WILL THE IRAQ DINAR REVALUE ON THE DAY OF THE ROYAL WEDDING???

I,M NOT SURE OF THE RULES OF WHAT I,M POSTING HERE I JUST HOPE TRINITY AND THE CREW CAN SEE THIER WAY TO LETTING THIS THROUGH,IF NOT I HOPE THEY CAN LET ME KNOW WHAT I HAVE TO DO TO REVISE AND PUBLISH THIS NEWS AGAIN.


THIS IS FOR ALL AND ANYONE WHO HAS INVESTED IN OR IS THINKING ABOUT INVESTING IN THE IRAQ DINARI.
THE FIRST PART IS A DEBUNKING PIECE BY WAYNE ASKEW OF DINARVETS(dot)COM. REGARDING WHY HE THINKS IT'S A MASSIVE SCAM..
THE SECOND PIECE IS BY VERY INFORMED DINARI INVESTOR THAT RIPS APART THE FIRST PIECE AND PRESENTS SOME INTERESTING POINTS REGARDING THE IMMINENT RV OF THE DINARI.

I,M NOT POSTING THIS TO MAKE ANYONE INVEST IN THE DINAR I HAVE NO AFFILIATIONS TO ANYONE IN ANY OF THE LINKS.


I INVESTED IN THE DINAR OVER 8 YEARS AGO. I KNEW IT WAS A LONG TIME GAMBLE AND HELD NO ILLUSIONS OF INSTANT WEALTH FROM THIS INVESTMENT. BUT NOW IT SEEMS THIS IS HAPPENING AT A VERY FAST PACE. I DON'T KNOW EXACTLY WHEN OR AT WHAT RATE IT WILL RV BUT FROM MY RESEARCH AND THE RESEARCH OF THOSE FAR MORE INTO THIS INVESTMENT THAN ME,IT SEEMS IT'S ABOUT TO HAPPEN SOON.
MY GUESS AND IT IS ONLY JUST A GUESS,THAT THIS MIGHT HAPPEN ON THE DAY OF THE ROYAL WEDDING.


SO HERE IT IS. WHAT DO YOU ALL THINK?


Wayne Askew of DinarVets has taken the time and effort to present his case that the IQD will in no way RV period, let alone to anything over $3.00. I have copied his entire post below for those who want to get the full flavor of his masterful presentation. Afterwards, I will address the pertinent facts to show that his reasoning suffers from a fatal flaw from the very beginning.

Read this from dinarvets:

How’s this for proof. If the IRD RV to just $1, there are 27 trillion of them in circulation. So that means CBI has to have $27 Trilliion to cover that value. Currently the hard currency reserves of the CBI are about $50 billion. So, just to reval to a dollar, they’re missing $26,950 Billion dollars. If you go to the other end of the scale, $6 RV, the number is $162 trillion, which is more money than actually exists on the planet.

In fact, recent changes in how the CBI is run make it more likely that it could run out of money.. [link to www.iraq-busi…e-central-bank]

The RV is fairy tale, sold and told to you by the companies selling dinars. If it really was gonna RV any day now, why would ANY of these companies be willing to sell ANY of them? If the $6 RV happened tomorrow, a company like Dinar Trade would have enough in the cash drawer to be a G8 country. Quit dreaming, there is no RV coming.

I won’t say anything about your typos, this is an internet forum, not a graded paper. I will point out your lack of any backing information to support your position. I provided a link to an official statement from the CBI that firmly establishes that they have foreign currency reserves of ~$50 billion. It’s an incontrovertible fact that whatever the IQD RV to, the CBI will need to have most, if not all of the total amount it revals for, in hard currency, available to redeem any dinars that speculators, investors etc.. would want to convert to dollars or euros etc.. I just want to know where that money is. They have $50 billion and are worried that they may have to recapitalize the bank, so how are you going to get paid if they RV? There isn’t enough money in existence to redeem all the dinars issued @ a little less than $3, so can you explain the realistic scenario under which ALL THE WORLD’S WEALTH will suddenly become available to the CBI?

If you got a masters in Econ and can’t do the maths to show if they sell every drop of that oil it still leaves them, umm, $17 trillion short, send it back and see if they’ll give you a refund.

