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US buying oil with RV'd Dinar??


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Hey Keep !! Have you been able to find anything any newer than that April, 2007 article? I read that and really enjoyed it, but that date kept bothering me. After all, that was before the meltdown of 2008.... Nothing detrimental implied, just wondering if there is anything more recent to see how the events of 2008 would have effected all the statements that were made.

Only one thing I didn't agree with to some extent was about the Fed. I happen to believe if Ron Paul was president and the IRS and Fed done away with AND we used gold or silver or something of value to back our currency, our dollar could remain as the world's currency for the forseeable future. That would make me a happy man to see my grandbabies wouldn't be slaves to ANYONE to pay for the rediculous indebtedness our government has gotten us into over the years, with the current administration being the worst, IMO.

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Im sure that everyone at some point has read the whole "economists" view on how we will cash in our dinars in the states.....well part of that whole explanation is based on the fact that we will be us

Hi keep Thank you for the excellent points being made. I can attest to several of your comments as being spot on. Saddam was planning on breaking out of the OPEC clan and demand the euro for pay

It would be a nice thought but central banks dont buy and sell currency for profit....only to manage monetary policies....and it seems China doesnt want our money anyways since they want to rid their

Excellent Thread and posts. Thought provoking and refreshing to see that some people really do have a grasp on reality. Jim1cor13 thank you for your insights and thought provoking post. Good discussions and rebuttals. DV needs more of these types of discussions. Keep thanks for starting an interesting and informative thread and the time involved with all your answers.

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I read your several posts and in fact read everyone else's posts as well. There are lots of assumptions that are pure speculation as I see it, all of which has little to do with the current situation. I gave you a simple solution to the Iraqi Dinar for oil conundrum. Do you really think it makes any difference to us if we send dinars to Iraq for their oil? It will all get adjusted into USD one way or the other. To me you are making a mountain out of a molehill. Besides we really don't know if we are holding any dinars except that rumors say we have trillions. This whole discussion could be meaningless academic nonesense which is why I classified it as MM. Also, others have posted that the US will broker oil at the going rate while buying it for $33 a barrel. Why is that not possible according to you? That is a perfect option for a guy like OBama and his Chicago Mafia connections. He will just make a Czar of Oil, probably Emanuel.

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I read your several posts and in fact read everyone else's posts as well. There are lots of assumptions that are pure speculation as I see it, all of which has little to do with the current situation. I gave you a simple solution to the Iraqi Dinar for oil conundrum. Do you really think it makes any difference to us if we send dinars to Iraq for their oil? It will all get adjusted into USD one way or the other. To me you are making a mountain out of a molehill. Besides we really don't know if we are holding any dinars except that rumors say we have trillions. This whole discussion could be meaningless academic nonesense which is why I classified it as MM. Also, others have posted that the US will broker oil at the going rate while buying it for $33 a barrel. Why is that not possible according to you? That is a perfect option for a guy like OBama and his Chicago Mafia connections. He will just make a Czar of Oil, probably Emanuel.

Well of course it is based on the assumption that we hold massive amounts of dinar and thats how we will be getting the dinar back to Iraq but that was kinda the whole point.....because I personally dont buy into the entire "economists explanation" of how the RV exchange would work and so many people bank on that fact and the explanation just cause it sounds good....so this post was kind of more fuel to the fire of how it doesnt sound very feasible....of course I dont think that buying oil cheaper then usual is not possible....Just making the point that it doesnt make much sense, and seems counterproductive and hypocritical for the US to directly use our dinar for buying oil....

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Finally a good common sense quote. This is so simple and as usual Keep has to confuse it with conspiracy theory junk of Saddam wanting to trade in Euros. Where did that rumor come from? If that were the case, we should be invading Iran for switching to the Euro. As I said, this is so simple. The US sends their dinars to Iraq and Iraq sends USD back. Then US buys oil with USD and keeps the currency moving. It is amazing how figures can lie and liars can figure. It's really called mental, masturbation.

There is no theory that Sadam was making great progress in getting OPEC to only accept Euros in payment for OPEC oil.

That is common knowledge for anyone who has done any research on the ME and OPEC in the last decade.

It wasn't the top story in the pablum and pap of the mainstream media, as this news, pre chewed and partially digested is enough to cause panic shedding of USD reserves in favor of replacing them with Euros.

This is not a good thing. If you do not understand that, please read again; slower.

