The following was shared as a recent comment. In my opinion, it contains some of the most informative, interesting and encouraging insight I’ve read on the dinar rv I’ve read in a while.
For the benefit of new investors, as well as not so new investors, the author has graciously given me permission to share it here as a featured post. I am sharing it as is.
Enjoy!!
Just some concepts to keep in mind as we watch the events unfold and the weird way things seem to be going.
First, money:
There are basically two types of money; money based on the strength of an economy like the US, and money based on valuable commodities like oil, gold, etc., like Kuwait, Saudi, and at present Iraq, potentially.
The value of the USD is based on our ability to produce goods and services.
The value of the KWD (Kuwait), for example, is 95% based on the value of the oil in the ground being pumped and sold. Iraq, right now, has now valued its money on the value of its commodities of which they have an abundance (oil, gold, other minerals, agriculture and a host of other valuable things the world wants). BUT, Iraq WANTS to have an economy on which to base its money because having a viable economy is MORE stable than simply pumping oil. When the oil runs out, their money becomes worthless again.
Second, International Politics:
The US and Iraq are tied together, the US$ is Iraq’s international money. They want their OWN international money.
China wants to dethrone the US$ as the global currency so they are pushing buttons with the IMF to revalue the IQD at a LOW rate which will weaken the US$. But they can’t let the US$ get too low, or their exports will become expensive and they will lose market share in the US. They are conspiring with Russia and Iran to screw the US$ internationally.
Third, US politics:
As the US deficit and debt grow our money becomes less valuable internationally. A good Iraq RV will boost the US$ big time and blunt the Chinese efforts to screw us. This just happened with Dubai.
The
Dubai problem is centered in the
..
which effects the EURO. US banks are not heavily into Dubai, thus with the Dubai possible default international money is flocking to the US and increasing the value of the US$ against the EURO. The US took a 6.5% bump up since the Dubai real estate problem became public.
This means that the IMF efforts to pin the Dinar to the EURO (the
$1.49 RV) is weakened by the stronger US$ which makes the Iraqi desire for a HIGH RV in US$ more probable and more feasible.
International Trade:
Iraq WANTS to establish an economy based on more than their oil, gold, and natural gas so they have to get into the international market systems. To do this they MUST have a currency with real value.
The sooner they do the RV, the faster they will be able to build their economy.
They have taken the steps necessary to begin this process, but still need the revalued currency.
So right now, we know a few things.
(more…)
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