What it would cost Iraq to RV

[DougsDinar]

A few weeks ago while talking to my book keeper (I operate an auto body shop) we managed to get around to talking about the "investment" in Dinar, this usually happens when I am in there, and the subject came up about just how many people in the US hold over 1,000,000 Dinar and how many mufti-millionairs a RV would create. Surprisingly he is not down on this investment like it seems most financial professionals are but he sees it more as a long term investment in Iraqi growth and holds little hope for a sudden and large RV (he will be the first to tell you he is not a currency trade expert and his opinion is just that, an opinion). That is what the discussion was about, considering how many people hold Dinar in large amounts and untold numbers holding smaller amounts plus what other countries might hold just how is all this Dinar supposed to be cashed in if it comes to a straight up RV? Who supplies all those billions of dollars? I am not trying to state anything or make any kind of point rather I am asking if anyone has run across any real statistics on these numbers because IMO it could have a profound effect on the Iraqi decision of whether to RD or not. I firmly believe that the Dinar is going to increase in value even if it RDs first, we may not get rich if that happens but at least our investment might be worth it, I am in until the end regardless.

[Kimberlye]

Welcome to DV DougsDinar,

I wish I could say I understood how all this would work, but I don't, sorry to say. I am curious to read the responses you will get from those members that do understand exactly how an RV would work. I read some post on here recently that seemed to break it down as far as how much money everyone involved would get, all the way from the investor to Iraq, but I honestly don't know if that was valid or not. I just wanted to say welcome anyway.

Happy Monday,

Kimberlye

[rulesforrebels]

A few weeks ago while talking to my book keeper (I operate an auto body shop) we managed to get around to talking about the "investment" in Dinar, this usually happens when I am in there, and the subject came up about just how many people in the US hold over 1,000,000 Dinar and how many mufti-millionairs a RV would create. Surprisingly he is not down on this investment like it seems most financial professionals are but he sees it more as a long term investment in Iraqi growth and holds little hope for a sudden and large RV (he will be the first to tell you he is not a currency trade expert and his opinion is just that, an opinion). That is what the discussion was about, considering how many people hold Dinar in large amounts and untold numbers holding smaller amounts plus what other countries might hold just how is all this Dinar supposed to be cashed in if it comes to a straight up RV? Who supplies all those billions of dollars? I am not trying to state anything or make any kind of point rather I am asking if anyone has run across any real statistics on these numbers because IMO it could have a profound effect on the Iraqi decision of whether to RD or not. I firmly believe that the Dinar is going to increase in value even if it RDs first, we may not get rich if that happens but at least our investment might be worth it, I am in until the end regardless.

I would have to disagree that "most financial professionals are in on the investment" I can almost gurantee if polled more would say we are idiots than would say they are also invested.

[Nelg]

I would have to disagree that "most financial professionals are in on the investment" I can almost gurantee if polled more would say we are idiots than would say they are also invested.

Reread what was said, "Surprisingly he is not down on this investment like it seems most financial professionals are but he sees it more as a long term investment in Iraqi growth and holds little hope for a sudden and large RV. . ."

No where does he say that "financial professionals are in on the investment."

Generalizations are seldom fodder for rebuttal.

A few weeks ago while talking to my book keeper (I operate an auto body shop) we managed to get around to talking about the "investment" in Dinar, this usually happens when I am in there, and the subject came up about just how many people in the US hold over 1,000,000 Dinar and how many mufti-millionairs a RV would create. Surprisingly he is not down on this investment like it seems most financial professionals are but he sees it more as a long term investment in Iraqi growth and holds little hope for a sudden and large RV (he will be the first to tell you he is not a currency trade expert and his opinion is just that, an opinion). That is what the discussion was about, considering how many people hold Dinar in large amounts and untold numbers holding smaller amounts plus what other countries might hold just how is all this Dinar supposed to be cashed in if it comes to a straight up RV? Who supplies all those billions of dollars? I am not trying to state anything or make any kind of point rather I am asking if anyone has run across any real statistics on these numbers because IMO it could have a profound effect on the Iraqi decision of whether to RD or not. I firmly believe that the Dinar is going to increase in value even if it RDs first, we may not get rich if that happens but at least our investment might be worth it, I am in until the end regardless.

