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Good Post from Franks Dream 21

pirate

By pirate,
in Dinar Rumors

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pirate Newbie

pirate

Posted
Posted

Possible RV before March 1!

In all this I wish to share with you my expectations according to the news that come out slowly and that many of them have caused much confusion and frustration. The LOP blessed automatic been wronged and has misaligned the nerves of many. I do not think there will be a LOP to the notes that we have in our hands and this has been enough talk. So a LOP (if you can call it that) is seen indirectly in the salaries of Iraq. mentioned that employees who are paid a monthly fee of 940.000 dinars to 940 dinars will be reduced to three zeros bone will be raised on 1 March current year. Interesting to see the Iraqis do not mention an RV because it is implicit not only in new wages, but even in the budget approved by chance that will also be in force on 1 March (a week before the election). Coincidence? Hmmmmm!! Now look has repeatedly mentioned a possible lop but have been very confusing because of language. Three zeros off the salary could be considered a lop but without changing the value. How? See what they are saying them. You are not really talking about a lop as we thought but rather an RV and made in the books. As is 940.000 dinars will be equal in value to 940 dinars. Observe well:

940.000 dinars x 0.0008547 usd / dinar = 803.42 dollars per month, now the new salary is 940 dinars x 0.8547 dollars (lop three zeros) = 803.42. Bone when they decide to reduce wages to 940 dinars without affecting its value means that a lop happened. Iraq now says that his new salary must be largely improved. Therefore an RV must occur to ensure compliance with this part. To set a range in the rate assume a hypothetical case that a government employee earns a new wage (purchasing power) of between $ 8 to $ 13 dollars an hour. Now do the math:

$ 8.00 / hr x 2080 hr / yr = $ 16,640 annual / 12 = $ 1,386.67 monthly

To achieve this we have to make monthly payment of $ 1,386.67 / $ 803.42 = $ 1,726 dollars (rate in the lower range).

Repeat the process now with the $ 13.00 / hr:

$ 13.00 / hr x 2080 hr / yr = $ 27,040 annual / 12 = $ 2,253.33 monthly

To achieve this we have to make monthly payment of $ 2,253.33 / $ 803.42 = $ 2,804 dollars (in the superior range).

A possible rate could be between $ 1.73 to $ 2.80 per dinar.

I know that many of us expect $ 3.00 + but I think that will over the next five years (no offense to anyone). What I mean is that even the range that emerges from this exercise looks attractive. In fact if you get a higher rate will be welcome. On the other hand am among those who believe that a significantly lower rate will arouse the curiosity to many speculators to buy larger quantities RV after a short, seeing the potential of a higher rate later and this may cause a bankruptcy or a large damage Iraq economy.

Well as I mentioned at the beginning am not an economist but a simple person slope arguments and analysis to observe in different forums. I think this week should be very important for us to have great potential in the RV happen since March 1 begins the new budget. I hope some help and if anyone has another argument for welcome.

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Scooter Newbie

Scooter

Posted
Posted

Pirate,

Well done!!!

Your calculations make perfect sense -- great post. The calculation may not make sense right now, but in 18 - 24 months, plays out perfectly to be "range trading" for GCC Acceptance beginning of 2013.

$1.15 -- Way to low -- won't get them there in time

$1.47 -- Still too low and not enough room to manuever around initial the retracement

$1.90 -- Nice spot and timing is good at 18 months - in a perfect world. However, with the 25K notes coming back rapidly and being cashed-in, the initial retracement could be up to 50%. Still too risky.

$2.25 -- $2.88 Is a safe range to start and leaves them room to modify accordingly to hit the 18 month target regardless of the retracement

Just my "two-cents".

Thanks again for the post and keep them coming!!!!!!!!!!

Scooter

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The Watcher Newbie

The Watcher

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I say again, if there is NO gain for the average Iraqi, why do this? There is no increase in buying power nor any rise in the standard of living. So what is the point. The ID must rv at least twice the 1 to 1 range everyone is talking about. And at $.86 China would buy the whole country and sit on the oil and the money.

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Acoustic Newbie

Acoustic

Posted
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I say again, if there is NO gain for the average Iraqi, why do this? There is no increase in buying power nor any rise in the standard of living. So what is the point. The ID must rv at least twice the 1 to 1 range everyone is talking about. And at $.86 China would buy the whole country and sit on the oil and the money.

There are good reasons to remove three zeros and then revalue the currency, one mentioned is to make banking easier by removing the large amount of currency in circulation. Another plus is the psychological benefits a population realises when their currency is in what we expect to be normal ie 5 dinar for a loaf of bread instead of 500 dinar.

In regards to China being able to buy the whole country because the value of the dinar is $.86 to the USD is ridiculous! The real value of commodities is not linked to the exchange rate ie oil will still be worth x USD regardless of the exchange rate of the IDQ

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BOKINEGRO Newbie

BOKINEGRO

Posted
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My question is what happens to the guy making 940 dinars... what do they make? I cant believe that the bathroom cleaners will make the same as the government officials.....

I see what u r saying if 2 iraqis hold 1000 dinars but one in small denom. the other in 1000 bill iqd the one with the smaller denom will still have 1000iqd the other 1 iqd.somebody?

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pirate Newbie

pirate

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Ok look at it this way lets say the average iraqi make 1,000,000 nid a month and saves 100,000 nid from his pay check for the last year. That iraqi has saved 1,200,000.00 nid right? So now here comes the ri or rv at 1:1 usd he or she has 1.2 million of usd of liquidity ..when people has money what do they do? They spend it on homes household items ect..and when people spend money ..jobs are created...

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