Where does the money come from?

[Wealthy1!]

I'm a newbie and this is my first post/question. I tried finding the answer in other posts but have a question: I've read the UST has trillions of dinar.... when it RV's... who has the 3+ trillion in USD to pay the UST.... where is this money coming from? I've never purchased currency as an investment before and don't really understand who will be paying us and where they're coming up with the cash???? It's all kinda mind boggling to me!

thanks for being easy on me!

[Alex38]

it's all electronic. it's not actual cash until you use it. you're not going to walk around with a million dollars in your wallet... rite? it's all recycled numbers. don't sweat it

[TQueezy]

What? That isn't how debt instruments work...

Money isn't real. We weigh debt instruments against each other as we don't base our monetary system on commodities anymore. So 3 trillion dollars is just a balance sheet number that can be represented by workforce contracts and political liaisons between nations, and in the end, things get shmoozed over. I know that sounds like B.S., but fortunately, that's how things work. If we were to meticulously bean-count every unit of currency and "money" in the world and expect people to honor their parts based on their economies, we'd be in even worse conditions than we are now.

The 3 trillion dollars will come from nowhere, from no one. It's simply a way to balance and measure debt instruments to achieve future economic and inter-governmental goals, like a one-world electronic currency, and a one-world government, and all those other freedom-vamping things that The Elite are all too eager to see happen.

That's all I got, peace out...

[elmstreet61]

All good answers...in addition, i know that the USA has an agreement in place to trade currency for oil with Iraq...so as the other guys said....don't sweat it.

Cheers.

exciting times, yes?

[binko]

What? That isn't how debt instruments work...

Money isn't real. We weigh debt instruments against each other as we don't base our monetary system on commodities anymore. So 3 trillion dollars is just a balance sheet number that can be represented by workforce contracts and political liaisons between nations, and in the end, things get shmoozed over. I know that sounds like B.S., but fortunately, that's how things work. If we were to meticulously bean-count every unit of currency and "money" in the world and expect people to honor their parts based on their economies, we'd be in even worse conditions than we are now.

The 3 trillion dollars will come from nowhere, from no one. It's simply a way to balance and measure debt instruments to achieve future economic and inter-governmental goals, like a one-world electronic currency, and a one-world government, and all those other freedom-vamping things that The Elite are all too eager to see happen.

That's all I got, peace out...

Yes I agree.

[MK1964]

Who cares where does the money come from. I care only to have some millions on my account and that is really important for me

[frankc]

What? That isn't how debt instruments work...

Money isn't real. We weigh debt instruments against each other as we don't base our monetary system on commodities anymore. So 3 trillion dollars is just a balance sheet number that can be represented by workforce contracts and political liaisons between nations, and in the end, things get shmoozed over. I know that sounds like B.S., but fortunately, that's how things work. If we were to meticulously bean-count every unit of currency and "money" in the world and expect people to honor their parts based on their economies, we'd be in even worse conditions than we are now.

The 3 trillion dollars will come from nowhere, from no one. It's simply a way to balance and measure debt instruments to achieve future economic and inter-governmental goals, like a one-world electronic currency, and a one-world government, and all those other freedom-vamping things that The Elite are all too eager to see happen.

That's all I got, peace out...

If Iraq can just add 3 Trillion dollars to their bank account out of nowhere then any country could do it. Makes no sense. You've been reading to many sci fi novels by Okie. lol lol

[imgesing]

Actually it is partially true but aside from the fact that it is electronic it is also an equal trade. I know it isnt something many factor but you need to realize all the currency goes up.

The value is up and the trade is equal. Try to wrap your head around this because many will say things which doesnt consider this statement. Also an RV isnt considered by money or oil alone.

There is a lot involved in the RV process. Yet, when this is done it is a value jump and those who were in the intrum lose out and those who have it do well. Iraq losses nothing in an RV but did while the value was down. The loss was in the trade value down.

Consider you had something of (reduced) value. You sell it to me for 1 dollar. Now it is re valued or worth 3 dollars. I sell it back to you for 3 dollars. You give me 3 dollars and I give the item back to you. You still have the item whose worth is more. We have equal trade value. The loss is when it is at a lower value depending on who holds it. Right now what we hold is of less value. If you sell it pre an RV you loose. Or in theory maybe a break even minus service fees etc. You will be behind the 8 ball. RVing doesnt LOOSE money. It makes the dollar value more and there is no loss. RD people are wrong in some of what they are saying because it weakens the structure of their monitary value. That is why it shouldnt RD. If however they were in a different economic model it might help. THIS scenerio does not benefit an RD. Lets hope this restructuring of the IRAQI currency is handled based on the reference economic models. If so we will all do well. It remains to be seen.

