Does Obama Have a Winning Wildcard?

By Dene McGriff

Day after day we get more bad news on the economy. The Eurozone is crumbling. The stock market has lost all of its gains for the year. Unemployment is up again, not to mention the hundreds of thousands who drop off the rolls every week and are therefore not technically “unemployed.” They have just run out of benefits or given up looking. The American debt is climbing and 41 cents of every Federal dollar spent is funded by more debt. There is no end in sight.

If Obama were to run on his record – the Fed spent 16 trillion to shore up the banking system and Obama unknown trillions to stimulate the economy. One would expect even poorly spent stimulus to have worked. After spending nearly a trillion dollars, the Congressional Budget Office estimates it cost an average of $4.1 million dollars to produce one job! At $30,000 per year or so (for a job) instead of hiring one person we could have “hired” 137 – good grief: 137 to 1. We could have done better just passing out money…oh woops, we did that too – loaning to dead broke banks and companies, many of whom went broke anyway. Obama may bash Bain Capital but he has more than one Solyndra hidden away. So which one knows business?

America is teetering on the edge as our deficits climb year after year with only vague promises of balancing it somewhere in the future. Is this sustainable? Can the Federal Government keep spending future earnings increasingly and indefinitely? Can states, cities and counties do the same? Europe is reeling over its debt crisis and recent talk is that Spain will leave the European Union before Greece. Italy is too big to save and many expect it to leave the EU soon. It could be quickly followed by Spain, Portugal and even France. For now the Irish are tightening their belts. You and I are tightening ours as well.

Romney: “It’s the economy stupid!” (President William Jefferson Clinton)

With all this doom and gloom all Romney has to do is repeat the Clinton mantra: “It’s the economy stupid,” and Obama is history. Already, early in the Presidential election season Obama is neck and neck with Romney in the polls and at this early stage in an election the incumbent is normally way ahead.

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Then we had the jobs report, June 1, 2012. The economy should be producing at least 150,000 just for replacement but only produced 63,000. That was April and they say May could be even lower. Consumer confidence continues to decline. All indicators are down; plus, states are now cutting employment extensions to the tune of 400,000 in the next several months – so unemployment insurance is being cut and by 2013 ALL unemployment compensation is ending! USA unemployment is said to be 8.2% (up .1% over last month)…

“Meanwhile, the so-called underemployment rate rose to 14.8%, after falling or holding steady so far this year. Some experts say this rate is a better measure of the job market’s health since it also includes people who could only get part-time positions and who have looked for a job at some point in the past year.” (CNN Money, May jobs report: Hiring slows, unemployment rises – by Tami Luhby, June 1, 2012)

Okay, that lays out the problem – the coming ECONOMIC COLLAPSE is all over the map and your GPS doesn’t work – we have no idea where we are and we await booming economies in Mendocino and Humboldt Counties of California to bail us out with their 66.67% Pot economies – while Stockton, California becomes the largest city in the USA to go bankrupt…the dominos are beginning to fall! I don’t like Obama’s policies but I didn’t like Bush’s either and probably won’t care for Romney’s if he’s elected. But, thank heaven! “This world is not my home and I’m just a passin’ through.” But I started out saying that Obama may have a wild card. What on earth could that be? What kind of wild card could be so big that it would bail out the government and the country? Is there anything that could possibly save Obama’s administration?

First Gulf War Paid for Itself

What I am about to say is difficult if not impossible to document, but there is enough smoke to realize there must be fire somewhere. We know that the first George Bush assured us that the first Gulf War would pay for itself and then some. And sure enough Clinton started showing surpluses. There were a lot of factors – Saudi cash, military expense decrease, welfare reform, etc. But there was one other factor. After the invasion of Kuwait, the Kuwaiti Dinar dropped from over $3 to one Dinar down to 5 cents and then came back up and has maintained a value of about $3.50 to the dollar over the years.

Some people got very rich from that change. Do you think that America might have had a few billion Kuwaiti Dinar? Ten billion Dinar would have increased in a value of $700 billion. This may be the peace dividend they speak of.

Will the Second Gulf War Pay for Itself?

Did we go into Iraq to save the world from Weapons of Mass Destruction – WMD no one ever found, from a crazy dictator (in a world is full of crazy dictators), or were there other geo-political reasons? Is there even the slight possibility we may have had another agenda? Is there a possibility that we didn’t spend a trillion dollars and loss of American soldiers (4,500 war dead alone), contractors and civilians…but could there be an upside somewhere? Are we that stupid?

I think not. I have laid out in other articles the fact that Iraq is one of the wealthiest oil countries in the world. It has not played out (dried up its oil, etc.) like Saudi Arabia and most of the other Gulf nations. They have only explored a quarter of their land and keep discovering more oil – high quality, easily accessible crude. They even discovered veins of gold – grief, right under Baghdad! Iraq has historically been the bread basket of the Middle East. Talk about resources!

Now takes 1166 Iraqi Dinar to Equal $1 USD …Used to be: 1 Dinar = $3.22 USD!

