Letter: Rising dinar may be worth watching
Tuesday, October 12, 2010
President George W. Bush liked to say the ($900 billion and counting) Iraq war would, eventually, pay for itself. Maybe he knew something average Americans weren't privy to. Suppose he was counting on Iraq's new high-tech (Saddam Hussein-free) dinar's eventual revaluation on the world currency market, and the United States being in a position to own and hold (cheap) dinars, both by way of the U.S. Treasury (currently more than $400 million worth) and private citizens (currently more than $100 million worth). A revaluation to pre-war rates (3.23 dinars to $1) would turn that $500 million (combined) investment into $15 trillion overnight, enough dinars to, essentially, pay off the national debt and then some while creating a new class of dinar-rich Americans, who will promptly spend their millions reviving our national economy in the process (the theory holds). Don't laugh. It could happen. (Bush is counting on it!)
The foreign exchange market, last week, moved the dinar from an “exotic currency” back to a “world currency.” Trade sanctions are nearly lifted. The Bank of England is co-sponsoring new banks in Iraq, based on a “five-fold increase in the value of the dinar over the next five years.” Most analysts believe the dinar will revalue higher, between .85/$1 and 2.85/$1. The dinar has to revalue to be made regionally competitive based on Iraq's natural resources. Many believe the only thing keeping it from happening is Iraq's unsettled parliament, which could be seated any day now.
Some analysts predict, based on Iraq's oil reserves alone, the dinar could rise to 7/1 over the dollar. Having said that, I am not an investment counselor and this letter is not intended to encourage anyone to purchase dinars (currently at 1,000 dinars for $1).
MITCH BOWEN
isor@localnet.com
Greenville
http://www.reflector.com/opinion/letters/letter-rising-dinar-may-be-worth-watching-148613