Here is some timely commentary from a good friend of mine...
Here is some timely commentary from a good friend of mine...
SWFloridaGuy - I am working on a special report together with a few others that will feature opinions from some of the top economists in the world who believe in Iraq's chances of fulfilling (what we consider) to be their potential in the short term during this global economic crisis, considering Iraq is one of only a handful of places that remains a plentiful source for non-renewable resources, which have been depleted elsewhere and cannot be reproduced, grown or generated (using the technology available today) that would be required for consumption rate stability.
We can ignore the warnings of professional financial advisers warning us of the dangers that a misplaced faith in the leading fiat currencies whose faith based system is failing resulting in a dangerous combination of increased debt and less purchasing power. The Euro has exposed that modern currency is nothing more than worthless paper when the government in question (U.S. in particular) is recklessly printing what they are incapable of backing. This problem is only overlooked because of ignorance and a refusal to accept and prepare for the irrefutable consequences of that going down this path will lead all who fail to head a proven historic precedence of what gives true value to a currency.
The Romans were far more successful in sustaining a respected medium of exchange using coins containing 24 carat gold for 700 years until military invasions and civil war resulted in an absolute eradication of all gold content. About 10 years later (12 to be exact), we had what could be considered one of the earliest revaluations when a new coin was introduced at a rate that brought it in at just slightly under what we would call an RI. Apples & Oranges from different eras but we can still fantasize about the similarities as Iraq reaches approaches that similar decade mark of reconstruction while they attempt to recover economically.
I realize the message I'm trying to convey will probably be misconstrued to lend support to the IQD RV, similar to how the history books have been re-written to by those who see the potential for profit by implying that Iraq is simply Chapter 2 of Revaluation for Dummies. Unless you were living in Iraq, stationed by the military in Iraq and hung on to a currency for a few months while dodging bullets to protect your crystal ball, you didn't become rich off the Kuwaiti Dinar.
I'm sorry for getting sidetracked but this is the #1 misconception about the history of large currency appreciations and an excellent way to spot a fraud using a fabricated story of his/her amazing foresight, seal team 6 like precision to accomplish a near impossible and dangerous mission for a US citizen and yet with all these talents when it comes time to share the details or provide evidence their mission takes an oddly abstruse direction. The internet contains hundreds of detailed first hand accounts documented by pictures and high def video of monkeys urinating in their own mouth but zero that prove that Kuwait revalued their currency. Here are the actual values straight from their central bank:
KuwaitD/USD Exchange Rates:
There are, of course, a couple news articles we've all seen describing the events following Kuwait’s liberation and described how the Kuwaiti dinar was restored as the country's currency and a new banknote series was introduced, allowing the previous notes, including those stolen, to be demonetized.
While some will tell you to completely ignore the Persian Gulf War, I strongly disagree for the simple fact that rather than concentrating on the temporary setback their currency sustained which any professional economist will tell you if you are trying to determine a plausible value of a currency of a country boasting comparable (even greater) wealth, you don't concentrate on the brief period during their history where their true value was not represented.
Of course the hypers claim that more countries are going to revalue than there are even currencies that exist so I guess China is not among that group or needed since there is an abundance of newly discovered currencies about to flood the market.
Captain Jack Sparrow makes a great pirate but moonlighting as a guru, no one revalues. Nothing changes. I've met the most intelligent, well-informed, descent individuals I've ever had the pleasure to know in dinar chat rooms, forums and 3rd party introductions and I'm sorry for being so blunt with my delivery which only applies to a very select few who have also managed to spread their message quite successfully while an overwhelming majority who respectfully disagrees often are silenced or banned.
I believe those that make bold date/rate predictions daily for years are just as entitled to their opinion as myself or anyone else. I've certainly been wrong plenty of times and that's to be expected but we should also encourage respectful debate to come to a better understanding knowing how many out there relatively new to this community take these predictions as gospel and sell their soul for 1 more 25k note.
