a mass amount to try and make some profit (EVEN AFTER THE RV).My logic says if it comes out per say 3.22 it will soon go up to say 4.50 or 5.00 and slowly settle down to a traded value of stability dictated by trade.

I stand humble in my opinion, because I am not some financial guru.

HERE IS A LINK I FEEL EVERYONE SHOULD LISTEN TO...

Peace

>>>> <<<<<

[Migkillertwo]

What about the value of Iraq's huge supply (world's largest?) of natural gas? How does that figure into their future income and ability to support their currency?

The demand for natural gas is not nearly as big as the demand for oil. Further, bringing natural gas to market is an extremely expensive and extremely dangerous venture. For many countries, its more economical to just drill a hole and burn the gas as it vents so they can drill safely for the oil.

I wouldn't take it as a big factor. But again, I would stress that this will have a much smaller effect on the value of the currency than a lot of gents here imagine. The math they use assumes that oil exports will be as high as the GOI hopes, and that all revenues from oil exports will go into the CBI's foreign currency reserves. This is manifestly false. The revenue will go to the GOI to pay off debts and pay for expenses (pensions, military, bureaucrat salaries, building infrastructure, education, etc.). The CBI cannot use natural resources to back the currency because they do not own these resources, the GOI does. They can only use foreign currency reserves.

[Migkillertwo]

Search posts made by MarcusCurtis here on DV. I forget the title, but his explanation of Fractional Reserve Banking answers your question. I understand your point about massive simultaneous cashouts effecting the value negatively. However, I would expect an initial RV to be at a number where not all speculative investors will cash out. Some will wait to see what the rate does. I think the rate will be good for those who cash out early while still attracting new investors. If it comes out at a dollar and it used to be $3.22, people will still buy in. Also remember that speculative investors are a small percentage of the total Dinar holders.

If you read the right post by MarcusCurtis, you will see that a $10 dollar investment pre-rv could not only bring the investor a good return, but also create additonal wealth. In his example (which assumes a given rate), would turn $10 into $10,000 for the investor, but when you follow that dinar all the home to iraq, it has created $24,000 worth of wealth.

It does add up. It can happen.

wealth is static until you create more land (as in, get more natural resources), labor, or capital. An RV does none of this. An RV that "gurus" here imagine will be a government fiat. All exchanges will be a zero-sum game. If I, the speculator, cash out my 1 million dinars for 1 million dollars, that's 1 million dollars that teh CBI does not have. Futhermore, the only way to keep investors buying dinars and not selling them would be to keep raising the value of the dinar to infinity.

Obviously this is not possible. There will be a "peak", at which every speculator will cash in his dinars. This will cause the value of the dinar to plummet.

You people keep ignoring the value of monetary stability, or even the value of inflationary policy to the CBI and GOI. The government of iraq does NOT NOT NOT want to turn their country into a banana republic, relying only on oil exports. This is an extremely bad long-term policy. The economy would be far too vulnerable to even minor variations in commodities markets. The Government of iraq wants to help manufacturing exports, which will be DESTROYED by an "RV" of this magnitude.

But let's ignore that. Let's say that this RV really could make every dinar-trader a millionaire over night.

What about the iraqis? There are plenty of iraqi merchants who still accept dollars. Merchants everywhere in teh world accept dollars. Why wouldn't the whole iraqi nation trade their dinars for dollars? There's nothing stopping them. Where does the CBI get 60 trillion dollars to exchange the entire money supply for dollars?

Does the CBI put a cap on dinar redemption? Well for one, this is totally counter to a policy which, ultimately, wants to get iraqis to trade in smaller dinar amounts comparable to dollars. If there's a cap, then how on earth will you redeem your dinars at once? Can't go to your local bank, they would only take it because they can make a profit on the forex. If there are so many dinar holders selling their dinars, but the CBI will not take them, then the forex value of the dinar will plummet.

NONE OF THIS MAKES SENSE! There are so many assumptions people around here make. None of them are feasible. Every one of them runs totally contrary to tried and tested fiscal and monetary policy.

[USMC_2674]

If they want to RV(which is unlikely because they've issued 100k dinar notes), they can do what poland, venezuela, russia, or mexico do, a reverse-currency split; Exchange old dinars for new dinars.

Where did I miss this?

I've read over and over again in the last month or so that they decided NOT to issue 100k dinar bills, haven't I?

Picture of the note?

[ChrisA70]

Where did I miss this?

I've read over and over again in the last month or so that they decided NOT to issue 100k dinar bills, haven't I?

