POP POLL (no lopsters please)

[AudiS4]

$0.10

[HopefulTxn]

they have oil-natural gas, they will also have years and years and years to pay this back.........as i like to say they will pay this back in oil and broken promises. everything is adding up to a rv, why else would every country besides kuwait forgive there debt? answer is iraq didnt want to double pay them debt plus rv, so they worked out the rv plan only. you are super smart why dont you turn positive for a minute and write a piece on how they will rv, and put the l o p aside for a minute. if iraqs economy was already stable in my mind a l o p would work, but they need a major jumpstart. iraq needs locals to open businesses, they need a major boost, and the rv is really the only way to get them there quickly. i respect your opinion on all this, but jmw, dalite, and yourself seem to forget that iraq has the most potential of any country ever, and they could easily support a rv.

Kuwait is not the only country that has not forgiven Iraq's debt.

From June 3rd, 2011:

Progress on debt forgiveness talks with non-Paris Club creditors remains uneven though the United Arab Emirates cancelled Iraq's debt in 2008. Estimates of Iraq's non-Paris Club debt vary but Kuwait, Turkey and Saudi Arabia are among the notable hold outs.

Link

Can you explain your statement on the 'easily support a rv'? It seems that their most prevalent natural resources (oil and natural gas) have a current lifetime value of less than $22 trillion USD. That is based on 200 billion barrels of oil and 126 trillion feet of natural gas.

Link to Oil

Link to Natural Gas

With stated currency levels by the CBI of 29 trillion dinar in circulation with a total M2 of 59 trillion dinar, and assuming there is no redenomination (lop), what would be your guess on a rate when taking the above information into account?

[sonny1]

And as we keep pointing out is that if they monetize the oil, it would put the value in jeopardy because the oil prices are too volitile to be stablized enough to keep a solid rate....not only that, if they monetize the oil to back the value of the oil, its basically like using it as collateral and as your pumping more and more oil to be sold, your collateral is lost and lowered and so would the rate....it would be silly to do so.....

I wasent even being negative in my comment or talking about a lop....I was actually being positive and saying that it should come out at the dollar to dedollarize iraq...which makes sense....

oil is unpredictable, but as they do in there budget, iraq will put the price of oil 20-25% below the actual cost of oil so they dont screw themselves.

[caz1104]

.86 to a buck is my guess.

[Eagle Eyes]

I've not had any dreams about a dinar RV. I can see .89 to maybe 1.19. 1:1 would make the initial transition a breeze for the Iraqi government and citizens.

[dominowinner]

2.19

[Priscilla]

I'm pretty convinced it will be 1$ for 1 dinar.

Love to see the value go up more, but will be happy with $1.00

[Psych]

I'll revise my guess...north of $12....!!

[HopefulTxn]

oil is unpredictable, but as they do in there budget, iraq will put the price of oil 20-25% below the actual cost of oil so they dont screw themselves.

Using oil to price their budget is a whole different ballgame than using it to support their currency value. The budget can be manipulated, where if the value of oil drops significantly they can postpone projects, or many various items to 'trim the fat'. Worse case scenario, they borrow shortfalls from another country or from the IMF.

If they base their entire monetary system on the value of their oil, and an incident happens like what happened in 2008 where oil lost over half it's value in a 3 month span (6 month span was a loss of 2/3rd's the value) (Link), their economy would essentially be completely devastated.

[Darin]

A lot of factors to consider from a very complex situation. Too low has advantages & disadvantages while too high has advantages & disadvantages.

Factors to consider:

** Coming out at an equilibrium price

** Adjusting to a rate that would combat dollarization. (See MOF about 1.13)

** What they can feasibly support (Liquid & non-liquid assets are likely not for the average eye to see....)

My prediction? $0.08-$1.13

I predict low, while hoping for a higher rate.

They'll likely wish to enter at a rate where people are cashing out while equaling being met by those buying in. (Equilibrium)

North of $1.00 USD would fight dollarization

Liquid & Non-liquid assets - Although, may not be transparent, the #s we see still exist. How true are they? What is the CBI realistically on the hook for?

KeepM, with your argument about using reserves as an asset-backing tool... Remember, as they deplete their inventory, they could also be using that as a tool to reduce their M1/M2. Therefore, what is subtracted from one side of the equation is equally subtracted from the other side. End result, value backing remains the same. (One note to consider: As technology improves, they may have the ability to search new areas for more reserves or find a more accurate measuring tool.)

