Economist RV Explanation Part I and II

[modbasso]

Outstanding. Thank you for the easy to understand process. Seems like a win win win for everybody.

We get the RV, USA gets reduced oil prices and taxes paid from its citizens. Iraq pays $130 to get that 10k note removed from circulation. The big winners are the IMF and Federal Reserve and a list of other banks because they can now buy oil at a substantually reduced rate and have that in their warchest to control oil prices globally when the time comes.

Wow.....it boggles the mind who thought of such a plan.

[von3223]

Thanks for the info and God Bless......Go RV!

[eliza0109]

Thanks for sharing all this great information. Much appreciated!

[bbrowder]

Makes sense, but I have one question. Will a 25,000 IQD note be exchanged for 1,000 of the 25 IQD notes or one 25 IQD note? If not 1,000 of 25 IDQ notes, there is no value created by the exchange.

[dbeck09]

Kinda gets your blood flowing. THANKS

[bonehead]

this is as close as I come to swearing....THAT WAS FREAKIN AWESOME!!! thank you for that wonderful post...it really opens a persons eyes to whats behind the curtain...thanx!

[bamf1414]

wow thanks that really explained it well

[bamf1414]

And it was I had never read it before and I really appreciate getting to thanks

Had to share this! Part 1

Economist Explains How The please note that I said "had to share this" and " Economist Explains How" This is surley not refering to myself. I thought this would be as interresting to others as it was for me. It sure helped me with a few things that I have wondered. I haven't read all the replies, I have thanked people for posting things they read and was kind enought to pass on. WOW sure did'nt think anyone would be so offended. I sure hope that no one stops posting interresting things they find for fear they will be bashed like me.

[JIMPR]

good notice thank

[beyline]

thanx for the info keep it comming!

[alaska kirk]

i may be a little slow but if the rv is 1 usd to 1 iqd and i take a 10k note in and cash it after the tax and fee's i would have 6.5k left ?? and the 25k note am i to beleave that they at the same rate i would only take in 16250.00 ! will some one help me out on this . brain is jello lol thanks

[Puff]

Wow and wow again...Thank you...

[C_BOLT]

Had to share this! Part 1

Economist Explains How The please note that I said "had to share this" and " Economist Explains How" This is surley not refering to myself. I thought this would be as interresting to others as it was for me. It sure helped me with a few things that I have wondered. I haven't read all the replies, I have thanked people for posting things they read and was kind enought to pass on. WOW sure did'nt think anyone would be so offended. I sure hope that no one stops posting interresting things they find for fear they will be bashed like me.

My apologies to you carlablum ........

[C_BOLT]

Thank you FDyer,

Also wrote "Had to share this!" I truly learned alot from this and thought it would be nice to pass on what I found. I could care less about any credit for anything I just found it, I'm not that kind of gal. Sure was shocked at how C-BOLT attacked me and do appologize if I didn't explain more. I also didn't think I should post where I found it becouse I like this site and did'nt want to say another sites name with respect to Adam.

How should I have explained it?

So sorry

My apologies - ---------- David

[ronscarpa]

Hi EVERYONE - There's only one issue that bothers me in this wonderful post - it's in item 3. as follows:

(3) We then moved to the removal of big bills (the ones with the 3 zeros on them) and he said that this activity was always built into the plan. The activity was to begin as soon as Iraq had implemented a modern digital financial system (i.e. bank branches, credit/debit cards, ATM’s, direct wire transfers etc.). The removal of the large bills in-country would be the reverse of the process that was used to remove the pre-2003 currency with Saddams picture on it. The example was a 25,000 IQD=$25USD/pre-rv note would be brought into the bank and exchanged for a 25 IQD note=$25 USD post/rv. The 25,000 IQD note would then be destroyed removing it from the currency in circulation account. I told him a lot of people would call that a LOP and he laughed, saying they are partially right, because 25,000 IQD was being lopped from the currency in circulation account, but the only reason for this process was to improve money handling ability at all organization levels, and reduce the actual physical currency in use in all areas of the Iraq economy.

Interestingly enough, he said this activity could happen in-country without an approved RV rate being released to the International financial system. I asked how much physical IQD did he estimated was in circulation in-country, and he said probably less than had been originally introduced in 2003 which was about $4.5 billion USD worth at anexchange rate of 2000 IQD = $1 USD, because there has been a continuous process of not replacing the larger bills as they wore out. In fact this has resulted in currency shortages in some areas.

Somehow, I don't see how they could have a separate rate in Iraq & out of Iraq. The Warks Bank accounts & other Bank accounts would then be marginalized, and not get to take advantage of the RV as those outside of Iraq. Also, if as he mentioned, there isn't that much available in Iraq - why make the change before an RV. The Iraqi people suffered extreme loss when their money became worthless because of Saddam. Now, why would we want to give them less than the rest of the world. It's just a point I can't seem to reconcile.

