The Wealth of Iraq

In dinarland we often hear gurus talking about the vast wealth of Iraq as the reason we can expect an unprecedented revaluation of their currency.  Iraq has a reported 143 billion barrels of proven recoverable oil in their reserves, which would amount to over $7 trillion dollars worth of oil.  While that’s an impressive amount, I think we need to put it in context.  You see, their neighbor to the east – Iran – has 158 billion barrels in their reserves.  Canada has 170 billion barrels in their reserves.  Saudi Arabia has 266 billion barrels in theirs, and Venezuela leads the world with over 300 billion in theirs.

Now, let’s take a look at their currencies.

The Iranian rial is valued at $.00003, down from $.000033 in 2015 and $.00004 in 2013, despite all of the hype generated by dinar/dong/Zim/rial pumpers in recent years.  Okay, maybe their reputation as a renegade radical Islamic state has kept the rial’s value down, so let’s look at the others.

Canada’s dollar (the loonie)  is currently valued at $.79, up from $.76 two years ago but down from about $.96 four years ago.

The Saudi riyal is valued at $.266, just like it was two years ago and just like it was four years ago, because it’s a pegged currency on a managed float just like the IQD.

And then there’s the Venezuelan bolivar, currently valued at $.10 after the country has fallen into an economic crisis.  Four years ago the bolivar’s value was $.16 and five years ago it was at $.23.

So we can see from these numbers that oil reserves don’t determine the wealth of a country or the value of its currency.  Why would the US, with only 35 billion barrels in their reserves, have a higher standard of living and a more valuable currency than the others?  Because the country has a diverse economy, an educated populace, a strong military, a stable government, and an arrangement with almost every oil producing nation to sell their oil for USD.  Many countries use the dollar along with their currency, or they use the dollar exclusively and don’t even have a currency of their own.  Countries want US products and US services, and they need US dollars to get them.  When Iraq has all of the qualities with its economy that the US has with its, maybe their currency will have a value near that of the USD.  Maybe by the end of the century that will happen, but by that time the IQD and the people who own it will be long gone.



4 thoughts on “The Wealth of Iraq

  1. Good point, Sam. The math needed to justify a value of even 1 cent for each Iraqi dinar has always been impossible (85 trillion currency units divided by $70 billion foreign currency and gold reserves equals $.00082 per currency unit or 1,214 currency units per US dollar which, miraculously, is almost exactly the fixed exchange rate). The scammers wouldn’t dare show it to their victims. They’ve always relied on this mystical claim of “hidden value” to lure in new suckers. But if dinarians think the dinar has all this hidden value because of all the oil reserves in Iraq then they should become less and less optimistic about an RV every single day. After all, once a barrel of oil is pumped from the ground and sold, it’s no longer part of the reserve. Iraq pulls millions of barrels out of the ground every single day and hundreds of millions of barrels out every year. So, in the absence of any new oil discoveries, Iraq has billions of barrels less in reserves than it had ten years ago when the dinar scam started. If each dinar wasn’t worth $3 or 25 cents or even 1 cent when Iraq had 160 billion barrels of oil in reserves why would each one have a similar value now that Iraq only has 140 billion barrels left in reserves? Every day that goes by reduces their reserves by millions of barrels and depletes the value further, right?

    Liked by 1 person

    • Well, it would deplete the value if they weren’t manipulating the money supply as their foreign currency reserves increase and decrease. That’s how they maintain a stable exchange rate, which is actually what they’re after rather than a substantial increase or decrease in value.

      Always good to see you, networth.


      • Of course. This whole notion that currency represents wealth is fatally flawed. Currency is simply a medium of exchange and store of wealth. Wealth is neither created nor destroyed through an exchange of currency. It is only transferred. If a nation could create wealth out of thin air simply by revaluing their currency why wouldn’t every poor country in the world simply issue their own currency and decree a favorable exchange rate with the US dollar or Euro? Heck, there shouldn’t be any poverty in the world if central banks in poor nations simply do what Adam Montana says they have the power to do: declare any exchange rate they want any time they want. So these fools that think they are going to become fabulously wealthy when the dinar miraculously and suddenly revalues should ask themselves from whom are they going to receive their wealth and, more importantly, why would that person allow it? The answer, of course, is that they aren’t going to become fabulously wealthy because no one is going to voluntarily transfer massive wealth to them just because they own a bunch of dinar. And, despite what Montana and the other clowns say, central banks can’t create wealth out of thin air. The value of a fixed currency like the dinar is incredibly easy to calculate. And in the universe we live, the laws of mathematics make a significant adjustment to the value impossible. Not unlikely. Not undesirable. Not improbable. Impossible.


  2. In Dinarland, emotions trump facts every time, and nothing is more emotional than the bizarre belief that Iraq is special enough that it’s allowed to sell the same barrels of oil twice over. That’s pretty much the RV/GCR argument in a nutshell – “price in” all reserves that will be sold over the next +150 years into today as mythical “RV backing”, but then ignore the fact all that oil will be consumed / sold for real when it actually gets exported in years to come (effectively double-counting it).

    Iraq’s $7tn oil wealth sounds impressive until you realise that sum is spread over the next 75-100 years worth of exports, ie, at 2.5m barrels per day production (912m barrels per year) it averages $45bn annual income based on $50 oil prices over 156 years. Double output to 5m barrels per day (1.8bn barrels per year), and that’s still $90bn annual income spread over 78 years which doesn’t even cover the cost of their government (hence their racking up $125bn govt debt despite increasing oil production and international aid) and is about the same size as the annual GDP of tiny countries like Honduras, Costa Rica, Paraguay, Congo, Macau, Nepal, etc.

    In reality, oil does have an impact on the currency but only during actual year of export. Iraq sells oil and uses revenue not for a delusional “RV” windfall, but for paying their govt budget / reconstruction (in lieu of Western style diverse economies + income taxes) plus imports. +90% of Iraq’s oil revenue directly or indirectly gets spent on security, energy, transportation, education, health, etc, for inside Iraq. Only a few Western “RV” scam victims still clinging on after 14 years and thousands of “this week, anytime soon!” failed RV ‘intel’ (ie, blatant lies), think all that oil revenue is piled unspent into a “RV windfall vault” whilst never stopping to think about what Iraq’s oil revenue actually gets spent on.

    You could do the same junk economics “maths” with any country, eg, 75-150x years of USA’s $19.4tn annual GDP = $1,455tn – $2,910tn or 162-323x Iraq’s worth of oil reserves. Given the BS +300,000% to +3,000,000% still being “pumped” by the RV scammers as some “magic beans” ‘windfall’, all I can say to that is “GO 483,000,000% USA RV” and “Go 600,000% Venezuelan Bolivar RV” using the same “RV” scam sales pitch…

    As for other currencies mentioned, the Iranian Rial’s low value has far more to do with the same excessive quadrillion unit scale money supplies that drove Vietnam’s & Indonesia’s down over the past 30-40 years or so than recent politics alone:-

    Iran – 12,534tn (ie, 12.5 Quadrillion Rial). Rate = 33,240:1

    Vietnam – 6,020tn (ie, 6 Quadrillion Dong). Rate = 22,732:1

    Indonesia – 5,225tn (ie, 5.2 Quadrillion Rupiah). Rate = 13,340:1

    ^ Pretty much every country with 5x digit exchange ratio’s vs the $ is that low due to literally printing QUADRILLIONS of local units, ie, same old currency devaluation as 4-digit Iraq, Lebanon, Colombia, Mongolia, etc, but on an even larger scale.


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