Picture of the note?

I also read the same too. If they want to get rid of the 25K why would they make a 100K.....???????

[Frank61]

It's not going to revalue for thousands of what it's worth now, so while you make many good points, it's not going to happen that way when it comes out. Look for a re-value at around $0.30, and if they place it on a float then you will see it rise or fall based on the performance of Iraq, it's government, it's standing in the "free world" and it's economy.

That is your guess. VERY few people are qualified enough to give that info and even THEY may not be correct. Quoting rates is foolish and naive at best.

[Econman33]

I would like to throw some info out that has been mentioned in this thread. If you go to CBI, click on statistics, click on Key Financial indicators. This will give you updated numbers. Looking down the list, you will see a-currency outside of banks and b-Bank reserves. This shows as of Nov 2010 there was 23,881 Billion or 23.8 Trillion outside of banks or a better word (everywhere but not in Iraqi banks). Thought this may help. http://www.cbi.iq/index.php?pid=Statistics.

[Uncle Barkie]

I laughed when I read your title and then your responses to everyones possible scenarios. It is glaringly evident that you are not here to have a "question " answered as your title suggests , so , I'm left wondering what you're really looking for. ?????? I'm a very laid back person , an observer of human habits , and it affords me an insight into people that they often don't realize they are projecting . You are well versed in matters of finance , or at least the language of " money ", and could easily answer this question yourself, as some of us already have . So, I'm left wondering why ?

Uncle Barkie

Edited January 27, 2011 by Uncle Barkie

[0331]

MIGKILLERTWO WHAT SAY YOU?

I was rather satisfied with this explanation, but what is your opinion on this explanation?

What is your overall opinion of the investment. I understand you are at odds with the way the majority believe this will work out?

How do you see this playing out?

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 this concept to light, from several legitimate economists and very sharp minds, their perspective to help each of you 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 in a form 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 $162.50 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 $162.50! 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 transaction is completed with the Federal Reserve exchanging foreign reserve credits which are equal to $12,500 USD (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 $162.50 USD for Iraq.

More completely explained, and simply put, it cost Iraq $162.50 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”.

So, here’s the summary for all the “players” involved, giving ballpark numbers, and not taking into account superfluous costs, fees, and other small details that don’t really affect the larger picture:

■Investor’s Net Gain: $10,000 – $200 = $9,800 x .65 = 6,370 for an investment that cost $10

■Bank’s Net Gain: $200 added to “capital account”, plus $2,000 they can use to loan out.

■US Treasury Net Gain: $2,500 from the .25 spread on top + $3,500 in quarterly taxes = $6,000

■CBI/GOI/Iraqi People Net Gain: $12,500 – $162.50 = $12,337.50 + Profits from “Other Factors”

■Overall Net Gain for All Involved: $6,370+$200+$6,000+12,337.20 = $24,907.20

This is the wealth that was generated from a single 10,000 IQD note that was given an original value of approximately $10! Is that amazing or what?! You tell me… can Iraq afford NOT to RV?!!! Will the IMF allow them to NOT RV their currency, but simply replace their large denoms for smaller ones?!!! LOL!!!

In this scenario, EVERYONE WINS… and the IQD is slowly (over 2 years) taken back in to the CBI… eventually destroyed, leaving a manageable M2 behind, having created HUGE WEALTH throughout the world to re-supply what was allowed to be destroyed in the “great bleed” over a period of just a few weeks a couple of years ago, even the greatest redistribution of wealth the world has ever seen. Believe it or not, it has happened for this very purpose, and it IS coming!

[Migkillertwo]

I laughed when I read your title and then your responses to everyones possible scenarios. It is glaringly evident that you are not here to have a "question " answered as your title suggests , so , I'm left wondering what you're really looking for. ?????? I'm a very laid back person , an observer of human habits , and it affords me an insight into people that they often don't realize they are projecting . You are well versed in matters of finance , or at least the language of " money ", and could easily answer this question yourself, as some of us already have . So, I'm left wondering why ?

Uncle Barkie

The only answer that I have come up with is that this is a VASTLY over-hyped investment and that dinar pumpers are full of crap. Hence, why I clearly said that this is a "problem" that I have with this investment.

[andy3978]

The only answer that I have come up with is that this is a VASTLY over-hyped investment and that dinar pumpers are full of crap. Hence, why I clearly said that this is a "problem" that I have with this investment.

so don't buy any Dinars. question answered, problem solved.

