Iraqi bank assets not sufficient for major foreign investment projects

[k98nights]

Iraqi bank assets not sufficient for major foreign investment projects

12/07/2011 13:41

Baghdad, July 12 (AKnews) – The assets of Iraqi backs are not large enough to make their use by international companies realistic, resulting in major investment projects being impeded, the Iraqi Electricity Ministry said today.

Spokesman Musab al-Mudarres told AKnews: “Iraqi banks cannot provide financial guarantees to foreign companies because their capital is below the guarantees expected by corporations."

"The Ministry of Electricity has submitted a request to the Council of Ministers about the need to facilitate banking transactions and involving well-known foreign banks in the guarantees."

By Jaafar al-Wannan

RN\PS

http://www.aknews.com/en/aknews/2/251469/

[tommyboy]

If they RV'd the dinar think of how much they would have. LOL

[Dalite]

If they RV'd the dinar think of how much they would have. LOL

If they don't have the reserves to back investments, what exactly would you suggest they use to back the RV?

[ftruck7]

If they don't have the reserves to back investments, what exactly would you suggest they use to back the RV?

OIL?

[vrnorth]

This may just be something put out by HSBC or Citi that are moving into Iraq.

[Don & Rocio]

Thanks for the post K98. Can I get one of those Cubans?

[Prim]

OIL?

True, if they RV to say (just a number) $3.00 for 1 Dinar. We then pay 3 time more for oil. A win win for them and Dinar holders. Am I wrong??

[txwaterfowler]

OIL?

So how do you use something as a reserve to back your currency when:

1) You are not in possession of it. It is still in the ground!

2) You don't have a precise count of how much you have. There are best and educated estimations but that's it. Again, you don't have possession.

3) It is a consumable resource. Gold and silver can be bought and sold, turned into things, etc. but it always remains the base element. It can be turned into bullion and stored in a bank vault and has a clear world market value. Oil is burned or processed to a point where the oil does not exist anymore and the total amount available is always being reduced.

The only logical way to use oil as a currency backer is to use the oil to sell for USD or another backed currency to back your own currency, or trade your oil for commodities such as gold, silver, platinum, etc. to use as currency backing. Which takes time and cannot support an over night RV, but rather a gradual increase over a long period of time.

The thought that oil makes Iraq rich is something I hear touted all the time, and it makes no sense. Many countries have large oil reserves in the ground, but due to the inability to retrieve it or poor political climates, the currency remains subpar at best. A perfect example of this is Mexico and Russia. Both have large amounts of oil but due to poor political climates they remain 3rd world countries and are by no means considered rich countries. Negative me to death if you want, but this oil backing the currency nonsense makes no sense! It's just another pumper mechanism to generate more sales. You can't just say, " Yesterday my currency is worth this, but today it's worth this much more" without backing it up with something tangible to prove the value.

True, if they RV to say (just a number) $3.00 for 1 Dinar. We then pay 3 time more for oil. A win win for them and Dinar holders. Am I wrong??

Why would we buy oil from them at that point when other countries are selling it cheaper per barrel? And I'm sorry, I don't want our oil companies paying 3 times as much for oil. Gas prices and the cost of goods and services would br a nightmare. Makes no sense!

Edited July 12, 2011 by txwaterfowler

[dhr05b]

So how do you use something as a reserve to back your currency when:

a) You are not in possession of it. It is still in the ground!

You don't have a precise count of how much you have. There are best and educated estimations but that's it. Again, you don't have possession.

c) It is a consumable resource. Gold and silver can be bought and sold, turned into things, etc. but it always remains the base element. It can be turned into bullion and stored in a bank vault and has a clear world market value. Oil is burned or processed to a point where the oil does not exist anymore and the total amount available is always being reduced.

The only logical way to use oil as a currency backer is to use the oil to sell for USD or another backed currency to back your own currency, or trade your oil for commodities such as gold, silver, platinum, etc. to use as currency backing. Which takes time and cannot support an over night RV, but rather a gradual increase over a long period of time.

The thought that oil makes Iraq rich is something I hear touted all the time, and it makes no sense. Many countries have large oil reserves in the ground, but due to the inability to retrieve it or poor political climates, the currency remains subpar at best. A perfect example of this is Mexico and Russia. Both have large amounts of oil but due to poor political climates they remain 3rd world countries and are by no means considered rich countries. Negative me to death if you want, but this oil backing the currency nonsense makes no sense! It's just another pumper mechanism to generate more sales.;

Not to be 'that guy,' but oil IS a renewable resource, and Iraq would be selling oil futures - not barrels of crude today or next week (this would still take time, just not years)

[txwaterfowler]

This may just be something put out by HSBC or Citi that are moving into Iraq.

So, since the article does not mesh with what the GO RV crowd wants to hear, it is smoke and mirrors? Honestly, do you think the Iraqi media, the banks, Iraqi investors, or Iraq really cares enough about us and our investment to fabricate lies? What would that gain them?

Not to be 'that guy,' but oil IS a renewable resource, and Iraq would be selling oil futures - not barrels of crude today or next week (this would still take time, just not years)

Fossil fuels are a renewable resource? Please explain.

[dhr05b]

Fossil fuels are a renewable resource? Please explain.

It's abiotic theory vs. biotic

There are several studies that suggest oil is replenishing at a much faster rate than is commonly accepted. Ascribing to the abiotic theory lends credence to the idea that 'fossil-fuel' is more of a political term. Look into it, I'm not saying I understand it 100% - or that it should be accepted as truth, I just got bored at work the other day and stumbled across it.

So having made that last qualifier, I suppose I should retract my first statement that oil IS (definitively) a renewable resource. However, after reading some of the subject matter, I'm inclined to BELIEVE that oil is a renewable resource.

[Alexyn1006]

True, if they RV to say (just a number) $3.00 for 1 Dinar. We then pay 3 time more for oil. A win win for them and Dinar holders. Am I wrong??

I can't say for sure that you're wrong, however, the latest info on gold that I've read as compared to currency regulations, states, from what I can gather, that the IQD will more than likely be tied to its gold.

[OhioTom1]

Tex.... good old common sense.. lets just hope they kick it in gear and start to maximize their "potential"!!!!!

Go "Potential"!!!

[drlewis]

Just for the record ..... I worked the oil field. And ROTFL my a** off ..... you honestly think they speculate on how much oil.they have. Hahahahaha. That's the funniest thing I have read on here.