So this brings us back to the Iraqi currency. Before the war one Iraqi Dinar was valued at $3.22. Once the war started it plummeted to $1 to 1700 dinars or so and leveled off at 1170 for the past few years. That makes the dinar worth about one tenth of a cent. If the value of the Dinar went to 1:1, that would be a huge increase, but if it went back to pre-war values of over $3 to 1 Dinar that would be gigantic! I have absolutely no idea what the exchange rate will be. All I know is that the Central Bank is getting ready to revalue (adjusting its currency to be traded in the world currency exchange). I have written other articles on Iraq and the revaluation. This has been nine years and counting toward having a “tradable currency” (i.e., the so-called IQD or “Iraqi Dinar” is NOT currently traded on the FOREX).

The problem has been that the Prime Minister Nouri al-Maliki has not implemented a previously agreed-upon power and revenue sharing legislation. He has not completed his cabinet appointments – as agreed upon. He has been looking like another dictator and has been dragging his feet. Parliament has done much better at understanding monetary policy and reform. Meanwhile, Iraq has the distinction of being the 175th out of 183 most corrupt nations on earth. It appears that even his own party has abandoned him and they are moving to a no-confidence vote and possible formation of a new government. This is not a very good environment in which to revalue a nation’s currency.

Meanwhile, the IMF is meeting on June 7 to discuss Iraq, the World Trade Organization on June 10 and the Security Council will discuss on June 15^th and possibly remove sanctions from Iraq (a.k.a. Chapter 7). In other words, there is a tremendous amount of pressure on Iraq to have a tradable currency. They have been operating on dollars, but no one will take them seriously when their currency is worth a tenth of a penny. Most of the other oil rich Middle Eastern nations have a currency in the $3 range (i.e. 1 Dinar = $3 USD). In fact, the IMF has said it should be at least on par with the dollar (i.e., 1 IQD = 1 USD). So how is Iraq going to rebuild her country, trade with neighbors, pay contractors without a revaluation or reinstatement in the value of their currency? A system of tariffs also goes into effect June 30. This would increase the burden on the Iraqi people at the current worthless rate.

If Iraq can break their intractable political stalemate, agree on power and revenue sharing and stabilize politically, they may finally be ready to revalue their currency. This is still a very high risk “revaluation proposition” and Iraq and the Middle East in general, are high risk territory – so don’t go buy dinar because of speculation in an article.

What Does this Have to Do with Anything?

Could this be the peace dividend the administration has been looking for? Some claim that Bush/Cheney had a plan all along to pay for the war and this was it. They know what happened in Kuwait. They know it makes no sense for a rich country like Iraq to have a worthless currency.

I will say up front that what comes next is just a best guess. I don’t think anyone knows for sure. I have read that there are anywhere from 600,000 to 3 million Americans that hold Dinar and the average person holds about a half million (worth about $600). Some say others could hold millions of IQD and others just small amounts. So for the sake of argument, let’s say a million people hold a half million dinar on the average. That represents 2.5 trillion dinar.

I have also read that the U.S. government is holding about 3 trillion IQD which it can cash in oil credits over time. If it revalued at one dollar, that would be $2.5 trillion new money being spent and invested by private citizens and up to $7.5 trillion if it were at three dollars. The U.S. government would have anywhere from 3 to 9 trillion (and don’t think the Treasury Department will wait around for cheaper oil – they’ll “leverage their would-be cheaper oil and cash it in ASAP while the American taxpayer sees a “slight reduction at the pumps” and enjoys paying for the Iraqi War after all! By getting an early leveraged payout – such a payout would go a long way toward balancing the budget (which is doubtful) or more wasteful spending.

Let me warn you. You will probably never hear about this, just like you never heard about Kuwait. This will never see the light of day. But if people started to spend and invest and government showed lower deficits, and the economy started to turn around, Obama would look like a hero and the election would be his.

Either way, if this were to happen soon (in order to have an effect prior to the election in November) it could turn things around fairly quickly – a sort of “economic adrenalin” and much better than that ‘ole “stimulus money” that normally winds up in the pockets of political hacks (George Kaiser of Oklahoma) like Solyndra – and rightly so – wouldn’t you if you were given over half a billion dollars and in less than three years bankrupted the corporation at taxpayer expense? Duh!!!

Now the USA windfall doesn’t mean that other countries may have been stocking up on Dinars. I know all of the arguments for and against, but all I can say is, look at the news. Something is happening in Iraq. If other ME countries can support a high currency value, so can Iraq and then some. This is not that unrealistic.

Does this somehow negate what I just wrote on “The Death of the World Economy?” Not really, even the Iraqi Dinar can’t save us ultimately from the trillions of bad debt floating around in the world – the quadrillions in derivative exposure are beyond a self-fulfilling prophecy. Allow me to quote the mild-mannered personal pastor of our beloved President, the Reverend Jeremiah Wright – who in a moment of brilliance has said some truly remarkable things – here’s one of them for the books regarding the American Economy and our massive spending habits which will one day ring out throughout the land:

“THE CHICKENS HAVE COME HOME TO ROOST!” — Rev. Jeremiah Wright

The most this will do is give the economy a little bump and possibly get Obama reelected. But long term, there is little indication that any of the world leaders are about to change their ways I must say, I hate this scenario and hope I am wrong. I really, really do! It may be too late already. Even if there is an RV this month, the American government will not get immediate access to their windfall. It may also take Dinar holders a while to cash out and get geared up to spend so it may be too little too late.

