Popular Post BOBBY ROMERO Posted May 11, 2011 Popular Post Report Share Posted May 11, 2011 I received this as an email and thought I would share, for those who are still grasping the concept of fractional banking -- BR 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! 19 1 Link to comment Share on other sites More sharing options...
Tropics Posted May 11, 2011 Report Share Posted May 11, 2011 I think we all understand fractional banking from the last 25 times someone posted it. 2 24 Link to comment Share on other sites More sharing options...
Buckeye Pilot Posted May 11, 2011 Report Share Posted May 11, 2011 IM IN.! All I want is any amount over 50 Cents and I shall be happy for evermore....... 1 Link to comment Share on other sites More sharing options...
dnardreams Posted May 11, 2011 Report Share Posted May 11, 2011 THIS IS AN OLDIE BUT A GOODIE 2 Link to comment Share on other sites More sharing options...
Buckeye Pilot Posted May 11, 2011 Report Share Posted May 11, 2011 I think we all understand fractional banking from the last 25 times someone posted it. Not nice, He is just trying to be helpful. 4 Link to comment Share on other sites More sharing options...
RescueBreaths Posted May 11, 2011 Report Share Posted May 11, 2011 (edited) Beat me to it. Edited May 11, 2011 by RescueBreaths 1 Link to comment Share on other sites More sharing options...
truthful1 Posted May 11, 2011 Report Share Posted May 11, 2011 There's one thing your missing with this argument. Iraq will have to give away there profits to redeem there formerly worthless currency at some point. How many barrels of oil are the Iraqis willing to give away to get back these notes? Even if not all dinar is coming back to the cbi at once, they still have to foot the bill to eventually retrieve them and hold a value for the total in circulation now. The wealth maybe created instantly, but bet your bottom dinar, Iraq will be the ones to foot the bill. And they know it. So time will tell.................we can all hope for the best. 1 Link to comment Share on other sites More sharing options...
dnardreams Posted May 11, 2011 Report Share Posted May 11, 2011 There's one thing your missing with this argument. Iraq will have to give away there profits to redeem there formerly worthless currency at some point. How many barrels of oil are the Iraqis willing to give away to get back these notes? Even if not all dinar is coming back to the cbi at once, they still have to foot the bill to eventually retrieve them and hold a value for the total in circulation now. The wealth maybe created instantly, but bet your bottom dinar, Iraq will be the ones to foot the bill. And they know it. So time will tell.................we can all hope for the best. The way it was explained to me is that theses oil certificated are like food stamps, the US puts another 0 onto the tally and sends the physical currency back to Iraq, or uses the large bills to do major currency transactions associated with contracts or government aid. Link to comment Share on other sites More sharing options...
dinarck Posted May 11, 2011 Report Share Posted May 11, 2011 How many times do we need to see this? We get it. Hope it happens. Let me ask this though. Why would they give up all their oil to get back their notes when they can just redenominate? Not saying I want that but can someone please answer this simple question. 9 Link to comment Share on other sites More sharing options...
phazedoubt Posted May 11, 2011 Report Share Posted May 11, 2011 How many times do we need to see this? We get it. Hope it happens. Let me ask this though. Why would they give up all their oil to get back their notes when they can just redenominate? Not saying I want that but can someone please answer this simple question. The simple answer is based on all of the knowledge we have to work with, they wouldn't. Or to rephrase that, if we were in opposite positions, we wouldn't give up our most valuable and plentiful resource just to get certain bills out of circulation... Not when a much easier and well documented solution exists. Link to comment Share on other sites More sharing options...
truthful1 Posted May 11, 2011 Report Share Posted May 11, 2011 The way it was explained to me is that theses oil certificated are like food stamps, the US puts another 0 onto the tally and sends the physical currency back to Iraq, or uses the large bills to do major currency transactions associated with contracts or government aid. That could absolutely be the case. My point is that Iraq will be paying for every dinar returned with there resources. They will be giving something up to get back the banknotes. Im looking at this through Iraqs perspective. It would be cheaper to straight up pay the U.S. 2 trillion dollars for the war, and give every dinar holder a 300% profit. Rather than give up tens of trillions of dollars in their resources to get back there currently worthless currency. They could hit the lop switch, and turn trillions to billions, with one blink. It would not destroy there country, it would do nothing other than help. All the while keeping there oil to sell us infidels at $120/ barrrel. Point being Iraq will do what most benefits them. I think it would be horrific for them to have a high, straight rv. Economically speaking with the amount thats currently reported to be in circulation. If they rv lower, the cbi will make ten fold on the rise. Iraq has the opportunity to rv, no questions about it. But, I strongly believe there still deciding which way to go. Sometimes we have to step out of our shoes, and look at things from the other side. 2 1 Link to comment Share on other sites More sharing options...