There have been several threads that have broached this subject. You might go to the search feature and do a quick search to see what you find. (I'm not going to search for you. )

[BULLY! BULLY!]

I can't remember where or who it came from but heres a good explanation.....

First off, I’ll use the exchange of a 10,000 IQD (Iraqi Dinar) note as my example. To help explain the economics of this cash-in example, I will use a 1:1 cash-in ratio between the USD (US Dollar) and IQD (Iraqi Dinar), that is given a two-tier payout, and a 2% bank spread.

What You Will Receive:

If you were to cash in your 10,000 IQD note with a bank that charges you a 2% spread, you would personally receive a net take-home of $9,800 credited to your bank account.

What Your Bank Will Receive:

Your Bank will receive a $10,000 credit to its Federal Reserve Account. They will also be able to add the $200 profit to their “capital account”.

Ultimately, the bank wins because they are able to gain $2,000 in lending power under the 10% “Fractional Banking“ model.

What the US Treasury Will Receive:

First off, the US Treasury will receive $3,500 in estimated taxes in the quarter after the exchange, because you are now in the “rich” category and get to enjoy the 35% tax bracket. This lowers the “net cost” of the IQD exchange to the US financial system to $6,500 USD (i.e. $10,000 out – $3,500 in).

Furthermore, the US Treasury’s rate is higher than the banking rate (we will use in this example 1.25), thereby further reducing their “net cost” from $6,500 to $4,000.

Oil Now Enters the Picture:

At some point, a Fed-appointed agent orders $12,500 worth of oil from Iraq. Payment will consist of a $12,500 transfer from the Fed’s foreign currency reserve IQD account to the IRAQ Oil payment account at the CBI (Central Bank of Iraq) in a form otherwise known as PetroDollars/PetroDinar. Even though the world spot price of oil is defined in terms of USD, the actual transaction may take place in any internationally recognized currency agreed to by the parties. For example, Iran only accepts Yen from Japan for their oil orders, because they don’t want USD in their foreign currency reserves.

How the CBI “RECAPTURES” the Money:

The $12,500 order is filled with 250 barrels of oil based on the spot price on the date of the sale (for this example we used a $50 USD spot price). What does it cost Iraq to produce the oil to fill this order? Well they have negotiated productions agreements for approximately $1.50 USD/barrel. From that price $.50 USD goes to the national Iraqi oil company who is the partner in the field the oil came from. Out of the remaining $1.00 the other oil field partners have to pay the Iraq government a profit tax of $.35 USD (35%). The net cost to Iraq to produce a barrel of oil used in this scenario is $.65 USD. (i.e. $1.50 – .50 – .35)

What does all that mean? It cost Iraq $162.50 to bring back a 10,000 IQD note! Can they afford that? I think so! So, instead of paying out $12,500 for a 10,000 IQD note, they only pay $162.50! That doesn’t add to the money supply much at all does it! They receive their IQD back and place it in the CBI, or destroy it.

The transaction is completed with the Federal Reserve exchanging foreign reserve credits which are equal to $12,500 USD (which had a net acquisition cost of $4,000 USD for the US) for 250 barrels of oil (which has a TOTAL COST to produce of $162.50 USD for Iraq.

More completely explained, and simply put, it cost Iraq $162.50 USD from their foreign currency reserve accounts to redeem the value of 10,000 IQD, which goes into their operating accounts. At the same time the US got $12,500 worth of oil for a net cost of $4,000. That’s how it was originally planned for Iraq to RV at 1 IQD = 1 USD, with the variable being the political element (i.e. UN Sanctions, GOI (Government of Iraq) actions, IMF actions, World Bank actions etc.)

Other Factors that Strengthen Iraq’s Position and Ability to RV:

■DFI (Development Fund for Iraq) Funds Returned & Other Assets: $280+ Billion USD, plus other frozen assets (estimated at $100 billion) will be returned back to Iraq and added to their foreign currency reserve, bringing it up to $430+ billion USD.

■CBI IQD Reserve Requirement Adjustment: The CBI will change the current fractional IQD reserve requirements from 100% to 15% at the appropriate time. As a result, the the total potential money supply will be raised in value to $2.8 Trillion (430 billion/15), while at the same time, the total physical IQD in circulation will be reduced by removing the large bills with the 3 zeros over a period of 2 years, as they have indicated.