Finally, and I repeat you will not read about this in the paper or see it on CNBC. If it happens it happens quietly. Frankly, if the Obama administration was interested in making this happen, it seems they would not have supported al-Maliki and allowed American troops to be so abruptly sent home. On the other hand, American Administrations don’t normally pull out of a place like Iraq without “cutting deals” with the locals – in other words: We’ll pull out BUT….and in any event we’ve got the largest embassy in the world smack dab in the middle of Baghdad and perhaps the most militarized area in the world right nearby called the Persian Gulf ready to pounce on anything that moves in the wrong direction in Iraq, or for that matter, anywhere else in the region. So stay tuned and we shall see…

PS Who pays for Wars?

Comment by D. K.

Here is the rest of the story – the truth is out there – and this is how we pay for our wars – WE ALL SHARE!

Well, think about it – let’s say the USA imports – what is it now we use some 23,000,000 barrels per day and nigh 65% or more is imported so that’s a pot load of oil and a ton comes from Canada and Mexico…so, think here that we get 14-15,000,000 bpd and of that we might eventually max out with Iraq (right now) at around 500,000 to 1 million (a drop in the ole bucket) – so EASY TO HIDE – it’ll just be another damnable war that the American people will have to pay for – meanwhile, keep digging up the Earth up there and sending it to the most consumption-driven economy on the planet… We’re the only sheeple who start these damnable wars – tell the people we won’t have to spend a dime for such a costly venture – and then turn around and do these tricky little “oil for guns” programs and wind up paying for them anyway!

“They say” this war in Iraq back in 2003-2012 is “going to pay for itself” – well, of course, if the Dept. of the Treasury is holding $3.5Trillion in IQD is sure as the world will! But just how will that $3.5Trillion be returned to our coffers? It goes like this – sort of an “oil for food” program but instead, allow me to call it: “oil for guns”:

Let’s say the article in the front Page of the NY Times on how well Iraq is doing – nearly 3 million daily barrels of oil and expected to increase to 12 or even 15 million within 10 years – lots of resources there – so the Dinar goes up in value after its revalued and we, the US Dept. of the Treasury, who cut the deal now gets Iraqi oil (about 500K to 800K bpd) for the going value of, let’s say, $88 per barrel – but the WAR MUST PAY FOR ITSELF – therefore, instead of paying $88 per barrel we only pay $44 – wow, such a deal BUT we have to be fair – therefore, instead of PASSING ON THE SAVINGS TO THE AMERICAN PEOPLE (like we all had this bizarre notion that this Iraqi War would pay for itself) we instead – the American Taxpayer, will pay slightly below the going rate – let’s say around $82.00 per barrel…so that world oil prices don’t go into a tailspin. Now I ask you kindly – WHO PAYS FOR THE WAR IN IRAQ? The American Taxpayer – that’s who.

Can you see how this goes down…it’s really sneaky – so you’re NOT going to see this horrendous savings at the pump – YOU AND I ARE GOING TO PAY FOR THE WAR IN IRAQ EVERY TIME WE DRIVE OUR CARS! Don’t you just love how our government takes care of us…and, guess what, plausible denial reigns – you’ll never hear a thing about it except from nuts like us who held presidential briefings, worked for the CIA and were former vice-presidents of AIG – strange on how things are really done in this country – but let’s ponder the notion: THIS WAR WILL NOT COST THE AMERICAN TAXPAYER ONE RED CENT – so goes the myth – but George W. is about as right as Obama is – you see, by the time big business is making tons of money in Iraq on import-export – and some just might trickle down to the American Taxpayer (not much) – the War will be long forgotten – meanwhile, each time you drive up to that pump you can just celebrate the victory in Iraq and the tens of thousands of Vets suffering from every malady this side of heaven and all the while you and me just keep paying for it through the pump (let’s see: $3.5 Trillion – so if the War costs that much and who knows the real cost?) and we’re getting 1 million bpd @ $50.00 (on the cheap) that equals to $50,000,000 per day (not to shabby). So how many days does it take to get back $3.5 Trillion? Simple: $3.5 Trillion/ $50,000,000 = 70,000 days/365 (one year) = 194 YEARS!

Listen – I’m not exaggerating – read this Washington Post article written in 2008 which said that the War would cost upwards and way beyond $3 Trillion in Iraq alone and then everyone from Rumsfeld to you name it telling us it was into the lower billions and wouldn’t cost us a dime! See here. But don’t work – we’ll have nearly 200 years to pay it off or if the Dinar revalues at $3.5 to 1 then divide 194/3.5 = 55 years – so, doesn’t that make you feel better? So – we’re on the petrol for at least another 55 years or more but don’t worry: THE WAR WILL PAY FOR ITSELF!

Now – doesn’t that make your day?

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Does Obama Have a Winning Wildcard?