The Real Story On The Dinar!

[xyzzy]

The most likely next move would be to allow the rate to slip upwards to 1000;1; an increase of 170:1.

Just to be clear you're suggesting that they would go from the current 1170 dinar per dollar (or 0.00086 dollar per dinar) to an even 1000 dinar per dollar (or 0.001 dollars per dinar). Which would be an RV of about 14% or 1.14 to 1. Is that right? . I think that is quite plausible, or maybe a bit higher so the dinar after RD would be at maybe $1.25 which would be an RV of about 30%.

[SurfingTheDinarWave]

So now an Iraqi is making 5,000 IQD per hour, about $4.25 USD which buys a loaf of bread lets say. After an RD his salary does NOT go down??? So now he's still making 5,000 NEW dianar per hour worth $4,250 USD and that loaf of bread still costs the same so it also is worth $4,250? I don't think so. Clearly wages, prices, loans, everything has to be divided by 1000 for an RD.

an RD does not change the value of a currency an RV does so 5000 per hour would still be 5000 per hour or $4.25USD

[DinarBoyz]

an RD does not change the value of a currency an RV does so 5000 per hour would still be 5000 per hour or $4.25USD

How is it so? RD would be lopping off the zeroes and effectively brings in a new currency to replace the outgoing ones. The new ones would be the one carrying parity value... no? So instead he will now earn 5NewIQD instead of 5000? Not unless again a noob like me has missed something big somewhere.

[Dalite]

if they simply RD there would be no need to change salaries and prices of goods they just get the same in lower denominations further suppressing the Iraqi people. so it keeps the people poor and the GOI rich, while your merchants are upper middle class to rich mostly rich. Which is why they have stated what they will they will do is adjust the salaries of the GOI which was supposed to happen 9/15/2011 to reflect an RV with a RD to follow to get them closer to the adjustment they will do to prices going down and the salaries of people going up, then you add in Tax and Tariff laws and the merchants get balanced out costs more for goods imported, forcing them to open factories and manufacturing, agriculture from within creating jobs for the people. This is why they articles of the teachers salaries going up was so important because it stated their intention to do this without saying the word RV and rather than rich and poor you have a much more level playing field. The whole point of a democracy is "For the People by the People" the intentions of a democratic government should be to reflect the desires of the people while stepping in to aid those in a more dire need, not to control all to benefit the government or personal agendas such as Maliki and Obummer are trying to accomplish in their respective governments.

Which is an entire fabrication, as part of the process of redenomination is adjusting wages, prices, contracts, loans, etc. proportionally to keep it revenue neutral.

It suppresses. nobody.

It changes nothing in the middle or upper classes economic standing.

Tariffs, if anything will cause an increase in some pricing, as they are a means of providing protection to local industry and agriculture, and have nothing to do with any monetary enhancements.

GOI salaries were decreased to prevent citizens uprisings, as they were obscenely higher than the surrounding wage structure.

Teacher's salaries were increased to try to jumpstart the program to lower illiteracy percentages.

The chances of any RV of more than is necessary to offset the rising inflation due to increased production are in inverse proportion to the economic experience of the one who initiates it.

The same adjustment could also naturally occur if the price of crude went down. This is the main pitfall of basing 95% of your economy on oil.

It is easy to throw out opinions .

It is preferable to try to keep them factual, which is a reflection of your understanding.

It is natural for someone who does not understand a process to misrepresent it.

It is up to the reader to judge the opinions on their merits and credibility.

History is a good referee.

[SurfingTheDinarWave]

Which is an entire fabrication, as part of the process of redenomination is adjusting wages, prices, contracts, loans, etc. proportionally to keep it revenue neutral.

It suppresses. nobody.

It changes nothing in the middle or upper classes economic standing.

Tariffs, if anything will cause an increase in some pricing, as they are a means of providing protection to local industry and agriculture, and have nothing to do with any monetary enhancements.

GOI salaries were decreased to prevent citizens uprisings, as they were obscenely higher than the surrounding wage structure.

Teacher's salaries were increased to try to jumpstart the program to lower illiteracy percentages.

The chances of any RV of more than is necessary to offset the rising inflation due to increased production are in inverse proportion to the economic experience of the one who initiates it.

The same adjustment could also naturally occur if the price of crude went down. This is the main pitfall of basing 95% of your economy on oil.

It is easy to throw out opinions .

It is preferable to try to keep them factual, which is a reflection of your understanding.

It is natural for someone who does not understand a process to misrepresent it.

It is up to the reader to judge the opinions on their merits and credibility.

