86cts to $1.20 is stupidity for RV

[General Kang]

Everyone keeps saying Iraq can't support a rate over $1.17 or so. Well the IQD was $3.22 over 20 years ago when the USD was far higher in value, Also much more oil has been discovered and still 80% of Iraq is unexplored. Add to the oil all the naural gas that was found. Iraq has several fold the resoures of Kuwait and the Kuwaiti Dinar was very high having now setled at about the $3.50 range.

With what has been discovered that being only 20% of Iraq explored they have more oil than Kuwait and all the natural gas to boot.

The Crude Wealth of Iraq;

Henry Thompson

Iraq is a wealthy country and every Iraqi a present value millionaire. Wealth in the world has shifted toward the owners of crude oil. Over the next two decades, total world energy consumption will almost double with serious alternatives to oil remain decades away. US oil consumption is expanding as production declines and imports climb. Oil prices and the energy share of national income will increase over the coming decades.

Monopoly resource profits will be going to the owners of oil and other energy resources. Oil extraction and refining are very competitive with profits slightly higher than the average industry but with high risk. The owners of the oil will enjoy the rising prices. Oil is owned primarily by governments around the world.

The price of a barrel of crude oil at the wellhead jumps around between $40 and $150 while extraction cost in the Middle East is under $10. The owners of the oil in the ground enjoy the profit. The Arab Gulf has 65% of the world’s proven oil reserves and Iraq has 12%. Oil in the ground is like money in the bank and that makes the government and perhaps Iraqis themselves wealthy. Iraq can produce 6 million barrels of oil a day, 2 billion barrels per year. At $50 per barrel, that oil would sell for $100 billion. The population of Iraq is 24 million and that oil income translates to $4000 per person.

If Iraq sells a quarter of its potential reserves at an average price of $50 for the next 20 years, that would generate 90 billion x $50 = $4.5 trillion. If the population of Iraq grows to 30 million that would be $150,000 per capita for 20 years, or $7,500 annual income per capita. Price will be rising but the Iraqi government will waste a good deal of the profit.

If instead of wasting the income it is invested, Iraq will become wealthy. Estimated productive capital assets in the US are $60,000 per capita and $5,000 for the entire world. If Iraq invests only 1/4 of its oil revenue for the next 20 years, it will match current US productive assets per capita.

The total value of Iraq potential oil reserves at an average profit of $75 per barrel over next 100 years would be 360 billion x $75 = $27 trillion or $900,000 per capita, making every Iraqi a millionaire. These calculations do not include natural gas revenue, lately about equal to oil revenue for producing fields. Also, most of Iraq has not been explored for gas or oil.

In the Persian Gulf region, proven oil reserves are 195 trillion barrels. Selling this at an average profit of $75 per barrel over the next 100 years would generate $15,000 trillion income. If half of that is invested, it would amount to $7,500 trillion or 1/4 of the present total capital assets in world. And this is only proven reserves. Due to political uncertainty most of the Gulf region has not been explored for gas and oil.

OIL IS NOW $100 A BARRELSO THIS WAS WRITTEN QUITE SOME TIME AGO. IT LEAVES OUT THAT ONLY 20% OF IRAQ HAS BEEN EXPLORED SO FAR, AND IT SAYS IRAQ HAS 12%. WE NOW KNOW IRAQ HAS FAR MORE OIL THAN ALL IT'S NEIGHBORS. ADDED TO THE OIL IS THE NATURAL GAS WHICH IRAQ ALSO HAS MORE OF.

SO THIS ARTICLE SAYING $50 ABARREL IS OFF BY 50% RIGHT HERE. IT IS OFF EVEN MORE WITH 80% YET UNEXPLORED

THAT SAID;

IRAQIS ARE MILLIONAIRES X 2 ( FOR THE $100 OIL) x 5 ( FO THE 80% YET EXPLORED)x WE HAVE NO NUMBERS FOR THE NATURAL GAS BUT YOU SEE WHERE ITS GOING.

