_(Dinar Recaps Note: Below is Kaperoni's opinion, which he is entitled to. It is important for all investors to hear that this is a possibility.)
I continue to be asked almost daily about the rate when the dinar revalues. I assume this because the rumor gurus continue to push nonsense of a high rate. Some even saying 8+ lol
Let’s get into this and put this to rest once and for all.
First I want to address the biggest “hype” for a high rate..That Kuwait came out at 8+ so Iraq might also. This is not possible. First, Kuwait did not have close to 6-10 trillion dinar sold outside the country like Iraq has. Iraq through numerous articles has stated that they want the New Iraq Dinar to be part of the world's currency reserves. That is a telling statement. First, no Central Banks are going to give you that kind of rate when you cash in so they can add that to their foreign reserves. That is simply foolish and makes no economic sense taking a risk that Iraq stays stable enough to maintain that rate. It just does not make sense. What does make sense is a lower rate around 1.2 to $1 in which these Central Banks (Federal Reserve in the case of the US) can buy your dinar and as Iraq prospers, so does the dinar. Ultimately, rising as oil production increases agriculture and manufacturing improves to a respectable rate. Iraq never stated they would have the highest exchange rate in the Middle East overnight. Don’t assume they will. When Iraq succeeds, so does the dinar and so does the world's debt crisis. They are a developing nation and a GOI that is very unstable constantly challenged currently with sectarian violence.
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_ How do I know the rate will be around 1.2 to $1 initially? Because Iraq said so. Not once but numerous times. There are at least 20 articles discussing new lower notes and an exchange rate of 50 dinars equals about $43 US. That is in fact, 1.2 to $1. Assistant Professor and Dean Dr. Fadel who helped create the “delete 3 zeros” plan back in 2006-2007 states 1.2 to $1 and makes this offering… “The deletion process will be on according to the following: it becomes the U.S. dollar at today's prices = 1200 fils in the sense that the U.S. $ 100 = 120 dinars, which is very suitable for such a stage that the government control inflation and keep it at reasonable levels.” Again, more confirmation of an initial rate of 1.2 to $1. Now one final bit of proof, Saleh who is Deputy Governor of the CBI has documented in tables that the rate of the dinar is somewhere from 1.17 –1.30 per $1. Again, more real confirmation.
What is the CBI’s objective? To make the dinar strong? To make it the primary currency of Iraq? And to dedollarize? Yes, all of these are the goals. All of these questions can be solved with an initial rate slightly higher than the USD. Remember what the “delete 3 zeros” is…. It is simple a process and a transition from larger notes to smaller notes. It makes sense to gradually increase the rate from 1.2 to a higher 3+ rate over time so they can collect these notes and destroy them. This metered approach will prevent chaos, and corruption, and potential theft and violence on the streets as these larger notes are removed. Could I be wrong? Sure I could be off a bit on this rate, but I will not be off by much. Certainly not off by the silly rates these gurus put out.
These rumor gurus play on your inability to know the plan. To know the facts and to know the process. They will continue to excite you with high rates as long as you’re willing to not hold them accountable for their comments. If these rumor gurus spent just 1 hour a day reading actual documents or table or chats from various real sources such as the IMF, World Bank, UN etc. they would have seen the evidence that supports a reasonable initial low 1.2 to $1 or about rate. What does that tell you?