Also - consider that if they were looking to become more of a Free-Market country, they will be seeking to not be oil dependent. As all of them will have the right-to-work.

Using oil to price their budget is a whole different ballgame than using it to support their currency value. The budget can be manipulated, where if the value of oil drops significantly they can postpone projects, or many various items to 'trim the fat'. Worse case scenario, they borrow shortfalls from another country or from the IMF.

If they base their entire monetary system on the value of their oil, and an incident happens like what happened in 2008 where oil lost over half it's value in a 3 month span (6 month span was a loss of 2/3rd's the value) (Link), their economy would essentially be completely devastated.

If they took a very conservative approach, I think it could be done. Claiming a lower rate per barrel (i.e., $60)

If it were ever to reach as low as $60, the economy would likely grow 'strong' and push up demand (which would also increase the value).

We're in a market that has become accustomed to higher prices.

If we ever see Regular below $2.50 / gallon in our lifetime, I would be extremely happy.

Below $2, I would be pushing estatic.

Near $1 - I would be thinking I was living in a fantasy land.

[RickOhio]

When I got into this in 2009, I was convinced that it was going to come in around 3.86. Now I'm hoping for dollar to dollar. We'll see. Alot of smart people on here with convincing reasoning for .10 to .30. You may say I'm a dreamer, but I'm not the only one!

[GODyesRVmaybe]

.75 - 1 Euro

[HopefulTxn]

If they took a very conservative approach, I think it could be done. Claiming a lower rate per barrel (i.e., $60)

If it were ever to reach as low as $60, the economy would likely grow 'strong' and push up demand (which would also increase the value).

We're in a market that has become accustomed to higher prices.

If we ever see Regular below $2.50 / gallon in our lifetime, I would be extremely happy.

Below $2, I would be pushing estatic.

Near $1 - I would be thinking I was living in a fantasy land.

Not sure if you looked at the link provided in the previous post, but considering the price of oil dropped from around $140 to less than $40 in a 6 month span, it wouldn't seem that even using $60 would be any insurance policy. The problem is that oil value is way too volatile for a country to base their entire monetary system upon. That is probably why no country can be found to have ever attempted doing so.

[sonny1]

Using oil to price their budget is a whole different ballgame than using it to support their currency value. The budget can be manipulated, where if the value of oil drops significantly they can postpone projects, or many various items to 'trim the fat'. Worse case scenario, they borrow shortfalls from another country or from the IMF.

If they base their entire monetary system on the value of their oil, and an incident happens like what happened in 2008 where oil lost over half it's value in a 3 month span (6 month span was a loss of 2/3rd's the value) (Link), their economy would essentially be completely devastated.

so what does kuwait-jordan-bahrain produce to have such a high dollar value? they are right in the middle of this region, and have the third most oil in the world, plus they have the second most natural gas in the world, and they have said they have only found roughly 50-60% of there actual oil. so iraq absolutely will base there dinar amount off of oil. no disrespect but really?

[jmw]

so what does kuwait-jordan-bahrain produce to have such a high dollar value? they are right in the middle of this region, and have the third most oil in the world, plus they have the second most natural gas in the world, and they have said they have only found roughly 50-60% of there actual oil. so iraq absolutely will base there dinar amount off of oil. no disrespect but really?

I'lll get an early start!....they have a much better ratio of GDP to M2....Kuwait's GDP is 148 billion US and their M2 is around 28 billion dinar

Irag's GDP is roughly 65 Billion and their M2 is 59 Trillion dinar

Vastly different ratios and therefor vastly different exchange rates.

[Darin]

Not sure if you looked at the link provided in the previous post, but considering the price of oil dropped from around $140 to less than $40 in a 6 month span, it wouldn't seem that even using $60 would be any insurance policy. The problem is that oil value is way too volatile for a country to base their entire monetary system upon. That is probably why no country can be found to have ever attempted doing so.

Uhm.... I don't think it dropped to $40, I would like to see proof of that.

When we were paying $1 or so gallon at the pump, it was normally at $30-40 per barrel.

You may have read that wrong. It likely dropped $40 in a 6-month span.

That would make more sense..

We would probably have to go back to the 90s to see it at $40/barrel.