I know ti is late and my ill fated attempt to explane this might be weak. I have a headache and cant sleep. Hopefully this brought about a light bulb moment for some.

If you are someone who can add to it or help better explain it I appreciate the help here.

Good luck and GO RV and lets all pray this ride ends soon.

[jg167]

What? That isn't how debt instruments work...

Money isn't real. We weigh debt instruments against each other as we don't base our monetary system on commodities anymore. So 3 trillion dollars is just a balance sheet number that can be represented by workforce contracts and political liaisons between nations, and in the end, things get shmoozed over. I know that sounds like B.S., but fortunately, that's how things work. If we were to meticulously bean-count every unit of currency and "money" in the world and expect people to honor their parts based on their economies, we'd be in even worse conditions than we are now.

The 3 trillion dollars will come from nowhere, from no one. It's simply a way to balance and measure debt instruments to achieve future economic and inter-governmental goals, like a one-world electronic currency, and a one-world government, and all those other freedom-vamping things that The Elite are all too eager to see happen.

That's all I got, peace out...

This is of course (no offense intended) completely ridiculous. The fact that money is represented by data in computers does not in any way mean that the representation does not have significance and constraints as if it were real money. Its (crudely speaking) a zero sum game. When a trillion dinars (let alone 10 or 20 trillion) dinars come in for exchange the CBI can not just say we only have $50B USD (registered in computers), so we'll just change that B to a T and presto its $50T dollars, no problem! We call that bank fraud. Iraq can gain dollars by selling oil (where the buyer pays in their currency and at a rate pegged in dollars) or having other countries buy dinars. When Iraq says, now the dinar is worth a dollar do you think other countries are going to buy dinars at that rate? Not a chance. So indeed where does the money come from? No where, this is why an RV of a $1 magnitude is impossible. The value of Iraq's (or any country's ) money supply is supported by their GDP. Iraq's is around $65B, so if they get their money supply down to $60B from $60T, then indeed the dinar could be worth $1 or so. i.e. an RD. Country's RV their currency to keep the world's currencies in sync with the world's economies, with the wealth of the world. You don't create wealth by just proclaiming that your currency is now worth more by a factor of 1000x.

[Luigi1]

Here's where...Oil revenues at over $100 a barrel. Also from dumping $Trillions of PetroDollars & replacing it with Euros, Dinars & Yuan. Opec has already partially dumped the weak & worthless Dollar. Even the EU refuses to accept Dollars.

[jmw]

I'm a newbie and this is my first post/question. I tried finding the answer in other posts but have a question: I've read the UST has trillions of dinar.... when it RV's... who has the 3+ trillion in USD to pay the UST.... where is this money coming from? I've never purchased currency as an investment before and don't really understand who will be paying us and where they're coming up with the cash???? It's all kinda mind boggling to me!

thanks for being easy on me!

they can't...doesn't matter if is electronic or in one dollar bills...it still has to be covered by the Central Bank if Iraq...it is their debt...there is no way around this...and, no... fractional reserve banking won't work either...Iraq can't grow our money supply...only we can...so they can't produce the needed US dollars to cover it....and no oil can't be used either...what they can do is reduce their staggering money supply and improve their GDP...that is what will give the IQD value....and then it can continue to appreciate.

Sorry if you have been misled...

[Dalite]

I'm a newbie and this is my first post/question. I tried finding the answer in other posts but have a question: I've read the UST has trillions of dinar.... when it RV's... who has the 3+ trillion in USD to pay the UST.... where is this money coming from? I've never purchased currency as an investment before and don't really understand who will be paying us and where they're coming up with the cash???? It's all kinda mind boggling to me!

thanks for being easy on me!

This is the most important question you can ask; and asking before you make the purchase us the best time to understand the dynamics.

Taking your number of 3 Trillion Dinar in the US, Iraq has to be able to take this back, at a price they create, when they change the value of their currency.

They set the price, and the whole execution of conversion must ultimately benefit them.

In order to meet that obligation, they must have an equal amount of reserves, in cash, to service the cost of exchange that they decide upon when they change the value of their currency.

