DINAR VETS CHAT - Realistic RV Rates (Compiled by Chazman)

Chazman

I read an interesting series of posts on DV about the potential RV rate and though our members might find it interesting.

Realistic rates

Grumpy aka Rob

My .02 worth on the possible RV rate.

All day long I have sat in chat listening to people come in and out spouting off rumors of $3.86 .04 cheaper than KWD. First of all the rate 1.00 KWD = 3.48675 USD. Amazing how easy it was to debunk with one click of the mouse.

IMO and only my opinion, I think we should be looking for a RV anywhere between .10 - the rate of the Euro. Don't get me wrong I would love a $2+ RV but I don't see it happening. First of all Shabibi is a economical genius, and is going to what is best for Iraq and no one else. I have tried to fight off the notion that anything less than $2 is a joke to Iraq and would embarrass them. Here is why I disagree, why would they RV so we could cash in the 20+ trillion dinars back in when they can just as easily RV at let say .50 and force a time limit to cash in?

After let’s say 60days they have two choices, a second RV or allow the currency to float and climb rather quickly IMO. Its simple math, receive 70-80% of currency back in at .50 and float. The least amount of currency out, the stronger the currency.

Let’s hear your opinions.

brianlpn

I would say that I agree, knowing that Shabibi gas publicly stated that he does not like speculative investors. However, if he chooses to come out at say .50, the wealthy are going to go on a buying spree of major proportions knowing that a rapid float to a much higher value or a straight up RV to a higher value looms in the very near future. That much of a run on their currency by new speculators, IMO, is very likely to surpass the current speculative holdings and in the end net them nothing with respect to the circulation amount. IMO, they will come out at 1.50 to 2, to get a large cash in and prevent a huge new batch of speculators b4 RV'ing again at a higher rate.

kelsguy1113

Several things to think about... first, if they RV too low, those who have the power to buy up a bunch (hedge funds, etc.) will slaughter the dinar. Investors make up very little of the over all picture. Those who run the major funds will buy massive amounts at anything less that $2 simply on speculation alone.

Second, go to Bank of America's currency exchange sight. The Kuwait Dinar is listed and $3.87. One click proves that this isn't a joke. It is a real rate.

I don't think Shabibi is worried too much about Iraqi pride. He knows that if the rate is not carefully released and moderately high, the dinar will be bought up in massive quantities at the expense of future value.


EddieX

So people still think there are 20T NID in the hands of the public? Governments own a big percentage of that and they have some deals in place like trade for oil, etc.

Also not everyone will cash out all at the same time.

Most bank transactions are electronic, not everyone here is going to cash out at the same time and build a Scrooge McDuck money bin to hold their cash with armed guards and Doberman with grenades in their mouths.

Banks will hold money, governments will hold money.

RV at 10 cents and there will be even more money in circulation because then the investors jump in. Right now it's speculators but if you allow investors to come in too, then you flood the market with monopoly money.

But people will continue to compare Iraq to Cambodia and all those other places that don't have their resources and I'm not just talking oil.

10 cents isn't going to help Iraq either. They do have bills to pay and a government to rebuild. We're talking about a country that has to rebuild.

They've been fighting for an RI for years, they're not going to accept 10 cents and neither will I
Not that I have anything to do with the decision.

Follow the breadcrumbs people. Follow the breadcrumbs...

allIneedisonemillionusd

A double RV, in which the first is low; "to bring in our big bills", would be suicide for Iraq, the large (think Countries/Hedge funds) would buy on the speculation of the second RV. The speculators (us) are not even a drop in the bucket when it comes to holding IQD. We aren't part of the decision process for the RV. IMHO