Iraq money

[KrispyKreme]

Simple question: Lets say Iraq has 50 trillion dinar. I don't know the real number and it does not matter.

If the dinar revalues to 3.00 u s dollars

Does what they have wherever it might be: 150 trillion.

Just a simple minded man. Make it easy and I can understand.

[chara55]

You would be correct 3x50=150

[tamiflyer]

Simple question: Lets say Iraq has 50 trillion dinar. I don't know the real number and it does not matter.

If the dinar revalues to 3.00 u s dollars

Does what they have wherever it might be: 150 trillion.

Just a simple minded man. Make it easy and I can understand.

Correct. But how did they arrive at the 3 dollar range? That would be the question. Futures, fractional banking, ect? An RV and RD would have to work hand in hand here. JMMHO. GLTY and all. Go RV.

[Rome M]

Remember that not all of the dinars will be exchanged for USD, or any other currencies. Almost all of it, I believe 80%, is still in Iraq (IMO this is what CBI means when they say they have accounted for 80% of the currency in circulation). Now, the Iraqis are not going to exchange it for another currency, just as we do not exchange our dollars for Euros to buy our everyday items. Using your example of 50 Trillion dinars, this means that 40 trillion does not really need to be backed by physical cash money or goods for exchange; which leaves only 10 trillion that MAY have to be backed. Now, if there is some sort of oil for dinar deal between Iraq and the US, or any other country for that matter, then this will bring the 10 trillion down a good bit. I believe the US has some form of deal like this. After we give our dinars to the banks, and they give us the new rate, the dinars then go to the treasury. Here the treasuryy can do their deal and give Iraq their dinars back in lieu of oil at a extremely discounted price: much more than what it cost them to produce but much less than the going rate for oil. If they even settled half of the remaining 10 trillion dinar like this, then only 5 trillion needs to be actually backed by something tangible. And even this 5 trillion, not everyone is going to exchange their dinars on one day, it will most likely take years for the actual dinar to be replaced by their physical cash they are backed by. This gives Iraq ample time to support a generous rate that brings back the great losses they have endured since the UN sanctions. Remember, Iraqis holding dinar (including the CBI and Gov) at the time of the sanctions are today in the hole 3000 times over what they originally held. As proud a people the Arab world is, I am sure they have it worked out that they get their money back. Hell, look at Kuwait, still complaining about a few un accounted for dead bodies, artifacts, and whatnots. Trust me, Iraq WILL get their money back, even if it means either blessing or screwing everyone else. Luckily for us, the best way for them to win is to let us in on some of it as well.

..................JMHO........................

[happygilmore]

Simple question: Why is this in chat Logs

[1xtradinar]

RomeM, That is the best damned description of how it could unfold that I have read anywhere. Good Job with telling how this may go down. Step by step an analysis

I can understand and appreciate. As an older veteran I have strong feelings about our participation in the political unrest of another country. And though this

looks like "taking advantage" who is to know , which side of this, made out over time.

[keepmwlknfny]

Remember that not all of the dinars will be exchanged for USD, or any other currencies. Almost all of it, I believe 80%, is still in Iraq (IMO this is what CBI means when they say they have accounted for 80% of the currency in circulation). Now, the Iraqis are not going to exchange it for another currency, just as we do not exchange our dollars for Euros to buy our everyday items. Using your example of 50 Trillion dinars, this means that 40 trillion does not really need to be backed by physical cash money or goods for exchange; which leaves only 10 trillion that MAY have to be backed. Now, if there is some sort of oil for dinar deal between Iraq and the US, or any other country for that matter, then this will bring the 10 trillion down a good bit. I believe the US has some form of deal like this. After we give our dinars to the banks, and they give us the new rate, the dinars then go to the treasury. Here the treasuryy can do their deal and give Iraq their dinars back in lieu of oil at a extremely discounted price: much more than what it cost them to produce but much less than the going rate for oil. If they even settled half of the remaining 10 trillion dinar like this, then only 5 trillion needs to be actually backed by something tangible. And even this 5 trillion, not everyone is going to exchange their dinars on one day, it will most likely take years for the actual dinar to be replaced by their physical cash they are backed by. This gives Iraq ample time to support a generous rate that brings back the great losses they have endured since the UN sanctions. Remember, Iraqis holding dinar (including the CBI and Gov) at the time of the sanctions are today in the hole 3000 times over what they originally held. As proud a people the Arab world is, I am sure they have it worked out that they get their money back. Hell, look at Kuwait, still complaining about a few un accounted for dead bodies, artifacts, and whatnots. Trust me, Iraq WILL get their money back, even if it means either blessing or screwing everyone else. Luckily for us, the best way for them to win is to let us in on some of it as well.

