Ramses73y: Ok guys if calculating the exchange rate was a simple equation then take a look at the U.S. on tradingeconomics.com our GDP is 16.8 trillion dollars and our M1 is 2.988 trillion divide those numbers and you get 5.622 our dollar should be worth 5.622 on the market. ‘
Ok now look at Iraq, their GDP IS 223 billion dollars times 1166 is 260.018 trillion dinar and their M1 is 72.651 trillion divide those numbers and you get 3.579 so you see calculating the exchange rate is not simple and you'll confuse yourself trying to see just one aspect.
This is way more involved. however what these calculations do show me is that the dollar is worth more than what we think and so is the dinar. have a nice day
To help make it simple the country as a whole in both scenarios is making enough money to support each individual dollar 5.622 times or each individual dinar 3.579 times
Bscott40510: Actually what your calculation above shows is what they call 'The Velocity of Money".. Simply defined the velocity of money is the turnover in the money supply.
It measures economic activity....the average frequency with which a unit of money is spent in an economy. It says nothing about the value of an individual unit of currency.
TheRainMaker: TLAR from another site put together an awesome synopsis of how IRAQ has substantially reduced the money supply and gives articles with statements to back it up it was pretty impressive, and sort of correlated with much of what Scooter talked about in a 2012 interview.
Unfortunately i can't post it but it's out there if you search for it. Personally, I do not believe the in current M figures. If you believe they are accurate, then you should just sell your dinar, respectfully.
Optimus Prime: Yes, In 2012 Scooter also indicated that the RV is "on". We can see that it did not happen. TLAR says one thing, but the CBI figures say another. I have a substantial amount of Dinar, and and do not wish to take a loss at the current buyback rate, so I am hoping for a miracle just like everyone else.
If a Central Bank is going to intentionally mislead the public, how long do you think the IMF would tolerate that? Respectfully, OP
TheRainMaker; OP, I don't recall Scooter saying it was "on", as in happening any moment.... but actually made statements about what to look for. One of them was the bond sales.
Even back then Scooter felt that was very important. The 2nd thing to look for was the reduced money supply which he believed was taking place back then and would continue to.
He believed at that time there was less than 4 trillion dinar in circulation. Saleh also stated back in early 2012 that were less than 4 trillion dinar circulating.
The key to this is how much is really out there, it's one of the most important pieces of information and we can only speculate. Most people seem to forget that IRAQ only has to cover what is left in country in circulation.
This example has been floating around for a while now.
HOW FRACTIONAL BANKING WORKS TO ALLOW FOR A REVALUATION OF THE IQD - JOSEY WALES At OOMF - 10/17/2011
From Dinar Recaps (Post by Red Lily)
How Fractional Banking Economics will allow a high RV EXPLAINED:
First off, I’ll use the exchange of a 10,000 IQD 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 and IQD, 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”.
If you don’t understand the “Fractional Banking“ concept that runs our country, you may want to, as that is what this is based on, and is what is behind this entire concept and plan.
To learn more about this concept, I suggest you click HERE, and go to a video post I brought to the forum previously, and posted in my “Tidbits“ section.
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 in a form notherwise 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 actions, IMF actions, World Bank actions etc.)
Other Factors that Strengthen Iraq’s Position and Ability to RV:
DFI 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 (over 2 years) 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! Rainmaker
Ramses73y: You're absolutely correct bscott thanks! Perhaps I wasn't clear in my statement I said you CANNOT calculate an exchange rate (exchange rate = value) you CANNOT calculate the value of a currency using simple mathematics.
I gave the example of GDP divided by M1. So the same goes for the opposite a person CANNOT assess a value CAP OR CEILING based on one aspect like units of currency in circulation. That is all
Optimus Prime; TheRainMaker and ramses73y, thank you for the civil manner in which you point out your information. I am in no way an expert in banking or economics.
While it troubles me to see the amount of IQD in circulation, I'm still hoping that something like "fractional banking" (WAY above my pay grade) and other factors will overshadow my concerns. I'll just end with... GO RV! Thanks to all! :) OP
JugDawg1: I seem to recall though that a couple years ago before Maliki got hot on Shabbi Baby's tail, we were constantly hearing about the tremendous reduction of dinar on the streets, so to speak, and it was no where near what the current amounts that are being put out there.
Maybe 30% of what we're hearing at the very highest. So I can't help but wonder. IF my recollection is correct,
1. In the interim years, have they released that much more dinar .......... or
2. Are we being fed misinformation like we've been all along?
Now I realize that my recollector is not what it used to be and sometimes not nearly as good as I think it is but if I'm even close to correct, I'm thinking that trying to calculate any current numbers is kinda spitting in the wind.
Know what I mean Vern? :D Carpe Refurbished Recollector