The Iraq Dinar, where's the RV?

by **Ponee** on Thu Jun 14, 2018 8:30 pm

The Iraq Dinar, where's the RV?

This is a commentary using known Fiscal Metrics to evaluate if the Iraqi Dinar Currency could somehow instantly increase in valuation to between $1 - $3 + US and if so, would it be logically and fiscally sound if that were to occur.

The opinions expressed here in, are, "my humble opinion". Caveat Emptor", each person should seek the Investment Advice of their own Investment adviser.

The Iraqi Dinar has always been, a currency manipulated through a "MANAGED FLOAT" not through a "FREE MARKET TRADED FLOAT" Traded on the FOREX. Pre Saddam, Saddam and Post Saddam…the Iraq Dinar has always been a PROGRAMMED RATE that is NOT reflected by the REAL WORLD WORTH or "VALUE" of FOREX Currency Traders that use the FREE MARKET to set the REAL WORTH of a currency based on REAL WORTH Metrics…so, the Iraqi Dinar is not now, nor, do I think ever will be based on REAL WORTH…because, if the IQD were ever to be pegged to a "FREE FLOAT" (Which I do not think it will be) but, using it as an example, then, FOREX Traders would value the IQD in real worth, somewhere between 1 cent to about 10 cents US, based on REAL WORLD VALUATIONS (See Valuation Metric Below)…However, I do not think the IQD will be FREE FLOATED, based on HISTORY, that was just to give a Metric based on REAL WORLD VALUE. I see the CBI using a continued MANAGED FLOAT approach to slowly continue the Rate down to 1,000 Dinar per dollar over many months, continuing to gradually and incrementally add very little value to the IQD, 100 Dinars every several years, until it is worth a penny in about 18 years or by January 2031, MANAGING or LOCKING it there.

Of course, the CBI of Iraq could themselves defy these very same metrics and RV the IQD at $1 to $3 +, however, by doing so, they will Bankrupt Iraq and totally Destroy the Iraqi Economy, set the Nation a blaze with civil war and unsettle the Region even further than it currently is, because of that, I do not "Think" the CBI will choose to go that route and instead, will, I think, wisely opt for a very slow methodical and controlled regulated or managed Float as laid out within my premise here.

Here are some Metrics to consider...

IRAQ                             vs                              USA

                                   GDP
$110 BILLION                                                $16 TRILLION

So, the US Economy is 150 Times the size of Iraq and yet our US Dollar has never been worth $3 +


DEBT to INCOME Ratio

Iraq’s external debt was between $130 to $140 billion in 2003, much of which was settled and forgiven through the 2004 Paris Club agreement, which would have equated to a 1:1.25 Debt to Income Ratio for Iraq, meaning they originally owed $1.25 for every Dollar they generated in GDP…

The USA Debt to income Ration is a mere 1:1. meaning, for every $1 the US owes, the US generates $1 in GDP. Putting that further into perspective, using Blue Chip Publicly Traded S&P 500 Company Debt to Income Ratio.
•IBM— 2:1
•Dupont — 3:1
•United Technologies — 3:1
•Boeing — 4:1
•Caterpillar — 14:1
And get this...
•JP Morgan Chase has a whopping Debt to Income Ratio of 50:1

In other words, IBM borrows twice as much money as it earns annually. Boeing borrows four times more than it earns. And JP Morgan Chase, clearly not too big to borrow, borrows 50 times more than it earns — getting $50 from lenders for every $1 it makes. Gee, JP Morgan Chase seems to have no problem with a "Fiscal Cliff", borrowing 50 Times more than it earns puts Chase at 50 times the risk of the USA, yet, it's Stock is fairly valued on the S&P 500 at $54 per Share and has risen 360% in just 4 years based on Wall Street Traders themselves setting the "Fair Value" on the Free Markets.

Clearly, the USA is NOT in a Fiscal Crisis compared to the Best S&P 500 Blue Chip Company in America, IBM, which owes twice as much as the USA, with a Debt to Income Ratio of 2:1 .

