After some thinking???

[jg167]

They wont have to just like our government still pays government contracts and people still get wellfare... (Paper) money is an illusion. It is nothing more than a physical presence based on things you can't necessarily see or touch like electricity for instance. It can't be held but doesn't mean it has no worth. We will just become to them like China now is to us... most of our money will be transfered electronically it is basically virtual worth.

The fact that it is not physical money is irrelevant. Its mostly electronic (just like in the US), but that does not mean you can just produce money out of thin air, that is bank fraud. If Iraq is going to provide 3T USD for exchange of 3T dinars at 1:1, then somehow they need to get 3T dollars and they don't have it and I see no way for them to get it. Edited July 24, 2011 by jg167

[jg167]

IMMHO, that would be a good deal for them for us liberating them from tyrany, oppression and introducing them to the only safe way to create wealth, capitalism through democracy.

They are under no obligation to pay the US anything. As another poster said, we invaded them. They may (eventually) be delighted to have gotten rid of Saddam, but they are not going to pay the US for doing so.

Whatever deal you think might be in place, test it by considering once it becomes known (and everything eventually does) will the politicians who agreed to it in Iraq survive? Any deal giving away 2/3 of the nations wealth seems to me to be unlikely to pass that test.

[Redwizard]

jg167, you may be right. But, it is in Iraq's best intrest to trade oil. If it cost you less than a dollar to produce something, and sold it for $30, you are still making a profit, and paying off a debt with out using cash. Hell of a deal.

[jg167]

jg167, you may be right. But, it is in Iraq's best intrest to trade oil. If it cost you less than a dollar to produce something, and sold it for $30, you are still making a profit, and paying off a debt with out using cash. Hell of a deal.

What debt? It makes no sense to sell something for $30 if other buyers will pay $100 and there is no shortage for demand for oil at $100/barrel, especially Iraq's light-sweet (low sulphur) variety.

[Redwizard]

Ok so you really think Iraq owes nothing.

Everyone here has an opionion, and we are all allowed to post them.

[speculatorsRIDE]

I may be wrong, but isn't 85% of the dinar in circulation in country? Why would Iraqi's need to cash in their dinar for US dollars? They wouldn't and won't. The only one's cashing in their dinars are us investors and we will be cashing in our dinar to our banks. Our banks will be turning in the dinar to the federal reserve. The federal reserve will be adding it to their foreign reserve currencies and using it to strengthen the dollar. Everyone is assuming that the majority of the dinar will be turned in for dollars and this is simply not true.

The CBI is owned and operated by the same folks that own and operate the majority of central banks and reserves globally. The Rothschilds will not be banking by Sharia Law. They will be using fractional banking as they do in all their other central banks and reserves. Currently there is 24 to 27 trillion dinar in circulation. The majority in 000 notes. It stands to reason that the lower denoms and coins in the vaults will equal this amount, since they will be exchanging lower for the 000 notes post RV. Add them together and that's 48 to 54 trillion. Interesting huh?

Iraqi's having become democratically free, have actually become 33 million new debtors. It won't take long before they are in the same boat as us. What boat are we in? Let's look at what we owe. I did a little searching and found this. This piece is a little dated so the figures are actually a little low but it gives a good picture of where we are and where they will be.

The Average American Household is Responsible for $546k in Government Debt

Over the last several months I have been thinking quite a bit about the national debt and what it means to us. Current estimates put the national debt at $10.75 trillion according to this U.S. National Debt Clock. On average, we’ve been building a debt of $3.5 billion per day since 2007. But what does that really mean?

Let’s say that, on average, we have a little over 300 million citizens. That means that each citizen would be responsible for around $36k in debt. Sure, that sounds alarming, but let’s face it, we purchase cars that can sometimes cost that much, and houses that cost a heck of a lot more, so $36k, while substantial, is probably sustainable, even though it is a significant number.

However, here’s where it gets more interesting. This number, $36k, reflects the responsibility per citizen. We don’t generally pay taxes as citizens, we pay taxes as households. So instead of saying $36k per citizen based on 305M citizens, the more accurate number is approximately 120M households. Now you’re talking about $90k in debt per household. Okay, this is starting to sound serious!