EVEN AT THE END WITH $75 A BARREL = $900,000 PER CAP ADD 25% MORE FOR $100 PER BARREL. AND STILL NO NUMBERS FOR THE NATURAL GAS

MULTI-MILLIONAIRES IS MORE LIKE CORRECT

Subject: Billions Over Baghdad - New York Times http://www.nytimes.c...n/27taylor.html Hello again folks, If U don't presently have a copy of the above article from the NY TIMES, written by Stanford graduate and former Under Sec. of the Treas., John B. Taylor, in Feb. 2007, please print one now and read it over and over, every time U may wonder if this RV is for real or not. Share it w/ others who may think you and we are all nuts, like CA Sen. Henry Waxman said on the Senate floor. As far as I'm concerned, it's the most concise explanation of how this plan was conceived by Cheney & Greenspan and then put into action before the first shot was ever fired in the Iraqi War. It also gives credibility to GWB when he expressed many times as to how this war would pay for itself, namely OIL. Iraqi oil at less than $33/bbl coming to the USA. This new Iraqi currency that was shipped & also flown by - get this: 27 747's into Iraq right during the war - is the very SAME dinar that we all presently hold awaiting the Re-Valuation. Just think about this: We are part of history being made, folks! And we will be made wealthy beyond our wildest dreams for so doing. So may I encourage you all to be patient. If we were any closer we'd be WET! Jim

Edited May 16, 2011 by General Kang

[AoK]

http://www.nytimes.c...n/27taylor.html : having problems with the link...does it work or is it just me? Thanks!

[djhemp]

You're forgetting to calculate how much currency was in circulation pre-invasion and currently today. It's can't just magically be what it was. That's like buying a stock at $1 with 1 million shares outstanding and wondering why it's now 1 cent because they authorized another billion shares.

[blknblu4evr]

Anyone would love 3-4 dollars per dinar... I know I would. I still think it will start low and move up over a period of time. Who really knows?? I can't wait to see what happens either way. I would love 86 cents.... thats one heck of a return.

[cocklebur]

How can Iraq get 50 dollars plus a barrell if they are selling it to the U.S. for less than 33 dollars per barrell? I hope if they ever do rv it will be for at least 10 to 30 cents on the usd, if it is for more than that hurrah, the more the merrier.

[General Kang]

You're forgetting to calculate how much currency was in circulation pre-invasion and currently today. It's can't just magically be what it was. That's like buying a stock at $1 with 1 million shares outstanding and wondering why it's now 1 cent because they authorized another billion shares.

THIS ISN'T STOCK IT'S OIL!! AND OIL IS GOING UP IN VALUE ALL THE TIME. IT DOES HAVE SOME FLUX, BUT THE UPWARD SPIRAL CONTINUES. AS THE WORLD BECOMES MORE POPULATED AND MORE FUEL IS NEEDED THAT UPWARD SPIRAL WILL CONTINUE. YOUR STOCK COMPARISON IS LIKE COMPARING APPLES TO ORANGES!

COMPANIES HAVE SOME STRICK LIMITS AS TO PROFITS WHERE IRAQ ONCE OUT AND OPENING UP ALL THE NEW OIL FIELDS THAT ARE THERE TO HAD WILL BLOW THE TOP RIGHT OFF ANY COMPANY STOCK CAMPARISON THAT CAN BE MADE.

[The Machine]

How can Iraq get 50 dollars plus a barrell if they are selling it to the U.S. for less than 33 dollars per barrell? I hope if they ever do rv it will be for at least 10 to 30 cents on the usd, if it is for more than that hurrah, the more the merrier.

I thought that $32 per barrell was debunked a while back cant remember the thread but as far as I can remember there was more than 1 thread on it ....... I think a realistic rate on the launch of the RV would be pegged level with the dollar which would be onlyGBP £0.61 for me.

GO RV

[General Kang]

http://www.nytimes.c...n/27taylor.html : having problems with the link...does it work or is it just me? Thanks!

Billions Over Baghdad

By JOHN B. TAYLOR

Published: February 27, 2007

Stanford, Calif.

Skip to next paragraph

Joe Morse

EARLIER this month, the House Committee on Oversight and Government Reform held a hearing that criticized the decision to ship American currency into Iraq just after Saddam Hussein’s government fell. As the committee’s chairman, Henry Waxman of California, put it in his opening statement, “Who in their right mind would send 360 tons of cash into a war zone?” His criticism attracted wide attention, feeding antiwar sentiment and even providing material for comedians. But a careful investigation of the facts behind the currency shipment paints a far different picture.