[jmw]

Uhm.... I don't think it dropped to $40, I would like to see proof of that.

When we were paying $1 or so gallon at the pump, it was normally at $30-40 per barrel.

You may have read that wrong. It likely dropped $40 in a 6-month span.

That would make more sense..

We would probably have to go back to the 90s to see it at $40/barrel.

so Iraq will be the only country allowed to use oil to back their currency?

[Darin]

so Iraq will be the only country allowed to use oil to back their currency?

Uhm, I don't think I saw anything about that claim in the quote you are quoting me of. Just simply was arguing the price per barrel within the past 10 years.

And for your question... I believe Saudi used to do this.. Working off of the idea of 'futures' backed it.

I'll have to provide links, or other backing information.

You would "THINK" natural resources could help back your domestic currency. You know, such as land, minerals, precious metals, etc. Its a non-liquid item that has value, you think they could account for it one way or another.

[jmw]

I'm not saying it is completely impossible...but since no one has ever done it and there are currently no plans that have been made public to allow it...I don't think it is a good argument to support the value of the IQD...and Hopefultx is correct...it is way to volatile to use...there are significant swings based on production which would allow major manipulations in currency values.

[blessedman]

1.17..............bank on it

[Darin]

I'm not saying it is completely impossible...but since no one has ever done it and there are currently no plans that have been made public to allow it...I don't think it is a good argument to support the value of the IQD...and Hopefultx is correct...it is way to volatile to use...there are significant swings based on production which would allow major manipulations in currency values.

I spoke with M. Curtis a few nights ago, and he informed me that S. Arabia used to value it that way based upon commodity futures. I'll have to refer to him on more details.

And.... Who would of thought you could exchanges goods & services for crude? But it appears China & Iran are doing it.... New processes occur everyday....

[jmw]

I spoke with M. Curtis a few nights ago, and he informed me that S. Arabia used to value it that way based upon commodity futures. I'll have to refer to him on more details.

And.... Who would of thought you could exchanges goods & services for crude? But it appears China & Iran are doing it.... New processes occur everyday....

tell marcus hello for me....would love to see something that outlines how they backed their currency by oil futures...bartering for oil is a very different aspect and one I wouldn't doubt could be done.

[HopefulTxn]

Uhm.... I don't think it dropped to $40, I would like to see proof of that.

When we were paying $1 or so gallon at the pump, it was normally at $30-40 per barrel.

You may have read that wrong. It likely dropped $40 in a 6-month span.

That would make more sense..

We would probably have to go back to the 90s to see it at $40/barrel.

There is plenty of documentation of the 2008 oil price crisis, but here is the history of prices from one site:

July 4, 2008 $145.29 <- notice the price here

July 11, 2008 $145.08

July 18, 2008 $128.88

July 25, 2008 $123.26

August 1, 2008 $125.10

August 8, 2008 $115.20

August 15, 2008 $113.77

August 22, 2008 $114.59

August 29, 2008 $115.46

September 5, 2008 $106.23

September 12, 2008 $101.18

September 19, 2008 $104.55

September 26, 2008 $106.89

October 3, 2008 $93.88

October 10, 2008 $77.70

October 17, 2008 $71.85

October 24, 2008 $64.15

October 31, 2008 $67.81

November 7, 2008 $61.04

November 14, 2008 $57.04

November 21, 2008 $49.93

November 28, 2008 $54.43

December 5, 2008 $40.81

December 12, 2008 $46.28

December 19, 2008 $42.36

December 26, 2008 $37.71 <- Notice the price here

Link

Or if you would rather see a graphical representation:

There are plenty more sources that can be shown, but I think you can see that I didn't read it wrong.

[smee2]

I envision, for myself at least, a series of cash outs, depending on where it starts and how fast it increases.

But to start, I would cash out if RV was announced anywayer from .20 and up. A dollar to a dinar would be great and I'd cash out half to move, buy a house built for disabled use, and hire a care worker.

The other half would be taking it's own trip mostly waiting for an increase in value. It will always be there if and when but I'd like when to be if it grows more.

smee2

p.s. I do like the idea of every roller coaster in the world.

[Darin]

Well hopeful,

You definitely schooled me there! Haha

I guess i never knew it dropped "that" much..

But in esssence, it was countered by being overpriced, so maybe to balance the markets it needed to be under-balanced for awhile to help the market, drive up demand, and help the global economy.