factional banking ,rv

[keepmwlknfny]

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!

I understand thats how banks make money....but alot of what is written on that post is just a THEORY......there is nothing pointing to Iraq changing the reserve requirements....thats just a thought....which this scenerio depends alot on.....also, the statement about Iraq having enough money because they are upping the oil production from 2 to 10 million barrels a day is yes what they planned, but that wont be anytime soon, that is years down the road from now....its going to take alot of time to get up to that level of production to finance all this, and there is no guarantee that even then, the market wont be saturated will oil production, driving the price and demand for oil way down....which is also a reason why they might not even get up to 10 mb.....im sure they are aware of this fact as well.....and why they dont want to let the dinar free float and let the market determine the rate because it will be volitile and open for drastic swings in value....thats why I dont see the dinar hitting forex like everyone says it will....wont be a huge demand to trade a currency that is damn near motionless as it is now......I just dont see them being so eager to trade oil to get their own bills back....its not like the US will want it....Im sure we have some in the UST, but what use is having trillions of a currency that has no use globally?? Again, this scenerio is just based on too many theories that dont have much factual basis to them.....just stuff that sounds nice.....could it happen?? I dont know.....maybe.....but it doesnt hold much water....

[radar12354]

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!

I believe the money will be detroyed that filter in from around the world, but that value of that detroyed money would be added to the smaller demons...........just saying.....reval

[imgesing]

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!

FINALLY YES someoen laid this out so eloquently! I wish I had the time and quite frankly the ability to put this out this well.

There are those who try so hard to debunk an RV with out a REDENOM (uneducationally called a LOP). This helps explain a portion fo what is behind it all. It doesn;t account for GNP and all the other factors which go into an RV but explains why and how it will easily take place. A + from me and a big YEAAAA....

Have a great day and week!

[Carrello]

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...

I cannot get my head around this investment being considered as income. To me, it is logical as a capital gain. Aaanth, do you have any written proof that is is in fact considered a capital gain? I would appreciate any guidance to this info.

Thanks.

[chefgene23]

I for one have been out of touch with Vacation from Afghanistan and definitely loved this post. I too, thought about the state tax, and have a concern with some one stating the flat 15% on this type of investment. Uncle Sam will try and get EVERYTHING he can from us. But this is all in hoping this is how the RV will play out. TIME will tel! Go RV -Straight up,up, and up!

[imgesing]

Keep you dont factor in the equal trade. And you use OIL as the only basis of trade.

It seems that even simplified there is much more but at least this gives a slight window into things.

Basic economic factoring will not work in this model. Neither will using Turkey as a model.

Yet, we all are doing our best using models and past economic situations to try and form an oppinion of this RV.

NO ONE HERE can be certain about a thing. We speculate and when those of us with little behind us but blanket theories try to act pompus it really bothers some of us who know better... lol

I will say that based on everything I have read and evaluated, I am excited by the prospect of this investment inspite of the NAY SAYERS and those who predict a much lower return from what I believe.

NEWBIE read on your own and follow different sites and news articles. Form your own oppinion and be careful to ride the wave of emotions as even as possible. This is possibly the best investment you ever made.

[dinarck]

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

O, Ok, I feel much better now. Think Im gonna go buy 10 million more dinar tomorrow now that you have explained whats going on.

[poorman]

A LOP MEAN,S THERE BROKE ,BROKE . DO YOU NOT UNDER STAND. THIS WILL NEVER HAPPEN.

A LOP MEAN,S THERE BROKE ,BROKE . DO YOU NOT UNDER STAND. THIS WILL NEVER HAPPEN.

[imgesing]

I understand thats how banks make money....but alot of what is written on that post is just a THEORY......there is nothing pointing to Iraq changing the reserve requirements....thats just a thought....which this scenerio depends alot on.....also, the statement about Iraq having enough money because they are upping the oil production from 2 to 10 million barrels a day is yes what they planned, but that wont be anytime soon, that is years down the road from now....its going to take alot of time to get up to that level of production to finance all this, and there is no guarantee that even then, the market wont be saturated will oil production, driving the price and demand for oil way down....which is also a reason why they might not even get up to 10 mb.....im sure they are aware of this fact as well.....and why they dont want to let the dinar free float and let the market determine the rate because it will be volitile and open for drastic swings in value....thats why I dont see the dinar hitting forex like everyone says it will....wont be a huge demand to trade a currency that is damn near motionless as it is now......I just dont see them being so eager to trade oil to get their own bills back....its not like the US will want it....Im sure we have some in the UST, but what use is having trillions of a currency that has no use globally?? Again, this scenerio is just based on too many theories that dont have much factual basis to them.....just stuff that sounds nice.....could it happen?? I dont know.....maybe.....but it doesnt hold much water....

