"When Kuwait RV'd" Posted by RealDinar at TNT

"When Kuwait RV'd" Posted by RealDinar at TNT
04/13/2014



RealDinar: i had to remind myself why I'm still here waiting on things to revalue. Hope this helps you, like it helped me.

NY Times article from 1991 reporting the revaluation of the Kuwaiti dinar

Jul 19, 2013

When Iraq invaded Kuwait in August of 1990, the value of the Kuwaiti dinar dropped to about 5 cents. In other words, it took 20 Kuwaiti dinars to buy one dollar.

In February of 1991 Iraq was expelled from Kuwait, and a month later, the banks revalued their currency to $3.47, the highest valued currency in the world. When this occurred, the New York Times reported the event on March 25, 1991.

http://www.nytimes.com/1991/03/25/world/after-the-war-no-electricity-but-kuwait-reopens-its-banks.html

It still has no water and little electricity or food, but Kuwait revived its banking system today, introducing a new currency.
....


Banks reopened for the first time since Iraqi occupation forces shut them down in December. Thousands of people lined up to exchange their old Kuwaiti dinars for crisp new ones and to withdraw a limited amount of money....

All other old dinars can be exchanged for new ones on a one-to-one rate until May 7, when the old dinars become invalid. The new official exchange rate is 3.47 American dollars for one new Kuwaiti dinar.

At the same time, the UN put Iraq under trade sanctions, crashing the value of the Iraqi dinar (IQD) from $3.22 to about 4000 to the dollar. Their currency could only be spent in Iraq itself, and people had to carry around wads of 25,000 dinar notes to buy groceries.

Then in 2003 coalition forces invaded Iraq and overthrew Saddam Hussein. By 2004 we gave them a new currency without Saddam's picture on it. The value soon doubled and went up to 2000 to the dollar. A few years ago the Central Bank of Iraq managed to stabilize the value at 1166 per dollar.

On June 27, 2013 the UN removed Iraq from Chapter VII sanctions, allowing Iraq to regain control of close to $80 Billion in frozen funds that had been sitting in western banks since 1990. This also allowed Iraq to be reinstated on the world's banking network, as soon as they are ready. At the same time many expect to see the IQD revalued at or near its former position.

I guess that's why everyone believes the IQD will revalue or re-instate to what it was before the war; because Kuwait did it.

Iraq will have to revalue it based on currency reserves, gold or anything else they hold.  They (the infamous they) say that Saddam over-inflated the currency under his regime so it never should have had a value of $3.22 in the first place.

Does this mean a $1.  I don't know. I don't know or see how they can pay that out to the investors who have purchased their pretty currency.  It certainly doesn't look like they will replace the currency they have now (at least that's how they make it look by printing more of the same) but who really knows. Would they go to that expense to pull on over on us?  Would they stiff us by giving us a time frame to turn in those notes for new currency notes?  What would be another reason they would abandon this currency and create a new entire different note?

I've always believed the banking structure was the key to this RV (along with other measures of course).  It's near completion.  I do hope we see some movement this year.  If we don't I have a concern we could be waiting years if the politics can drag this out.

Everyone asks, "would Iraq stiff the investors who purchased their currency"?  I think it's a much of a possibility as it is that it will revalue and that we make some kind of return on it.

There are days I would just like to double my investment. Who gets that kind of return these days or any days for that matter.  That means no retirement or beach for me. But, at least this ride would be over.  Does anyone feel like they have been on this one?



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Saint, have you tried this one?

 

The biggest "fear" that I've had (in comparison to the Kuwait dinar revaluation) is the timing.  It was such a short period of time for Kuwait as with Iraq has been devalued for 12 years plus.

Oh well.  Stranger things have happened.