TidBit from Phonex on Dinar in Circulation

[john1025]

Phoenix Email to another site 2/17/10

February 17, 2010

[Muhammad]

Is that a jigsaw puzzle for us to solve? Can someone clarify that?

[SexyDinar]

I think what he is trying to say that he doesn't know but he is guess the dinar will RV when they decide to LOP the currecy at the backenf of 2010!

That's my take on it anyway, but what the heck does it matter he probably wrong like the rest od us on here.

What will be, will be. We all will have to deal with any outcome, just like puppets on a string!

[Mongo]

Is that a jigsaw puzzle for us to solve? Can someone clarify that?

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[sholmes]

Wow...can someone translate for those of us who. DON'T KNOW WHAT THE **** THAT MEANT!!!!

[djuggler]

Ok, I have it if someone can explain M0 (Zero) and M2. HELP!!!!

[kayaman]

First time I heard of the M0 component of the money supply. The Fact is no one really knows exactly how much hard currency are in circulation...

[Den56]

Let me take a stab at trying to help you folks understand this.

First, he stated "I think what we are about to see is a novel event and a “hybrid re denomination” if you will.

I think we will see this combined with a revaluation." I believe he is saying that they are going to RV and re-dominate the currency simultaneously. In other words, there will be an RV and an introduction of the smaller demons and fils (i.e. bills & coins) at the same time. Then, the CBI will put a time limit to exchange the larger bills to draw them out of circulation, although they may still be used for institutional banking (i.e. only between banks). In fact, he stated this just a couple of paragraphs later.

Secondly, there are two measures of "money supply" . . . . "MO", or Physical Currency. And "M2", or Total Currency, which is the total of Physical Currency and Digital Currency. The reason that Phoenex wanted to discuss this is because . . . . there have been many analysis' floating around stating that Iraq could NOT afford to RV, because there is too much physical currency in circulation by incorrectly using the higher "M2" figure instead of the actual lower "MO" number, which makes an RV much more realistic.

Anyways, that's my stab at it . . . hope it helps.

[chuksan]

Thanks Den56, sounds like you put it in a nutshell.

[sly]

sounds right den56, that was my take on it also.. using the mo, IMO the RV should be higher then the .80 cents being put out.

[Kent]

Ok, I have it if someone can explain M0 (Zero) and M2. HELP!!!!

Answering your question, this link has simple definitions for Money Supply: http://dollardaze.org/blog/?post_id=00565 NOTE THAT M1 AND M2 INCLUDE YOU BANK ACCOUNT! That's those pesky "electronic digits and deposits" he was referring to. I would assume you guys with a Warka would hope that your bank account would grow during an RV? That is why it is more appropriate to use an M2 figure when estimating how much money Iraq needs to have in order to do an RV. It is not unreasonable to question whether they can afford what everyone wants them to do.

Now I guess I am going to really whack the hornets nest by taking on one of the big guys. As one of the little fellas that has posted a few things on this money supply issue, let's do a little Phoenix fact checking:

This CBI official says Iraq has 25 Trillion Dinar in circulation http://ph.news.yahoo.com/rtrs/20100211/tbs-iraq-currency-955c2a1.html . There have been several similar articles recently.

This CBI link gives you M1 and M2 figures as recent as Dec '09 http://www.cbi.iq/xl&wr/key%20financial.xls . The M1 figure is 37Trillion dinar. The M2 is 46Trillion.

Notice the "currency outside banks" in that same link is almost 22Trillion - not that far off the 25Trillion mentioned in articles. CBI doesn't call it M0 but it fits the definition.

Now Phoenix may not believe the CBI, and it is certainly true that we all want a big RV, but there is a valid argument that an economy of only $95Billion Dollars in GDP can't handle a money supply (EVEN USING M-0) of $66Trillion Dollars on a $3 RV. That is about the money supply of the entire globe! And here is the reference for that: http://dollardaze.org/blog/?page_id=00023 . Even if Iraq were as big as Saudi Arabia tomorrow they would only be about 4.5 times their present economy, so immediate and enormous oil growth doesn't get you there either. IMO, about the only logic I have seen so far to cost justify a pretty big RV has to do with the amount of reserve capital backing the currency compared to reserve ratios typically being small, but I am still researching that one.

