Thread: Iraq/Dinar News. 09/05 to 01/14/07

Originally Posted by Caroline

WELL, I just got off the phone with a young lady in the foreign currency department at the Zions Bank in Utah who told me that they are not selling/buying the dinar. HOWEVER, she hesitated a bit before answering me and seemed a little unsure of her answer. When I then asked if they expect to in the near future, she again seemed unsure of what to say and then said that maybe they will sometime. I wonder if since that post in whatever forum it was first posted in they've had a deluge of calls and are backing off if indeed they were actually offering the dinar for litle while....????

Caroline

Interesting,

I had called and got the same response, almost as if they were not sure and were not going to respond without account information. Obviously, I don't have an account, was more curious as well since I have been selling dinar. Same thing with Compass bank who I know is selling and exchanging, but you need to open an account first. The point is, sooner or later many more banks will be involved, some sooner than others, but like Adster says, no rush, we both feel revalue will be low and then allowed to float up, so hang on.

Good luck to all, Mike

Compass will sell you Dinar for approx. .0008 cents and buy your Dinar from you for approx. .0005, right now. This is an approximate 40% profit for them. The mgr. of a Compass branch told me that the reason for the large profit margin is due to the price of the Dinar, very low atm. Leads me to believe that once the Dinar is convertible, or able to be exchanged anywhere for US$, Compass' profit margin, or difference between what they will sell and buy back Dinar for, will decrease. As a matter of fact, before the bank mgr. looked up the buy/sell rates on his computer, he was saying there wouldn't be a 40% difference between buy and sell, he said that was too high. Then he looked it up and said that now he understood the large difference, because the value of the Dinar was so low at this time.

Mike is right, main thing to look for is for more banks to start trading in Dinar, I.E. the Dinar becoming convertible. Many Forex sites have been spotted with the new Dinar trading symbol joining their lists of tradable currencies. Although the Dinar has no value placed by it's symbol, the mere fact that the symbol has been added gains credence that this is something they are gearing up for, as to not be caught unprepared.

It's getting close IMHO.

Compass are one of the few that are currently buying/selling dinar. Good work on their part, forward thinking. They know it's a matter of time so why not get a jump start and sell/buy it now when a lot of people want a piece of the action? As for the rates above, no real surprise, until more banks get involved they've more or less captured the market so can set whatever rate they want to. The bank will always win. End of the day we took the risk with this investment but the banks win either way with no risk involved.


Have a read of this. I feel a reval is not far off with more price hikes for fuel.


In The News 01 Feb-10 Feb
Gateways….
Surprisingly enough a key Iranian diplomatic figure in Baghdad has warned against the illegal entry of Iranian pilgrims into Iraq http://www.irna.ir/en/news/view/line...5619105924.htm and said Iraqi police have arrested more than 20,000 Iranians who, in recent days, have tried to cross illegally into Iraq to do pilgrimage or participate in the Ashura procession. At the same time alleged infiltration of foreign militants into Iraq through Syria appears to have dramatically slowed down, according to US military officers on the Iraqi-Syrian border. http://news.ft.com/cms/s/b6912472-99...0779e2340.html
However there are now more Iraqis getting out on the Jordan boarder, According to The Washington Post, an Iraqi interior ministry official stated that the volume of Iraqis, educated or otherwise, travelling overland to Jordan every day has gone up fourfold — from 200 or 250 a day to 1,100 a day — since last July. http://www.menafn.com/qn_news_story_...StoryId=124617 (“The Brain Drain” article is worth the read) Although you wouldn’t know it given the multitude of Iraqs problems drugs are continually making it through the Kuwait boarder in large quantities. http://www.arabtimesonline.com/arabt...?ID=6805&cat=a Also it is worth mentioning regarding the sheep and older woman driving the pick up truck, hitting the patrol car who was the lead vehicle in a U.S. convoy, the term “Strange incident” does not refer to the sheep nor the police car but the woman. In Kuwait it is illegal for a woman to drive a truck. If it were a man driving… it would have been business as usual.


Where in the world is Sadar these days?