The currency that was shipped into Iraq in the days after the fall of Saddam Hussein’s government was part of a successful financial operation that had been carefully planned months before the invasion. Its aims were to prevent a financial collapse in Iraq, put the financial system on a firm footing and pave the way for a new Iraqi currency. Contrary to the criticism that such currency shipments were ill advised or poorly monitored, this financial plan was carried out with precision and was a complete success.

The plan, which had two stages, was designed to work for Iraq’s cash economy, in which checks or electronic funds transfers were virtually unknown and shipments of tons of cash were commonplace.

In the first stage, the United States would pay Iraqi government employees and pensioners in American dollars. These were obtained from Saddam Hussein’s accounts in American banks, which were frozen after he attacked Kuwait in 1990 and amounted to about $1.7 billion. Since the dollar is a strong and reliable currency, paying in dollars would create financial stability until a new Iraqi governing body was established and could design a new currency. The second stage of the plan was to print a new Iraqi currency for which Iraqis could exchange their old dinars.

The final details of the plan were reviewed in the White House Situation Room by President Bush and the National Security Council on March 12, 2003. I attended that meeting. Treasury Secretary John Snow opened the presentation with a series of slides. “As soon as control over the Iraqi government is established,” the first slide read, we plan to “use United States dollars to pay civil servants and pensioners. Later, depending on the situation on the ground, we would decide about the new currency.” Another slide indicated that we could ship $100 million in small denominations to Baghdad on one week’s notice. President Bush approved the plan with the understanding that we would review the options for a new Iraqi currency later, when we knew the situation on the ground.

To carry out the first stage of the plan, President Bush issued an executive order on March 20, 2003, instructing United States banks to relinquish Mr. Hussein’s frozen dollars. From that money, 237.3 tons in $1, $5, $10 and $20 bills were sent to Iraq. During April, United States Treasury officials in Baghdad worked with the military and the Iraqi Finance Ministry officials — who had painstakingly kept the payroll records despite the looting of the ministry — to make sure the right people were paid. The Iraqis supplied extensive documentation of each recipient of a pension or paycheck. Treasury officials who watched over the payment process in Baghdad in those first few weeks reported a culture of good record keeping.

On April 29, Jay Garner, the retired lieutenant general who headed the reconstruction effort in Iraq at the time, reported to Washington that the payments had lifted the mood of people in Baghdad during those first few confusing days. Even more important, a collapse of the financial system was avoided.

This success paved the way for the second stage of the plan. In only a few months, 27 planeloads (in 747 jumbo jets) of new Iraqi currency were flown into Iraq from seven printing plants around the world. Armed convoys delivered the currency to 240 sites around the country. From there, it was distributed to 25 million Iraqis in exchange for their old dinars, which were then dyed, collected into trucks, shipped to incinerators and burned or simply buried.

(Page 2 of 2)

The new currency proved to be very popular. It provided a sound underpinning for the financial system and remains strong, appreciating against the dollar even in the past few months. Hence, the second part of the currency plan was also a success.

The story of the currency plan is one of several that involved large sums of cash. For example, just before the war, Saddam Hussein stole $1 billion from the Iraqi central bank. American soldiers found that money in his palaces and shipped it to a base in Kuwait, where the United States Army’s 336th Finance Command kept it safe. To avoid any appearance of wrongdoing, American soldiers in Kuwait wore pocket-less shorts and T-shirts whenever they counted the money.

Later, American forces used the found cash to build schools and hospitals, and to repair roads and bridges. Gen. David Petraeus has described these projects as more successful than the broader reconstruction effort.

But that wasn’t the only source of dollars. Because the new Iraqi dinar was so popular, the central bank bought billions of United States dollars to keep it from appreciating too much. As a result, billions in cash accumulated in the vaults of the central bank. Later, with American help, the Iraqi central bank deposited these billions at the New York Federal Reserve Bank, where they could earn interest.

Finally, when Iraq started to earn dollars selling oil, the United States transferred the cash revenue to the Finance Ministry, where it was used to finance government operations, including salaries and reconstruction. Many of these transfers occurred in 2004, long after the financial stabilization operation had concluded. Iraqi Finance Ministry officials had already demonstrated that they were serious about keeping the controls they had in place. The 360 tons mentioned by Henry Waxman includes these transfers as well as the 237.3 tons shipped in 2003 in the stabilization.

