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 BaghdadInvest says: "the currency of a sovereign nation is NEVER backed by it’s finite reserves"

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RamblerNash
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PostSubject: BaghdadInvest says: "the currency of a sovereign nation is NEVER backed by it’s finite reserves"   Thu Apr 27, 2017 1:04 pm



Joe


I own some dinar and I’m not sure what will happen. I’ve done a ton of research and there’s 2 things that I can’t get out of my head: 1) do the research and you will find that because of Iraq’s resources, their currency fluctuated between $2 and $3.50 compared to the USD. Because of dumb Saddam, their production of resources dwindled because of sanctions put on Iraq, many countries stopped all trade with Iraq. Their currency started to go down the whole because there was no economic growth, but do you think Saddam would let that happen? No, instead their currency stayed at about $3 because of no other reason except for the fact that Saddam said it was worth $3. That’s nice, the only proof supporting that you have one of the strongest currencies is that your dictator says so. You can see how that would mess everything up.

2) what about the fact that every currency fluctuates on a daily basis? Even if by the smallest percentage, but still they all fluctuate….except for the dinar it’s at 1166 dinars = $1 for the past 10 years. This is because the UN put sanctions on the currency until Iraq hits certain milestones or basically doing what they can to undo all the terrible things that Saddam did to the people of Iraq and surrounding countries.


When you look at all the other countries producing as much oil as Iraq, all of their currencies are worth more than the USD. Ask yourself why then is Iraq producing just as much oil yet their currency is worth 1,000 times less than the USD? All I ask is before people laugh and say this is a scam, do some research and you will find some things that will boggle your mind. Maybe it will happen tomorrow maybe it won’t happen for 20 years, I have no clue, but I do believe it will happen at some point. Iraq was a wealthier nation than the USA until Saddam messed it all up. That’s a fact. I do believe once the rebuilding is finished, their currency will go back to its true value.


March 10, 2014 at 11:00 pm  




baghdadinvest

Hi Joe,

Valid questions though way off.


1. “because of Iraq’s resources, their currency fluctuated between $2 and $3.50”


No, Iraq fluctuated between $2 and $3.50 because back then there were only 20 billion singular dinars meaning the value in USD terms came in at 64 Billion USD.


Today there are around 82 trillion dinar which in USD terms come in at 71 billion USD


A little more than what it was then……… really simple arithmetic for you to comprehend. The difference between then and now is INFLATION.


2. “every currency fluctuates on a daily basis? Even if by the smallest percentage, but still they all fluctuate”


Currency fluctuations are a natural outcome of the floating exchange rate system that is the norm for most major economies. The exchange rate of one currency versus the other is influenced by numerous fundamental and technical factors. These include relative supply and demand of the two currencies, economic performance, outlook for inflation, interest rate differentials, capital flows, technical support and resistance levels, and so on.


Right now, Iraq is NOT in a free float scenario due to the insane levels of inflation among other factors. Plus the nature of the market would mess things up economically all the while there is fire raging on the streets of Baghdad. Every time a major attack were to happen the currency market would be spooked.


Once a redenomination has taken place and they have eliminated a substantial number of dinars from circulation AND the situation in Iraq is as normal as everywhere else, perhaps they will then consider a float…… but that has to be years away from now, in my opinion.


3. “Iraq producing just as much oil yet their currency is worth 1,000 times less than the USD?”


I am sad to say that the currency of a sovereign nation is NEVER backed by it’s finite reserves. 2% of Iraq’s reserve is Gold and the other 98% is USD. If they were to back it with the barrels of oil / oil reserves they would do one thing and one thing only…. guarantee the market that the currency of Iraq will get weaker day by day…… Why? Because once a barrel of Oil is sold or burnt = less oil to back the currency which means every year the currency is weaker. This is why NO country in the world backs it’s currency with its finite resources.


I wish you well on your quest for riches. Unfortunately the currency of Iraq is not the one. Visit our site if you want to find out more about what we have/are researching: http://www.baghdadinvest.com


 March 10, 2014 at 11:40 pm
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BaghdadInvest says: "the currency of a sovereign nation is NEVER backed by it’s finite reserves"
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