Syria of course… Leader of the Sadrist movement in Iraq underlined on Wednesday the role of the Ulama in unifying the Arab and Islamic rank and in countering the occupation and destructive schemes. The Grand Mufti of the Republic, Sheikh Ahmed Badriddin Hassoun, who attended the meeting, said that "Iraq constitutes a trust for our nation and we must work to foil any aggressive scheme aimed at dividing Iraq into small states and sects." http://www.arabicnews.com/ansub/Dail...006020912.html Why do we keep tolerating him?


Do what you say… say what you do…

Group of Eight countries ( G8) have so far failed to fulfil their high profile commitment to cancel all eligible heavily indebted poor countries’ debts to the Industrial Development Agency, the International Monetary Fund and the African Development Fund, according to a report by Toronto University. http://news.ft.com/cms/s/5ccfebaa-9a...0779e2340.html Especially in the case of Iraq… “The pledge to reduce Iraq's debt by implementing the terms of the November 2004 Paris Club agreement was only 25 per cent achieved.” You would think since the G8 has not deployed any troops they could at least shave off some debt.

We have a target…

For a while now we knew that there would be more fuel subsidies but we never knew a stopping point. “One liter of gasoline in oil producer Saudi Arabia costs between 25-30 cents. When Iraq increases the price tenfold a liter will cost between 40-42 cents.” http://www.menafn.com/qn_news_story_...StoryId=124482 and they expect to reach this rate during 2006.

Younes Abbas Shamari is a carpenter with an open-air shop on Baghdad's Zawiya Street, which means he depends on electricity for most of what he does: sawing, drilling, sanding. These days, however, he rarely works, as the electricity is off more than it's on. His workshop sits on a commercial strip in a relatively calm area in the central part of the city. Many small businesses here are in need of electricity to function, but Mr. Shamari estimates he gets just two hours of electricity for every four there is none. And that's twice the Baghdad average, this being one of the capital's more upscale neighborhoods. Baghdad was receiving an average of at least 16 hours of power a day.
Today, with insurgents targeting power plants and electrical lines on an almost daily basis, the city gets power just four hours each day on averageIraq was generating 4,500 megawatts before the US invasion. But by November of last year that generation capacity had dropped to 3,995 megawatts, well below the national demand of 7,000...

When fuel was still cheaper than water, before the government cut subsidies in December, Shamari made up for the lack of power with a gas-powered generator. But with the price of fuel now three to five times what it was just three months ago, that's no longer an option. (2.8 cents) http://www.csmonitor.com/2006/0210/p01s03-woiq.html


Conclusion:


If small business owners cannot afford to use fuel at 2.8 cents a litre… how are they going to afford fuel at prices higher than Saudi when we know that only 33% of Iraq’s power grid is operational, and congress is not giving up the funds for reconstruction ? Who said there were no signs of a reval?

Exactly,

With the increase in fuel costs and the subsidies being phased out, these are all good signs for dinar. My associates in Iraq have been saying this is no different than when we went through oil embargo, and what we will again be going through when Iran pulls the plug on exports, there is a spike in prices due to fear and speculated supply shortages. Nothing new to us here, but when it happens in Iraq, that is new.

Simply put, the Iraqi people are feeling the pinch, but they also know deep down inside that they are in for a reversal, if not windfall any day, so just as we saw protests when first susidie were phased out, and prices went up four times previous levels, this too has stopped. We all over react when first fased with a price spike on any commodity, and this is what we saw in Iraq, but just like here in US when prices doubled, we adjust and get use to it.