CARLA - Perhaps you can ask your Economist friend about this point, and let us know his response.

Blessings to Everyone in our DV family, to our Troops, and the Iraqi people.

RON

[Kent]

Hi EVERYONE - There's only one issue that bothers me in this wonderful post - it's in item 3. as follows:

(3) We then moved to the removal of big bills (the ones with the 3 zeros on them) and he said that this activity was always built into the plan. The activity was to begin as soon as Iraq had implemented a modern digital financial system (i.e. bank branches, credit/debit cards, ATM’s, direct wire transfers etc.). The removal of the large bills in-country would be the reverse of the process that was used to remove the pre-2003 currency with Saddams picture on it. The example was a 25,000 IQD=$25USD/pre-rv note would be brought into the bank and exchanged for a 25 IQD note=$25 USD post/rv. The 25,000 IQD note would then be destroyed removing it from the currency in circulation account. I told him a lot of people would call that a LOP and he laughed, saying they are partially right, because 25,000 IQD was being lopped from the currency in circulation account, but the only reason for this process was to improve money handling ability at all organization levels, and reduce the actual physical currency in use in all areas of the Iraq economy.

Interestingly enough, he said this activity could happen in-country without an approved RV rate being released to the International financial system. I asked how much physical IQD did he estimated was in circulation in-country, and he said probably less than had been originally introduced in 2003 which was about $4.5 billion USD worth at anexchange rate of 2000 IQD = $1 USD, because there has been a continuous process of not replacing the larger bills as they wore out. In fact this has resulted in currency shortages in some areas.

Somehow, I don't see how they could have a separate rate in Iraq & out of Iraq. The Warks Bank accounts & other Bank accounts would then be marginalized, and not get to take advantage of the RV as those outside of Iraq. Also, if as he mentioned, there isn't that much available in Iraq - why make the change before an RV. The Iraqi people suffered extreme loss when their money became worthless because of Saddam. Now, why would we want to give them less than the rest of the world. It's just a point I can't seem to reconcile.

CARLA - Perhaps you can ask your Economist friend about this point, and let us know his response.

Blessings to Everyone in our DV family, to our Troops, and the Iraqi people.

RON

I was wondering if anyone was going to look more closely at any of the post. Describing a lop and a 1:1 or even a 1:3.21 RV in the same discussion with the only difference being one being an in-country exchange example and the other a foreign investor's exchange left me for a loss. I received this same content in an email from a friend on Thursday and didn't post it because I didn't have permission from the sender and his email gave some contact specifics. There is some great stuff in this post, but some of the numbers also don't reconcile to CBI published figures on their website. As an example, the 25 Trillion Currency figure most closely resembles the "currency outside banks" figure from CBI, but unless he is really saying they will only RV foreign Dinar holders, that really makes no sense. That figure wouldn't include any soft deposits (individual bank accounts). To include those, you would have to use the M2 figure at 46 Trillion. Likewise, his speculation about oil revenue is a best case scenario and we just saw an expert opinion posted this week indicating that they are only likely to hit 6 mb/d any time soon. If anyone can get to this guy and ask Ron's question that would be very helpful!

[inmarc]

I'm the original author of this piece and let me see if I can answer the questions raised. If the answer wanders, please forgive me as I am hospitalized being treated for atrial fibrillation with some pretty powerful drugs flowing into my arm.

The plan that was described originated in 2003 and there have been many changes. A point that I also had a problem with was understanding that the re-valuation in-country is to facilitate purchase of goods & services and is concerned primarily with physical currency. A re-valuation of out of country is concerned primarily with facilitating trade, imports etc. using digital currency. The methodology used in each case will be different but the underlying revalued exchange rate is designed to be the same worldwide.

The reason there is a good deal of physical currency outside of IRAQ is because of the effectiveness of the CBI's physical currency sale efforts, which I think got most of us involved. That effort was probably helped quite a lot by Shabbi's reputation among central bankers. The educated conjecture is that it only took one phone call to the Federal Reserve who is the US Central Banker (i.e. Allan Greenspan) to get Money Service Licenses issued to US locations who started Internet based sales operations to streamline IQD purchasing. We remember our first purchases were through Jordan, via the US customs in New York labeled "Numismatic Documents" and delivery via the Post Office to our office. They were also accompanied once by a visit from Homeland Security to inquire about the purpose of our shipments from Jordan.

