Can anyone answer this question

[gideonx]

I really have problem wrapping my brain around this one.

Why would CBI sell the iraqi dinars @ 1170 in exchange for US$1 NOW only to buy 1 dinar back @ US$1 ONE WEEK LATER?

.........assuming that the dinar RV @1:1 happens one week from today.......??

In other words it would cost CBI to pay US$ 1170 to buy back the same amount of dinars it would have sold 1 week earlier for US$1 !!

Are we missing something here ?.................

Many of us want the RV so bad that we will believe anything................... I am also one of those..........

Is it too late to have a reality check....................

Can some PLEASE help........

Thanks

gideonx

[NotReallyTex]

Your logic makes sense to me.

That's why this is a risk and pure speculation.

[TechOps]

Great question for the economists of the bunch.....Would like to hear some real perspective on this.... My guess is that if it were say a 1:1 iraq in general wouldnt be the ones handing out the major us dollar conversions (seperate from say a tourists who is doing a simple exchange) and they would just continue to use their currency... the only ones that i see it would effect would be those banks and brokers that actually exchange currency which at that point its just more numbers in a computer and another day that goes by.... I could be way off but i dont see the avg bank in iraq carrying that much US currency.... Like i said i would like to hear from an experts perspective and like the question.....

[Froto]

I really have problem wrapping my brain around this one.

Why would CBI sell the iraqi dinars @ 1170 in exchange for US$1 NOW only to buy 1 dinar back @ US$1 ONE WEEK LATER?

They wouldn't. They also wouldn't sell all of the dinar they did in 2010 @ 1170 only to buy back @ US$1 one year later. That would be financial suicide.

In other words it would cost CBI to pay US$ 1170 to buy back the same amount of dinars it would have sold 1 week earlier for US$1 !!

Sounds odd, doesn't it?

Are we missing something here ?.................

Yes.

Many of us want the RV so bad that we will believe anything................... EXACTLY!

Your logic makes sense to me.

That's why this is a risk and pure speculation.

Pure speculation, yes. The risk is almost non-existent IMO. I doubt it will lose value. The only value loss will be the excessive mark-up paid if you buy from a dealer.

[Doctor Smith]

Because it will be worth 1 dollar if it RV's at the same value as the US Dollar. It will be an even exchange. They wouldn't lose anything.

Once the value of the currency changes you are simply exchanging one currency for another. Gold is now around $1300 per ounce. Did the dealers get ripped off when it was $300 per ounce? No. At that time it was only worth 300 dollars.

The way I understand it. Except for Oil, Iraq will be an import country. And oil operates off the Petrol US dollar. So having a higher value will not hurt oil exports. Having a higher dinar value will help them import goodies like computers etc etc etc.

The IMF etc will limit them as to how high they can value their currency.

[doc9574]

Nice avatar doc :lol: :lol: , shootin at the dog and I believe you are correct , by raising the dinar value it increases the buying power, a countries international currency value and I did say international not in country is based upon the value of its assets in relation to the other countries of the world to back the currency IE oil and in this case lots of it. So much oil that 1/8 of their entire oil reserves could pay for the entire gulf war. The problem is the oil is still in the ground, get the oil out and you have a country with something everybody wants. Thats how a little bitty country like Kuwait can have so much influence. Why do you think we did the first gulf war. I don't care what they say it wasn't to defend the people of Kuwait it was so Saddam wouldn't have control of all of that oil. Had he been allowed to do that the world would have been in a whole lot of trouble cause he could buy anything he wanted then. You see a dollars a dollar unless its backed by say gold, then its more than a dollar. Hope it helps

[hf328]

If I understand the CBI auctions correctly, they are buying IQD back from the participating banks with US dollars. Thereby getting the IQD back into the CBI. This would make sense to do so that there is less and less IQD in the global market.

[hammy]

For those of you here in the U.S. Take a $1. bill and take a $100. bill. They are both made the same way, they are both the same size, they weigh exactly the same, but one is worth lots more. Why? At one time it was based on the Gold Standard, and the Silver Certificate bills were based on Silver. What is it based on now? The Federal Reserve.

The value of the U.S. dollar declined significantly during wartime, especially during the American Civil War, World War I, and World War II. The Federal Reserve, which was established in 1913, was designed to furnish an "elastic" currency subject to "substantial changes of quantity over short periods," which differed significantly from previous forms of high-powered money such as gold, national bank notes, and silver coins. Over the very long run, the prior gold standard kept prices stable - for instance, the price level and the value of the U.S. dollar in 1914 was not very different from the price level in the 1880s. The Federal Reserve initially succeeded in maintaining the value of the U.S. dollar and price stability, reversing the inflation caused by the First World War and stabilizing the value of the dollar during the 1920s, before presiding over a 30% deflation in U.S. prices in the 1930s.

Under the Bretton Woods system established after World War II, the value of the U.S. dollar was fixed to $35 per ounce, and the value of the U.S. dollar was thus anchored to the value of gold. Rising government spending in the 1960s, however, led to doubts about the ability of the United States to maintain this convertibility, gold stocks dwindled as banks and international investors began to convert dollars to gold, and as a result the value of the dollar began to decline. Facing an emerging currency crisis and the imminent danger that the United States would no longer be able to redeem dollars for gold, gold convertibility was finally terminated in 1971 by President Nixon, resulting in the "Nixon shock." The value of the U.S. dollar was therefore no longer anchored to gold, and it fell upon the Federal Reserve to maintain the value of the U.S. currency. The Federal Reserve, however, continued to increase the money supply, resulting in stagflation and a rapidly declining value of the U.S. dollar in the 1970s. This was largely due to the prevailing economic view at the time that inflation and real economic growth were linked (the Phillips curve), and so inflation was regarded as relatively benign. Between 1965 and 1981, the U.S. dollar lost two thirds of its value.

When the powers that be say that that piece of paper is worth something other than what is worth today what do they base it on? Unless you really understand the inner working of this system it can be very confusing. When the Dinar rv's, don't forget Iraq is building it's investments all over the World right now. Their currency is worth more because of that. For you conspiracy people and those who speak of a ONE WORLD CURRENCY it may just end up being based on that worthless toilet paper that we are all waiting to RV.

Edit: Spelling

Edited February 10, 2011 by hammy

[hammy]

Remember at one time the whole world looked up to the USD. They may have said that they hated us and we were the Great Satan, though who's currency did they have stock piled? The day is coming when I believe that the IQD will be what the world will want. You may think I am crazy, but I didn't just invest in a worthless currency, I invested in a country that has enough oil to make every man women and child that lives their a millionaire twice over. Let me ask you this: What if Iraq and it's new Gov't somehow make arrangements to control the majority of oil bearing countries in that region? If you believe in the word of God it does say that something just like that will happen.

Dan 11:23 And after the league [made] with him he shall work deceitfully for he shall come up , and shall become strong with a small people.

Dan 11:24 He shall enter peaceably even upon the fattest places of the province ; and he shall do [that] which his fathers have not done , nor his fathers fathers ; he shall scatter among them the prey , and spoil , and riches [yea], and he shall forecast his devices against the strong holds , even for a time .

The word FATTEST in 11:24 is also translated OILY in the Hebrew language. Just a thought.