Nor, is America or the US Dollar "Doomed" for Bankruptcy, considering our current Debt to Income Ratio is multiple times BETTER than the best Blue Chip Companies in America and far less then the Debt to Income Ratio of the Average US Citizens personal Debt of around 3:1...most families grow through strategic debt, including assuming decades-long mortgages, car payments and student loans on par at around a Debt to Income Ratio of 3:1. We do this to "Leverage" our ability to GROW, using OPM (other peoples money) and yet, some of the strongest opponents who so severely critique the USA for carrying a Debt to Income Ratio of 1:1, hypocritically and wrongly do so even while they themselves are personally "Leveraged" in debt on average at a National rate of 3:1.

Borrowing today to fund the innovation of tomorrow stimulates our economy and generates revenue growth that pays back the debt. That's why emerging economies such as Singapore, which is still riding high despite the worldwide economic downturn, carry a Debt to Income Ratio that looks more like DuPonts 3:1, borrowing money to keep its economy innovating and growing.

The USA has the potential to easily increase our GDP 20 Times, or, 2000%, just by developing our proven Oil Field Reserves in the Bakkan Region of North Dakota, Montana and Colorado

                                    Recoverable Oil

According to US Energy Information Administration the US has 10 Times the Proven Oil reserves than Iraq has:

Iraq                                                                  USA
300 BILLION                                       3 TRILLION BARRELS
$24 TRILLION @ $80 per Barrel          $240 TRILLION @ $80 per Barrel

So, the US has Ten Times as much Oil Wealth than Iraq, and yet, somehow, speculators in the IQD seem to "believe" that the IQD should be "on par" with the almighty US Dollar? Some IQD speculators even believe it will instantly one day RV to $3 +…this isn't logical, nor practical, based on REAL WORLD Metrics.

                                 Population
Iraq                                                              USA
30 Million Citizens                                 300 Million Citizens

So, the US has Ten Times as many workers as Iraq, with Ten times the output and Ten Times as many Business Men and an Intellectual Property Incubators that out number Iraq ten fold, and yet, our Dollar has never been worth $3 +, based on this REAL WORLD metric, it isn't logical the IQD could even be worth 10 cents US. Yet, there are those who base their IQD Speculative Investment logic on the Historical MANAGED PROGRAM RATE that never has reflected REAL WORLD WORTH or VALUATION that can be quantitatively measured against a STANDARD!

                                     Roads
Iraq                                                                USA
50,000 Miles                                          4 Million Miles

                                 RAIL Roads
Iraq                                                                 USA
1,200 Miles                                                233,000 Miles

                                    Pipelines
Iraq                                                                  USA
2,000 Miles                                              2 . 5 MILLION

                        Electrical Power Generation
Iraq                                                                  USA
14 Gigawatts                                               1,000 Gigawatts TOTAL
                                                                      60 Gigawatts WIND
                                                                        6 Gigawatts Solar PV
                                                                     100 Gigawatts Hydro Power
                                                                        4 Gigawatts Geothermal
                                                                         6 Gigawatts Nuclear

                                    Sea Ports
Iraq                                                                  USA
6                                                                   360

                                  Universities
Iraq                                                                  USA
30                                                                   300 +

In conclusion, based on the above and many other metrics, it is my opinion that.

Many IQD speculators are counting on and HOPING the IQD will soon RV or RI and they "Believe" it will do so in the $1 to $3 Range, however, this is not logical based on my premise as outlined above, nor is it economically viable for Iraq to do so, because it would end up costing the Iraqi Central Bank in the general ball park of between $3 Trillion to $9 Trillion to CASH OUT the IQD inside Iraq in the hands of the Iraqi population. The CBI of Iraq could themselves defy these very metrics and RV the IQD at $1 to $3 +, however, by doing so, they will Bankrupt Iraq and totally Destroy the Iraqi Economy, set the Nation a blaze with civil war and unsettle the Region even further than it currently is, because of that, I do not "Think" the Iraqi CBI will choose to go that route and instead, will, I think, wisely opt for a very slow methodical and controlled regulated or managed Float as laid out in my premise.

