I talked to our team about the countries next to Iraq and feel that a one to one has no signification disadvantageous regarding fair trade…a 1:1 rate or a bit higher.
Now, will this happen the way we think? Maybe or maybe not, but it sure does appear to be pointing that direction of being backed by gold.
[The question I have is how the process of revaluation of the dinar changes (if any) being pegged to gold. In other words, would it be a gradual or a more sudden increase?]
There would be no “revaluation” but rather now a value that follows the gold standard.
One possible scenario: The CBI will just announce that the IQD is now backed the the gold standard.
So if you go to the bank, now any bank for that matter, they would simply looked up the buy rate at the time and pay you in USD that value.
So lets look at both sides of the coin now.
So it is not pegged to to Gold, what else could it be pegged to? Yes the USD, which is still fairly close to a 1:1 or a bit less at the moment, regardless worth something.
So who are the winners here, most everyone including yourselves.
Now it comes out at a $3 plus rate, who is the winners here, again you are, but I do not see how Iraq can support that type of cash out now that oil is so low.
Iraq needs to be able to set themselves up for success, not a rate that cannot be sustained.
[Let’s say hypothetically that the switch is flipped today and the dinar is now backed by Gold. What would the dinar value be at this point? Is it even possible to determine that or is there more to it than just looking at the price of Gold?]
$1,101.65…Here is how it was explained to me.
Lets say the CBI said that one IQD is now backed by one ounce of gold.
It is my understanding that one IQD would be equal to $1,101.65 or a 25K note would be worth $27,541.25 USD, less any spread and fees.