If anything, the US would allow the CBI to retire Dinars held by the UST in exchange for US oil purchases, as an exception to the USD being the accepted reserve for OPEC purchases..

There is no benefit for the CBI to repurchase dinar that still carries Sadam era hyper inflation at face value with USD.

Consider the UST use of Dinar for discounted oil the TARP of the Middle East.

The bad debt swap must be beneficial for both.

You really need to at least try to understand the concepts of the discussion before diving into the deep end.

Google is your friend.

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Its not a conspiracy....Saddam was demanding euros for oil......if you havent figured it out, Im not much into conspiracy theories....did you happen to read the link I provided?? Or just skip right to the comments?? We cant touch Iran right now.....believe me, if we could they would invade Iran but they have some pretty big allies behind them and we are going to need more of a reason to go in there.....take some time to read the link before inserting foot in mouth.....its not just a random made up story.....I try to stick to the facts.....thanks for ur useless comments though!!

So are you trying to say that the US govt will use physical dinar in holding to send to Iraq for the direct purchase of oil?? You were talking about the fed reserve and people getting cash or whatever but im not sure how that applies to the explanation that everyone wants to believe about when the RV happens, that our physical dinar will be cashed in, and then will be sent directly back to Iraq through the purchase of oil......that is what this post was about.....

Never go back to Iraq. They do not want large notes, so why send back to be destroyed. It will be destroyed in the US.

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Thanks for starting a great topic Keep!...some great responses on both sides of the argument...I have always had issues with..."the US will use the dinar to purchase oil"...for the exact reasons Keepm has expressed....It also doesn't work as "credit" against oil purchases...and at $33 per barrel? Here is why...in the simplest terms..it would mean that Iraq would not be getting any revenue for their oil...ever...lets look at their production which is currently less than 3 million barrels per day...so for the year they are able to produce roughly 1 billion barrels...lets say the US alone (remember there are several other countries that are said to have large holdings of dinar) has 1 trillion dinar (which is a very low estimate for what we as speculators hold) and the dinar RV's to 1 to 1 which means we have $1 trillion in credit and using $33 per barrel they would owe us 30 billion barrels of oil...

Iraq's oil production makes up 95% of it revenues...but they are going to owe us 30 years worth of production on credit...meaning they get no revenue at all...and that is just for the US...there are other counties that are rumored to have dinar as well...so how can Iraq survive with this strategy?

So I would agree that the dinar we hold or the Gov't holds can't be exchanged for oil...and if not how does the CBI cover it...it is the CBI's debt...and at the end of the day they have to cover it.

It's a great debate and discussion!

A couple of others I would like to get into would be to discuss the removing of the zeros....and peoples claims that this is just removing the large notes from circulation and that they have been doing this for a while.

Also, peoples claims that we can use fractional reserve banking to cove the cost of the RV.

Thanks for starting the tread Keep!

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If in fact the world keeps buying oil with Dollars, perhaps the countries holding dinar will simply 'cash in' themselves, buying freshly minted US currency in exchange for their dinar holdings. The dinars come here, where we become even MORE invested in Iraq, her oil reserves, and production capability.

Just like our government can get away with the sale and distribution of carbon credits for the emission of domestic companies, they could offer oil credits in exchange for increase 'tax' revenue (discounted, of course). That would allow them (USG) to send the Dinar home, keeping the value of it here in the States. While the government wouldn't be buying oil directly, they would still be capitalizing on the IQD for US$ for oil exchange.

Thoughts?

gbosh

The world order has been here a long time... its camouflaged AKA: US Government... We all believe we are free and to an extent we are... If you put a mouse in a cage but do not close the door... feed him and he has a great life better than any he could find outside of the cage does the mouse stay or leave? When the mouse family has no food AKA money in this world government they are given food stamps and able to survive. In other cages (Places on the planet) this same mouse family would not be taken care of so well.

It is my believe that we have been under-control as a people for a long time! as-long as our government exists we have the following: A good way of life. however i trade of is this... Constant war to anyone that challenges our way of life.... The whole cold war... i know many Russians they to this day believed that they had a system that challenged ours on many levels... they wanted many of the same things for their people. They did not want to Nuke us of the plant any more then we wanted them nuked...

I think it came down to the Hilton competing with the days inn... both offered great rooms and a great vacation package... however both want to be the best and want all the business..... Thus the cold war!