The total combined value when converted to USD of the top 38 countries that make up 89% of the world's GDP and 65% of the world's population total $60 Trillion USD world wide. How
can Iraq RV their 30 trillion dinar to equal 30 trillion US dollars, a 1 to 1 ratio?

Logically, using fiscally sound economic metrics, the answer is of course that Iraq can not and WILL NOT do it. There are 30 Trillion Dinars Total. They only have $60 Billion in USD in reserves and their GDP is $110 Billion. Most countries in the world have an M2 as a percentage of GDP that is below 100%, no county has an M2 that is remotely close to -50,000% of GDP, which would be the result of a 1:1 RV ( M2 is 72B USD and GDP is 110, so M2 is -50% of GDP, x 1000 is -50,000%). These are all fundamental metrics of how an economy works.

This Article on the Iraq Dinar is merely intended to generate deep thought based on using the same metrics we normally apply to any of our Investments within our Investment Portfolio...I must admit, I too got caught up in the "Emotion" of the IQD Investment and forgot to apply "Common Fiscal Metrics" all good Portfolio Managers use when evaluating an Investment, however, now that I have personally been Invested in the IQD for 3 years, I decided it was time to forget about all the "Articles" coming out of Iraq and instead, simply evaluate the IQD Investment from a purely fiscally sound metric along with Historically comparing Iraq to our own Country that is now almost 237 years young and use that to compare where Iraq is in respect to the "Actual" "Fair Value" of their currency relative to what FOREX Traders should VALUE it at, much like any other Currency based on the real WEALTH of their Nation and how realistic is it for folks to "Believe" it will somehow defy the very metrics Forex Traders use every day relative to determining "Fair Value" based on "Free Markets"...of course, Iraq' CBI could themselves defy these very same metrics and RV the IQD at $1 - $3 +, however, by doing so, it is my humble opinion, by doing so, they would unwisely do so and Bankrupt Iraq, totally Destroying the Iraqi Economy overnight, set the Nation a blaze with civil war and unsettle the Region even further than it currently is. So, that said, it is my humble opinion that, I do not "Think" the CBI will choose to go that route and instead, will, I think, wisely opt for a very slow methodical and controlled regulated or managed Float as laid out in my premise above.

In my humble opinion, there are much better Investments out there in the Expanding Global Economy that people can Capitalize on, that offer far less "Speculative" risk. Investments that are in mega trends and super growth areas that should be competing for our Investment money. I personally discuss these in detail on my Radio Broadcast at http://www.GreenROIRadio.com and within my Best Selling book "Green ROI: Sustainable Investing" whereby known fiscal metrics are used to determine a "Balanced Portfolio" approach. In so deploying these strategies, it is my opinion one would increase their wealth substantially over the next 20 years.

In conclusion, I myself have chosen to liquidate 100% of my IQD holdings and have made a personal choice to do so, based on the premise of my Dinar Article "The Iraq Dinar, where's the RV?".

NOTE: This should not be construed as Investment advice, each of you reading this should seek the advice of your personal Investment Adviser.

Best Regards!

Ken Howard

Ken Howard is the Best Selling Author of Green ROI: Sustainable Investing
Ken is a Radio personality and Host of GREEN ROI RADIO

http://www.GreenROIRadio.com

http://www.buyacopynow.com

May 31, 2013 at 2:47am
Author: Ken Howard
Copyright 2013
Edited: 11-11-2013

by **Ponee** on Thu Jun 14, 2018 8:32 pm

AN UPDATED POST BY KEN HOWARD --

Ken Howard UPDATE: It's been 5 Years to the Month since I wrote and Published the above Article on the IQD, and, as I stated in the Article, it is not Logical, nor Fiscally responsible to believe the IQD will RV. Since then, many who hold on to their IQD could have instead made a tremendous Return by investing in the FUTURE of Money, digital currency, cryptographic currency, cryptocurrency. Learn more @ www.CryptoCoinBuz.com and www.AICE.world

Cheers!

The Iraq Dinar, where's the RV?

The Iraq Dinar, where's the RV?

The Iraq Dinar, where's the RV?

Re: The Iraq Dinar, where's the RV?