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Sustaining a higher RV rate


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I may be missing something in the math/economics of this, as it deals with macroeconomics of countries and is very complex, but consider this...it is probably too simple to be true, but...

What if the Dinar RVs at say, $1.17, a reasonable guess considering the three zeros argument, etc. and the exchange rate now. OK, so the main argument for a low rate, or God forbid a re-denomination removing the value of three zeros a la Keepm, is that Iraq can't pay off that high a value to currency investors. OK, good enough. But...

When it does RV, who here can say Iraq doesn't have billions of dinar, or trillions, printed and stashed away for themselves in the CBI as a backstop for the RV? At the new, higher rate, after RV, they might be able to pay off investors, especially in a tiered or "stepped" RV process, or even one outright high rate RV such as $3.00 or more. Their dinars will be would worth just as much as ours. They exchange them for dollars, or euros, and pay us off.

How are the traders like DB saying they will pay us off? By keeping a stash of dinars at cash out time. Same concept.

Furthermore, if they are allowed by the IMF to monetize the oil assets, along with this concept, and countries holding large amounts don't cash in at once, but over the years...a high rate is feasible?

Shoot me down if you will. I am not sure myself.

By the way, I love this place.

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Nothing to shoot you down for, you make a good observation for a debate.

But - you knew that was coming - could it be a higher rate? Will it be? No. Why? It makes good common business sense to start as close to the dollar as possible. Adam thinks it will come in much lower from .10-.35. I don't think that -- I think it will come in close to the dollar. Why? Because Iraq is still in the dollarization mode. The country still needs to be sterilized from the dollar to the dinar. That may take a while. Until then, it would make good business sense to stay as close to the dollar as possible because that is what the businesses are used to. That is my opinion.

This 3-4-5 dollar RV is BS. They could never afford that, even with the backing of the oil. I don't think they are dumb enough to do that. I don't think the IMF, World Bank, or anyone else will allow them to do that.

Blue Horseshoe

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Nothing to shoot you down for, you make a good observation for a debate.

But - you knew that was coming - could it be a higher rate? Will it be? No. Why? It makes good common business sense to start as close to the dollar as possible. Adam thinks it will come in much lower from .10-.35. I don't think that -- I think it will come in close to the dollar. Why? Because Iraq is still in the dollarization mode. The country still needs to be sterilized from the dollar to the dinar. That may take a while. Until then, it would make good business sense to stay as close to the dollar as possible because that is what the businesses are used to. That is my opinion.

This 3-4-5 dollar RV is BS. They could never afford that, even with the backing of the oil. I don't think they are dumb enough to do that. I don't think the IMF, World Bank, or anyone else will allow them to do that.

Blue Horseshoe

Good point you make about the dollarization.......pretty decent argument about why it would be a good idea to get as close to the dollar as possible......they started the process last year around January.....Im curious as to how well its taken......seems they have been pushing the dinar as much as they can, and even giving our soldiers access to exchanging their money for dinar for use in the marketplace......Im pretty confident at this point in time its probly gone over pretty well....

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Wow Keep...good to see you say something other than a redom....this is a good point and I agree that it will be close to the dollar which is why I can see a lifting of the three zeros from the exchange rate only....this would allow that and room for the currency to appreciate with more oil production...I HATE THE WAITING GAME

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Good point you make about the dollarization.......pretty decent argument about why it would be a good idea to get as close to the dollar as possible......they started the process last year around January.....Im curious as to how well its taken......seems they have been pushing the dinar as much as they can, and even giving our soldiers access to exchanging their money for dinar for use in the marketplace......Im pretty confident at this point in time its probly gone over pretty well....

Come on Keep...what do you think about the concept I outlined?

I don't want this to be an LOP argument...simply the idea that a raised ocean floats all boats...

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Nothing to shoot you down for, you make a good observation for a debate.

But - you knew that was coming - could it be a higher rate? Will it be? No. Why? It makes good common business sense to start as close to the dollar as possible. Adam thinks it will come in much lower from .10-.35. I don't think that -- I think it will come in close to the dollar. Why? Because Iraq is still in the dollarization mode. The country still needs to be sterilized from the dollar to the dinar. That may take a while. Until then, it would make good business sense to stay as close to the dollar as possible because that is what the businesses are used to. That is my opinion.

This 3-4-5 dollar RV is BS. They could never afford that, even with the backing of the oil. I don't think they are dumb enough to do that. I don't think the IMF, World Bank, or anyone else will allow them to do that.