But let’s take it a step farther. The United States only calculates its debt on a cash basis, meaning total cash in versus total cash out, or in other words, liabilities are paid as they occur with no consideration for the future needs.

If you look at the total federal obligations, meaning the money borrowed from Social Security and Medicare to keep our debt under control, it really becomes quite alarming. Remember, we’re all paying social security and Medicare, with the belief that this money is set aside and saved for us so that, when we get older, we can benefit from it.

According to this article, if you take into account our total federal obligations in terms of money paid in to Medicare and Social Security–money that is no longer there because it’s been borrowed for other government programs and expenses–the total debt is $65.5 trillion! That’s over 6x more than the average debt number you hear from the media. This number reflects calculating our debt on a GAAP (Generally Accepted Accounting Practices) basis rather than a cash basis.

Calculated per American citizen, that’s $215k worth of debt per American. Ouch.

But again, we don’t pay taxes as individuals, we pay taxes typically as households. So 120M households with $65.5 trillion in debt comes out to… <drumroll> … $546k in debt per American household!

The reality is, if you don’t look at our national debt on a cash basis, we’re accruing debt at a rate of $455 billion per year, or $3800 per American household, per year. If you look at our national debt from a GAAP basis, we’re accruing debt at a rate of somewhere around $5 trillion, or approximately $42k per American household.

Scary isn’t it?

And oh, by the way, that GAAP basis number of $65.5 trillion is actually higher than the world’s GDP.

Isn’t this cash basis vs. GAAP basis the reason why Enron executives ended up in the slammer? Why is it that every American corporation reports earnings and debts on a GAAP basis, but the federal government continues to report the deficit on a cash basis?

I invite you to check over my numbers and see if I missed anything. I’m hoping there’s a decimal error in there. If not then oh well… so much for my future mansion on the lake.

[Old Guy]

Let assume the US Gov't has 4 trillion dinar like some people think.....Now remove the 3 zero's Value at $3.00... US now has 12 billion dollars.... not very much when you think about it...

I don't think then can remove the 3 zero's ...

Looks like a pretty good return for a $400,000 investment, I certainly would'nt turn it down !

Good Things To All !

[Redwizard]

speculatorsRIDE, interesting but depressing

[jg167]

I may be wrong, but isn't 85% of the dinar in circulation in country? Why would Iraqi's need to cash in their dinar for US dollars? They wouldn't and won't. The only one's cashing in their dinars are us investors and we will be cashing in our dinar to our banks. Our banks will be turning in the dinar to the federal reserve. The federal reserve will be adding it to their foreign reserve currencies and using it to strengthen the dollar. Everyone is assuming that the majority of the dinar will be turned in for dollars and this is simply not true.

There are 59T dinar in Iraq's M2 according to the June spreadsheet on the CBI's site. Lets say only 2% comes in for exchange after an 1:1 RV, where does Iraq get that $1.2T dollars? Further I don't see the idea that the federal reserve will just keep dinar. Why would they? What good are dinars to the fed? Foreign reserves are for exchanges INTO that currency from dollars, I don't think many folks will want to be doing so.

Generally a countries M2 can not get more value than its GDP and Iraq's GDP is only about $65B. A 1:1 RV would put their M2 at $50T, the US's GDP is only $14T. A 1:1 RV seems impossible to me.

As for your tale of indebtedness of the US households, yes I think your number are about right and it is scary, but it can also be misleading. Social Security and medicare are greatly underfunded, however they were never setup to have a big pile of money to pay for the retirees, it has always been a system where current workers pay for current beneficiaries. So to get them back in line we only have to change the system sufficient to make sure that continues to occur. Given the scale of participation, huge results can be made with quite small changes. Moving the age at which you can receive full benefits from 65 to 70 over say 10 years for example takes care of a lot of the problems. I'm not saying its easy, but it can be done.