Specifically to the points raised:

(1) The treatment of Warka or other commercial bank accounts is not addressed directly because initially these accounts were not going to be available outside of Iraq. The development of their internal banking systems, plus the expansion of their in-country ISP backbone have allowed the expansion of banking services, plus brokerage input into the ISX. Because the accounts are electronic, they would not have to be involved in a physical exchange of currency and just should be credited with the equivalent exchange rate value. (i.e. if an account had 100,000IQD pre RV, it would still have a 100,000IQD account post RV, but with a 1 IQD to $1.00 USD exchange rate the account exchange value would be increased)

(2) The physical exchange of bills in-country does not establish different rates, it's just a method of affecting the exchange. They would be implementing the re-valuation by making the exchange of bills that would then be used to purchase goods and services in-country. A person walks in with currency valued at $25 and walks out with a different currency valued at $25. The equivalent exchange rate is the controlling factor, not the currency denomination. The implementation of the currency revaluation can be done in as many stages as the plan adopted by the CBI specifies, and the method described is only one of those at their disposal that allows for a removal of the big bills (3 zeros).

Even though the in-country currency is the smallest component of outstanding currency, they still want to change from a currency oriented economy where they currently are, to a more modern digital based economy with people using banks, smart cards etc. A currency intensive economy is expensive to maintain because of the relative short lifetime of currency, plus the problems of counterfeiting and other illegal activity.

(3) The discussion that was summarized was intended to explain a broad outline of the process, not relate it to specific current metrics (i.e. oil output, oil price, actual M2 etc.) The numbers used were for example purposes only. Also the time frames offered were for implementation of the basic objective which was to eliminate the existing dual currency system (i.e. IQD & USD), by elevating the value of the IQD to a parity with the USD and have it approved/accepted as an internationally recognized currency that could be exchanged on the world market. An analysis of the current economic situation in Iraq would obviously generate different metrics and to many peoples thinking a higher re-valuation rate than 1 IQD = $1.00 USD which was a basic target.

Hope that answers your questions and wasn't too rambling. I tried to proof read but the eyes aren't really focusing all that well right now. Sorry.

[ronscarpa]

Kent, Thanks for yopur post - Be Blessed...!

INMARC, thanks for answering our question. I'm not sure I really understand, but I certainly appreciated the facts as you clearly relayed them. If I understand correctly, initially Iraq will have a lop with an RV of 1:1, then a float up to the 3+ value in Iraq - am I reading this correctly...?

My question actually referred to the apparant double standard - inside & outside Iraq, and the IQD held in the Iraqi Banks (only a very slight increase <17%>. I'm still a bit confused - sorry (I'm the guy that has to put words into pictures - like a comic book) ...

Blessings & Happy Easter to All,

RON

[Ana214ej]

Thanks for the informational post... this brought a lot of light to what I thought I already knew.

[inmarc]

ronscarpa, the methods described had a target rv rate of 1 IQD = $1 USD. We have no real information what the real rate will be. There is no double standard inside & outside IRAQ, the exchange rate will be the same. What is different is the method of completing the exchange depending on whether it's physical or electronic currency. The general description is that in-country is considered physical and out-of-country is considered electronic. There are obvious exceptions, the accounts held in banks like Warka are exchanged using the electronic method, that is if an account is 100,000 IQD before the exchange it will be 100,000 IQD after the exchange. If the account is also stated in USD, it should read $100,000 USD. With respect to actual currency held by us, it will be exchanged as if it were electronic money. The difference will be that the crediting of the account is in the banking system where the exchange is made instead of the Iraqi banking system.

[ronscarpa]

ronscarpa, the methods described had a target rv rate of 1 IQD = $1 USD. We have no real information what the real rate will be. There is no double standard inside & outside IRAQ, the exchange rate will be the same. What is different is the method of completing the exchange depending on whether it's physical or electronic currency. The general description is that in-country is considered physical and out-of-country is considered electronic. There are obvious exceptions, the accounts held in banks like Warka are exchanged using the electronic method, that is if an account is 100,000 IQD before the exchange it will be 100,000 IQD after the exchange. If the account is also stated in USD, it should read $100,000 USD. With respect to actual currency held by us, it will be exchanged as if it were electronic money. The difference will be that the crediting of the account is in the banking system where the exchange is made instead of the Iraqi banking system.

Thanks INMARC - NOW, I understand what you meant. You're the man...! Praise GOD...!

Blessings,

RON

[bahtman]

Inmarc,

THANKS SO MUCH FOR YOUR EXPLANATIONS AND ANSWERS. I'VE BEEN studying this stuff for 8 months and with your descriptions, I finally get it.

Thanks again.

P.S.

Ronscarpa...Did you get it? NO LOP

[Muttchief]

Excellent synopsis....many thanks

Economist RV Explantion

[lgraham]

Thanks inmarc. Yours has been one of the best explanations I have seen. Thanks for making the time to answer these questions despite the drugs flowing into your arm. Please recover soon and I appreciate your information. Thank you!

Lgraham

[kox]

I think this is the best post yet...Thanks so much for sharing your knowledge...Share the Easter blessings.