It is my belief that is does not matter who it is or where you are! The people that have the money control the Hilton and the days-inn... we just rent a room! If we buy a house it can be taken from us to build or widen a road.... the only thing we are truly giving is: The perception that our hotel is the greatest in the world and they we must die for it... Money is the root of control and is the reason we have lost the fight... The new world order has already taken over it is not like we have read it it’s not a world order we can see or touch... it’s a belief it a way of life... is the raising of people to believe that we are the best and everyone in the word so do as we do and act as we act....

Face it we lost to the world order before any of us were even born.... our fathers fathers lost that fight... it was a battle fought so well the losing side never even realized that they lost....

The victor of the battle speaks very powerful and compelling words such as: Freedom, democracy, glory, These words a very compelling and will bring many people in ready to fight and lay down their lives for....

It is my belief that the best way to control the mice is to make them believe that it was their choice and they are not forced... and give them the feeling they are free and give them a good way of life...

when these conditions are met you will have the strongest mice army the world has ever known.... they will be ready and willing to shed blood for the 3 words above: Freedom, democracy, glory

what so great about his method of control is the it spreads like a cancer other nations see how well it works and join Nato and other controlling organizations and try to model after our HOTEL... remember you don't have to force people to do things...

You don't have to force men and women to dig ditches and to kill and to lay down and die! when people believe in the cause they have been known to strap bombs to their chests! they have been known to kill harmless and innocent people.. the cause is very powerful and compelling and many nations have causes that do not align with ours Thus we have conflict that escalates to war....

Now i am not Anti- American in anyway i love my nation however i have been and seen the world and i know a few things! We are not a free as we are lead to believe! we do live better than most! We the mice family are safe as-long as we have more bombs than anyone else....

We are built upon false freedom and false safety! However once the world is converted to democracy we will be under a world control this is all happening right now! people we don't know all over the world are standing up to try to achieve a better way of life like ours and they will get it however it will cost them the same amount it has cost us!

God bless us all in the US and rest of the world! do not reject the world government it is not all bad it will basically expand our mouse cage to the rest of the world over time! I just hope and pray that many more do not have to suffer and die for it...

I believe in a word with one government and no boarders... were people are not called Mexican because they come from there! or Iraqi because they come from there... i see the day to you can be born anywhere and have the same freedoms and rights as us!

the one world government will allow us to blend and a planet and forget our differences... I just hope the cost does not out-weight the benefits...

Imagine how much better our world would be if we all worked toward a common goal! Face it a new world order is the best thing this planet could ever realize

This new world order may or may not be controlled by the USA the US may have to fail for it to work because it is not allowed due to our constitution. This document while very good and very important was created in a time when world control was not possible… we could not go to England in 2-4 hours we could not get to any spot on the planet in hours. Face it the word has changed forever and we are governed by obsolete government… When a computer get old and no longer does what you need it to do you replace it with something better.

I think we should take what we have and use it as a draft to create something new that works in these times… this 200 year old document seems to work less and less and in 500 years when we are on the moon and mars… it does not work at all!

Please do not bash me if you do not agree!

The planet must unite under a new constitution one that works for all nations one that is for the people of the planet!

This is happening everyday but it will take time and money and lives to happen….

Once this happens the cage will be expanded but the people with money will still be in-control however the cage will be much bigger!

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I like this circulating of the notes idea:

The US send IQD to the CBI in exchange for USD. The CBI destroys the bills.

The CBI has semi-depleted reserves, but, the US than send the same amount of USD once in the reserves back to the GOI for purchases of crude. This replenishes the reserves.

CBI wins by having a depletion of overall money supply.

USD wins by having basically crude IQD credits to receive oil.

Now, the US would know better than to use all IQD to perform these functions as it would cripple the economy & banking industry within their country. Thus the reasonable reduced rate theory.

This process would drive the demand for USD which upon all exchanges = demand.

USD is a free-float currency on the FX market. So, the heightened trading back and forth would keep the value up.

The raising of the exchange rate reduced the costs of imports into the country. This allows for the tariffs to be implemented as the economy would be able to support it. Buying power is raised which means citizens can afford goods, services, etc if available. Common problem is, the lack of a private sector. They'll have the buying power, but not enough goods to buy.

Foreign investors will see this as an opportunity and flock to the country and setup shop. They'll profit from offerign their goods & services to the citizens. They'll need to hire working staff, so this overall will reduce unemployment & poverty.

