A very intellegent opinion on the RV

[joe]

This was forwarded to me by a friend, it really makes you think.

opinion piece received via email 11/30/09 iknowHEis Today at 9:45 am

Just some concepts to keep in mind as we watch the events unfold and the weird way things seem to be going.

First, money: There are basically two types of money; money based on the strength of an economy like the US, and money based on valuable commodities like oil, gold, etc., like Kuwait, Saudi, and at present Iraq, potentially.

The value of the USD is based on our ability to produce goods and services.

The value of the KWD (Kuwait), for example, is 95% based on the value of the oil in the ground being pumped and sold. Iraq, right now, has now valued its money on the value of its commodities of which they have an abundance (oil, gold, other minerals, agriculture and a host of other valuable things the world wants). BUT, Iraq WANTS to have an economy on which to base its money because having a viable economy is MORE stable than simply pumping oil. When the oil runs out, their money becomes worthless again.

Second, International Politics: The US and Iraq are tied together, the US$ is Iraq's international money. They want their OWN international money.

China wants to dethrone the US$ as the global currency so they are pushing buttons with the IMF to revalue the IQD at a LOW rate which will weaken the US$. But they can't let the US$ get too low, or their exports will become expensive and they will lose market share in the US. They are conspiring with Russia and Iran to screw the US$ internationally.

Third, US politics: As the US deficit and debt grow our money becomes less valuable internationally. A good Iraq RV will boost the US$ big time and blunt the Chinese efforts to screw us. This just happened with Dubai.

The

Dubai problem is centered in the European Central Bank which effects the EURO. US banks are not heavily into Dubai, thus with the Dubai possible default international money is flocking to the US and increasing the value of the US$ against the EURO. The US stock market took a 6.5% bump up since the Dubai real estate problem became public.

This means that the IMF efforts to pin the Dinar to the EURO (the

$1.49 RV)

is weakened by the stronger US$ which makes the Iraqi desire for a HIGH RV in US$ more probable and more feasible.

International Trade: Iraq WANTS to establish an economy based on more than their oil, gold, and natural gas so they have to get into the international market systems. To do this they MUST have a currency with real value.

The

sooner they do the RV the faster they will be able to build their economy.

They have taken the steps necessary to begin this process, but still need the revalued currency.

So right now, we know a few things.

First, in order to get a better economic position the CBI had to revalue before the IMF imposed deadline which all information says they did.

So

there IS a value but we don't know what it is. But the CBI has no POWER to implement the RV publicly. Only the government of Iraq can do that and they are looking for the most politically advantageous time to insure their re-election in January or February. Apparently, the CBI HAS made the decision to avoid the embarrassment of having the IMF tell them what THEIR money should be worth. They just haven't made it known yet. That's up to the politicians. We believe they are ready to do it but just have not decided precisely when. With their desire to get into international trade, they have to get moving on this.

Second, Iraq didn't want the low IMF value of $1.49. They would prefer a high $3.27 for two reasons; it is supportable by their natural resources AND it would attract investment to the country to help build their economy.

Third, they can't go too high as that would only be based on natural resources and would be better off to go a little lower in order to give them room to grow. Thus, we have the $2.47 possible rate. The problem with the high rate is that it would make the nation a welfare state like Kuwait and Saudi Arabia. In both those countries with high value money, they don't do anything but pump oil. 95% of the value of their currency is the money they get from exporting oil. If the exports decrease, their revenues decrease and they have nothing to back it up. The people don't do anything except receive royalty checks from the government, it's like a nation of welfare recipients run by rich sheiks. Iraq wants to avoid that situation, but still have a high enough value to attract investors.

Fourth; the $2.47 rate is based on the SDR which is a "basket" of currencies from different nations with stable economies so that the money value will remain consistent. The SDR consists of proportions from the US$, British pound, Japanese Yen and the EURO. This position makes the most sense as the economies are stable, functional and diversified.