Iraq export revenue in March was $4.35 billion, so they could, at that level, support a dinar for a dollar with 517 years worth of oil revenue, provided of course that they spent every penny of it on backing their currency, and not bother with things like an elecrical grid that works more than a few days a week, or any infrastructure, expense of government, build roads or anything like that. (source fopr revenue figures)
[link to www.jihadwatc…ad-attacks.html]

I know, I know, the revenue is down, when they get everything up and no insurgents and such, it would DOUBLE! Fine, so you only have to devote 208 years of eveery penny of revenue to paying off dinar speculators…. Think you can increase the sales so much that you can RV the dinar and not take a few centuries to do it? Well, you’ll have to see if the UFO people need gas on their planet, because the total world market in oil is 73 million barrels per day. That the whole planet. That’s 26.37 billion barrels a year, or @ 100 a barrel, $2.6 trillion. You could fund that $1 per dinar exchange rate in just 10 years, if Iraq was the only country to produce petroleum for those ten years, notwithstanding that they would run out of oil to sell in as little as 4 years, but even the most optimistic number of their reserves only gives them enough to produce that rate for 8 years. (link to global oil production figures, 1960-2009)
[link to www.eia.doe.g…xt]

people just don’t get the basic concept that for the dinar to revalue, the money has to be somewhere. Oil in the ground? It has to got to $2600 a barrel to support a dollar dinar. When you cash your dinars in, are you gonna accept it in dollars, euros or a barrel of oil. See above for the oil, the waiting line is 500 years. Want it on dollars, the amount the ICB needs is almost twice the entire GDP of the USA, and they have to have it in cash. And that’s just for it to be a dollar. Take all this alnd mulitpy by whatever number your guru is quoting today, and find where the money is gonna come from to pay it.

Read more: Link to Dinar Vets Post Thread

Wayne Askew

OK, let me now address the serious error in this post.

Wayne begins by stating that there “are 27 trillion dinars in circulation.” If this were true, then the remainder of his thesis might hold water. However, this is patently NOT true.

What IS true is that there WERE 27 trillion dinars in circulation at one time, between the introduction of the dinars in 2003 and late last month, 2011. As I have shown elsewhere, since 2005 it was known by the Ministry of Finance and the Central Bank that this money supply would have to drop substantially in order to allow for an RV of the dinar.

In February of last year (2010) Mr. Saleh of the CBI was quite specific that the money supply was too large:

Central Bank adviser Muhammed Al Salih appeared to discuss the economic policy of the central bank for withdrawing cash from the local market due to the “inflation suffered by the money supply, which rose from 25 billion dinars in 1980 to 23 trillion dinars now. He said “it is important to reduce [the money supply],” noting that the process of lifting the zeroes is a “long-term policy adopted by the Iraqi government and the central bank, which will direct the project as soon as the development of the Iraqi economy warrants it, and that this may be this year or next and will probably require a longer time, depending mainly on the stability [of the economy] for the operation.”
[link to ar.aswataliraq.info]

Another article in the same month said roughly the same thing:

Salih said by the end of 2010 the new banknotes will be fully introduced while the old banknotes will be gradually removed from circulation. He did not specify when the new notes would be issued.

Both will be legal tender in Iraq until the old notes are completely withdrawn.

Salih added that in 1990 the value of banknotes in circulation was about 25 billion Iraqi dinars but is currently some 25 trillion dinars.

[link to www.rferl.org]

On April 14, just 5 days ago, Mr. Saleh made the following statement:

Iraq’s Central Bank announced on Tuesday that the project of Iraqi Dinar re-denomination consisting of removing three zeroes is close to completion….

In an earlier statement to Alsumaria News, Iraq’s central Bank adviser Mothahhar Mohammed Saleh affirmed that the bank plans to remove three zeroes from the Iraqi Dinar noting that the zeroes which were added to the Iraqi currency previously constituted a large money supply estimated at 27 trillion Iraqi Dinar.

[link to iraqidinars.com]

What happened, then during the year between February 2010 and April 2011? We now know the answer.

Mr. Shabibi, head of the CBI, announced as far back as July of 2010 that the process of removing the large denominated notes (“removal of the three zeros?”) was even then already 70% complete. Therefore from 27 trillion dinars in circulation, as far back as July of last year that number was down to 8.1 trillion dinars still remaining in circulation.

Now, as of this month, Mr. Saleh says that the process of removing the large denominations is “nearly complete.” What does this mean? Clearly they haven’t removed the large denominated notes from outside of Iraq, including the notes we hold. Therefore, his statement must be taken as referring to large notes WITHIN the country of Iraq.

