Thread: What it would take to achieve parity

Hi Folks,

I'm a new guy on the forum and was enlightened on the prospects of investing in Iraqi dinar by a fellow employee.

Apparently there is a lot of mis-conception about what it would take to bring the Iraqi Dinar to parity or even beyond with the US dollar and I'm afraid a lot of that mis-information is obtained right here on this forum.

So please indulge me as I present what I know and ask for the "experts" input on my assumptions and allow those with different opinions to "show me the light".

Currently we have an exchange rate of around $1=$D1200.

This varies quite significantly depending on your source but that's a current rate offered by bloomberg. And will suffice for discussion purposes.

What my co-worker has been told is that not only is a 1:1 parity with the US dollar quite possible but that it is expected and in fact this source fully expects the dinar to be revalued at somewhere between 3 and 4 dollars per dinar. That is to say: $1 = $D .66 - $D .75

I have made a genuine effort to explain the magnitude of how unlikely such a revaluation would be without a complete rebasing of the currency, only to be rebuked with a contention that this is exactly what occurred with the Kuaiti currency.

Let be sure that if that in fact did happen to the Kuaiti currency it only did so because of the utter and complete disconnect from the fundamental realities faced by the Iraqi Dinar. The political upheaval in Kuwait was far shorter than that of Iraq and the governmeant and economy in Kuwait far more resiliant than that of Iraq. While Iraq has the worlds 3rd largest supply of oil reserves their infrastructure and ability to market those reserves in a meaninful way is greatly impaired and a good deal of time is necessary to repair what's been broken by both the war and the irresponsible regime of Saddam Hussien.

While I do appreciate that the Dinar does indeed possess the potential to appreciate materially against the US dollar for a variety of reasons, most significant being an ongoing devaluation of the dollar against the international basket of currencies and the ongoing improvements in Iraq, in both their infrastructure and stablility....the Thesis of Iraqi Dinar and US dollar parity is simply not supported by the fundamental realities.

Please...if possible enlighted me otherwise.

jc