History is a good referee.

history states that an RV would merit the process of the change in prices and salaries to reflect it since an RD has no bearing on the exchange rate...so yes you stated your own judgement on yourself!!

How is it so? RD would be lopping off the zeroes and effectively brings in a new currency to replace the outgoing ones. The new ones would be the one carrying parity value... no? So instead he will now earn 5NewIQD instead of 5000? Not unless again a noob like me has missed something big somewhere.

monetary face value and exchange rate are 2 different things, RD does not effect exchange rate, only an RV does!

if 5000 dinar = $4.25 with the large denominations it still takes 1000 of the 5 dinar notes to equal 5000 dinar = $4.25

[xyzzy]

an RD does not change the value of a currency an RV does so 5000 per hour would still be 5000 per hour or $4.25USD

An RD does not change the value of the current currency, it prints a new currency with a new value. You may not agree one will happen but lets at least get the definitions straight. You've been here far too long to not understand what an RD is.

[Dalite]

Just to be clear you're suggesting that they would go from the current 1170 dinar per dollar (or 0.00086 dollar per dinar) to an even 1000 dinar per dollar (or 0.001 dollars per dinar). Which would be an RV of about 14% or 1.14 to 1. Is that right? . I think that is quite plausible, or maybe a bit higher so the dinar after RD would be at maybe $1.25 which would be an RV of about 30%.

Correct on the numbers to reach 1000:1.

At this point, it would upset the symmetry to go higher, if the CBI is still planning RD.

One of their goals is to decrease reliance on the dollar, and they have announced a denomination structure similar to the dollar to ease transactions. A dinar equalling a dollar is the easiest way to achieve that goal.

If there is a RD, that gives a 1:1 ratio, without having to waste a valuable successive RV, which is restricted in both percentage of increase and time between changes by the IMF, due to the dollar peg, and Iraq's stance as a borrower, it gives the CBI greater flexibility to make the first RV after RD more substantial..

Also, the paris Club will not allow Iraq to inflate away their debt while Paris club is responsible for collecting it. Iraq is on the hook for 20 years minimum of twice yearly payments to them, after they successfully negotiated forgiveness of 80% percent of Iraq's debt.

A broad based increase in exchange rate without an offsetting reduction of the money supply, would do just that; cheapen the value of the payments, by creating overnight debt forgiveness due to the inflation that would result from exponentially increasing the exchange rate of a grossly overprinted money supply.

The Paris Club has performed the same debt relief for other countries also, as that is their purpose. Iraq is one of their many benefactors.

No promises on any of this; but this seems the most logical way to get from here to there.

Some of the suggested outcomes makes it impossible to get to there from here.

[Dalite]

history states that an RV would merit the process of the change in prices and salaries to reflect it since an RD has no bearing on the exchange rate...so yes you stated your own judgement on yourself!!

monetary face value and exchange rate are 2 different things, RD does not effect exchange rate, only an RV does!

if 5000 dinar = $4.25 with the large denominations it still takes 1000 of the 5 dinar notes to equal 5000 dinar = $4.25

RD divides currency, and exchange rate.

For three zeros, it divides currency by 1000, and increases the exchange rate 1000 times.

Revenue neutral

It is always stated that a RD affects everything the same; wages, costs, loans, contracts, checking, savings...

If 5000 old dinar = 4.25, 5 new diner = $4.25

If you don't believe me, ask someone else who understands the process, better yer, read about it.

Being Value neutral is the reason it is sometimes called a monetary illusion.

Since I'm a nice guy, I will accept that the comments you make are due to not understanding the process.

No harm, no foul; just a waste of about 19 pages..

Edited September 20, 2011 by Dalite

[DinarBoyz]

RD divides currency, and exchange rate.

For three zeros, it divides currency by 1000, and increases the exchange rate 1000 times.

Revenue neutral

It is always stated that a RD affects everything the same; wages, costs, loans, contracts, checking, savings...

If 5000 old dinar = 4.25, 5 new diner = $4.25

If you don't believe me, ask someone else who understands the process, better yer, read about it.

Being Value neutral is the reason it is sometimes called a monetary illusion.

Since I'm a nice guy, I will accept that the comments you make are due to not understanding the process.

No harm, no foul; just a waste of about 19 pages..

To be fair, the discussion has always centered on RV. It's something which everyone is hoping and wishfully dreaming of. Suffice to say it could yet come through. It's the quantum which I believe will disappoint many.

[Dalite]

To be fair, the discussion has always centered on RV. It's something which everyone is hoping and wishfully dreaming of. Suffice to say it could yet come through. It's the quantum which I believe will disappoint many

Contrary to popular belief, I feel there is a very real possibility that a redenomination may not become a reality.