One of the most successful and carefully planned operations of the war has been held up in this hearing for criticism and even ridicule. As these facts show, praise rather than ridicule is appropriate: praise for the brave experts in the United States Treasury who went to Iraq in April 2003 and established a working Finance Ministry and central bank, praise for the Iraqis in the Finance Ministry who carefully preserved payment records in the face of looting, praise for the American soldiers in the 336th Finance Command who safely kept found money, and yes, even praise for planning and follow-through back in the United States.

[speculatorsRIDE]

General, I wouldn't worry to much about what others think the rate will be. Do some research and come to your own conclusions. Here are a couple of items for you to research. Take a look at the accounts that belonged to Saddam Hussein that our government froze. I believe there are 5 or 6 of these and each is in the trillions for balances. These funds belong to Iraq and will be returned at the appropriate time. These accounts will be added to their assets as will all non-liquid items currently excluded as assets. These assets include oil, natural gas, etc etc etc and are worth trillions. We are waiting for Ch7 to be lifted and for them to move onto Ch8. Once Ch7 is lifted all of their non-liquid assets will become liquid assets. There is no way we will see a rate lower then the prewar rate of $3.33.

Keep in mind that the US has assets of 188 trillion and it is my opinion that Iraq's assets will top 200 trillion.

Edited May 16, 2011 by speculatorsRIDE

[bahtman]

Everything you say is true with regards to what the value "should and will" be.

It just won't start that way.

If Iraq had their way, the rate would come out at $3.86

But the US is in charge. The RV will cost Iraq very little. They release some smaller denoms and really have to pay nothing to investors exchanging

( If the US makes all dinar go back to the UST).

In the US things are different.

The US has to pay for every dinar.

The UST saves $2.6 Trillion by starting the RV at $1.00 instead of $3.00 after the collection of taxes.

That savings only increases if you use an RV rate of $4.00 or higher.

After a 90 day cash in period, they can then let the rate move up to $3+ over the coming months.

But they will have saved those $trillions in the meantime.

The USA, as usual, wins on all counts!!!

Here's hoping I'm wrong.

[DinarThug]

I guess you must really like this article(s) GKang. It was used 3times here yesterday in the Rumors Section including by you in "Athena Is Correct On $7.23 Rate".

It is a nice read though, especially without the Trek-Speak !

[Coonerx]

In my humble opinion, for the RV to take place and not a RD, the rate will have to start low. My thoughts have always been the $.10 - .40 range. I always supposed that if, IF, the rate came out freakishly high, like say $7, then we were looking at an RD. If this investment is going to have returns the way we all want it to, then maybe a low rate with a managed float to start is the way to go. It will prevent a run on Iraqi reserves in the short term and will allow the country to make good on the foreign investment plans it has. Over time, within the framwork of a managed float, the currency will be bumped in value (or not depending on market forces at that particular time). To me, the biggest single issue with this investment is not the rate, but the date. The sooner this currency can be activley traded on the foreign currency market, the better. With all the oil and gas Iraq has, coupled with the foreign investment and huge expenditures foreseen on infastructure projects, the value of Iraq's currency will increase...over time. From a therapuetic standpoint, I think many of you would feel a sense of relief knowing that trading restictions have been lifted and your investment has the ability to rise in value, with the sky being the limit. Then it's only a matter of exchanging your currency at a price that's good for you and your expectations of this investment.

[Fummins]

Dont forget Saddam had the Dinars rate artificially high.

[speculatorsRIDE]

How can Iraq get 50 dollars plus a barrell if they are selling it to the U.S. for less than 33 dollars per barrell? I hope if they ever do rv it will be for at least 10 to 30 cents on the usd, if it is for more than that hurrah, the more the merrier.

The $50.00 a barrel is used as an example in this article. Oil is now selling for closer to $100.00 a barrel. The $33.00 rate is referring to the plan that was conceived by George senior and was the reason for the war to begin with.

[HANN]

Bush doesn't look so stupid now does he? No one knows what went on behind closed doors, half of which Bush couldn't announce publicly. He will go down as one of our BEST presidents EVER.

[CAPT JACK]

Thanks for the post.

