Redenomination reasons and examples of the past.

[Cabletech911]

See file for redenom examples and why they took place as well and what actions they took. This should also explain why we are not in the same boat and the lop theory is not valid for Iraq...

attachment.pdf

[MicBain]

So.. would you compare Romania's tactics to re-denomination to the new Leu before also switching to Euro, the same as Iraq printing new money with security features before it RI/RV?

Yes, taking off zero's would be technical, and it does state that the new currency will not work if the economy cannot sustain the new rate... Seems to leave it pretty open to many possible outcomes.

And obviously if they do it too quickly then you will see inflation (like russia) in 1999. I guess I'm just trying to better understand the "Stabilization Program" that these countries like Bulgaria/Poland/Israel used to see the positive effects of the currency re-denomination. If the troops are leaving as fast as people say they are then is all the restructuring complete? Any extra explanation is appreciated. Thanks

Also, have other people been buying some of these other currencies before they switch to Euro if we know they will have a successful re-denomination?

[inmemoryofrob]

So the chart showing they removed zeros, makes me think lop, but the chart showing they had time to switch them out makes me think we'll have time to cash in, and then they move to new currency without all the zeros.....is that correct?

[GeologyGirl]

Thank you for adding that. I wanted to see something just like that. Great work!!!

[Upgradable]

See file for redenom examples and why they took place as well and what actions they took. This should also explain why we are not in the same boat and the lop theory is not valid for Iraq...

The linked article was really good at explaning revaluation by lopping. I also understand the processes that need to be in place to make this change effective. But could someone please more clearly explain to me WHY lopping is not logical for Iraq? I'm still not understanding the correlation.

[Blue-Duck]

If you want to see an example of re-denomination of the US currency, or at least that's the same scenario that the IQD will take under the same form of government (Democracy). First there was the large denoms, $500, $1,000, $5,000, $10,000 and $100,000 and then came the small denoms. Now check the history out on the Wikipedia, http://en.wikipedia.org/wiki/Large_denominations_of_United_States_currency

Can anyone show me where the $1,000 dollar bill became the same value as the $1 dollar bill? I think not, but in bring in the low denoms into circulation, the low denoms were injected and the high denoms were dejected and it was such a smooth process as to not shake up the currency system that it is not even mentioned in the history of the transition taking place. In my own opinion, it is exactly what will transpire with the IQD! So all of the deletion of the three 0's I think is nothing but smoke trying to get us to give up our IQD! Remember this is IMHO! Great post CableTech, thanks for your hard work!

Cheers and Beers to everyone!

[Blue-Duck]

While we are on this subject, these articles was already posted in August, and September. I tried to copy and paste them but they won't let me do it, sorry.

http://www.iraq-businessnews.com/2010/08/24/zeros-will-not-be-removed-from-iraqi-currency/

http://www.iraq-businessnews.com/2010/09/25/redenomination-an-unlikely-priority-for-the-cbi/

[Upgradable]

I need a lightbulb emotie!! Thank you, Blue-Duck!! Those last two links explained a lot behind the rationale. I appreciate the help!

[Blue-Duck]

No problem, Upgradable, this particular subject continues to come up as new people see the article on the XE about redenomination and that article misleads if we don't know the history. Automatically people jump to the lop theory and if you stick around you will see explanations going the way, one of the things about lopping is done in the case of super high inflation. Iraq is very low in inflation, approximately 3 to 4 percent, the lowest inflation on earth of any nation. So I think Iraq is in good shape and we are in good shape as investors!

[keepmwlknfny]

No problem, Upgradable, this particular subject continues to come up as new people see the article on the XE about redenomination and that article misleads if we don't know the history. Automatically people jump to the lop theory and if you stick around you will see explanations going the way, one of the things about lopping is done in the case of super high inflation. Iraq is very low in inflation, approximately 3 to 4 percent, the lowest inflation on earth of any nation. So I think Iraq is in good shape and we are in good shape as investors!

If I remember correctly redenomimation is done AFTER a period of hyperinflation when things stabilize.....which unfortunately for us is where Iraq is now....hopefully that's not what they are thinking!!!

[deenar]

What level of inflation constitutes hyper-inflation?

[michelneedsRV]

If I remember correctly redenomimation is done AFTER a period of hyperinflation when things stabilize.....which unfortunately for us is where Iraq is now....hopefully that's not what they are thinking!!!

I don't think US govt will invest 400 million dollars a day in a country which is gonna LOP or simply redenominate. Don't forget all int'l companies jumping into this arena.

Michel

[Geck]

What level of inflation constitutes hyper-inflation?

Hyperinflation is empirically measured at figues exceeding:

• 10% per day,
  

• 50% per month, or
  

• over 25% per annum, compounded.
  

This does not apply to Iraq, as any current figures upon research would verify.

Edited December 23, 2010 by Geck

[prettybaby]

So does this mean we are still looking for and RV soon?

[Shylmysten]

While we are on this subject, these articles was already posted in August, and September. I tried to copy and paste them but they won't let me do it, sorry.

http://www.iraq-businessnews.com/2010/08/24/zeros-will-not-be-removed-from-iraqi-currency/

http://www.iraq-businessnews.com/2010/09/25/redenomination-an-unlikely-priority-for-the-cbi/

Wow...reading the comments on this second article from the deweaver character, that's a really heart-wrenching conspiracy theory I had never considered...