The same is true with the businesses which must raise prices due to this increase cost, and in a couple months it is forgotten and we all just take it on the chin with increased prices a way of life. In Iraq, this was the first increase in fuel price ever, and as I recall when I was there fifteen years ago, I always commented, WOW, .10 a gallon, and at the time we were $1.30per gallon in US. Just didn't make sense to me then, but that was before I realized subsidies were the reason. Crazy way to run a government, but then again, Suddam was crazy, so it all makes sense now. (g)

As I see it in talking to my contacts, this is a stairstep approach to eliminating subsidies, you have to do it in phases, testing the feedback of people regarding economic impact, and just as the Adster article pointed out, it is indeed impacting business with the increase in cost. But guess what, I am sure this business owner has increased his prices by now, and his customers are adjusting to reality, right? That is basic economics, nothing new, just a little new to Iraqi people. (g) One more increase in fuel prices and my contact in Iraq says peg will be announced, but not introduced for about another month, so we are real close now, and as I stated earlier, we will see peg before PIPS, and now before HA, who woulda thunk it? (g)

Good luck to all, Mike

Totally agree Mike, a reval has to happen or the people have no future, most are poor enough anyway without paying more for things. They are owed bigtime and that day will come.

What do your contacts say as a rate for reval?

Originally Posted by Adster

Totally agree Mike, a reval has to happen or the people have no future, most are poor enough anyway without paying more for things. They are owed bigtime and that day will come.

What do your contacts say as a rate for reval?

Hi Adster,

As you know, we hear more speculation on revalue of dinar than on PIPS. (g) Although I was hoping for .30 or more, my Iraqi contacts seem to think .20 range and then it will be allowed to stabilize, and with any luck, if we see less and less terrorist activity, and more and more bond interest activity, the dinar will increase with little need for official help, so I would be more than content with this scenario, how about you? (g)

Good luck to all, Mike

Mike,

Have heard all sorts from .001 to 1 dinar to 3 dollars! LOL.

My own take is if they reval too low then they'd get screwed by all the speculators buying up billons of dinar in anticipation of it going up further. If they reval too high then they haven't got the reserves to back it. Somewhere in between, something in the region of .10 to .20. That would do nicely, I'd cash in a couple of million and sit on the rest because once released on the Forex the rate will climb and climb and 1 to 1 could be achieved inside 2 years.

Let's hope so my friend. This was and still is my banker. With pips and plex not looking too good it's comforting to think one investment will come off.

Hi Adster,

Yes, it has been a fun ride up to this point, and it gets better every day. I never fully expected it would come around this quickly, after all, it took 18 months with Kuwait dinar to rebound, and they had a stable government before Saddam attacked, so I am very happy for what we have seen, even if it does peg at .01, this is still a very handy return given the near zero risk. (g)

How often do you find such a low risk investment? Only a couple times in my lifetime, and maybe only once for others, so like you, I jumped on it and am glad I did. I feel better than ever and increased my holdings even more, in fact, crazy, I picked up another 10M with some timely stock plays. (g)

Call me crazy, I don't care, I will not be caught on the short end like I was with Kuwaiti dinar play. My two associates are millionaries on that one, me, I was playing it too conservative as everyone was calling me crazy to invest in any middle east deal at the time. Well, I did real well, not a millionaire like my two friends became, but it got me through a general down turn in economy in early 90's which I wouldn't have survived without it, so thank God I didn't listen to my friends back then. (g) Yep, I was crazy and still am LOL

Good luck to all, Mike

OK fellas you got me , I just went and bought another mil. denar . Good luck and god bless us all.

Hey Rolbuddies. After reading your posts, I went to Compass Bank to see for myself what would happen if I went in talking about the Dinar. After waiting in a line and getting to the teller window, I promptly asked, "Who do I talk to about currency exchange?" The teller said, "O, I dont know, let me check" She went to another man who said we dont do that here, go to the bank by the airport. I then said, "I was told that you exchanged the new Iraq Dinar at Compass Bank." She checked with another person and she came to me and said we can do that here, but come to this room. So I followed her and sat down and asked, "what is the exchange rate" To make a long story short, it stood at $812. for 1 million for me to buy. And about $560. for me to sell. I told her I wanted to buy, placed my order, locked in the rate, and walked out 1 million dinar richer. If thats not free trade, then I dont know what is! I walked in to my local bank, bought dinar at a rate that is better than what I can find on the internet, with no 6 month wait, or any wait whatsoever. An instant purchase with a locked in rate. Granted I couldnt turn around and sell it to them and make a million, but that isnt the way the banks or the world works. Im ready to revalue this thing! Go Dinar!! God Bless you all.