Thursday, January 5, 2012



 01/05/2012  _Dinar Recaps Note: A very long read with comment by Miskebam at end  - this article has resurfaced before but gives good credibility to the investment for the newbies

Subject: The first real lead on a rate that I have seen...
Well folks I have found something that is real and can be confirmed regarding the rate we can expect. I will post what I have found and the link then I will address it a little.

2. Justifications for exchange-rate adjustment:
there are a number of important and powerful arguments which support
the view that the official exchange rate reduces the real value of
foreign currency for purposes of calculating the economic
national profitability for investment projects and hence for the
purposes of investment planning. It is demonstrated in this context to
call for assessing the dinar for less than (3.208) dollar (official
exchange rate) when assessing project outputs and inputs of traded goods
of exports, substitute imports and imports... etc.

The justifications to call for the use of an exchange rate that is lower than the official exchange rate are:

The use of an exchange rate that is lower than the official rate is the appropriate action at the investment planning level to translate the country’s economic strategy aiming at stimulating central investments in the sectors that encourage the development of non-oil exports, as well as sectors that encourage the expansion of domestic production base in order to reduce imports and compensate it with local commodities.

This helps to reduce reliance on foreign exchange earnings from crude oil exports and increases the share of non-oil sectors in the local production.

The application of the amended exchange rate on project imported inputs will assist in directing investments away from aggregated sectors dependent on imported inputs and the preference of those sectors that rely on locally produced inputs.

The use of the amended exchange rate helps to correct the balance in favor of the traded goods sectors compared to non-traded goods.

The real exchange rate has declined rapidly since the early seventies, through rapid rise of the level of prices and local costs which led by the steadiness of the official exchange rate to change in prices and actual local rate costs that gave an advantage for imported goods at the expense of locally produced goods, meaning that it led to deterioration of the competitiveness of alternative replacement goods and export commodities.

This action shows that the official exchange rate overestimates the value of the dinar, compared to the foreign currency and from the promoting goods substituting imports and export commodities point of view of.

And in support to this view is the state’s utilization and in a broad approach to the customs and quantitative protection policies especially for consumer goods, as well as export subsidies that exports have through an amended export exchange rate.

3. Estimate the amended exchange rate of the Iraqi dinar to be used in technical and economical feasibility studies and for (1.134) dollar per dinar. This price should be approved for 3 years until re-appreciation by the competent authorities.

That is from the Iraq Ministry of Planning's website. What I think it is saying is that the old rate of $3.208 dollars per dinar is not an effective rate for calculating national profitability nor for investment planning. Now I, like everyone else would love to see a rate in the $7 to $8 dollar range, but according to this they are proposing a rate more in the $1 dollar range. In fact, they are proposing a rate of $1.134 dollars per dinar.

That isn't bad and it is still a huge return on our investment and I will take it all the way to the bank. They also said that they recommend that this rate be maintained for 3 years and slowly make changes with market value based on exports and other factors and the thing that really impressed me was that they said the rate should be evaluated and re-approved as the need arises by "competent authorities". This tells me that the government of Iraq is not a bunch of loony toons running around infighting and playing games like the mass media is showing us. They understand what needs to happen and they even deffer to authorities with more expertise in this area when the time comes to reevaluate their currency exchange rate.

This gives me a lot of comfort in my investment because I feel much more confident in the Iraqi government after reading this. They are also looking at non oil exports being a big part of their GNP which to me says they are wise as well. They have so much to offer and if they just focus on oil they are not using all their natural resources to their fullest capabilities. But if they take steps to grow ALL their natural resources they are going to be a very wealthy and influential country in the ME and in the world in the years to come.

Yes, I would love to see a rate much higher than this, as would everyone who owns dinars, but at the same time I am cheering the country on to be the best they can be and this is how they will do it. If someone wanted to hold on to some of their dinars for a couple of years they may see much higher rates but for me, I will cash in at the rate they come out with and sing all the way to the bank. Go Iraq and go RV!!!

Yes... that it the same study that caused me to BUY my first dinar... This articles resurfaces 2 or 3 times a year... but I still love reading it....

Google any part of this, and you will see that its on every dinar forum dating back to 2004 or 2005... maybe further back...

Not bursting bubbles... but gives people that are new to this, resolve that its real... and seasoned dinar investors renewing and reminding that there IS a feasiblity study out there, and they did for a reason....

Thanks for the reminder craig! Good job!

Dinar4silver wrote:

Thanks for taking the time to post this article.

I know for a fact that I do not know what the rate will be for the IQD RV.

My guess is that only a handful of people in the world actually know what the rate will be.

As far as the dozens and dozens and dozens of articles that have indicated a rate (one way or another), let's consider one thing:

If you were in charge of the re-valuations of your countries currency
(Which has been intentionally kept deflated for over a decade), would you announce your intensions in any manor to the world?

If I was in charge of the RV, everybody would be guessing what the rate and date were until the RV occurred. Very much like you are seeing now.

Can you say smoke and mirrors? All this speculation appears to be coming to an end. Regardless of the rate, we should all be happy!

Dinar4silver PART 2 COMMENT  ***********

PostSubject: Re: The first real lead on a rate that I have seen...   Yesterday at 11:14 pm    Select/Unselect multi-quote Reply with quote
In my opinion, there are two aspects of the RI/RV that I believe are critical from this point on:

1. What strategies will we each use to optimally benefit from the the Dinar we have each purchased.

If the IQD RV's at roughly 1 US dollar. Should you sell your Dinar immediately or will the rate increase (possibly increase dramatically) over a period of time. The key element that we guide each one of us, will be our ability (and or desire) to deal with risk.

Six months ago, I would have told you immediately, that if the IQD RV'd at a rate of one US dollar, I would cash in the Dinar that I needed for a six month period of time and wait for the rate to increase over time.

Today, I am looking at the volatility and instability of the Middle East (with an emphasis on Iraq) and asking myself, will the Iraqi's be in a Civil War in the near future and should I cash out everything immediately.

I can't help but wonder if the recent unrest of the Iraq and the Middle East is to deter people from waiting long term to cash in their Dinar. Iraq is legendary for their gamesmanship

There is no doubt in my mind that OOM will be far more important to it's members after the RV than before the RV. Our ability to affectively strategize how we will cash in our Dinar will ultimately decide our degree of success.

2. Has the purpose of the re-valuation of the IQD changed in the last six months?

When I began to invest in the IQD just over three years ago, all talk about the re-valuation of the Dinar was centered around the need for Iraq to RV their currency to rebuild the country.

Obviously the need for the Dinar to RV is no longer exclusively tied to what is needed for Iraq to benefit from the RV. The re-valuation of the IQD is now tied to a world wide plan to "jump start" the worlds various currency's (to the tune of over 150 countries).

It's my opinion that the rate that we will see will be much higher in January of 2012 than it would have been in January of 2011. Why, the major economic countries of the world will benefit far more if the rate of the RV comes out high.

I believe the change in the purpose of the Dinar RV has increased the rate that we will see.

In any case, each of us needs to prepare mentally for cashing out if the rate comes in low (.85 to roughly $1.50), Medium ($3 to $4.50 range), high ($5 to $6 range), and absurd but possible (a rate above $7.00).

The game is about to begin! Are you ready?

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