There is little doubt it would be the easiest solution to prep the economy for rapid growth.

Shabibi fully understands this, and RD has always been his first choice, at least since 2006.

However, as Dani points out, many of the ministers have no experience in their position, and were hired on quotas; like our affirmative action.

Shabibi can push it through on the authority of the CBI, but needs the cooperation of many of the ministries is executing it.

There is so much distrust present, and Maliki seriously resents the autonomy of the CBI. Few MPs seem to understand the process, and Maliki's lap dogs have little difficulty in capitalizing on ignorance and building on distrust.

For those reasons, and others that I feel will soon emerge, it is very possible Shabibi may have to take a different route; if he comes out of the current parliament dust-up alive, and with his job not supervised by one of Maliki's goons.

Anything that benefits Iraq, and ultimately us depends on Shabibi staying in the saddle.

But, it is possible that Maliki will push for Shabibi's replacement, and fill his job with a loyal sanitation engineer.

Weak mind, weak policy. While Maliki has a vested interest in subduing the population and keeping them poor, any one of his highly educated, but loyal appointees could do anything, at any time; out of total ignorance.

There are a lot of power plays ongoing. It is usually in times like this that policy may be forced in haste; possibly to our advantage; not Iraq's.

Whatever the outcome, this thread was originated in an attempt to browbeat anyone that didn't share the OPs dissatisfaction with Shabibi's plan, and has been a great cheerleading practice session.

Fortunately, a lot of others paid attention, and were able to learn a lot about the process and possibilities.

Despite what looks like even more problems in the GOI that seem to be growing, I still have hope of a positive outcome.

[keepmwlknfny]

I no longer have the time nor the energy to waste debating with someone who when given a comparison that is plain as day they are 2 completely different situations historically proven, decides to manipulate those factors that determine them to fit their agenda, because I don't follow your agenda nor do I want to be associated with it!!

The plan is and always has been to RV in order to get the larger notes back in the hands of the CBI and as those notes get cashed in by those who hold them distribute the lower denominations...because you have never been to the ME let alone Iraq I understand that you don't understand cultural differences and the specific verbiage Shabibi would use to create a speculative variation of outcomes in part I fell he would to flush out corrupt individuals within the GOI and in part I feel to not come out directly saying RV so he can confuse counterfeiters and terrorists. After all things he was trained by the IMF who are the best at doing so in an economic stand point. These things are neither here nor there the simple fact of the matter is they will RV to control inflation which will cause the 000's to come back to the CBI for deletion from the marketplace as they distribute the lower denominations with 3 languages on them that is how Shabibi intends to make the currency strong again and it will be supported, until we know the real numbers on everything we will not actually know how. We don't know the results of the geological and geothermal survey that took 7 years to complete, so we really don't know what the reserves could be that could add to the GDP, we don't know if the other central banks and the IMF will push every member to go back to a modified asset based gold standard of some sort that may or may not include in the ground resources, we don't know a rate nor a date for all of this to go down however it will work out...tangible historical evidence points from all directions that since moving from the gold standard monetary policy has spun the global economy and all countries economies into chaotic crisis situation so the historic rhetoric is a flop and does not work it needs to be reformed and backed with tangibles or what is known and could be tangible. We also know your agenda needs to be dropped because it is sickening people and causing people to question their hope and faith, as well as is a waste of time and energy it takes away from my family time which I value much more than you!!

So your saying you can't back what you stand by? Ok that's fine....just thought if you posted something you believed in you could state your reasonings and debate why it holds true to you but I guess that is kinda hard when. Its based off false facts.....its cool though.....

I guess some of the facts are too hard to swallow when it comes to your hopes and beliefs.....that's what happens when emotion overcomes logic

[keepmwlknfny]

I have a great solution for all these lopsters, and negative people who think they have the only answers, and solutions that Iraq will lop, and my solution is to place these individuals on block so I do not have to read, or see their negativity. As for this keep charater he needs to change his smirky little disgusting avatar. Lol!

You can put me on ignore yourself!! Its under your profile options! YAYYY!!! Then you wont have to read anything you dont want to or cant handle to hear!

And FYI....I don't know that iraq will lop....I hope they don't.....and I don't think its their only way to go but I refuse to call a rabbit a duck when its really a duck.....

Spinning things into meaning something its not is a pet peeve of mine.....we all wanna be rich.....but don't ignore the facts and what has been put in front of our faces just because we don't like to hear it