Tax reform may occur and the GOI will create revenue from the taxes from foreign investors, their own people based upon employment, and still receive revenue from crude exports.

Imagine if the US suddenly had the exportation capabilities of the M.E. with our current system in place. Wow, this country would in a sense be quite rich.

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I like this circulating of the notes idea:

The US send IQD to the CBI in exchange for USD. The CBI destroys the bills.

The CBI has semi-depleted reserves, but, the US than send the same amount of USD once in the reserves back to the GOI for purchases of crude. This replenishes the reserves.

CBI wins by having a depletion of overall money supply.

USD wins by having basically crude IQD credits to receive oil.

Now, the US would know better than to use all IQD to perform these functions as it would cripple the economy & banking industry within their country. Thus the reasonable reduced rate theory.

This process would drive the demand for USD which upon all exchanges = demand.

USD is a free-float currency on the FX market. So, the heightened trading back and forth would keep the value up.

The raising of the exchange rate reduced the costs of imports into the country. This allows for the tariffs to be implemented as the economy would be able to support it. Buying power is raised which means citizens can afford goods, services, etc if available. Common problem is, the lack of a private sector. They'll have the buying power, but not enough goods to buy.

Foreign investors will see this as an opportunity and flock to the country and setup shop. They'll profit from offerign their goods & services to the citizens. They'll need to hire working staff, so this overall will reduce unemployment & poverty.

Tax reform may occur and the GOI will create revenue from the taxes from foreign investors, their own people based upon employment, and still receive revenue from crude exports.

Imagine if the US suddenly had the exportation capabilities of the M.E. with our current system in place. Wow, this country would in a sense be quite rich.

Finally someone who knows what he is talking about. Go DARIN. That's what I was trying to say. Thanks for the help.

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Jim, keep, et. al., finally a good discussion of the possibilities and questions surrounding this 'penny stock' investment. Thank You

Keep, that's one of the major 64,000 dollar questions regarding the dinar. WE DON'T KNOW and we won't til afterwards.

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I like this circulating of the notes idea:

The US send IQD to the CBI in exchange for USD. The CBI destroys the bills.

The CBI has semi-depleted reserves, but, the US than send the same amount of USD once in the reserves back to the GOI for purchases of crude. This replenishes the reserves.

CBI wins by having a depletion of overall money supply.

USD wins by having basically crude IQD credits to receive oil.

Doesnt that still leave no profit on oil from us for decades to come?

Never go back to Iraq. They do not want large notes, so why send back to be destroyed. It will be destroyed in the US.

Thats also one of my points...is that it doesnt make any sense...been told from a few smarty pants that the dinar will never see iraq again....another reason why that economists explanation is flawed...

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Doesnt that still leave no profit on oil from us for decades to come?

Thats also one of my points...is that it doesnt make any sense...been told from a few smarty pants that the dinar will never see iraq again....another reason why that economists explanation is flawed...

An interesting thing to consider... And another reason why it may "appear" the IQD for Crude is a sensible option.

The GOI only receives a small % of their exportation of crude. The rest is deposited in the DFI funds. So, in reality, they are already used to their revenue stream being limited.

What is released from the DFI fund is only used for necessities (So they say).

So, if they are able to survive on their limited revenue "NOW", why would they not be able to continue surviving upon their current revenue numbers in the future.

Think of the gas at the pump prices... We're groomed to pay higher prices and $1/gallon is likely out the window. If US citizens were capable of paying $2.50+/gallon, but in reality, at the price we were receiving oil was taxed heavily to make up the end price $2.50, the Govt. profits. We would not really be too phased by it, as we are paying prices we've become accustomed to.

The GOI would really be in a same boat. They're in the position to only receive a small % of funds from exports. As they take-in IQD for crude, they would reduce their overall money supply. The GOI would continue going forward receiving the same type of revenue in % terms as they draw in the 000s from the UST. However, at this point, the difference would be the exchange rate. Upon a new exchange rate, foreign investors would buy-into their country to build businesses & infastructure. This would create a demand for the IQD. Maybe they come out high based upon this thought to pad their own reserves.

Here is another kicker to consider. As the 000s are exchanged state side. The UST may hold onto them and the CBI would not have to worry about a depletion of their reserves until they started their own IQD for crude agreement. As things were to stabilize, productions increased, and so forth.. The IQD for crude would take action. The process going by, IQD for USD, USD for Crude... Which ever process maintains the value of the USD..