Crouton Posted May 11, 2011 Report Share Posted May 11, 2011 As far as the U.S. goes, maybe them giving up the oil is a payback to us for being there. 2 Link to comment Share on other sites More sharing options...
aaanth Posted May 11, 2011 Report Share Posted May 11, 2011 (edited) you have to go back to the beginning of your number model and throw out your %35 tax (short term capital gains or/ income tax money owed) as it is incorrect. an RV would and has always been considered by the IRS as long term capital gains. %15 percent, plus, state tax if you have any. there is no, nor has there ever been, in modern times any %35 tax on this investment. this has been proven over and over again, just like this model you've put out here. I appreciate your effort and thank you, but, as the folks above have put it, we've been here and done this. best... Edited May 11, 2011 by aaanth Link to comment Share on other sites More sharing options...
3keepfaith Posted May 11, 2011 Report Share Posted May 11, 2011 I for one am greatful for the post. Now I get it. Thanks for the post. 4 Link to comment Share on other sites More sharing options...
dnardreams Posted May 11, 2011 Report Share Posted May 11, 2011 That could absolutely be the case. My point is that Iraq will be paying for every dinar returned with there resources. They will be giving something up to get back the banknotes. Im looking at this through Iraqs perspective. It would be cheaper to straight up pay the U.S. 2 trillion dollars for the war, and give every dinar holder a 300% profit. Rather than give up tens of trillions of dollars in their resources to get back there currently worthless currency. They could hit the lop switch, and turn trillions to billions, with one blink. It would not destroy there country, it would do nothing other than help. All the while keeping there oil to sell us infidels at $120/ barrrel. Point being Iraq will do what most benefits them. I think it would be horrific for them to have a high, straight rv. Economically speaking with the amount thats currently reported to be in circulation. If they rv lower, the cbi will make ten fold on the rise. Iraq has the opportunity to rv, no questions about it. But, I strongly believe there still deciding which way to go. Sometimes we have to step out of our shoes, and look at things from the other side. I'm picking up what your putting down. I would think they would just want to give us our money straight up, makes more sense. I think they will end up paying for it in resources over a period of time. Its like buying a car, who wants to put up all the money up front. Most people want to spend the banks money and keep their cash in their pocket to invest and make more from it. Iraq may be thinking the same thing. Pay back over a period of time through oil certificates and invest their cash in other commodities. I think no matter what happens we will continue to get raped in the oil trade so we will ultimately lose and they will end up with the money in their pockets. Just like the Saudis. JMHO 2 Link to comment Share on other sites More sharing options...
Sucma Posted May 11, 2011 Report Share Posted May 11, 2011 My first time reading. Bobby I now know and like you for the post. ignore the grumper stumpers that don't know how to understand others may not be on ther level. Really like the over post especially if the US does have control over aspects of the RV as stated by others. KEEP buddy, I know you have read this or something like it before what does this do to the 24tril argument? Really curious? Link to comment Share on other sites More sharing options...
wayoutwest Posted May 11, 2011 Report Share Posted May 11, 2011 Thank you for the post. I am new to all this and it helps to see how the cycle works. Even if it is ballpark figures, it looks pretty good for all involved! Link to comment Share on other sites More sharing options...
Gordy Posted May 11, 2011 Report Share Posted May 11, 2011 I think we all understand fractional banking from the last 25 times someone posted it. Link to comment Share on other sites More sharing options...
gramms9 Posted May 11, 2011 Report Share Posted May 11, 2011 Thank You Bobby, many of us still need this kind of post so keep up the good work, we appreciate you. Link to comment Share on other sites More sharing options...
quadraph0nic Posted May 11, 2011 Report Share Posted May 11, 2011 interesting theory, ive heard it before not banking on it happening EXACTLY like that :lol: Link to comment Share on other sites More sharing options...
