Thread: What it would take to achieve parity

Hi Folks,

I'm a new guy on the forum and was enlightened on the prospects of investing in Iraqi dinar by a fellow employee.

Apparently there is a lot of mis-conception about what it would take to bring the Iraqi Dinar to parity or even beyond with the US dollar and I'm afraid a lot of that mis-information is obtained right here on this forum.

So please indulge me as I present what I know and ask for the "experts" input on my assumptions and allow those with different opinions to "show me the light".

Currently we have an exchange rate of around $1=$D1200.

This varies quite significantly depending on your source but that's a current rate offered by bloomberg. And will suffice for discussion purposes.

What my co-worker has been told is that not only is a 1:1 parity with the US dollar quite possible but that it is expected and in fact this source fully expects the dinar to be revalued at somewhere between 3 and 4 dollars per dinar. That is to say: $1 = $D .66 - $D .75

I have made a genuine effort to explain the magnitude of how unlikely such a revaluation would be without a complete rebasing of the currency, only to be rebuked with a contention that this is exactly what occurred with the Kuaiti currency.

Let be sure that if that in fact did happen to the Kuaiti currency it only did so because of the utter and complete disconnect from the fundamental realities faced by the Iraqi Dinar. The political upheaval in Kuwait was far shorter than that of Iraq and the governmeant and economy in Kuwait far more resiliant than that of Iraq. While Iraq has the worlds 3rd largest supply of oil reserves their infrastructure and ability to market those reserves in a meaninful way is greatly impaired and a good deal of time is necessary to repair what's been broken by both the war and the irresponsible regime of Saddam Hussien.

While I do appreciate that the Dinar does indeed possess the potential to appreciate materially against the US dollar for a variety of reasons, most significant being an ongoing devaluation of the dollar against the international basket of currencies and the ongoing improvements in Iraq, in both their infrastructure and stablility....the Thesis of Iraqi Dinar and US dollar parity is simply not supported by the fundamental realities.

Please...if possible enlighted me otherwise.

jc

You don't sound like you need enlightening to me, I would say you're pretty much up to speed.

I am surprised that if your co-worker truely has the opinions that you have stated, that he/she, would direct you to this particular forum.

Welcome to this forum and thank you for your comments.

Maybe you can re-educate your co-worker.

Originally Posted by hreally

Hi Folks,

I'm a new guy on the forum and was enlightened on the prospects of investing in Iraqi dinar by a fellow employee.

Apparently there is a lot of mis-conception about what it would take to bring the Iraqi Dinar to parity or even beyond with the US dollar and I'm afraid a lot of that mis-information is obtained right here on this forum.

So please indulge me as I present what I know and ask for the "experts" input on my assumptions and allow those with different opinions to "show me the light".

Currently we have an exchange rate of around $1=$D1200.

This varies quite significantly depending on your source but that's a current rate offered by bloomberg. And will suffice for discussion purposes.

What my co-worker has been told is that not only is a 1:1 parity with the US dollar quite possible but that it is expected and in fact this source fully expects the dinar to be revalued at somewhere between 3 and 4 dollars per dinar. That is to say: $1 = $D .66 - $D .75

I have made a genuine effort to explain the magnitude of how unlikely such a revaluation would be without a complete rebasing of the currency, only to be rebuked with a contention that this is exactly what occurred with the Kuaiti currency.

Let be sure that if that in fact did happen to the Kuaiti currency it only did so because of the utter and complete disconnect from the fundamental realities faced by the Iraqi Dinar. The political upheaval in Kuwait was far shorter than that of Iraq and the governmeant and economy in Kuwait far more resiliant than that of Iraq. While Iraq has the worlds 3rd largest supply of oil reserves their infrastructure and ability to market those reserves in a meaninful way is greatly impaired and a good deal of time is necessary to repair what's been broken by both the war and the irresponsible regime of Saddam Hussien.

While I do appreciate that the Dinar does indeed possess the potential to appreciate materially against the US dollar for a variety of reasons, most significant being an ongoing devaluation of the dollar against the international basket of currencies and the ongoing improvements in Iraq, in both their infrastructure and stablility....the Thesis of Iraqi Dinar and US dollar parity is simply not supported by the fundamental realities.

Please...if possible enlighted me otherwise.

jc

Are you saying that, there will never be the fundamental realities of parity, or are you saying that these will take more time in Iraq? And if it will take more time, but will happen, then the fundamental realities are there, but not so apparent? Same goal but Kuaiti was the rabbit and Irag is the turtle?

Maceman

maceman...i think u make it much more complicated then what it actually is....as we all do....if the {GOI} would ""STOP"" taking under the table handouts and ""START"" worrying about their people as they say they do,everything would fall in place....but as of now,they r so worried about losing a nickel from what they r stealing{THE IRAQI GOVERNMENT} that the people's agenda is left behind...in other words....they {GOI} could give a RAT"S u no what if they {THE IRAQI PEOPLE} get anything of what they need...IMHO...Pat

Originally Posted by Seaview

You don't sound like you need enlightening to me, I would say you're pretty much up to speed.