[estephan]

See file for redenom examples and why they took place as well and what actions they took. This should also explain why we are not in the same boat and the lop theory is not valid for Iraq...

good read ty,! considers our similar concerns

[richietan]

documents show a lop then RV so if now we have 25K dinar with rate 1170IQD = 1USD after re-denomination we will have 25 new dinar with rate 1.170IQD = 1 USD and then the new dinar will RV to 3 IQD = 1 USD

current IQD money flows are 26 trillion IQD. And it said this can strength into 80billion USD (). if iraq RV at 1IQD = 1USD it will have 26 trillion USD. This sound like BS to me.

[keepmwlknfny]

I don't think US govt will invest 400 million dollars a day in a country which is gonna LOP or simply redenominate. Don't forget all int'l companies jumping into this arena.

Michel

Its not about their currency to our govt......its about the resources and the oil......he who controls the oil, controls the world......international companies are not worried about it either.....they are going to be paid in their own countries currency, not dinar.....

[Chape]

See file for redenom examples and why they took place as well and what actions they took. This should also explain why we are not in the same boat and the lop theory is not valid for Iraq...

This is a good post. I have just posted a response to another thread.

In regard to the the UK pound, I indicated what happened at home.

It is a good lesson in how countries transform.

You can read the document here at this link.

http://www.ecu-activities.be/documents/publications/publication/1994_3/moore.html

Best Regards..

[Aqua Dude]

See file for redenom examples and why they took place as well and what actions they took. This should also explain why we are not in the same boat and the lop theory is not valid for Iraq...

is it just me or do these country have nearly no natural assets(like iraqis 150+ billion barrels of oil)

and

is it just me or did these countries NOT get forgiven for the debt from MULTIPLE other nations!!!

COME ON GUYS, stop talkin about lop crap!!!!!! its pure BS....fabricated BS

[Sucma]

I need a lightbulb emotie!! Thank you, Blue-Duck!! Those last two links explained a lot behind the rationale. I appreciate the help!

Click on show all . I found a light bulb the other day!

If I remember correctly redenomimation is done AFTER a period of hyperinflation when things stabilize.....which unfortunately for us is where Iraq is now....hopefully that's not what they are thinking!!!

I tend to agree with you but I remember adom referring directly to Iraq not being in hyperinflation. I will look for the post.

I don't think US govt will invest 400 million dollars a day in a country which is gonna LOP or simply redenominate. Don't forget all int'l companies jumping into this arena.

Michel

My take is America is invested in oil not paper. What they do with the paper does not change the fact they have oil.

[Aqua Dude]

My take is America is invested in oil not paper. What they do with the paper does not change the fact they have oil.

in order to get the money back that they invested in oil they need to sell back to iraq their dinar

[Sucma]

in order to get the money back that they invested in oil they need to sell back to iraq their dinar

Do we know how much iqd the reserve holds?

[shineonme]

Just got this in my email today, and thought I would share it ..... not that I agree, but apparently this is what mainstream wall street is wriing about the Dinar RV. I hope I did not post it in the

wrong place. Not too saavy on how to post or start a new subject in this forum.

Sovereign Man

Notes from the Field

Date: May 13, 2011

Reporting From: Santiago, Chile

Have you heard the rumors about the Iraqi dinar? Week in, week out, we receive at least 2-3 questions about this. The 'word on the street' is that the Iraqi government is set to "increase" the value of the dinar, essentially re-peg it against the dollar by 2, 10, even 100 times its current value.

In other words, rumor has it that if you're sitting on $1,000 worth of Iraqi dinar, that after the re-pegging, that same dinar will be worth up to $100,000, practically overnight.

I hate to be the bearer of bad news, but it just isn't true... and I wanted to take some time today and lay these rumors to rest since it's such a popular question within this community, and I know that there are some people scrambling to pick up dinar.

In 2010, the Central Bank of Iraq did announce plans to 'redenominate' the Iraqi dinar, effectively chopping off a few zeros from the nominal value of the bank notes. But the actual value in US dollar (or euro, gold, oil, wheat, etc.) terms would remain unchanged.

Any potential upside in the Iraqi dinar is in becoming a free-floating, market based currency. Many currencies in the Middle East including the United Arab Emirates dirham and Saudi riyal are pegged to the US dollar. So is the Iraqi dinar.

Iraq's peg is set by the International Monetary Fund because, at this time, there is no international market for the dinar. In time, I suspect the dinar may break away from this fixed rate (similar to how Kuwait abandoned its dollar peg several years ago) and appreciate against the dollar.

Over time, this would result in single or double digit returns, however, not overnight fortunes of making 100 times your money. I still own some of the old Saddam Hussein dinars, they're just collectors items for me, nothing more.

Bottom line: don't believe the hype about the dinar. Even if you're bullish on the country and think that a market valued dinar will appreciate, you would still have to hold the investment in cold, hard cash. There are better proxies for Iraqi growth, particularly in Kurdistan. We'll explore those another time.

[dinarck]

It's time to deal with it people. Iraq is in a prime position for a LOP. Doesn't mean they will but they are in a prime position for one. The example that the US redenominated and never lopped was a joke. The US dollar was never worth 1000 times less than any currency in the world and we never had 27 trillion dollars in circulation. I garantee you if we did we would have lopped. People seem to think that people in the US were walking around with 10,000 dollar bills. Not the case. They were used for bank transfers only. Guess what. People in Iraq are walking around with 10 and 25 thousand dinar notes. Somethings gotta give. Lets just hope they don't go through with it.