..................JMHO........................

JUst because they might not be cashing in the entire money supply doesnt mean they dont have to back it.....seems the CBI is following 100% backing of the currency right now with the 50 billion in reserves.....but regardless of where the currency is, the country who printed it is still responsible for backing the value of it....

Correct. But how did they arrive at the 3 dollar range? That would be the question. Futures, fractional banking, ect? An RV and RD would have to work hand in hand here. JMMHO. GLTY and all. Go RV.

And in Iraqs case the RD would probly have to come first to see that 3 dollar range....

[goldengoose]

Remember that not all of the dinars will be exchanged for USD, or any other currencies. Almost all of it, I believe 80%, is still in Iraq (IMO this is what CBI means when they say they have accounted for 80% of the currency in circulation). Now, the Iraqis are not going to exchange it for another currency, just as we do not exchange our dollars for Euros to buy our everyday items. Using your example of 50 Trillion dinars, this means that 40 trillion does not really need to be backed by physical cash money or goods for exchange; which leaves only 10 trillion that MAY have to be backed. Now, if there is some sort of oil for dinar deal between Iraq and the US, or any other country for that matter, then this will bring the 10 trillion down a good bit. I believe the US has some form of deal like this. After we give our dinars to the banks, and they give us the new rate, the dinars then go to the treasury. Here the treasuryy can do their deal and give Iraq their dinars back in lieu of oil at a extremely discounted price: much more than what it cost them to produce but much less than the going rate for oil. If they even settled half of the remaining 10 trillion dinar like this, then only 5 trillion needs to be actually backed by something tangible. And even this 5 trillion, not everyone is going to exchange their dinars on one day, it will most likely take years for the actual dinar to be replaced by their physical cash they are backed by. This gives Iraq ample time to support a generous rate that brings back the great losses they have endured since the UN sanctions. Remember, Iraqis holding dinar (including the CBI and Gov) at the time of the sanctions are today in the hole 3000 times over what they originally held. As proud a people the Arab world is, I am sure they have it worked out that they get their money back. Hell, look at Kuwait, still complaining about a few un accounted for dead bodies, artifacts, and whatnots. Trust me, Iraq WILL get their money back, even if it means either blessing or screwing everyone else. Luckily for us, the best way for them to win is to let us in on some of it as well.

..................JMHO........................

'Rome M',

Good evening!

That was an excellent explanation and opinion piece!

Keep up the good work.....

Thank you,

GG

[Rome M]

JUst because they might not be cashing in the entire money supply doesnt mean they dont have to back it.....seems the CBI is following 100% backing of the currency right now with the 50 billion in reserves.....but regardless of where the currency is, the country who printed it is still responsible for backing the value of it....

And in Iraqs case the RD would probly have to come first to see that 3 dollar range....

Yes Keep, that is correct. They are doing the 100% back up as they should. I for one think this is how it should be, EXCEPT in our investment's case LOL. I am not sure if they are going to continue this way, it is just an idea I had up there in the noggin. It does make some sense to do it this way (I mean hell, what is the chance EVERY Iraqi will want to exchange and leave their country?), but who really knows what guidelines these guys are willing to bend in order to get their money back. I for one would like to see it work this way, and this is the one way I come back to at times when things look bleak for our investment. It is a rationalization and a best case scenario which is possible, just like the dreaded LOP is possible. I guess consider these the best and worse case scenarios.

PEACE

[KrispyKreme]

Thank you gentlemen.

I was just trying to see how they would have enough money to pay all of the investors.

[Rocker]

50 Trillion will still be 50 trillion in iraq , it will be worth 3 times that if it is figured in USD.

[Dalite]

50 Trillion will still be 50 trillion in iraq , it will be worth 3 times that if it is figured in USD.

That is correct..

It would take 150 trillion USD to back a RV of 3:1 with a M2 of 50 trillion Dinar.

Now the problem here, as loose as the Federal Reserve is with the Heidlebergs, they haven't printed anywhere enough for the US to have a tenth of that in circulation.

So, the question is, how do you support a RV that carries a liability to Iraq of 150 trillion USD, when all the cash of the G20 nations together would most likely not cover more than half that much?

Do you write them a check postdated for 2020 AD and hope to have sufficient funds to cover it by then.

Yes, it is only 50 trillion Dinar. If you say it fast enough, it doesn't seem like much to have to cover @ 3:1..