Saying "There has never been any articles ever printed saying more dinar was ever printed above the first printing

of 9 trillion of which a little over half of that amount was placed into circulation." is just plain silly and isn't supported by the facts.

I told myself I wasn't going to get back into another one of these discussions, but the Phoenix post really called me out. OK, bang away people. I hate to see so many hoping so much based on misinformation.

[JAMMING]

Only people who buy into anything this fake has to say are newbies and those who bow down at his alter.

[super]

I agree with both of you, Kent and Jamming. All I can say is man can not live on dreams alone, but have to face up to the truth at one time or another and if we don't then shame on us! Thanks for your posts!

[jackdavis1364]

Here is my take...maybe right, maybe wrong, maybe close. Let's try to simplify. These are merely examples.

M0 = $100.00 (Includes only the printed money in circulation)

M2 = $500.00 (includes all of the printed money and debits and credits in the banking system)

When various people have been trying to justify whether Iraq can RV or not and at what rate it would RV they used the M2 figures and said there is no way that they can afford to cover all of that money that is out there in circulation. They should have been using the M0 figures which is less dinars to be covered. That will show that it can be done and that it will allow for a higher rate.

I could be so far off it will make people roll in histirical laughter but that is my take. Take it or leave it.

[rt59]

Answering your question, this link has simple definitions for Money Supply: http://dollardaze.org/blog/?post_id=00565 NOTE THAT M1 AND M2 INCLUDE YOU BANK ACCOUNT! That's those pesky "electronic digits and deposits" he was referring to. I would assume you guys with a Warka would hope that your bank account would grow during an RV? That is why it is more appropriate to use an M2 figure when estimating how much money Iraq needs to have in order to do an RV. It is not unreasonable to question whether they can afford what everyone wants them to do.

Now I guess I am going to really whack the hornets nest by taking on one of the big guys. As one of the little fellas that has posted a few things on this money supply issue, let's do a little Phoenix fact checking:

This CBI official says Iraq has 25 Trillion Dinar in circulation http://ph.news.yahoo.com/rtrs/20100211/tbs-iraq-currency-955c2a1.html . There have been several similar articles recently.

This CBI link gives you M1 and M2 figures as recent as Dec '09 http://www.cbi.iq/xl&wr/key%20financial.xls . The M1 figure is 37Trillion dinar. The M2 is 46Trillion.

Notice the "currency outside banks" in that same link is almost 22Trillion - not that far off the 25Trillion mentioned in articles. CBI doesn't call it M0 but it fits the definition.

Now Phoenix may not believe the CBI, and it is certainly true that we all want a big RV, but there is a valid argument that an economy of only $95Billion Dollars in GDP can't handle a money supply (EVEN USING M-0) of $66Trillion Dollars on a $3 RV. That is about the money supply of the entire globe! And here is the reference for that: http://dollardaze.org/blog/?page_id=00023 . Even if Iraq were as big as Saudi Arabia tomorrow they would only be about 4.5 times their present economy, so immediate and enormous oil growth doesn't get you there either. IMO, about the only logic I have seen so far to cost justify a pretty big RV has to do with the amount of reserve capital backing the currency compared to reserve ratios typically being small, but I am still researching that one.

Saying "There has never been any articles ever printed saying more dinar was ever printed above the first printing

of 9 trillion of which a little over half of that amount was placed into circulation." is just plain silly and isn't supported by the facts.

I told myself I wasn't going to get back into another one of these discussions, but the Phoenix post really called me out. OK, bang away people. I hate to see so many hoping so much based on misinformation.

But Kent, who cares what you think. We only want to see info that supports a really high RV, don't we? At least we will feel good until the real number comes out...falsely! And go buy lots of Dinar, so we will be really really rich! lol

[armondtoth]

Good Stab, I couldn't have said it better.

[Kent]

Here is my take...maybe right, maybe wrong, maybe close. Let's try to simplify. These are merely examples.