As a newbie I had experience with this myself and had to take responsibility for investing more than I could afford but I was also influential in convincing the group of friends I brought on board to make similar decisions and a friend lost her apartment. I had the best intentions and can't wait for the day that this will pay off for her but I'm sharing this experience to make the point that the constant date/rate predictions although a source of entertainment for those of us more experienced may have (often does actually) have real effects on others so we need to be as honest with each other as possible and not embellish or fabricate posts, hiding behind anonymity, deflecting albatross by saying blaming it on relaying information rather than take responsibility for their lack of vetting the credibility beforehand and as much as possible provide the reasoning behind your conclusions which helps us all come to a better understanding.
When I first signed up for this ride (and I'm extremely grateful I did), under many false pretenses, it wasn't until I went to sites where censorship was not allowed and by having my own posts and interpretations challenged by those with more experience I learned more in a couple months then the years combined where the cult-like type atmosphere was more prevalent and critical thinking was discouraged. Vague analogies posted for adulation, increased sales revenue, site traffic hits or all 3 where you're left to believe that if you read between the lines with a decoder pen not only will you be able to safely operate a jumbo jet you will receive an early cash out in Reno with a higher exchange rate.
On the other hand, I believe those who can only envision a straight RD forgot we've come up from 3000 to 1 already and no matter how significant a revaluation, you will never be given a heads up by any Iraqi news articles or neon boulevard of dreams signs affirming a RV/RI/Float/Change in Peg etc., in advance.
So, continuing to take that stance, demanding proof is everyone's right but IMO boasting of vast knowledge while devoting their time/energy to a hopeless endeavor is a sad example of being blissfully unaware of their need to impart a constant state of atrophy. This is just my personal perspective and I am well-aware that many view me as "negative" myself and at the end of the day I do appreciate anyone who is devoting their time, on the same team, in it for the long haul but hoping for a victory in the near future.
I prefer not to use the term Lopster anymore because of the unnecessary contention and hostility it conveys. The straight RD theory will continue to gain tenability following every baseless, farcical rumor that damages the credibility of a promising investment opportunity (be that gradual or long term) and we are left holding the bag trying to explain to Google that the IQD is a currency, not a scam and that large currency appreciation shocks do exist and historically no country has ever been in a better position to accomplish such a drastic change, which we have all recognized and is the reason we are here.
I stay away from rate predictions but I would love to see on par with the USD. If you disagree then take it up with the Finance Committee, CBI officials and reports to US Congress that state 1 to 1 or slightly higher as the target rate. I'm not going to reiterate the multitude of reasons I believe that one day Iraq will have one of, if not the, strongest and most valuable currency not only in the M.E., but globally.
I have an extremely optimistic outlook for this investment but also am overtly opposed to the hype only because those far more educated than myself have explained in detail why bank screens flashing, amber to red, Forex movement (with a currency that's not even traded), bogus Prosperity Package memos that have zero basis in reality and even George Lucas would struggle to tie that to the IQD to gain credibility, 172 (156) countries all RVing in a global reset which is accepted by many in the community as if it were a button found on my Play station, 100+ countries couldn't agree on a favorite color and if even a quarter of that amount actually revalued it would destroy the global economy not save it. For example, we can't even get China to make small incremental adjustments because in their opinion it's in their best interest to keep the Yuan artificially low.
We cannot underestimate the importance of oil in today's market. Kuwait's wealth was due almost completely to their large oil production when a redenomination is an understandable position to maintain for those who don't understand all the determining factors that contribute to adding value and fail to take into account what determines supply and demand and completely lose sight of key macroeconomic trends a currency's value. There are different types of economies, degrees of market orientation and how far along the economic development has progressed and today's most promising economies specialize in unique areas where important natural resources are taken heavily into account, historic oil production is one area where there will always be a demand and confidence that it will be commercially recoverable under these current economic conditions.
This is one of many reasons Iraq is the fastest growing economy in the world. Also, oil is quickly becoming second in Iraq to gold. Early in 2012 there was a large discovery of Gold in eastern Baghdad. The last couple years have produced large quantities of gold through their vast drilling operations and have already surpassed the purification and extraction process. This discovery, among others, could turn Iraq into a producer of gold more than oil. It also will increase real estate prices due to the influx of gold job seekers.
I apologize for my inability to summarize my opinions but the bottom line is we should feel confident we have signed up for a great investment opportunity and it's a good policy to fact check the information you receive whether that be from myself or anyone else. Trust what your own research leads you to believe because none of us can predict the outcome but we can do a far better job speculating if we work together.