[milo825]

This is just for the conspiracy theorist but does anyone recall the vast amount of 100 dollar bills we printed that were incorrect and essentially written off as toilet paper? Wouldn't it be funny if the were chilling out in iraqs reserves. Which I think theyre being stored in a storage unit down the street from my house until they can all be inspected but who knows just some food for thought.

[Darin]

Yup! - Upon a R/V, the citizens would start using their national currency more frequently. - The CBI would have to consider backing that particular currency, but, they would also know that it is not like they are going to run to the CBI and cash out for USD. Also, since the dollar is still "king" on the street, upon a R/V, the banks could easily draw in all the flow of USD in circulation over there basically removing the threat of dollarization. I would love to see the figures and or #s of how much USD is in circulation over there. (Amount in circ. & overall value).

[RodandStaff]

JUst because they might not be cashing in the entire money supply doesnt mean they dont have to back it.....seems the CBI is following 100% backing of the currency right now with the 50 billion in reserves.....but regardless of where the currency is, the country who printed it is still responsible for backing the value of it....

Just a simple question for you keep... how is our currency backed, in your opinion? Thanks! GO RV Already Baby!!!

[Dalite]

Just a simple question for you keep... how is our currency backed, in your opinion? Thanks! GO RV Already Baby!!!

We sell treasury bonds to back each dollar ( for the most part), and pay interest on the bonds, which is the responsibility of the taxpayers.

We have a debt backed monetary system; in order to show economic growth, we have to go deeper in debt.

If we cannot pay interest on the debt, we go into default; that is what the Debt Ceiling is about.

Our debt ceiling is an indication of the taxpayer's ability to pay future debt. If our population size, demographics, our GDP project only X amount of possible debt service capability.

We are wise to limit the amount of we create to the amount future generations can service.

We don't promise to cover a bet that is a few thousand times higher than either the bond backing we have in place, nor the ability of all future generations to service the interest on.

This is the nature of the science of mathematics.

It gives us the ability to project future numbers based on finite data.

Our problem is believing the facts put before us.

Thank you gentlemen.

I was just trying to see how they would have enough money to pay all of the investors.

That depends on which avenue they take.

They could cover a RD, with RV to follow.

As far as a straight up RV; not so much..

[Darin]

Just a simple question for you keep... how is our currency backed, in your opinion? Thanks! GO RV Already Baby!!!

Each dollar is in the form of debt...

To put it into perspective.

If all government debt & private debt (private as you and I) was paid off... The USD would be non-existant.

So chew on that! And think about how many USDs are in existance.. A large amount...

[RodandStaff]

We sell treasury bonds to back each dollar ( for the most part), and pay interest on the bonds, which is the responsibility of the taxpayers.

We have a debt backed monetary system; in order to show economic growth, we have to go deeper in debt.

If we cannot pay interest on the debt, we go into default; that is what the Debt Ceiling is about.

Our debt ceiling is an indication of the taxpayer's ability to pay future debt. If our population size, demographics, our GDP project only X amount of possible debt service capability.

We are wise to limit the amount of we create to the amount future generations can service.

We don't promise to cover a bet that is a few thousand times higher than either the bond backing we have in place, nor the ability of all future generations to service the interest on.

This is the nature of the science of mathematics.

It gives us the ability to project future numbers based on finite data.

Our problem is believing the facts put before us.

That depends on which avenue they take.

They could cover a RD, with RV to follow.

As far as a straight up RV; not so much..

Wow... I guess the quote I once heard applies here..."your intelligence is measured by the people you surround yourself with"... I am looking pretty intelligent thanks to many of you here!! I would like to propose a theory... if our currency isn't backed by precious metals, or something of tangible value other than basically a worthless paper note and a promise to "make it good" ... why should it be any different for Iraq? I'm sure ya'll will have a real intelligent answers... but hey, lets keep it basic here... could it not RV at a decent rate just because "someone" says it can??? Remember keep the answers brief if possible, yeah, I know... that's hard to do for me too!

Each dollar is in the form of debt...

To put it into perspective.

If all government debt & private debt (private as you and I) was paid off... The USD would be non-existant.

So chew on that! And think about how many USDs are in existance.. A large amount...

Thanks Darin... kinda confirms the theory I am asking about.

[Dalite]

Wow... I guess the quote I once heard applies here..."your intelligence is measured by the people you surround yourself with"... I am looking pretty intelligent thanks to many of you here!! I would like to propose a theory... if our currency isn't backed by precious metals, or something of tangible value other than basically a worthless paper note and a promise to "make it good" ... why should it be any different for Iraq? I'm sure ya'll will have a real intelligent answers... but hey, lets keep it basic here... could it not RV at a decent rate just because "someone" says it can??? Remember keep the answers brief if possible, yeah, I know... that's hard to do for me too!

