BobW

Well I know Dinar Banker is offering $900.00 to buy back 1 million uncirculated IQD (and they probably want them back) and they will sell you 1 million uncirculated IQD for $1,180.00. So the "spread" there is $280.00 per million IQD. Banks really don't want to buy IQD and only some are selling when they have to and I have seen where someone was offered below $700.00 as a buy back at the bank. So my question was if the banks were going to narrow that spread margin significantly and does anyone have any guesses or predictions of what that might be? For example (wishful thinking) the CBI rate was $3.50/IQD, what would the bank rate be and what spread below that is the bank going to want to keep? Anyone know?

OK, I did a search but did not come up with much. I hear that if you go to the bank after RV, they will negotiate with you on their fees or even forego them but that you will have to pay the spread. I know the spread now between buying and selling is huge at banks (approx sell $1170 buy back $700 per million), but is that how much the spread will be if it RV's to say $3.50? I have heard the terms bank rate and CBI rate. Is the bank rate what the banks will give you taking the spread into account? Or is that what the banks can get and the spread comes after that? Also, DT and DB and the some of the other Dinar sellers have said that they would buy back for approx $150 fee per million and give you the CBI rate. Sounds like the most for the Dinar but there are considerations such as waiting for appointments and travel to a redemption site. One of the gurus (Night... something or other) says to get cashed in ASAP because of the volatility of the ME and I wouldn't mind getting off this ride soonest so if we are talking millions of dollars there is a point where I will bite the bullet and get it done now and take a little hit. I'm sure all of this will come up when and if it happens but something tells me there will be more than a little bit of panic and confusion when a lot of us are running around like Chicken Little that just got hit by a gold brick falling from the sky, so would like to have some idea.

It could also go the other way, perhaps those in the know in Iraq and Kuwait gave their friends and their people (the Kuwaitis) a chance to get some good money for their IQD before Iraq decides to LOP or give a timeline for turning in the large bills at the present rate. Guess I'm a pessimist and have little faith that the Iraquis have any regard for the rest of the world at all. Hope not of course but it is a possibility. IMO the probability of a LOP is very small because of several reasons but I am not encouraged by this at all.

I heard that Ali has said he will procure the smaller denominations and exchange our notes for them. Of course there will be many problems with that. The shear amount of notes needed, time line for exchange, transportation and of course there will be further charges and exchange percentages. That will bite into a very small profit margin of 3 to 1.

There are (supposedly) new smaller denomination notes ready for distribution. The old currency (what we have now) will all be lopped, a 50 dinar note will be worth .05 dinar. There will be a time line to redeem or exchange all the old currency for the new which will be revalued at the new rate ($3.22 ??). So essentially a 25K note will be redenominated to 25 dinar and revalued to be worth $3.22 x 25 or about $80.50. All they have to do is say that is the way it is going to be. It is their money. Hope it ain't so.

What happened to "A Simple Explanation"??

Hey Nick Let's all hope Enoch8 is correct. He lost me when he went from $0.07 to $1.13. What I have a hard time wrapping my brain around is the practical applications of an RV without a lop. A redenomination would have to be carried throughout their whole system. For example lets just take a middle class Iraqui (and I'm just guessing on the numbers here for discussion sake) who has about $20,000 worth of assets (20 MILLION DINARS). That would be in money in the bank, money in his pocket and equity in possessions. If he had $18,000 worth in the bank (18 MILLION DINARS), in a redenomination I assume they would just tell him he only had 18,000 Dinars in his account. If he was paying for or owned outright a home that was valued at $50,000 (50 MILLION DINARS) then they would have to legally inform him his house was only worth 50,000 Dinars and change any and all legal paperwork and tax structures. This type of redenomination would carry through everything; car payment, salaries, utility bills, loan payments etc. Not saying it can't be done just saying as much as those people distrust each other and like to fight, the arguments over the fine print would last generations. Taking the big bills out would be the easy part. Just give a time period for exchange, period. Then start distributing the lower denominations they have waiting (supposedly). But an RV at $1.13 without a redenomination would make that same middle class to poor Iraqui a multi-millionaire. I'm talking in US Dollars worth. His 18 MILLION Dinars in his bank account alone would give him a net worth of $20 MILLION US DOLLARS in real world value. He would be able to go from scraping along to buying armored Mercedes Benz's and hiring private security from Blackwater and most of his neighbors would too! I certainly wouldn't begrudge anyone that, but it seems unrealistic and undoable. The only problem I have with a low RV rate, say $0.07 to $0.27 is the pride of the Iraqui and knowing that they were so much lower than their neighbor Kuwait. Even at the rate mentioned above of $1.13 they would be 1/3 as much as Kuwait. I haven't seen much discussion on the possibility of an "interim" rate for pulling the larger bills in with no redenomination and then a higher rate later. As much as I hate it, a redenomination and revaluation to $3.50 would seem like the easiest way for them. They don't create 1,000's and 1,000's of real world value multi-millionaires and they can satisfy their pride by being comparable to Kuwait. We're all guessing and much better odds than a lottery ticket on a fantastic payoff.