Blue Horseshoe

Horseshoe...I agree, it probably won't be a higher rate. But I'm talking about the idea that they could sustain around a dollar rate easily IF they could pay off investors like us with a higher IQD value. That's all.

(and monetize their oil assets, known and projected...)

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Good debate guys, while we can only give our opinions about the coming rate, i will add mine-----i am optimistic that we will see a good rate and the reasons i say this is four things that keep sticking in my mind......Shabibi said in meeting here that we would be well pleased with the rate, US needs higher rate to accomplish any good with taxes because budget is busted, many accounts of Dinar frozen in several countries and has been since first war with Saddam per UN sanctions which is frozen till chapter 7 is lifted. Kuwait stated to UN and VP Joe Biden in December that they wanted Iraq to RV close to what they rate is and UN said that Iraq could add an additional 20% for inflation. I am not disputing anyone opinion just adding mine.

Edited by Heavyduty053
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agree with the oil argument supporting a high rv, they're sitting on a ocean of oil, they know it, the rest of the world knows it...why not make a big splash instead of jockeying around with baby steps? of course, anything is possible...and yes, I had some insight back in Nov that they would go big rate, not small...still hearing this from other sources not listed on this site, so am optimistic...we'll see

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I also think it will be a higher rate because not only are they sitting on an extremely large amount of oil, they have the contracts to sell this oil to back it up. That is 100% income for their country. The up front cost of drilling has already been incured, now is just the profit. Secondly, the people need a lift and to just spin your wheel by dropping the zeros and not adding any value does not help them. This is their chance to push the reset button and they will do it big. Not pumper big like $5 - $8, just $2 - $3 big. Lastly, don't think for one minute that our government doesn't have some influence on this. They are depending on this as a government just like we are as individuals. JMHO

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All the Oil in the world is useless without the security to protect the extraction, delivery and export mechanisms.

Half the country is he'll bent to destroy any progress, a quarter of the folks don't use a rear-view mirror to see the future and the other quarter are trying to find a way to keep unity from overcoming corruption.

Iraq would really prosper in a major way, if not for the Iraqis.

The only way this will ever work is to pay them enough to stay home and not destroy things, while bringing in outside sources to setup, implement and manage oil production.

This is far from the most profitable way to manage a resource.

Unfortunately, whatever the level of production, it will always be less profitable than what a less destructive mindset could produce.

They are literally their own worse enemies, and desperately wish to remain that way.

It is hard to monitize their brand of thinking. It discounts everything that anyone else can do for them.

All figures have to take this into effect before prediction outcomes.

Any rate has to consider paying for a dozen installations and total destruction between rebuilding prior to predictable output that can produce stable figures.

Face it, these people are deathly afraid of progress..

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They are deathly afraid of progress bacause they have been under the rule of a suppressor and a dictator for the last umpteen years. They don't know what progress is. They have been kept down all of their life. Can't run before you walk. Can't walk before you crawl. This is an opprotunity of 10 generations for their country and the "leaders" aren't about to let it pass them by. JMHO

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All the Oil in the world is useless without the security to protect the extraction, delivery and export mechanisms.

Half the country is he'll bent to destroy any progress, a quarter of the folks don't use a rear-view mirror to see the future and the other quarter are trying to find a way to keep unity from overcoming corruption.

Iraq would really prosper in a major way, if not for the Iraqis.

The only way this will ever work is to pay them enough to stay home and not destroy things, while bringing in outside sources to setup, implement and manage oil production.

This is far from the most profitable way to manage a resource.

Unfortunately, whatever the level of production, it will always be less profitable than what a less destructive mindset could produce.

They are literally their own worse enemies, and desperately wish to remain that way.

It is hard to monitize their brand of thinking. It discounts everything that anyone else can do for them.

All figures have to take this into effect before prediction outcomes.

Any rate has to consider paying for a dozen installations and total destruction between rebuilding prior to predictable output that can produce stable figures.

Face it, these people are deathly afraid of progress..

I am afraid you have it wrong here...they know they are an occupied country and want to throw out foreigners and control oil production themselves, in their own country. Simple enough. We would sabotage too if we were occupied by foreigners. This isn't too hard to understand.

I am just hoping they will RV as a means to quiet insurgents by propelling the country forward in standard of living. Otherwise the insurgency will remain strong. It may never stop until we are gone entirely.

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