Iraq has untapped wealth, and the most prevalent " forum fact" is that the UST will cover the exchange, and send the Dinar back as payment for discounted oil.

Unfortunately, the amount of dollars the UST would have to spend to do this would contract the money supply in the US beyond the point of survival.

The UST could decide to create the debt needed to fund a cash in of 3 trillion Dinar, but the world is weary enough of US treasuries, and creating bond sales greatly expand the US money supply would be high inflationary in the US, and a hard sale to overseas buyers.

Plus, that newly created money could only be produced as the bonds are sold to back it; which wouldn't be overnight. It is not practical to take this approach.

Iraq has announced bond sales in their future. When the stability and security in Iraq reaches the point of safety to the world investor, Iraqi bond sales should be brisk, and could greatly enhance their reserves; but represents debt. They have to show the ability to produce in excess of the cost of maintaing their country, as well as servicing this new found debt.

As this stability and security becomes reality, Iraq can systematically increase their reserves; but not at this time.

There are many factors to consider, and there are folks here that can answer most questions you ask, using the facts available from officially released documents.

There are others, who will repeat the words of the gurus and Pumpers, and tell you, on no uncertain terms that Iraq can not only make you a millionaire overnight, that they owe it to you as an entitlement, and it is not possible for this not to happen.

Depending on your understanding of mathematics, the history of economics, or rumor driven frenzy, your decision will arrive.

It will boil down to analytical versus positive hope..

There are strengths and weaknesses to both approaches..

I personally try to find the most positive analytical approach, based on factual info.

As more info, or more accurate info becomes available; I adjust my expectations.

There is great potential here. How much, and How soon are the 2 Wildcards that drive the discussion..

Welcome to DV!

[Darin]

Interesting question....

I wonder, where would the money come from if China decided to take their US from their foreign cash reserves and say, "Hey U.S.! I don't want your greenbacks no more, exchange them for EUROs please....."

If I recall, we only have $150 billion in our foreign cash reserves.

China? They hold over $1 trillion in USD.. (I read on one site, as of March 2011, they held beyond $3 trillion..)

[Dalite]

Interesting question....

I wonder, where would the money come from if China decided to take their US from their foreign cash reserves and say, "Hey U.S.! I don't want your greenbacks no more, exchange them for EUROs please....."

If I recall, we only have $150 billion in our foreign cash reserves.

China? They hold over $1 trillion in USD.. (I read on one site, as of March 2011, they held beyond $3 trillion..)

That is a very real fear; for both sides of the equation.

The Dollar is at $.7480 as of yesterday's market close.

Due to the large amount of US debt that China holds, they cannot afford to cause the value of the debt to drop by dumping large quantities at a time.

They have converted a lot to gold, and that even had a negative affect, as it served to increase any future cost of gold purchase.

Recently, they went short term on much of their debt renewal, which gave the US a gain in the savings of projected inflation in the interest of long term bond holders. They learned from Robert Ruben, and are losing their appetite for US inflation.

As much as they don't want to be caught holding the bag for future loss of value of the USD, they equally know of the potential instability of the Euro due to financial stability problems throughout the EU.

[Darin]

DaLite,

Using the Euro was a bad example considering the Greece issue. Gold seems to be where everyone is running to at this time...

But, the point of the matter is, $150 billion wouldn't go very far if they had USD come in with a request to exchange against a different currency.

[mws]

Welcome Wealthy1! Good question

[MPG350]

If Iraq can just add 3 Trillion dollars to their bank account out of nowhere then any country could do it. Makes no sense. You've been reading to many sci fi novels by Okie. lol lol

Stop it you are making to much sense, that doesn't fly on this site.

[jg167]

Here's where...Oil revenues at over $100 a barrel.

Iraq's target is to pump 5m barrels per day on average (currently they do many 2m). So even if that $100 per barrel is all profit (i.e. costs are 0) that is about $180B per year. That is no where near the trillions of dollars they would need if they RV at anything close to q dinar per 1 USD. Further this oil revenue is what will be used to pay for rebuilding and developing Iraq so sending it out of the country for make foreigners rich is the last thing Iraq would want to do.

Also from dumping $Trillions of PetroDollars & replacing it with Euros, Dinars & Yuan. Opec has already partially dumped the weak & worthless Dollar. Even the EU refuses to accept Dollars.