M0 = $100.00 (Includes only the printed money in circulation)

M2 = $500.00 (includes all of the printed money and debits and credits in the banking system)

When various people have been trying to justify whether Iraq can RV or not and at what rate it would RV they used the M2 figures and said there is no way that they can afford to cover all of that money that is out there in circulation. They should have been using the M0 figures which is less dinars to be covered. That will show that it can be done and that it will allow for a higher rate.

I could be so far off it will make people roll in histirical laughter but that is my take. Take it or leave it.

Jack, FYI, notice on the link above in that graph that the M0 of the globe is less than $5Trillion Dollars. In my example above, I was using Iraq's M0 but using the World's M2 to be inordinately generous. And just to answer the question before anyone asks, yes I am a small (2.25Mil) dinar investor and still think it will be a good investment (just not huge).

[mpmartin]

Good job JOHN1025

[scoty1967]

sounds like lop lop lop, like a flat tire

[War Eagle]

A little correction; In 2003 there were 9 BILLION DOLLARS of dinars printed by DE LA RUE.The dinar at that time was about 2,000-1,or 18 TRILLION dinars.Since that time the dinar has increased in value to 1170-1,or a little over 40%,making the dinars in circulation a little over 25 BILLION. i HAVE NO IDEA HOW MANY WERE PUT INTO CIRCULATION. tHERE IS SOME THINKING THAT THE SMALL DENOMINATIONS WERE COUNTED IN THIS FIGURE,AND JIST MAYBE THEY WERE 1/2 OF THE NUMBER; THIS WOULD STILL LEAVE 12 1/2 BILLION DINARS IN CIRCULATION.JUST MY 2 CENTS!!!!!!!!!!

[Kent]

A little correction; In 2003 there were 9 BILLION DOLLARS of dinars printed by DE LA RUE.The dinar at that time was about 2,000-1,or 18 TRILLION dinars.Since that time the dinar has increased in value to 1170-1,or a little over 40%,making the dinars in circulation a little over 25 BILLION. i HAVE NO IDEA HOW MANY WERE PUT INTO CIRCULATION. tHERE IS SOME THINKING THAT THE SMALL DENOMINATIONS WERE COUNTED IN THIS FIGURE,AND JIST MAYBE THEY WERE 1/2 OF THE NUMBER; THIS WOULD STILL LEAVE 12 1/2 BILLION DINARS IN CIRCULATION.JUST MY 2 CENTS!!!!!!!!!!

I am just curious. Any reason you don't like the CBI figure from their website at 22Trillion? A paper bill only lasts a few years in circulation so countries are always printing more just to replace what is already in circulation. It is not suprising that there would be no news story about Iraq printing money.

[TheDinarWolf]

explain this.....if the dinar was at one time 3.xx something before the sanctions, why would you think after 20 years that it should not be re-instated back to around that level? and if it was 3 then.........they sure seemed to have it covered with this money supply deal you all speak of.. what am I missing?

I am not saying will RV at 3. but seems like with progress to the country and getting ready to be free to function at their best.....should be near that or start above 1 as it gets itself in position.

[chas32]

Articles from Iraq state that Iraq

[Den56]

Sly . . . . . there's a good chance of that. Enorrste did an excellent analysis a couple of weeks back(which you can probably find in an older thread here) stating his believe that the most likely scenario would be $1.30 - $1.50. I believe he felt that if they came in real low at say a dime, it would flood speculation money from around the globe and cause more problems from a too rapid of a rise upward. While Iraq could support a $3+ RV, it would be safer to come in at the mid-point, or around the Euro.

[BurntToast]

Just trying to expand my understanding here, but in my mind it doesnt matter how much foreign currency Iraq has to back the dinar if it RVd at any amount. Because, for every dinar cashed in, Iraq could turn around and convert it into any other foreign currency at the new exchange rate. For example, if I turn in 1 mil. dinar post RV of say 1 USD, they pay me 1 mil. USD, they take the 1 mil. dinar and purchase 1 mil. worth of goods from wherever. In fact, their purchasing power (internationally) would be multiplied by whatever factor the new exchange rate is. The question then in my mind is, how much should, or can, or will Iraq's purchasing power increase via the exchange rate? No doubt there is much I dont understand, but how can Iraq's purchasing power be allowed to increase by 1000-3000 percent? Certainly they need to re-instate value they lost due to the war, but is it that much?