■Oil Production Increased: Iraq will also execute the plan they announced to increase oil production from 2+ million barrels/day to 10 million barrels/day with the resulting revenues flowing directly to the Iraq treasury.

■Oil Futures & Forex Contracts Added: To further stir the pot, the CBI will continue to use it’s sales window to market oil futures and forex contracts. They have shown they can generate significant cash flow in the private market. Think of their impact in public markets.

There, my friends, is how this plan will be enacted and made possible. Taking NOTHING, and turning it into SOMETHING, then bringing it back to a “manageable and reasonable something” that is accepted and supported by seeming endless supplies of oil. This is how the world’s ENTIRE NEW MONETARY SYSTEM will be regenerated and supported and backed, given, in essence, a re-birth and renewed for most governments and economic regions… even by “Black Gold”.

So, here’s the summary for all the “players” involved, giving ballpark numbers, and not taking into account superfluous costs, fees, and other small details that don’t really affect the larger picture:

■Investor’s Net Gain: $10,000 – $200 = $9,800 x .65 = 6,370 for an investment that cost $10

■Bank’s Net Gain: $200 added to “capital account”, plus $2,000 they can use to loan out.

■US Treasury Net Gain: $2,500 from the .25 spread on top + $3,500 in quarterly taxes = $6,000

■CBI/GOI/Iraqi People Net Gain: $12,500 – $162.50 = $12,337.50 + Profits from “Other Factors”

■Overall Net Gain for All Involved: $6,370+$200+$6,000+12,337.20 = $24,907.20

This is the wealth that was generated from a single 10,000 IQD note that was given an original value of approximately $10! Is that amazing or what?! You tell me… can Iraq afford NOT to RV?!!! Will the IMF allow them to NOT RV their currency, but simply replace their large denoms for smaller ones?!!! LOL!!!

In this scenario, EVERYONE WINS… and the IQD is slowly taken back in to the CBI… eventually destroyed, leaving a manageable M2 behind, having created HUGE WEALTH throughout the world to re-supply what was allowed to be destroyed in the “great bleed” over a period of just a few weeks a couple of years ago, even the greatest redistribution of wealth the world has ever seen. Believe it or not, it has happened for this very purpose, and it IS coming!

[MahiMahi]

The most important question is "What will it cost IRAQ if they DON'T RV???"

[despain]

History is repeating itself. The "plan" has been in place since the beginning. Big players explained it long ago. It is almost over, and this is how WARS are paid for. It really is all Funny Money, folks. They just push the reset button, and BAM. The balance sheets are cleared. Pretty crazy if you ask me, but if you do your research, then this model will take you back to the Marshall Plan. JMHO...

[BULLY! BULLY!]

You explanation on the pay-out seems to make sense but my very first post dealt with the oil issue, does our Government really buy oil? My book keeper disagreed with that when I said something similar to him, the US Government is not in the oil business and does not buy imported commodities such as oil. Imported petroleum is purchased by the oil corporations not any Government agency, by what method would the Government dole out oil to the corporate owned refineries if they do indeed purchase oil? I have never heard of the oil companies having to buy oil from any Federal Government agency but if they do what is the name of this agency? Even the strategic petroleum reserve oil is purchased from domestic oil companies (even if it consists of previously purchased import oil) and it becomes a huge news making deal if the Government sells any oil from that to the big oil companies. I too was of that opinion until I mentioned it during one of the conversations at the book keeper's office and while he may not be a currency expert he is pretty sharp in corporate workings. I am not saying this is not right and maybe the Government does buy imported oil and distribute it to the corporate held refineries but does anyone have any real evidence of this? What agency is in charge of this practice and how is the oil distributed fairly, does the US Government hold auctions to sell this oil to the refineries? I seriously doubt the Government buys oil and then just gives to the oil companies.

Again this is just my take on it and it may or may not mean much of anything

I didn't have much time to research but I did fine out that it is the Dept. of Energy that is given permission to make direct purchases to replenish the strategic petroleum reserves. If they can be given permission to do that then what limits that to just domestic companies? Besides, with all the "secret" goings on that the Government does, the no bid contracts to haliburton, and the whole facade of weapons of mass destruction to go into Iraq, who's to say that we know the whole truth about just how involved the US is in the oil industry?