[MrRich]

THIS ISN'T STOCK IT'S OIL!! AND OIL IS GOING UP IN VALUE ALL THE TIME. IT DOES HAVE SOME FLUX, BUT THE UPWARD SPIRAL CONTINUES. AS THE WORLD BECOMES MORE POPULATED AND MORE FUEL IS NEEDED THAT UPWARD SPIRAL WILL CONTINUE. YOUR STOCK COMPARISON IS LIKE COMPARING APPLES TO ORANGES!

COMPANIES HAVE SOME STRICK LIMITS AS TO PROFITS WHERE IRAQ ONCE OUT AND OPENING UP ALL THE NEW OIL FIELDS THAT ARE THERE TO HAD WILL BLOW THE TOP RIGHT OFF ANY COMPANY STOCK CAMPARISON THAT CAN BE MADE.

The stock analogy was not only valid it was spot on. There's no way that they can support an RV of even $1 with 27 trillion in circulation. The only way that they can support values of $1-3 is to reduce the money supply. Leaving the money supply out of the equation is simplistic. The assumption is that their currency will be backed by oil. Proven extractable reserves are at 143 billion barrels. If you figure the price of oil at $75/bl you get a little over $10 trillion. So to justify a $1 RV they would need to shrink the money supply down to 10 trillion dinar unless you add their other assets into the mix. I can assure you their combined assets of everything in the country wouldn't come to $100 trillion which is what they would need to support the $3.86 figure that many are throwing out there. Not without a corresponding reduction in their money supply.

Edited May 16, 2011 by MrRich

[MPG350]

1 Saudi riyal = 0.2666 US dollars enough said.

[easyrider]

1 Saudi riyal = 0.2666 US dollars enough said.

yea but we did not invade saudi arabia did we? Thing is no one knows what deals were made behind closed doors with this whole PLAN from the start of the Bush administration. All we can do is ccompare countries to Iraq but in the end when you think about it are we really missing something? is Iraq unique? Will Iraq be the start of something brand new on a global scale? IMHO this is a lot bigger than many can see or try to simplify into logic.

[Darin]

The stock analogy was not only valid it was spot on. There's no way that they can support an RV of even $1 with 27 trillion in circulation. The only way that they can support values of $1-3 is to reduce the money supply. Leaving the money supply out of the equation is simplistic. The assumption is that their currency will be backed by oil. Proven extractable reserves are at 143 billion barrels. If you figure the price of oil at $75/bl you get a little over $10 trillion. So to justify a $1 RV they would need to shrink the money supply down to 10 trillion dinar unless you add their other assets into the mix. I can assure you their combined assets of everything in the country wouldn't come to $100 trillion which is what they would need to support the $3.86 figure that many are throwing out there. Not without a corresponding reduction in their money supply.

I think we take into account to many factors that we may not fully understand or fail to remember.

Kuwaits R/I & Turkey's R/D are apples to oranges in this situation.

We can look towards the past for the IQD and I think the same can be said when comparing the past & present of the IQD.

The past, the country was a dictatorship regime as it is now a democratic govt. The U.S. helped liberate, build, and set this all up.

So, the questions to consider.... Was the IQD ever in Article VIII of the IMF or were they always Article XIV? -- That alone can be a HUGE factor in deciding the value of then & now.

[General Kang]

In my humble opinion, for the RV to take place and not a RD, the rate will have to start low. My thoughts have always been the $.10 - .40 range. I always supposed that if, IF, the rate came out freakishly high, like say $7, then we were looking at an RD. If this investment is going to have returns the way we all want it to, then maybe a low rate with a managed float to start is the way to go. It will prevent a run on Iraqi reserves in the short term and will allow the country to make good on the foreign investment plans it has. Over time, within the framwork of a managed float, the currency will be bumped in value (or not depending on market forces at that particular time). To me, the biggest single issue with this investment is not the rate, but the date. The sooner this currency can be activley traded on the foreign currency market, the better. With all the oil and gas Iraq has, coupled with the foreign investment and huge expenditures foreseen on infastructure projects, the value of Iraq's currency will increase...over time. From a therapuetic standpoint, I think many of you would feel a sense of relief knowing that trading restictions have been lifted and your investment has the ability to rise in value, with the sky being the limit. Then it's only a matter of exchanging your currency at a price that's good for you and your expectations of this investment.

