Food for thought...

[roger01]

This is my opinion...after a long drive and alot of thinking. Some may not like my thoughts but judge for yourself and hope I'm wrong, I sure do!

I've made a few posts in the past about different senarios of what could be done to raise the value of the dinar while keeping the same notes in use at a lower exchange rate of say .05 and just issuing smaller denominations. I've also talked about the amount of currency in cirrculation possibly being false and us seeing a rate above a dollar and as high as 4.00+. I've also thought about the dreaded LOP, which none of us want. Something got me thinking about this one dealer. I won't mention his name but I'm sure most of you know who he is. A few people have stated in the past they wouldn't give their exchange fee out until it RV'd because of shipping and admin fees...yada, yada, and yada! A realistic statement. Then there's another dealer claiming a flat rate of $150.00 per million upon exchange. This intrigued me. Why would a buisness man say this? What this says to me has only a few senarios.

1) He inticipates it LOPing. If he sold you a million dinars for 1,180.00 and you went to sell them back he may pay you in the range of 880 to buy it back. Thats 300 dinar, a difference of $76.92 at the rate of 1170. The current exchange rate. They would make 10.00 selling it straight to you. Not a big increase but I'm sure they make a dollar or two on shipping costs also. Now, why would I say he inticipates it LOPing? Lets look at some math. If it lops and it RV's to say 3.22... 1000*3.22= 3220-150=3070. A profit of 2070.00 to you and he makes 140.00 if it costs him 10.00 to ship or transport money anywhere other than his local bank. Don't forget your taxes on your profit!

2) If he anticipates it RVing to say .05 thats 50,000. What bank do you know will exchange anything without a fee? Even a check cashing fee ranges from 1% (500) to say 4% (2,000). And he's only going to charge you 150.00? NAH!

3) If he anticipates it RVing at .86 (1.17 converted for those that don't understand how to use a calculator) thats 1,170,000. Is he only going to charge you 150.00? I don't think so. This bank, private lender, or financier would lose so much profit on that, it would never happen. They would have to have trillions in the bank to do something stupid like that. Which isn't likely. Does BOA store trillions at your local branch? Maybe a few million at the most. Some of the biggest bank heists were only for a few to several million or more... Ohhh....say for the kicks of it, well its all numbers that will be transfered digitally... When was the last time you did a western union money transfer? Most places charge you for that too! Some banks may not, but most still charge something. I know it cost me 12 to send 100 to my brother last week. I wonder what a million would cost me?

4) He's totally lying and he will increase his rate.

Okay so take a look at all four senarios...If I missed something, clue me in. I'm game, I'm a big boy, and I'm not all knowing. Niether is he but I think I know what he's betting on. Option 1?!! What's realistic?

Now, since I've been sitting on my dinar since Feb 2004 and have spent two years in Iraq working in town with the people on a daily basis as a squad leader, vehicle commander, running the Syrian Port of Entry etc... I would dare to say I have a bit of understanding how corrupt the people are even to their own people, let alone the US. And we're hoping they will bail us out of financial trouble. With that being said... the hope of well...the world forgave their debts looked pretty attractive to me for them to straight up RV too but Kuwait wants their money rain, sleet, hail, snow. They aren't counting on an RV, they want their cash. I figure the rest of the countries think they're going to get a deal on oil through bids on oil contracts or commercial business or whatever. I think our idiot politicians have just spent out of control and we're screwed either way. The Govt will get some income in the form of taxes if we make some money either under the 60/40 rule or 35% capital gains, but it's not going to be our saving grace and wipe out trillions in debt. I also think the whole tank the dollar is in response to China's practices of currency manipulation, but even then our politicans didnt say crap becasue china came right out and said dont devalue the dollar to kick up our exports. Our politicans suck, they dont know business and have destroyed what America was and is without them. They have all sold us out for thier reelections. Not our best interests as a country.

DO I HOPE I"M WRONG?

HELLS YES!

AM I?

PROBABLY NOT!

WHAT DO YOU THINK?

[roger01]

Sorry, wasn't looking for spelling errors or typos, oh well!

[cbisinger]

This is my opinion...after a long drive and alot of thinking. Some may not like my thoughts but judge for yourself and hope I'm wrong, I sure do!

DO I HOPE I"M WRONG?

HELLS YES!

AM I?

PROBABLY NOT!

WHAT DO YOU THINK?

Good post, nice deductive reasoning and very difficult to argue with. Sadly it supports the LOP theory as the most probable. As $150 Does seem insanely low if there is no LOP.

Edited August 15, 2011 by cbisinger

[GODyesRVmaybe]

Hope you are wrong too on the LOP thinking. Don't know why you would get negs for a thoughtful post. +1 from me.

[josephj792]

What you or we do not know if that dealer is going to sell back directly to CBI for let's say .05 or more of what we got from him that will be a good reason to do so .05cents per millions make a big difference maybe that is what the dealer are basing it on. what do you think

[In Iraq]

Sorry, wasn't looking for spelling errors or typos, oh well!

You are right about the people being corrupt even toward their own. I think they take pride in swindling. We are way at the bottom of the list for countries they would go out of their way to help. I have seven years experience in the middle east so you can't convince me otherwise.

[design interrupted]

My guess is there is a spread hidden in the rate they will be exchanging for, just like a bank. Even if they say they are only charging a $150 per million to cash in, they are business men or women. The may reduce the spread to make it appear lower than a bank, to gain your business, but IMO there will definately be a spread no matter what they tell you.

[leanonme]

I beleive the $150 will in addition to the spread. NO LOP. Iraq can not afford a LOP.

[LittleMissGrits]

My guess ... There is some type of advantage for the dealer on the back end of the exchange process which we will not know about. We sell for the $150 per mil which means he keeps his word to us and makes his profit as well. What he makes on the other end is his business. Last I knew, it is still not a crime to make a profit in this country. Just wait til you try to deal with a bank rate for foreign exchange. For every penny difference it will cost you $10,000 per mil. Cut Ali some slack., because in all honesty no one knows what will happen at "cash in". Right now it is a problem we don't have to worry about, sadly. Lots of folks had no problem buying and dealing with him on the front end. He was forthright and honest and expeditious, but now all of a sudden he is a crook??????

[Jaxinjersey]

My guess is there is a spread hidden in the rate they will be exchanging for, just like a bank. Even if they say they are only charging a $150 per million to cash in, they are business men or women. The may reduce the spread to make it appear lower than a bank, to gain your business, but IMO there will definately be a spread no matter what they tell you.

I agree... with even a small spread any dealer is making a good business profit, plus the $150.00 per million. Seems credible for a dealer to propose, and not that unbelievable to me at all... and no big deal... same as at a bank.