Doctor Smith Posted May 11, 2011 Report Share Posted May 11, 2011 How many times do we need to see this? We get it. Hope it happens. Let me ask this though. Why would they give up all their oil to get back their notes when they can just redenominate? Not saying I want that but can someone please answer this simple question. ■CBI/GOI/Iraqi People Net Gain: $12,500 – $162.50 = $12,337.50 + Profits from “Other Factors” Read more: http://dinarvets.com/forums/index.php?/topic/65933-factional-banking-rv/#ixzz1M0kTPLa6 How many times do we need to see this? We get it. Hope it happens. Let me ask this though. Why would they give up all their oil to get back their notes when they can just redenominate? Not saying I want that but can someone please answer this simple question. ■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. Read more: http://dinarvets.com/forums/index.php?/topic/65933-factional-banking-rv/#ixzz1M0ktlD5J 1 Link to comment Share on other sites More sharing options...
keepmwlknfny Posted May 11, 2011 Report Share Posted May 11, 2011 My first time reading. Bobby I now know and like you for the post. ignore the grumper stumpers that don't know how to understand others may not be on ther level. Really like the over post especially if the US does have control over aspects of the RV as stated by others. KEEP buddy, I know you have read this or something like it before what does this do to the 24tril argument? Really curious? LOL.....I mean its a nice THEORY.......but based on what?? Based on just an idea?? I mean so the US is going to use the dinar to buy oil which is internationally bought and sold in and with USD?? Thats what doesnt fly with me and what holds this back from being a GREAT explanation as to how cashing in would work just with the US speculators......what about people outside the US?? Are all these other countries going to do the same thing?? Buy oil dirt cheap with again, a currency that is not used widely on a global basis and for something that again is bought and sold with USD?? Thats just one of the problems I see with this explanation.....Of course Iraq wont be cashing in the whole 24 trillion if they RV, but lets just say they only have to deal with the US speculators and we hold lets just say 2 trillion dinar...where is the money going to come from?? From the reserves of the CBI?? LOL....not likely....they only have about 50 billion correct?? That wouldnt do.....or are they to spend the next decade paying off a debt to cashing us in right from the get go?? That doesnt make much sense either..... 3 3 Link to comment Share on other sites More sharing options...
radar12354 Posted May 11, 2011 Report Share Posted May 11, 2011 How many times do we need to see this? We get it. Hope it happens. Let me ask this though. Why would they give up all their oil to get back their notes when they can just redenominate? Not saying I want that but can someone please answer this simple question. Simple the deal was made back in lets say 2002, reminded by McCain about the deal for liberation........lets say this whole thing was plan..........just saying Link to comment Share on other sites More sharing options...
Doctor Smith Posted May 11, 2011 Report Share Posted May 11, 2011 LOL.....I mean its a nice THEORY.......but based on what?? Based on just an idea?? Read more: http://dinarvets.com/forums/index.php?/topic/65933-factional-banking-rv/page__st__20#ixzz1M0oCob5O It isn't theory. This is how Banks make money. Fact. You put your money in the bank and receive only 1% at today's low rates. They then take it and lend it out at least 5 times at 4%! They are making at least 20% annual interest off your money! Link to comment Share on other sites More sharing options...
Sucma Posted May 11, 2011 Report Share Posted May 11, 2011 LOL.....I mean its a nice THEORY.......but based on what?? Based on just an idea?? I mean so the US is going to use the dinar to buy oil which is internationally bought and sold in and with USD?? Thats what doesnt fly with me and what holds this back from being a GREAT explanation as to how cashing in would work just with the US speculators......what about people outside the US?? Are all these other countries going to do the same thing?? Buy oil dirt cheap with again, a currency that is not used widely on a global basis and for something that again is bought and sold with USD?? Thats just one of the problems I see with this explanation.....Of course Iraq wont be cashing in the whole 24 trillion if they RV, but lets just say they only have to deal with the US speculators and we hold lets just say 2 trillion dinar...where is the money going to come from?? From the reserves of the CBI?? LOL....not likely....they only have about 50 billion correct?? That wouldnt do.....or are they to spend the next decade paying off a debt to cashing us in right from the get go?? That doesnt make much sense either..... If and I am not the guy to answer if this article is accurate as to fractional banking i would bet other countries have a similar system but carry much less iqd. They will not be writing the us citizens mil's FYI lol agreed. But this outlook if it has legs is cool! This example I assume is based on a internationally traded currency at a respectable value. Since I don't really know anything I have sent this to my adviser at Merrill lynch and asked for a fractional banking definition. If he is at all close to this I will be a happy dude. Not much besides NUFF said debunks your argument. Although since they said 5 years ago they were going to start removing the large denoms I have some happiness to debunk the 24 tril on its own. Not to mention how much harder ot will be on them not to straight RV. Link to comment Share on other sites More sharing options...
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