[mentalmagic]

Hello. New member here, but I've been a member at Investors Iraq for a while now and was poking around for answers to this question regarding this problem I see with this investment opportunity. I heard about this board from a few people, so I will just post what I posted over there and maybe someone can solve my problem.

Basically, how does this investment work out if the Government doesn't have enough foreign reserves to redeem dinars for dollars on a one-to-one basis?

The RV will be backed by oil futures from my understanding. Those long term contracts with all countries. This is the basis for the revaluation.

[adritex]

so don't buy any Dinars. question answered, problem solved.

AMEN!! I think he is just here to start an argument?

[keepmwlknfny]

The only answer that I have come up with is that this is a VASTLY over-hyped investment and that dinar pumpers are full of crap. Hence, why I clearly said that this is a "problem" that I have with this investment.

Yes you are correct in that it is horribly over-hyped by pumpers who are promising you will be a millionare overnight......thats how alot of things in this world are today when someone is trying to sell you something......and yes, they are completely full of s&%t.......which is why they get bashed to death over at this site cause we are tired of the BS that gets spewed out of their mouths on a daily basis....I know where your coming from because some of the numbers are hard to swallow when they have an estimated 27 trillion in physical currency out in circulation......people will tell you that they removed 70-80% of those but there is nothing backing that claim like most "forum" facts passed around...what they did was remove 70% of the excess liquidity and funnel it back into the banking system for financing, loans, and things of that nature.....however I do believe from what I have read, researched, and from what some other highly intelligent people have brought to the table that the value of the dinar WILL go up....its just a matter of when, how much, and how they accomplish it.....they could straight up let the value gradually rise or they could lop, and then start with a new and higher rate......thats part of the speculation......Let me just suggest a few members for you to look up and read their posts packed of valuable information and you can make a better judgement call for yourself.....read up on all of "Scooter" and his past posts (not just his chats, more info in his real threads) and "MarcusCurtis"......both have a very good understanding of whats going on and what could/should happen......hope that helps....

[Migkillertwo]

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.

To avoid any fallacies of distraction, let's examine where all this money comes from.

When I get the 10,000$ for my IQD exchange, this 10,000$ comes from the bank. It has to have reserves to back this up. The Fractional reserve banking system only adds to the money supply by financing debts. currency exchange is not such an example. The only way that the bank would actually "add" money to its accounts from this exchange is to exchange the dinar for dollars on the forex, at another bank, or the CBI. But ultimately it has to come from somewhere. Wealth isn't truly "created" except when land, labor, or capital is expanded, or if it is used more efficiently. This is a basic concept of economics, which is ultimately why I am extremely skeptical of this "investment"

Where did the money received by the bank come from? Well there is no money that it receives. It only loses money when I exchange my IQD for dollars.

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 in a form 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.

Why, exactly, does this happen? Why would the Fed buy 12,500$ worth of oil from the iraqis? Where did it get 12,500$? And how do they buy this oil from the CBI? The CBI does not own the oil, the GOI does.

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 $162.50 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 $162.50! 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.

Again, here's one of those pesky distractions. Assuming the CBI pays for the dinars with oil (which it can't, it doesn't own the oil), it's still out 200 barrels of oil. That's an asset, that's a cost. You are ignoring that when you calculate the 162.50 cost for the 12,500$ from the Fed's dinar accounts (if they have any)

The transaction is completed with the Federal Reserve exchanging foreign reserve credits which are equal to $12,500 USD (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 $162.50 USD for Iraq.

Another one of those distractions. Where did the Fed get these 12,500 USD? I assume it's related to the "1.25 treasury banking rate". That is related to the 10,000 IQD exchanged by the investor at the bank, so somehow the 10,000 IQD has multiplied by 1.25? Problem: The Fed's reserves are not the treasury. The Feds can't use treasury funds, or your banking accounts, to buy assets abroad. Furthermore, are your dinars worth one dollar suddenly because the iraqi central bank says so? Once again the CBI has to back these up with something, and the mechanism you propose are frozen foreign assets and oil. The CBI does not own any of these assets, or they do not exist. Below you say that there are roughly 500 billion dollars in frozen assets abroad. This is simply not true. All of the frozen assets of the Saddam regime are either in the courts, or have already been recovered for the DFI. The total amount of disputed frozen assets is only 5 billion dollars.

More completely explained, and simply put, it cost Iraq $162.50 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.

Where did these numbers come from? The DFI assets are fare lower than that, and the frozen assets are only 5 billion dollars

■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.