For some reason, I potentially for-see a "boom" such as if someone put their foot on a water hose that was on full-blast and held it there for quite some time as the back-pressure built up. That initial boom could be what we see for the next 2-3 years...

A lot of things are rather "stagnant" as if something was a hold-up.

(Laws being passed, 1170 program rate, and so forth...) Progress overall is slow, and upon what is needed to break that stagnant state, overall progress may go pretty fast.

As laws being passed and other things happening..

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An interesting thing to consider... And another reason why it may "appear" the IQD for Crude is a sensible option.

The GOI only receives a small % of their exportation of crude. The rest is deposited in the DFI funds. So, in reality, they are already used to their revenue stream being limited.

What is released from the DFI fund is only used for necessities (So they say).

So, if they are able to survive on their limited revenue "NOW", why would they not be able to continue surviving upon their current revenue numbers in the future.

Think of the gas at the pump prices... We're groomed to pay higher prices and $1/gallon is likely out the window. If US citizens were capable of paying $2.50+/gallon, but in reality, at the price we were receiving oil was taxed heavily to make up the end price $2.50, the Govt. profits. We would not really be too phased by it, as we are paying prices we've become accustomed to.

The GOI would really be in a same boat. They're in the position to only receive a small % of funds from exports. As they take-in IQD for crude, they would reduce their overall money supply. The GOI would continue going forward receiving the same type of revenue in % terms as they draw in the 000s from the UST. However, at this point, the difference would be the exchange rate. Upon a new exchange rate, foreign investors would buy-into their country to build businesses & infastructure. This would create a demand for the IQD. Maybe they come out high based upon this thought to pad their own reserves.

Here is another kicker to consider. As the 000s are exchanged state side. The UST may hold onto them and the CBI would not have to worry about a depletion of their reserves until they started their own IQD for crude agreement. As things were to stabilize, productions increased, and so forth.. The IQD for crude would take action. The process going by, IQD for USD, USD for Crude... Which ever process maintains the value of the USD..

For some reason, I potentially for-see a "boom" such as if someone put their foot on a water hose that was on full-blast and held it there for quite some time as the back-pressure built up. That initial boom could be what we see for the next 2-3 years...

A lot of things are rather "stagnant" as if something was a hold-up.

(Laws being passed, 1170 program rate, and so forth...) Progress overall is slow, and upon what is needed to break that stagnant state, overall progress may go pretty fast.

As laws being passed and other things happening..

Correct me if I'm wrong but I thought that. The DFI actually only holds 5% of their revenue and its to pay back kuwait......

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Correct me if I'm wrong but I thought that. The DFI actually only holds 5% of their revenue and its to pay back kuwait......

Uhm, no...

They currently have two accounts setup with the UST

1) for themselves and the 2nd) for Kuwait and their 5% reparations.

I believe they are restricted by a degree on the funds they are to acquire, withdraw, or receive from the DFI. This has limited them to use 100% of their revenues. They can only use a certain %, or amount from the DFI.

I recall this, because, some referred to Shabs as a "genius" so to speak as he started to sell IQD to draw in USD or other trade-able currencies to meet other expenditures.

It was one of the main "reasons" I always view the current foreign cash reserves to likely be under-valued "so to speak" as it would be indeed due for replenishment.

See, the debts & payments made by the GOI are used from the foreign cash reserves...

As per Scooter.... The replenishment is sort of on-going & also an overall need to completely replenish what was borrowed.

As I brought this up to Scoot, he went into the Executive orders and was talking about the DFI funds.

See, the DFI funds may replenish those reserves to what their true value should be..

The only # we see is $50 billion USD - but, in reality, maybe that value should be higher.

The CBI makes money from the "spread" (In the instance we understand it as of now would be 13 dinar) countless transactions add up.

Than, if we consider moving from Article XIV to VIII where they monetize their non-liquid assets.. Abiding by that article and replenishing their foreign cash reserves to their proper level from the DFI funds.. We could see our substantial R/V. --

But overall, I believe they are not receiving 100% of their oil export revenue. -- This is & has been UN regulated. One of the "other" reasons June of this month appears to be so good as June 30th comes and the UN protection is removed. Than it is on the hands of the U.S. due to their EO that were signed. US woudl have more leverage on deciding factors.

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An interesting thing to consider... And another reason why it may "appear" the IQD for Crude is a sensible option.