We also know that all of this has to happen pretty soon if Iraq is going to get the benefits from ALL the contracts they are signing to develop their oil fields and get their manufacturing and agricultural economy going. Thus the people get jobs, make money and don't end up like Kuwait or Saudi where a bunch of sheiks instead of an elected government runs the country.

With all of the oil (3rd largest in the world) in the ground being exploited, nearly the same amount of oil (approx 150 billion additional

barrels) not yet drilled (found but not drilled), their gold deposits, other minerals, natural gas deposits, and agriculture (the Tigris and Euphrates Rivers make the land VERY fertile), Iraq has the potential for a diversified and significant economy. So this country is really on the brink of economic explosion so WHEN they decide to implement the RV, their economy will begin to rebuild. This will be a significant political benefit to the current politicians. Again, the sooner the better for everyone. They are just waiting to get their internal politics lined up and let it happen.

But politically, if Iraq becomes a strong, semi-democratic, economically stable nation, it will divide the jihadist Iran and isolate it from Saudi, etc. and over 2/3 rds of the Middle East oil (which is 60% of the total oil in the world) would be in moderate Islamic control which will blunt the jihadist movement.

As far as we are concerned, all of this good stuff is still POTENTIAL not ACTUAL, so the RV is really for Iraq as much as a speculation as it is for us. They have to get their "ducks in a row". They have to be generating contracts to develop their resources to get the money to grow their economy.

They have to have their politics lined up so the internal factions (Kurds, Sunnis, Shi'ites) who don't like each other much get the right share of the benefits. They have to avoid the Chinese blackmail attempt to bankrupt them by dumping their 3 trillion dinar on the market to derail their efforts to aid Iran and Russia in THEIR attempts to corner the oil and natural gas to Europe. Right now with the Dubai real estate failures, the European Central Bank is in trouble and the US$ is getting stronger pushing Iraq away from any RV that has the EURO in it. As Iraq moves away from the EURO and toward the US$, that makes China's bid to deny the US$ as the default global currency less successful.

IF, for example, Iraq RV's at $3, then the US will have $15 trillion dollars in dinar. We owe China $800 billion which works to weaken the US$. We could give China 100 billion dinars out of our 5 trillion (plus the 1.5 trillion private US citizens own) and pay them off helping the US$ get stronger by wiping out our debt to China and thus counter their political moves against us. The rest of the dinars we own, we could use to buy oil from Iraq with DINARS, not US$ which would again help our economy recover thus pulling out of Saudi. This way we could buy oil, pay off our debt without having to print more US$ and that would help our deficit and debt BIG TIME!! A big RV is a real boon to both the US and Iraq, IF Iraq can get their act together.

(Remember Bush said Iraq war would PAY for itself and this is the

way.)

So ... when we watch the nets and it seems like people are wrong, or seem to be putting out false info, remember this situation is as fluid as water and Iraq is trying to contain a spill. There's a LOT MORE involved in this RV than simply posting a number on Forex. And this doesn't take into account the biblical aspects of a resurgent Iraq!

------- End of forwarded message -------

[terr]

always politics gets in the way..wish it would all come to light, and be fact, so we can all move on.

[fallen]

Great article. Do you know who wrote it?

[joe]

Sorry, No...It was forwarded to me by a friend.

[MakeYourDay]

THANKS! WOW! truly the BEST information I have read on this matter!

[beachboy7]

Very good article and makes a LOT of strong points. That kind of info is what this site should be about, and not so much childish junk. A BIG THANKS to the writer!

[beachboy7]

Very good article and makes a LOT of strong points. That kind of info is what this site should be about, and not so much childish junk. A BIG THANKS to the writer!

[tuxunder]

Great article, really brings everything together. I always figured that China was a huge player in all of this, but from a different angle. I figured China would want a higher Rv because that would guarantee payment for the debt we owe them, but your article explains the situation much better than I had pictured it in my head. My guess is that the politicians are afraid of what might happen in Iraq if an RV does happen before the election and what would happen if they don't RV. Politicians are always looking after themselves rather than their constituents, business as usual.

No mention of chapter 7 or wto.

[fire51]

Best I have seen ... A Big Thank you