I don't think $7 is likely, but the $3.22 plus 20% for inflation allowed by the UN is VERY likely. Anything less or more opens the door for money troubles. Less and the big money guys know it came in low and is going up so they will buy buy buy with deep pockets. Anyhting more and Iraq may have trouble with inflation.

Corps all over the planet are lining up to get into Iraq because they know money can be made there.

Edited May 16, 2011 by General Kang

[MPG350]

yea but we did not invade saudi arabia did we? Thing is no one knows what deals were made behind closed doors with this whole PLAN from the start of the Bush administration. All we can do is ccompare countries to Iraq but in the end when you think about it are we really missing something? is Iraq unique? Will Iraq be the start of something brand new on a global scale? IMHO this is a lot bigger than many can see or try to simplify into logic.

Thats fine you can think whatever you want, but I see a country much much more advanced than Iraq pumping out alot more oil now and there currency is at .26 cents compared to the dollar.

Sure I do think the dinar will go up in value over time but not for awhile, the dinar isn't holding back Iraq, Iraq is holding back Iraq.

[easyrider]

Thats fine you can think whatever you want, but I see a country much much more advanced than Iraq pumping out alot more oil now and there currency is at .26 cents compared to the dollar.

Sure I do think the dinar will go up in value over time but not for awhile, the dinar isn't holding back Iraq, Iraq is holding back Iraq.

yea but you might be surprised what will happen if indeed there is a global reset of currencies look at kuwait they revalued twice i believe last year it can easily be done. Makes sense for countries to revalue higher if they have the resources to back it up because if the dollar dropping in value and Yes saudi arabia is pumping more now but will they be pumping when Iraq iss at its full potential? we don't know liike i said all we can do is compare other countries but we could be coparing apples and oranges here is all im saying.

[jxhal]

Stop- just Stop.................

[splicer09]

The stock analogy was not only valid it was spot on. There's no way that they can support an RV of even $1 with 27 trillion in circulation. The only way that they can support values of $1-3 is to reduce the money supply. Leaving the money supply out of the equation is simplistic. The assumption is that their currency will be backed by oil. Proven extractable reserves are at 143 billion barrels. If you figure the price of oil at $75/bl you get a little over $10 trillion. So to justify a $1 RV they would need to shrink the money supply down to 10 trillion dinar unless you add their other assets into the mix. I can assure you their combined assets of everything in the country wouldn't come to $100 trillion which is what they would need to support the $3.86 figure that many are throwing out there. Not without a corresponding reduction in their money supply.

Good point Scooby Doo and I agree whole heartedly, with this exception. I believe back in Oct or Nov the CBI announced that they had removed about 80% of the large notes from circulation. Now I know with daily auctions and 27 trillion in ciculation its hard to believe what's in circulation and if in fact they did remove 80% of the larger notes. So I have tried to view it as if this had no bearing on me whatsoever. I don't think many realize the efforts taken to reduce what is in circulation and Iraqs inflation is still low. I do believe they have reduced their money supply from 27 trillion but how much is the key. There is so much we are not suppose to know until after and total assets has to be one. Their 2011 budget is based off of $79 per barrel and have been above that since its inception. See I think this money trail (oil) has been manipulated to increase Iraqs wealth and support the plan for a higher RV. The IMF's recommendation in Dec was for Iraq to RI at its last accepted rate plus inflation since. ( I believe late 70's or early 80's). Ok so what did I mean about manipulating the money flow. The unrest in Egypt was orchestrated by a major exec. At Google. He has proven it and spoken publicly of it. Why would a US multi million dollar executive take such leaps and bounds. Well oil prices went up because of the unrest. Hmmmmmm. Then Lybia has unrest and helps escalate those oil prices. Lybia is reponsible for only 1% of the globes oil supply so why not increase export somewhere else to balance that measley 1%. I guess I am under the assumption that, and always have been, that we are not prevy to all that is going on( reduction of currency in circulation) and we will be led by misinformation for a reason. That is why we are all speculators, because Iraq and the GOI will not give out those game changing numbers, intel or dates. I do however believe that the rate will be higher than many think simply because of the obvious efforts to increase oil prices and many respected spectulators have always stated that oil prices would go up before the RV. It will solidify their assets and I do believe a good portion of currency has been removed from circulation thus increasing the rate of RV. Its just a matter of opinion but thought i'd share it.