The GOI would really be in a same boat. They're in the position to only receive a small % of funds from exports. As they take-in IQD for crude, they would reduce their overall money supply. The GOI would continue going forward receiving the same type of revenue in % terms as they draw in the 000s from the UST. However, at this point, the difference would be the exchange rate. Upon a new exchange rate, foreign investors would buy-into their country to build businesses & infastructure. This would create a demand for the IQD. Maybe they come out high based upon this thought to pad their own reserves.

Hello Darin...hope you don't mind if I jump in...in the above you talk about reducing their money supply by taking in Dinar's for crude. Not sure if i understand...but are you saying as countries buy oil with IQD then Iraq would destroy that payment in order to reduce the money supply?...just looking to clarify...thanks

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Hello Darin...hope you don't mind if I jump in...in the above you talk about reducing their money supply by taking in Dinar's for crude. Not sure if i understand...but are you saying as countries buy oil with IQD then Iraq would destroy that payment in order to reduce the money supply?...just looking to clarify...thanks

Not necessarily destroyed, but removed from circulation. As it is not being circulated, it is not considered a liability to pay an exchange to.

You have to consider currency as a form of debt. As the currency is used as legal tender throughout the nation, the banks view it as debt because if a person wishes, they should be able to exchange it for another currency if they wished to do so. Drawing it in reduced the liability of having to pay an exchange to that currency note(s). Therefore, if crude were to be given in exchange of the currency, the foreign reserves would not really be impacted. The market basis its value upon the USD which keeps the demand for the USD high. Therefore, if the UST exchanged IQD for USD & than used the existing USD to pay for crude, the demand for USD remains, the foreign cash reserve level remains the same, and the CBI reduces the liability of IQD it has to account for. Some may argue simply that they're still giving away potential wealth/revenue. Well yes they are, but they're also using that wealth/revenue to remain stable and improve their own national economy. See, as the exchange rate is increased, the citizens of their own country have increased purchasing power. (Meaning, what they had in the pocket pre-R/V will now help them buy more post-R/V as the costs of importing goods will have decreased. The Govt. can then implement the tariffs to create revenue stream from imports. As their people have more wealth, they would also implement or reform their tax structure. Now, they're receiving taxation from imports, business, and people. The importers, citizens, and busineses would not complain as they would all still benefit.

Businesses would be able to offer goods & services to people generating profits.

Importers would generate revenue from buyers

Citizens would not only have a bump in wealth, they would likely have higher chances for jobs as the market allows it. As all this goes hand-in-hand-in-hand, the economy will "BOOM."

See, foreign investors are very skeptical at the moment from setting foot and doing business for multiple reasons. The rewards do not exceed the risks.

Risks = stability, security, infastructure, and potential corruption.

I would fore-see a R/V to reduce all risks which would mean the rewards outweigh the potential risks.. Making doing business within the country reasonable.

How would it reduce risk?

Putting people to work would increase stability, reduce unemployment, and also reduce poverty

The people would demand security, which would also ultimately mean some people ousting potential security threats.

Contracting for the re-building of infastructure would be easy upon fixing those two problems.

Corruption "may" be reduced because the wealthy would be even more wealthy... However, I believe that to a certain extent corruption will always exist everywhere.

What kind of businesses would open up?

Well, at first, I would say service businesses that accommodate locals and foreigners such as hotels.

Construction companies to help rebuild the infastructure (roads, electricity, and water)

Markets for goods (clothing, tools, supplies)

Restaurants - providing food

As these businesses open, they'll require a working staff.

This is all very possible w/o a R/V, but, it would take "time" which could amounts to years and potentially decades to achieve desired results.

A R/V could give it a boost...

I'm not saying this is how it goes down, just how I see it working.

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Great thread, Keep. When I started buy dinar I never believed that IQD would be used for the purchase of oil for the reasons already addressed, i.e. petrodollars. Since I have never seen anything other than rumors regarding the UST holding dinar, which I also believe is just the runmor morphing of the $5 bn we flew out of Iraq for their safekeeping into magical IQD reserves, I think its the Fed Reserve that has that money and was giving them $120 million per year in interest too. it was always my opinion that we would build up reserves from the IQD we all hold and any additional, if needed, that our government would acquire through trade w/ Iraq that did not include oil .

