Iraqi Dinar Facts

[talion1011]

One of the most commonly quoted facts on Dealer

Edited December 4, 2009 by talion1011

[avenger380]

My Dinar Dealer continues to sell them to make a living. What he told me is that he has a quanity of Dinars that he keeps for his personal stash. When he sells Dinars to the public, he re-orders the Dinars every day based on what his sales are. He makes sure that he can get supply everyday before selling Dinars. So, if he is making 200. per 1 million in each transaction, then he is making a living for his family. I have gotten over the mentality of why they would sell the Dinars if they were about to RV, because, I think that none of them truly know when this is going to happen, so, they continue to make a living and maintain their stash for the RV when it finally hits. Does this make sense to you?

[Charles45]

I just had to respond to this and I am NOT trying to

[talion1011]

I can't really comment on the arguments. They look good, Charles. I took everything I posted from a website. I guess I should have put that disclaimer in, sorry. Was just trying to throw some food for thought out there.

[talion1011]

Argh, I was editing and was going to add a lot more.. but I got timed out.. gimme a few minutes to repost

[talion1011]

During Saddam's regime, the dinar was artifically set by Saddam. Prior to that, you said that it traded in a 2-3 dollar range in relation to the USD. Given the relative economic strengths between Iraq/US back then compared to now, what would your reasoning be in seeing a growth or valuation of the IQD at a similar 2:1 or 3:1 to the USD? America is much stronger now, economically speaking, than Iraq is compared to back then. Especially when you factor in the level of infrastructure damage and random terrorist activity disrupting things.

As for the Venezuelan example, I agree that it was a little off. I think the point that was being portrayed, however, is that a country who's economy is solely dependent on one export/trade is quite unstable. The valuation of a currency/security/etc is not only based on present day value (oil production, as is the case with IQD) but also on the stability and future of it. In a country where oil production can potentially be disrupted, this presents a very difficult valuation of future production, and would have negative impacts on the value of the IQD.

Still, for me, the biggest obstacle are the denominations of the dinar itself. As we all know, Iraq discontinued production of the old currency that had Saddam's face on it. What puzzles me is that in the development of it's new currency, Iraq chose to create it's dinar in large denominations (50 through 25,000) which either means they had incredibly bad foresight, or they weren't intending to have a highly valued currency in relation to other countries.

So, no matter how you look at it, if an RV is going to occur, Iraq will have to change it's currency. Even if the IQD RVs at a 1:1 ratio with the USD, they are going to have to do a major overhaul of it's currency and, at the very least, create new lower denominations.

Now that I think about it.. logistically, it would make most sense for Iraq to produce and introduce lower denomation notes into the economy PRIOR to an RV, as opposed to afterwards. I mean, those first few days after an RV would be hectic for day-to-day activities.. who wants to buy eggs and milk for 50 IQD when 1IQD = 2-3 USD?

So I think that would be the biggest tip off to an oncoming RV.. the introduction of lower denomination notes. Without the introduction of lower denomination notes, it would just be plain idiotic for Iraq to do such a thing.

[Scooter39]

Do we know for a fact that Iraq doesn't already have lower denoms printed and ready for use sitting in a vault?

[Captain Terry]

Both arguments are increadably good, well thought out and eliquently delivered. The one thing that neither of you considered is the politicians. What will benefit the Iraqi politicians??? The answer is simple. MONEY!!! Money for the politicians and money for the Iraqi people.

Let's see now, I want to be re-elected so, I think the best way to get everybodys vote is to give them money. It's called a bribe folks and in Iraq bribes are pretty normal.

This will RV!!! It is a no brainer after all that I have read over the past several years. Everything seems to be in place. It is just who is gonna pull the trigger. My hunch is that Maliki will pull the trigger from 2 to 4 weeks prior to the election.

Election?? This begs the question: "When is an election going to occur??" Hummmmmm!!!!!!!!

Oh, by-the-way, as an aside, looks like SFJones has lead a lot of folks to the Kool-aide once again. Can I say: "I told you so???" Nahhhhhhh!!! That would be bashing. Shame on me. My bad!!!!!!

[phooper]

Ask yourself this question. If you thought that Iraqi Dinars were about to explode in value, would you sell them? Of course not. You would grab all your money, and buy as many dinars as you could, then sit back and wait for the money to roll in. Why are there dealers selling dinars then?

I have asked the same question about the push for gold of late. The commercials claim that due to the falling value of the dollar, gold is the safest place to invest. But when you buy the gold, what do they take in exchange??-- the us dollar. I the dollar is doing to poorly, why are they excepting it in exchange for the "higher valued" gold? Just keep the gold.

[vestor]

During Saddam's regime, the dinar was artifically set by Saddam. Prior to that, you said that it traded in a 2-3 dollar range in relation to the USD. Given the relative economic strengths between Iraq/US back then compared to now, what would your reasoning be in seeing a growth or valuation of the IQD at a similar 2:1 or 3:1 to the USD? America is much stronger now, economically speaking, than Iraq is compared to back then. Especially when you factor in the level of infrastructure damage and random terrorist activity disrupting thing.

Still, for me, the biggest obstacle are the denominations of the dinar itself. As we all know, Iraq discontinued production of the old currency that had Saddam's face on it. What puzzles me is that in the development of it's new currency, Iraq chose to create it's dinar in large denominations (50 through 25,000) which either means they had incredibly bad foresight, or they weren't intending to have a highly valued currency in relation to other countries.

_______________________________________________________________________________________________________

During Saddam's reign, up until the invasion of Kuwait the IQD maintained a world wide value over $3. After the invasion when the UN sanctions were in place is when Saddam set his artificial value on the IQD. Even then the black market price was $1.86.

As for the current IQD, that was all done by the IMF under the authority of the UN Chapter VII. The IMF decided the value, what the bills would look like, and who would print them. I personally think the IQD value was set so low as a punishment.

[talion1011]

Ok, but the manner in which they set up the currency system in itself creates problems for a high value currency. With the lowest denomination as a 25 dinar coin, you simply can't conduct transactions if the dinar were highly valued.

[willettemc]

Thanks for the info