It Seems Impossible, Part II

Okay, the big carrot – pay 1/10 of one cent for an investment that returns in excess of $3.00.  I still can’t believe it’s true.  But I bought a bunch.  Then I started to work with some numbers

Pssst, Buddy, Want Some Dinar?

Assume there are 2,000,000 dinar holders worldwide.  Not such a wild assumption because Ali at DinarTrade has over 600,000 by himself.

Now assume the average holding is 1,000,000 dinar.

That’s TWO TRILLION dinars in circulation.  And that number supposedly represents only 5% of all the world’s dinars.  Apparently Iraq holds 85%, governments and large investors hold the remaining 10%. 

Let’s assume the RV/RI comes out at $1.00.  We don’t know where it will come out and we hope it’s more, but for sake of argument, let’s use a buck.   That’s TWO TRILLION AMERICAN DOLLARS.

If you look at the entire supply of dinars, an RV at $1.00 would be worth FORTY TRILLION AMERICAN DOLLARS.  If the dinar comes out at $3.00, we’re looking at $120 TRILLION.  That’s a lot of cabbage.

Our friends say the RV can be done because it’s backed by oil and gas reserves.  A report in early January 2011 said the total reserves could exceed 500 billion barrels.  At $90.00 per barrel, that makes the oil reserves worth 45 TRILLION AMERICAN DOLLARS.  Add in gas reserves and you have maybe $100TRILLION, all of this taken in over at least the next two decades.  That means $120T out short term and $100T in long term.

  

People have explained the plausibility of the RV because “Before Saddam, the dinar was trading for over $3.00.”  This is comforting and historically true but I’m wondering if there were nearly as many dinars in circulation.

We’ve see lot of explanations of how this whole thing is coming down, but it seems impossible to me.  In the end, I guess I don’t care - I just want my coupla million greenbacks in the bank.  How about you?