I would be dumbfounded, but not surprised, if the U.S. did not supply the largest quantity of imports to Iraq after liberating the country from dictatorship. I do see Russia, China and France dipping their beaks into Iraqs need for trade goods even though they all sit on the U.N Security Counsel and were going to vote to release Saddam from the sanctions of the 90's just prior to the invasion. So IMO, our dinar will never see Iraq again unless they do in fact redemominate. That would be the worst case scenario that has been in play since the beginning and would be a good reason why the UST has no current IQD reserves.

A little off topic, but wouldn't it be a great benefit for companies to get into Iraq right now while their currency is so cheap? A low exchange rate benefits the exporting nation and aside from oil bought with petrodollars, Iraq is going to be an importing nation for the near future. A high rate in relation to the exporting nation would be to their benefit. Instead of waiting for a RV, I would be getting over there right now if I were providing them imports and take advantage of the lower cost and greater profit margin of doing business with them while their currency is so low in comparison to the dollar.

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Not necessarily destroyed, but removed from circulation. As it is not being circulated, it is not considered a liability to pay an exchange to.

You have to consider currency as a form of debt. As the currency is used as legal tender throughout the nation, the banks view it as debt because if a person wishes, they should be able to exchange it for another currency if they wished to do so. Drawing it in reduced the liability of having to pay an exchange to that currency note(s). Therefore, if crude were to be given in exchange of the currency, the foreign reserves would not really be impacted. The market basis its value upon the USD which keeps the demand for the USD high. Therefore, if the UST exchanged IQD for USD & than used the existing USD to pay for crude, the demand for USD remains, the foreign cash reserve level remains the same, and the CBI reduces the liability of IQD it has to account for. Some may argue simply that they're still giving away potential wealth/revenue. Well yes they are, but they're also using that wealth/revenue to remain stable and improve their own national economy. See, as the exchange rate is increased, the citizens of their own country have increased purchasing power. (Meaning, what they had in the pocket pre-R/V will now help them buy more post-R/V as the costs of importing goods will have decreased. The Govt. can then implement the tariffs to create revenue stream from imports. As their people have more wealth, they would also implement or reform their tax structure. Now, they're receiving taxation from imports, business, and people. The importers, citizens, and busineses would not complain as they would all still benefit.

Businesses would be able to offer goods & services to people generating profits.

Importers would generate revenue from buyers

Citizens would not only have a bump in wealth, they would likely have higher chances for jobs as the market allows it. As all this goes hand-in-hand-in-hand, the economy will "BOOM."

See, foreign investors are very skeptical at the moment from setting foot and doing business for multiple reasons. The rewards do not exceed the risks.

Risks = stability, security, infastructure, and potential corruption.

I would fore-see a R/V to reduce all risks which would mean the rewards outweigh the potential risks.. Making doing business within the country reasonable.

How would it reduce risk?

Putting people to work would increase stability, reduce unemployment, and also reduce poverty

The people would demand security, which would also ultimately mean some people ousting potential security threats.

Contracting for the re-building of infastructure would be easy upon fixing those two problems.

Corruption "may" be reduced because the wealthy would be even more wealthy... However, I believe that to a certain extent corruption will always exist everywhere.

What kind of businesses would open up?

Well, at first, I would say service businesses that accommodate locals and foreigners such as hotels.

Construction companies to help rebuild the infastructure (roads, electricity, and water)

Markets for goods (clothing, tools, supplies)

Restaurants - providing food

As these businesses open, they'll require a working staff.

This is all very possible w/o a R/V, but, it would take "time" which could amounts to years and potentially decades to achieve desired results.

A R/V could give it a boost...

I'm not saying this is how it goes down, just how I see it working.

I do agree that money=debt...but the mechanics of it are actually a lot more complicated than the scenario you presented. Let's look at just a couple of the pieces of it...first for the UST to exchange the IQD for dollars it would need to grow our current M2 money supply by well over $1 Trillion...and this would have to be new money...which if we used that to buy oil it would food the market...in addition the amount would equate to roughly 10 billion barrels of oil..which would take Iraq several years to produce...and that is just to our country...what happens to the other countries that hold IQD?...do you think they will exchange them for the US dollar as well?

Now, if they take the notes out of circulation...they end up with no revenue to run the country (95% currently comes from oil sales)...Lastly, if you look at their current money supply of 27 trillion, they really need to get this back into the billions (which is where it was when the IQD was strong) and to that they would need to get rid of over 20 Trillion dinar...otherwise it won't even make a dent in their money supply.

thanks

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