I don't know what this means. Iraq does not have trillions of petrodollars and replacing, i.e. exchanging once currency for another does not offer a vast increase in value from that transaction.

[STI4RV]

What about the fact that Iraq has there own IQD. There currency will go up in value just like everyone else who owns dinar. The banks in Iraq probably have more dinar than any one country. Idk why people think that they wont have money to pay for this. Im tired of the same old questions. Where is the money coming from? How does this all work? LOP THIS LOP THAT. USE THE SEARCH BUTTON. Dont drink the koolaide and buy dinar without doing some research into this investment.

[jg167]

What about the fact that Iraq has there own IQD. There currency will go up in value just like everyone else who owns dinar. The banks in Iraq probably have more dinar than any one country. Idk why people think that they wont have money to pay for this.

Because they won't have it. How does having trillions of dinar available produce dollars (or euros or whatever) to exchange? When you pet the value of your currency that is the value the central bank will support. No country is just going to buy dinars from Iraq at 1000x the rate just due to Iraq proclaiming the dinar is now worth more.

Im tired of the same old questions. Where is the money coming from? How does this all work? LOP THIS LOP THAT. USE THE SEARCH BUTTON. Dont drink the koolaide and buy dinar without doing some research into this investment.

Perhaps such questions are from people doing this research, maybe some of it is a bit late, but better late than never.

[Wealthy1!]

I appreciate all the information that you're sharing.... as I never studied economics in school.... it just kept bugging me... all these people with millions of dinar, expecting to walk into the bank and deposit millions into their accounts.... maybe the cash out rate is a little lower than their sell rate back to Iraq.. if that's what they do with the dinar when they cash us out?? And does Iraq even want to buy back it's dinar at the higher value? I'm sorry for my naivete.... and I really do appreciate those of you who understand how this is going to work.... sharing your knowledge with me!!

[Luigi1]

Iraq's target is to pump 5m barrels per day on average (currently they do many 2m). So even if that $100 per barrel is all profit (i.e. costs are 0) that is about $180B per year. That is no where near the trillions of dollars they would need if they RV at anything close to q dinar per 1 USD. Further this oil revenue is what will be used to pay for rebuilding and developing Iraq so sending it out of the country for make foreigners rich is the last thing Iraq would want to do.

I don't know what this means. Iraq does not have trillions of petrodollars and replacing, i.e. exchanging once currency for another does not offer a vast increase in value from that transaction.

The Saudis & other OPEC members have been accepting Euros, Yuan, Rubles & Gulf States Dinars. Before, All OPEC trading was done in PetroDollars. The weak Dollar is killing OPEC profits & driving up energy costs . Google it or go to WSJ. The Dollar is no longer king. This is old news.

[jg167]

The Saudis & other OPEC members have been accepting Euros, Yuan, Rubles & Gulf States Dinars. Before, All OPEC trading was done in PetroDollars. The weak Dollar is killing OPEC profits & driving up energy costs . Google it or go to WSJ. The Dollar is no longer king. This is old news.

But so what? This does not make your statement that Iraq will (in part) pay for an RV by "Also from dumping $Trillions of PetroDollars & replacing it with Euros, Dinars & Yuan. Opec has already partially dumped the weak & worthless Dollar. Even the EU refuses to accept Dollars.". As I said before, Iraq does not have "trillions of petrodollars" and even if they did exchanging them for other currencies does not create new value.

[jg167]

Total agreement Networth. To break even or maybe make a small profit on dinars you will also have to hold them for another couple of years (i.e. as their GDP grows if they money supply grows less, dinars will appreciate). But that also means you may have to deal with an RD, that means more transaction fees and spreads making an eventual profit even more elusive.

[Luigi1]

But so what? This does not make your statement that Iraq will (in part) pay for an RV by "Also from dumping $Trillions of PetroDollars & replacing it with Euros, Dinars & Yuan. Opec has already partially dumped the weak & worthless Dollar. Even the EU refuses to accept Dollars.". As I said before, Iraq does not have "trillions of petrodollars" and even if they did exchanging them for other currencies does not create new value.

Again, Google it & do a little research. The US Dollar has lost 30% over the last year. OPEC must charge 30% more just to break even. Opec must dump the Dollar. It has no choice. Iraq has the potential to become the world's largest exporter of oil within 2 years. The Iraqi Dinar will become the currency of choice with OPEC. Saudi Arabia is on the wane. Who else can take up where the Saudis left off?