Here are my responses to this week's questions for Adam "Wolfyman" Montana.
- How is the changing of the guard at CBI going to effect the chances of an RV? Some folks think it is so Maliki can plunder the reserves. What's your thoughts? Well it didn't have much effect the last time they changed it, now did it? People have been saying that about Maliki for years but the reserves keep growing. However, it's their country and they can run it into the ground if they see fit. That's a risk you take in buying the currency of an unstable country.
- Concerning the loss of value of the us dollar when the RV comes. If the dollar devalues against the Dinar, Dong, etc. How much of the buying power will the US dollar decrease? The dinar is pegged to the USD, so if the dollar loses value the dinar loses value too. If they revalue or devalue it won't make much difference, since (contrary to what the idiot gurus are telling you) those two actions are relatively insignificant in nature. As for the dong, Vietnam prefers to slowly devalue it so I'm not expecting any increase any time soon. The dollar might decrease a few % in value, but in the last few years it seems to be holding up fairly well on the forex. I look for that to continue short term.
- How do you think an rv would affect the stock in iraq? Not much. It's just an exchange rate vs. foreign currencies. Raising the value a few % would only have a negligible impact. Would they just change the nominal value and I'm still left with the same amount of stock? Changing the nominal value would be an RD, not an RV. After they redenominate your stock in XYZ that sold for 1,000 dinar will now sell for 1 dinar.
- Can you give a breakdown of what is happening now in Iraq? Violence, corruption, sectarian division ..... same ol' same ol'. We heard that Turki is being removed and that all has been completed including the HCL, just not implemented. Who knows? Who cares? None of that is going to raise the value of the dinar substantially. What laws are still hanging out there that have to be done? Ditto. What are your contacts in Iraq saying. What contacts? I can't believe they are waiting on the elections to revalue currency. Just doesn't make sense. You're right, it doesn't. They've raised the value in the past with Maliki in office. The only reason they aren't raising the value now is that they apparently don't see the need to.