Newbie here (I know, collective groan) but not new to forums in general. I have read, read, read around this site and briefly on a couple of others. IMO the Iraquis CAN redenominate if they so choose and it seems they do intend to remove the larger denominations from their currency, the question is will they and when. There is nothing to prevent them from declaring that the larger bills now represent 1/1000 of their stated face value and that we have a grace period to exchange them or they become worthless. That would bring the larger bills in. At that time it seems reasonable that they would revalue or reinstate. So if they did RD the 3 zeros and RV or RI to $3.22 we all have tripled our investment. Not really what I and most others here are looking for but the movers and shakers probably are not that concerned with us. They are concerned with the Iraqui in the streets and for their population an RD and RV to ~$3.22 would triple the amount of VALUE in their pockets. Not a bad thing. If the US tripled the value in my pocket and bank accounts then I would be at least pleased. BTW, why is it always 3 zeros and not 2? A better scenario is for them to RV, pull in the big bills and then remove them from circulation without RD first. Again IMO it would have to be reasonable and that's where the disagreements begin about RV amount. From lurking and reading there have been a lot of estimations and theories but generally: The sum 25 TRILLION Dinars (value of 25 BILLION) has surfaced quite a bit. The way I understand it that amount is drastically reduced because Iraq has already taken out of circulation a sizeable portion (I have seen estimates of 20% to 70%) so for arguments sake lets take out 50% and now there are 12.5 TRILLION (value of 12.5 BILLION) that would still be out here. Foreign governments would have most of that and I have read there are just over 1 TRILLION Dinars (value of 1 BILLION) owned by private investors. The US govt supposedly has 4 to 5 TRILLION Dinars (value of 4 to 5 BILLION) which seems like chump change the way our government spends money. If they RD (3 zeros) and RV (~$3.22) then the VALUE of private investors would only be $3 BILLION and the US govt would only have $12 to $15 BILLION dollars worth of VALUE (again, chump change) and the total VALUE of Dinars out there using the 50% still in their vaults example would be ~$40 BILLION. This seems like a possibility and fairly easy for them to do and they would look good with a $3.22/Dinar exchange. Still chump change on the world market and compared to the value of their resources, but a starting place. 3x our investment. If they RV but at a lower rate like $0.27 without an RD the ROI goes up. The VALUE of the 4 to 5 TRILLION Dinars the US govt holds would be $1 to $1.5 TRILLION and the amount of VALUE owned by private investors would go to ~$300 BILLION US dollars. 300x our investment and entirely possible given the value of their resources. If they RV sans RD at ~$3.22 we all have our dreams come true. But the VALUE of the Dinars in the US Treasury is then $12 to $15 TRILLION Dollars and the VALUE of private holdings adds on another $3 to $4 TRILLION Dollars. Add in all the other holders of Dinars like foreign govts and it gets crazy. I know, they don't actually have to fork over the cash and intend to pay with oil but that's a lot of "bubbling crude". 3000x our investment. Like I said, I think they will think first about their people first. For example an Iraqi businessman has been working hard and has earned and saved ~$50,000 US dollars worth of Dinars (50 MILLION Dinars); an RD & RV to ~$3.22 would mean that he now is worth $150,000, an RV to ~$0.30 would mean he is worth $1.5 MILLION (US Dollars) and an RV to $3.22 would mean he is worth $15 MILLION (US Dollars)! Ramblings from a newbie, be kind!