That's contradictory. How do you reduce the money supply while reducing the reserve requirement of banks?

■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.

CBI=/= Treasury. The CBI cannot (and will not) use the oil as reserves to back an RV. No elected representative will allow the GOI to use the oil revenues just to pay foreign governments and speculators

■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”.

So, here’s the summary for all the “players” involved, giving ballpark numbers, and not taking into account superfluous costs, fees, and other small details that don’t really affect the larger picture:

■Investor’s Net Gain: $10,000 – $200 = $9,800 x .65 = 6,370 for an investment that cost $10

■Bank’s Net Gain: $200 added to “capital account”, plus $2,000 they can use to loan out.

■US Treasury Net Gain: $2,500 from the .25 spread on top + $3,500 in quarterly taxes = $6,000

■CBI/GOI/Iraqi People Net Gain: $12,500 – $162.50 = $12,337.50 + Profits from “Other Factors”

■Overall Net Gain for All Involved: $6,370+$200+$6,000+12,337.20 = $24,907.20

This is the wealth that was generated from a single 10,000 IQD note that was given an original value of approximately $10! Is that amazing or what?! You tell me… can Iraq afford NOT to RV?!!! Will the IMF allow them to NOT RV their currency, but simply replace their large denoms for smaller ones?!!! LOL!!!

In this scenario, EVERYONE WINS… and the IQD is slowly (over 2 years) taken back in to the CBI… eventually destroyed, leaving a manageable M2 behind, having created HUGE WEALTH throughout the world to re-supply what was allowed to be destroyed in the “great bleed” over a period of just a few weeks a couple of years ago, even the greatest redistribution of wealth the world has ever seen. Believe it or not, it has happened for this very purpose, and it IS coming!

Let's all remember one thing: Currency exchange is a zero-sum game. So whenever someone gains money, someone else loses money. Or a central bank prints money, in which everyone but speculators loses. Assuming that, we will see that this scenario involves a lot of fallacies of distraction.

[jimmey309]

Lets look at this investment in a sober way.

In my experience, for investments / financial instruments ,

the rises and falls of the value of a financial asset

are based in large part on the perception and price momentum

of that financial asset.

While it is true that Iraq currently produces 2.7 mil bpd of oil,

translating to 78.84 $ billion USD a year if for argument's sake, an average rate of $80 USD per barrel

is used ** [ ** : Right now oil is actually around $90 a barrel ]

and if my guesstimation is reasonably close to accurate

and Iraq produces 5 mil bpd within 5 to 8 years

[ remember Saudi Arabia does 6 mil bpd ] ,

this translates to roughly $ 150 billion USD per yr.

If the value of oil grows such that the average rate at that time

is $120 USD per barrel,

then we can increase these numbers by 50 % to $ 225 billion USD per year .

But just as important, is the perception and value momentum of the currency

pair IQD /USD IMHO.

Iraq has tremendous oil reserves.

Some things are based on accountability time span.

Corportations like AOL and eBay produced zip for a long time.

Their stock values shot up like a rocket at one point prior

to any even close to profit valuations / profitable quarters.

If the big world currency players decide that Iraq's reserves

are as good as currency, precious metals, etc. ,

then the exchange value of the IQD could be many times

its actual value as it may reflect the reserve value of the country.

All financial instruments have similar elements and characteristics

that cause them to be either good investments or bad ones.

If oil is perceived as being as good as currency or better

[ and right now it clearly is ] ,

the value of the oil reserves in Iraq is humungous.

Much greater than a few trillion USD. Or even $15 trillion USD.

Iraq actually has a convertible asset in the form of oil.

In the stock markets, stocks often sell for 100 times

their price to earnings and price to book ratios.

These stocks have questionable value at best,

yet if you can a find a buyer for these stocks,

you can get the going price.

The same may be true for IQD.

As long as a big player perceives their is an advantage

in picking up your dinars, you will be able to sell them.

Just wanted to add that I did not even

mention fractional banking.

It is another aid to the upper momentum

potential for the long - term value of the IQD IMHO.

[keepmwlknfny]

wow.... looks like he shot holes through that theory......I personally dont know enough about that to even begin to comment but it seems that you (migkillertwo) have quite the understanding on how those things work......always wondered if that whole economists explanation held any water......

[0331]

MIGKILLERTWO,

It’s difficult to question your motive or effort, so I will assume that you are genuinely interested in offering this information as a public service.

It seems abundantly clear that you have satisfied your knowledge on the topic… so how do you see this playing out?