KEEP not "alot" but A LOT of what you say is YOUR THEORY. Now you can go back and correct all my typos too... lol

You are wrong many times when trying to play a conservative role. I fully understand many of your points, yet slow down a bit and read from some who are a bit more versed. Not even I would venture to being in the GURU section. Yet, I do believe I am fairly versed on this topic. What I like the most though is reading and learning. There is a huge wealth of crap and good information here, if you are willing to decifer thru it. I enjoy sitting back and watching emotions fly and also I get a bit uneasy when false BS is spread all over the place. If this comes out at 30 cents post RV I will do well. Yet, I really strongly believe it will do better and I am fairly sure they absolutely have the ability to RV higher... much higher. I am also head strong on no redenomination for all the past reasons everyone mentioned already.. I listen to your arguments and for each one there is another article or post which debunks your theories. I sincerely hope you can see the potential for this to do better then your figures.

I hope so for your sake and others and of course my own.

Peace

[Tubbs]

The plan......Iraq ......just stick to the plan

Go RV !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[radar12354]

O, Ok, I feel much better now. Think Im gonna go buy 10 million more dinar tomorrow now that you have explained whats going on.

If you think you can afford it..........go for it.........just saying

A LOP MEAN,S THERE BROKE ,BROKE . DO YOU NOT UNDER STAND. THIS WILL NEVER HAPPEN.

A LOP MEAN,S THERE BROKE ,BROKE . DO YOU NOT UNDER STAND. THIS WILL NEVER HAPPEN.

What does a lop mean?..............just saying

[quadraph0nic]

Since this theory is about the oil. I did some digging around based on a conversation I had a coworker about oil production down south....

Interesting read:

http://www.downstreamtoday.com/news/article.aspx?a_id=26190&AspxAutoDetectCookieSupport=1

Iraq Takes Steps to Solve Basra Bottlenecks

by Hassan Hafidh Dow Jones Newswires

March 30, 2011

BASRA, Iraq (Dow Jones)

Bottlenecks at Iraqi export terminals, aging pipelines and shortfalls of crude oil storage capacities are serious obstacles to Iraq's ambitious plan to quadruple its crude oil output from supergiant oil fields clustered in the oil-hub of Basra in southern Iraq, officials said Wednesday.

Iraq's South Oil Co., the largest state oil entity, along with international firms, has started to build massive storage tanks in Iraq's southernmost Faw peninsula and dig sub-sea trenches to extend three new pipelines that would pump crude from these depots to floating terminals in the Gulf.

Total south storage capacity is only 5 million barrels now, enough to store three days worth of southern output, while industry experts suggest at least twice that amount is needed to avoid missing shipments.

"Now we are building 16 new tanks at Faw with total storage capacity of another 5 million barrels," Basim Abdul Kareem, head of oil operations at SOC, told Dow Jones Newswires.

"Four of these tanks will be ready in August and a similar number by the end of the year, while the remaining eight will be completed next year," engineer Abdul Mutaleb Abul Razzaq, head of Basra export terminals at the SOC, said.

Faw, which used to be a crude oil gathering point before pumping crude to Iraq's two main sea oil outlets, Basra and Khor al-Amaya terminals in the Gulf, was seized by Iran in the 1980-88 Iraq-Iran war and all the 62 tanks which used to store some 6 million barrels were destroyed in bomb attacks.

Eight tanks are being built by the oil ministry's State Company for Oil Projects, known as SCOP. Engineer Hamid Kasim said that some 32 Iraqi workers are working around the clock to finish them. Equipment is bought by SCOP from international companies specialized in oil tanks, he added.

SOC has recently awarded a contract of around $150 million to state-owned Ibn Majed Co. to construct the other eight tanks, Abdul Razzaq said, speaking from Faw peninsula, 120 kilometers south of Basra.

These 16 massive tanks would be linked to three under-sea pipelines to feed four new Single Point Mooring, or SPM, buoys, three of which are being constructed by Leighton Offshore Private Ltd.--part of Leighton International (LEI.AU), which was awarded a $733 million engineering, procurement and construction, EPC, contract last year.

Basra Export Capacity To Hit 4.5M B/D

Loading capacity at both Basra and Khor al-Amaya is around 1.8 million barrels a day. The SOC project will raise export capacity in the southern terminals to 4.5 million barrels a day by the end of next year. It has hired Foster Wheeler Ltd. (FWLT) as a project management consultancy service contractor and designer of the project.

Two under-sea pipelines, each one 48 inches in diameter and 50 kilometers long, are expected to be completed by the end of this year. Two SPMs, each with 900,000 barrels a day loading capacity, will be commissioned this year. That would double current loading capacity in Basra. The remaining SPM will be finished next year, Abdul Razzaq said.

A fourth SPM and a third under-sea pipeline, costing around $500 million would be funded by the Japanese International Cooperation Authority, which is part of the $5 billion that Japan pledged to Iraq in 2003. The contract is yet to be awarded, he said.

The $1.4 billion project would include a $70 million contract to supply pipelines and some $50 million deal to supply equipment for these floating terminals such as metering systems.

SOC is also building several other tanks in various fields in the south to cope with increasing crude oil output after Baghdad signed more than 12 mega deals to boost its output to 12 billion barrels a day in 2017.

"In the long term we are planning to build a total of 64 tanks in Faw as well as several ones near oil fields," Abdul Razzaq said.

Copyright © 2011 Dow Jones & Company, Inc.

[aliciadogz]

Thanks, for the great post,I needed that.GORV!!!