I am surprised that if your co-worker truely has the opinions that you have stated, that he/she, would direct you to this particular forum.

Welcome to this forum and thank you for your comments.

Maybe you can re-educate your co-worker.

Seaview

Not sure I'm following here. Are you of the opinion that 1:1 is not realistic or cannot be supported?

Hello One Oar,

I am of the opinion that 1:1 or more is realistic longterm, but not short term. I believe the CBI will try to buy speculators out at the cheapest price possible, just one of many reasons. After all, they are in the business of making money not giving it away. JMHO for what it's worth.

Originally Posted by bigopie

maceman...i think u make it much more complicated then what it actually is....as we all do....if the {GOI} would ""STOP"" taking under the table handouts and ""START"" worrying about their people as they say they do,everything would fall in place....but as of now,they r so worried about losing a nickel from what they r stealing{THE IRAQI GOVERNMENT} that the people's agenda is left behind...in other words....they {GOI} could give a RAT"S u no what if they {THE IRAQI PEOPLE} get anything of what they need...IMHO...Pat

Yes, you're right bigopie. It may even be simpler than that. Pick up and read any history book about ME culture 1000 or even 2000 years ago. Then look at it today. Behold! Nothings changed for the most part. Instead of swords, they use AK 47's and RPG's. The Sheik's control everything and the people eat sand. They loved that way of life so much, they made it a religion in the 6th century that thinks the ancient Arab way of life should be forced on everyone on the planet.

Now, some of the wealthiest Arabs are clerics. Thats why these men of Allah will butcher competing clerics to keep their share of the wealth. So, if you want money, you need to be a Sheik or cleric or the relative of one. You might get some crumbs if you are a member of their "tribe" too.

Waiting for Iraq to suddenly become concerned about the people at large will leave you frustrated at best. That will never happen. Since Muhammed turned ancient Arab culture into a religion some 1400 years ago, Arab culture is caught in a time warp. Of coarse, thats OK with the clerics, Islam believes that everything that ever was or ever will be is in the Quran. Therefore, we are all supposed to live like Arabs lived in 632 AD.

The real time bomb is going to blow when the oil runs out or alternatives hit the market. Then, the people of the ME will look around and see that they have nothing to show for the trillions upon trillions of dollars that flowed into their countries from oil sales. No industry, no trade, no money and more importantly, no interest in them whatsoever from outside countries. I'm sure there will be plenty of guns and ammunition left to carry out their revenge and blood feuds. Hopefully, by then the world will have figured out a way to quarantine that part of the globe.

Originally Posted by bigopie

maceman...i think u make it much more complicated then what it actually is....as we all do....if the {GOI} would ""STOP"" taking under the table handouts and ""START"" worrying about their people as they say they do,everything would fall in place....but as of now,they r so worried about losing a nickel from what they r stealing{THE IRAQI GOVERNMENT} that the people's agenda is left behind...in other words....they {GOI} could give a RAT"S u no what if they {THE IRAQI PEOPLE} get anything of what they need...IMHO...Pat

Bigopie, thanx for the compliment but I don't deserve it . I don't know enought about this to be deep. I do know it takes longer for rain to hit the valleys before it hits the hills, Irag is at its lowest now, it will take a minute. The rain is hitting the hills.(GOI) The valleys are next. But this is why there is war, if there was nothing to be gained, not particularly how soon, Egypt would be still ruling the world. The Govs. declare war, not the poor and working and underprivledge people. The Govs. do this for money, power, position etc. So for those reasons they would like things to stable up a bit so all these things can be permanent, the money, power,and position, what ever each of the Gov officials is in it for. (Now ,I think that was a little complicated !)

So I guess I was just saying ,it will probably take some time before it happens, but if it doesn't happen,(make profit) for more than just the Gov, then maybe this will be the last war aside from armageddon, and I seriouly doubt that !

Maceman

Originally Posted by Seaview

Hello One Oar,

I am of the opinion that 1:1 or more is realistic longterm, but not short term. I believe the CBI will try to buy speculators out at the cheapest price possible, just one of many reasons. After all, they are in the business of making money not giving it away. JMHO for what it's worth.

Understand. I think a lot of us have believed this about the CBI, but on the other hand there is a very good arguement about setting the rate too low and giving the big money players the option to come in on the cheap. There is no question the value will rise (a lot) when the oil begins flowing. But when, in what increments, and what will the ceiling be is stuff these forums are made of.
What are your thoughts on an opening rate as it appears that you are not a proponent of slow grow?
Thanks.