Kaperoni's Opinion With Reply From Tlar on:
The Real History of the Saddam Dinar and It'sDevaluation...
I am going to give you my opinion. I am clearly stating here that this is "just an opinion." I am doing so to stimulate comments and thoughts from our members based on facts...
Now it is a known fact that the dinar in Iraq pre-war under Saddam had value of about 1 dinar = 2.8 dollars. The dinar did rise to a value as high as US $3.3778, but did de-value to about US $3.2169, a rate which remained until the gulf war.
Here is a very important fact...
Just after the Gulf War in 1991, due to sanctions placed on Iraq by the United States and the international community and excessive government printing of the new notes issued, the dinar devalued quickly, and in late 1995 US $1 was valued at 3,000 dinars.
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So what happened was a gradual devaluation over a 4-year period from ($3.21 to 1 dinar) to ($1 to 3000 dinar). In essence, the Iraqi people lost all of their personal wealth unless they converted it to dollars or gold or some other commodity before it dropped too far.
So now is where the New Iraqi Dinar comes into play...
Shabibi takes over post war with a new currency. One that was further devalued to about 4,000 to $1. He had inflation to deal with and instituting a new banking system.
To also rebuild, if you like, the entire economic and monetary policies according to international banking standards. And to create an environment that Iraqi's would embrace. Keep in mind that most Iraqi people lost everything during the war.
So we come to the period that we are at today, which is low inflation, a banking system that has been for all practical purposes rebuilt to a level in which it can interact with the global community, and we are just waiting on the next move.
Some want you to believe there is no option but to LOP or re-denominate the currency. Well, in fact, that is untrue. In fact, if you think about it, it would literally destroy the monetary policy and system they spent 10 years rebuilding.
Those who lost everything would not accept a LOP or re-denomination because it never restores what they had. It never gives them back what was taken from them as a result of Saddam's war.
On the other hand, if they restored the value of the dinar (either slow rise or RV) they are gaining back what was taken from them. That in itself separates this experience from others.
That in itself is why the dinar will rise. And, IMO, the Iraqi dinar will rise the same way it devalued...over time.
Remember it took 4 years to devalue, it could easily take 4 years to appreciate back to it's rightful value once the banking system and the economy is ready to begin this process. Giving the Iraqi people what they so deserve. Kap
TLAR: Good summary Kap. Although the same two questions that existed when I first got into this investment have yet to be answered, when and how much, I believe we all are in general agreement on the outcome. Iraq will be a rich country at some point in the future.
We forget sometimes all the good things that are happening every day in Iraq as we tend to focus on the super negatives or super positives in articles as they come out daily. We are all guilty of sometimes letting our emotions run away.
To us, this is an important investment we are waiting to come to fruition.. It can consume us and frustrate us but from what I've seen of the members here, is the understanding that this may yet take a while to come to an end. To the common Iraqi, it is his life and the life of his family .
I think we would all agree. Not only has he paid dearly to get to this point. but he continues to pay everyday.. What we are witnesses to is a great transformation taking place.
A country being re-engineered from the ground up for the benefit of not only us, but the world. Iraq will succeed because it has too. Whatever the price it must be paid because without Iraq and it vast resources operating efficiently, we will all pay a huge price in the future.
The world is ready to give Iraq enormous wealth for those resources. Those of us who have been lucky enough to find and understand this and have faithfully believed enough to invest, will be rewarded and will share in Iraq's coming wealth.
Those that know of this investment and failed to believe will forever berate themselves on how they came this close to being rich. Those that bought and gave up, selling their dinar before this investment comes to fruition, will hate themselves for many years to come.
I want to compliment every member that comes to this site daily investing their time to understand their investment. You and I are the wise ones. I also want to thank Bob and Kap for providing an inspirational and educational platform for us to come together, not to mention their knowledge.
This investment would be a hard if not impossible one to experience in a vacuum.