Thanks Darin... kinda confirms the theory I am asking about.

Iraq shows a M2 of 59 trillion Dinar (approx 59 Billion Dollars) as of April 2011. The CBI recently announced they will start selling Bonds. This is what they have to pay for a RV. If confidence is high, Bond sales will be successful in building reserves. If ther is little stability, security or minimum infrastructure, it is difficult to build as much confidence as a nation that doesn't have to face those problems can.

I have recently seen a graph of world Gold Reserves, and the US has respectable gold reserves as well. Our monetary system is backed by the confidence of those willing to buy our debt. Our debt is the amount of USD; what we are responsible for. This is the amount of money printed. The bonds we have sold is the promise we made, and the interest we pay on those bonds is the continuing commitment.

If confidence fell sharply, the Federal Reserve, through UST may have to buy back those bonds that have matured and not renewed. If this happens, and other bonds are not sold to offset the repurchase, the UST hast to remove that amount of currency from circulation; which decreases out debt by that amount.

If all confidence ceased, we would have to repurchase our debt, and basically render our monetary system to coin only.

Congress could decide to mint 2,5,10, etc. Coin, and bypass the Federal Reserve. When JFK threatened to do this, not only was he eliminated from the picture, coin started to sharply lose silver content, and shortly thereafter were copper and zinc.

A more direct answer is that Iraq could RV at a rate higher than they are able to back. If that happens, they will have to print money non stop, and add zeros to it to offset inflation, just to keep up with the loss of confidence, and the inflation that is created.

This is what they are both trying to avoid, and trying to correct from the past, when hyperinflation caused the zeros to be added.

To regain strength, the CBI has telegraphed that they will RD (divide all by a thousand) followed by RV to 1:1, in move destined to restore strength and confidence to their currency, as well as moving to a one currency nation.

[Dalite]

Here is another thought... If the US does not extend the debt ceiling, they can no longer service the debt. All countries pegged to the dollar will collapse along with the US; Iraq included.

The IMF, WTO, BIS all the global cabal will probably not allow this to happen.

There are rumors of a Soros inspired plan to allow countries to capitalize, based on resources available.

If this comes to pass as a measure to prevent Global Collapse, both Iraq and the US could back a new monetary system backed by oil reserves.

This would be a complex plan of debt swaps, debt forgiveness, and Paris Club debt repayment plans.

If this happens, Iraq could probably RV to whatever they want, but I would imagine it would require introduction of a properly valued currency, along with the rest of the world.

In that case, I don't know where that would leave us; in both our Dollar and Dinar holdings.

In some ways, a RV could be tied to the US debt ceiling; but only if the worst happens.

[jg167]

Remember that not all of the dinars will be exchanged for USD, or any other currencies. Almost all of it, I believe 80%, is still in Iraq (IMO this is what CBI means when they say they have accounted for 80% of the currency in circulation). Now, the Iraqis are not going to exchange it for another currency, just as we do not exchange our dollars for Euros to buy our everyday items.

For items manufactured in the country in quesiton no, but for anything imported yes it is exchanged. BMW doesn't want Dinars for their cars they want Euros. If the value of the Dinar goes up by 1000x lots of Iraqi's will be millionaires and want to spend their money. Luxury goods won't be able to keep up with demand and there will be giant inflation. M2 can not become 100s of times greater than GDP as you get hyper inflation. Dinar's going to $1 or $3 can not happen unless the number of Dinars in M2 is greatly reduced. They could do this with an RD (so new IQDs are exchanged for current IQDs at 1 to 1000 ), or by slowly raising the value just enough to pull in lots of Dinars and taking them out of circulation. The value of M2 is only about $50B USD now, so this would not be too expensive. Which they will do? I have no idea. One is a big traumatic event but then is stable, the other has constly increasing dinar values so prices in Iraq will be changing all the time, but is gradual.

[RodandStaff]

Thanks dalite... this was the answer I was looking for ... " If confidence is high, Bond sales will be successful in building reserves." That makes sense, and I have heard for years that the US currency is backed by..... faith in it's currency! If folks lose faith in it, we are.... well, you get the point!

Here is another thought... If the US does not extend the debt ceiling, they can no longer service the debt. All countries pegged to the dollar will collapse along with the US; Iraq included.

Wow... that is serious stuff you are talking about. Thanks for the reply! GO RV Already Baby!!!