Our medical system is made expensive by many things, none the least of which is a culture that pays for intervention with disease instead of promotion of health. This is getting way off track, but I love the parable of the two villages in The Art of War. Each has a doctor. One is known far and wide for curing every disease his villagers ever come down with and fixing every injury they suffer from accidents. No one has ever heard of any great works by the doctor from the other village, no one in his village has ever gotten sick or had an accident. Which village has the better doctor?

[reveldog]

.00086 now remove three 000 and see what you get!!!!!!!!!!!

then take .86 divid by 1 = 1.16 times 4 trillion 4.6 trillion

[hpygrl]

This is the only situation that I've ever been in where I feel like I've heard it all already after only 8 months!

[reveldog]

This is the only situation that I've ever been in where I feel like I've heard it all already after only 8 months!

everything is the same , same bank stories , same i know somebody , same BS and still some of it is funny to read

[Chilliherb]

Hey Guys

Everyone seems to think it is either all or bust , why can't it be a combination. IMO It may be that this RV is possible but just not at the rate the optimists think and certainly not at the other end where there is nothing in it for the investor.

I believe the UST is holding dinar as security against the money that GOI has been given/borrowed to get the basic infrastructure restarted.

I also believe that agreements are in place that that Dinar is only used for the importation of oil as needed in the future by the USA. Lets say for arguments sake that the US holds only 4 trillion in Dinar even if they slash the zeros and revalue to around their neighbors (kuwait) level that is 12 Trillion USD for the US to use against the debt ceiling.

I further agree with one of the above posts that the IMF may well be telling the US to get its house in order first and get some decent monetary policy's in past decade the US monetary policies have sucked big time going from Republican extremes of screwing the little guy to unrealistic entitlement expectations from the Democrats. Don't get me started on the Tea party as I see them as a destructive no Knowledge force that will cry foul as soon as they find out how complex our global trade and responsibilities are as leader countries in the developed world on this little speck in the cosmos.

This is my opinion and whilst I have no proof of the US holding Dinar I have been shown no proof they do not.

Cheers Chilli B)

[Dinariana]

What does Iraq owe us for??? Maybe for there freedom to start? Maybe for our military? Maybe for the US carrying them for years? Maybe for building there country?

Just to name a few things!

What part of 100,000 dead civilians doesn't register with you? Have you ever lost someone you loved? If your little girl was blown up by a bomb, would you care who was in power?

Ok so you really think Iraq owes nothing.

Everyone here has an opionion, and we are all allowed to post them.

I've been reading up on the Inquisition. It's hard to believe, but when a family member was hauled in and tortured and then burned at the stake, the family had to pay for the services, and the fuel.

[jg167]

They wont have to just like our government still pays government contracts and people still get wellfare... (Paper) money is an illusion. It is nothing more than a physical presence based on things you can't necessarily see or touch like electricity for instance. It can't be held but doesn't mean it has no worth. We will just become to them like China now is to us... most of our money will be transfered electronically it is basically virtual worth.

The fact that its electronic instead of physical is irrelevant. The Fed can manufacture dollars out of thin air and the US Treasurey can actually print them, but not so for dinars or euros or yuan. The CBI can manufacture dinar out of thin air, but not dollars. One country attempting to manipulate the money supply of another country by producing (electronically or physically) its currency seems likely to be considered an act of war. This seems an unlikely foundation for Iraqi fiscal policy.

[dream farmer]

The fact that its electronic instead of physical is irrelevant. The Fed can manufacture dollars out of thin air and the US Treasurey can actually print them, but not so for dinars or euros or yuan. The CBI can manufacture dinar out of thin air, but not dollars. One country attempting to manipulate the money supply of another country by producing (electronically or physically) its currency seems likely to be considered an act of war. This seems an unlikely foundation for Iraqi fiscal policy.

JG I think you misunderstood my point... I'm not saying anyone is manipulating the money system. The original question was if Iraq isn't worth as much as their debt will be to repay all of this then where do they get the money from? Answer - it's called credit. Just as we keep getting money from China to pay our debts so do other countries. Don't think for a minute that the U.S. will straight up "cash in" all of their dinar. You can bet that if and when this thing goes down they have some options on repayment or an inside track to future business dealings with Iraq whether it be negotiated terms of oil prices or contracts for business and trade.