Let’ assume that American investors hold about 3 trillion dinars, and lets assume that the US government and all other governments and people outside Iraq hold another 4 trillion dinars. This would mean that there would have been about 1.1 trillion dinars left in Iraq to draw into the CBI from July of 2010 until now. Saleh’s statement indicates that this process of removal is now “nearly complete.”

We know this to be true because there is literally no cash in the Iraqi economy at this time. This is nearly at a crisis point and the issuance of the smaller denominated notes (which, incidentally, were part of the original 27 trillion dinars printed in 2003) is about to begin which will correct this problem. Of course issuing the small notes without also revaluing the currency would fail. People would need a wheelbarrow of notes to fill their car with gas!

What about the remaining 7 trillion dinars floating around the world? How in the world could Iraq buy these back? According to Wayne, even if his number of 27 trillion dinars is reduced to 7 trillion dinars, there still isn’t enough money either in Iraq or elsewhere to pay back the investors, or is there?

The US, China, Britain, and France by far hold the majority of the outstanding dinars. An agreement was made with Iraq last year in which it was agreed by all four countries that none of them would attempt to “cash in” their dinars for a minimum of 6 months after the RV.

Of course Wayne might then say that this is only pushing the ball down the field and that it does not solve Iraq’s problem. If that were the whole story, he would be correct. However there is a second part to the story.

When these four countries finally begin to “cash in” their dinars they will do so for oil, not dollars, or pounds, or yuan. Oil is something that Iraq DOES have plenty of, literally trillions of dollars worth. Furthermore, it costs Iraq about $.57 per barrel to get that crude out of the ground. Therefore, effectively, given a current price of oil of $125 per barrel, Iraq will be buying back its dinars, $125 dollars worth at a time, for only $.57. It is clear that they can afford this.

How about all of our invested dinars? How will they pay US back when we cash in? The answer to this is also quite simple: our dinars go to the US Treasury and become a part of the pool of dinars that will be traded for oil beginning 6 months from now. It will actually be the US Treasury that will be cashing us in, not Iraq.

How can the US Treasury afford to do this? Again, the answer is simple. First, the transaction is purely electronic. The UST does not need to have trillions of dollars printed to cash us out. Second, and this is important for the health of our own economy, the US government has contracted to buy oil from Iraq, beginning in 6 months, at only $32 per barrel, not $125. Therefore, for every dinar that we turn in to the US Treasury, the federal government will quadruple the buying power of those dinars when converting them to oil.

Presumably the US government will then sell the oil to Chevron and others for $125 per barrel, keeping the gain in their own coffers, more than enough to offset the inflationary pressure from the initial cashing in of our dinars to the US Treasury,

Now we must address another key point that Wayne is mistaken about. This has to do with the amount of reserves that Iraq holds, and will hold, after the RV. He is correct that the current reserves are about $50 billion. However, what he fails to take into consideration is that there is at least that much more outside of Iraq held in banks around the world “in trust” awaiting the final disposition of the Chapter 7 issue with the UN. With the RV will come the final release of Iraq from Chapter 7. This will allow Iraq to reclaim its vast wealth from overseas banks, as well as ships moored outside Iraq for 20 years, and other assets.

The result will be that the reserves of Iraq will more than double.

Let’s assume that the reserves double to $100 billion.

Now, how will that compare to the new money supply of Iraq after the RV? Mr. Shabibi and Mr. Saleh are on record that they intended to bring the money supply back to the early 1980s level of 25 billion dinars. Mr. Saleh indicated 5 days ago that this processs is “nearly complete”, as I have quoted above.

Are the reserves worth $100 billion dinars sufficient to cover a money supply of only 25 billion dinars? Assuming we have an V at $3 per dinar, the money supply would be worth $75 billion. The reserves would cover the money supply by 125%, making Iraq the strongest currency in the world.

The US, incidentally, has reserves of about 10 cents for every outstanding dollar.

Now, in closing, let’s take this one step farther. Suppose, over the next 6 months, the dinar gains and gains in value until it reaches $12 per dinar. Can Iraq afford this? Let’s do the math again. With a money supply of 25 billion dinars, the “worth” in terms of dollars would be $300 billion (12 times 25). I have just shown that post RV the “worth” of the Iraqi reserves will rise to $100 billion. Therefore they would STILL have 66% coverage for their money supply in reserve, even at $12 per dinar.

I believe this is sufficient to show that Wayne’s analysis is quite flawed and that no one needs to be concerned about this RV. Everything is on plan, and imminent.

Steve