Why a 1:1 RV makes most sense

[steveflex7]

I have been putting much thought into why the rate should be 1:1. If you listen to what the CBI is saying, we are currently in phase 2 of this process. They stated that in phase 2, new currency is to issued. We can also assume that these are the lower denoms. Now, I have also seen where it has been stated that the next move by the CBI is to move the rate to 1000:1. While this is a move in the right direction, the impact will not be sufficient enough to give the iraqi citizens the purchasing power they want and need. Also, with an issuance of the lower denoms, there must be a higher rate associated with those notes, if not, then the iraqi citizens will not turn in the USD they are holding, and therefore the dedollorization process wouldn't work. Also, this is why the theory about the CBI moving the rate a few pips at a time rally doesn't make sense. My theory is that along with the issuance of the new currency, we will see the new rate. No small pips, no small movements, there will be one significant rate change, and that will be it. Anyway, this is what I have been thinking about. Please feel free to tell me what you guys think. Thanks

[fnbplanet]

At a dinar value of an even one tenth of a cent (1000:1), the fils would be only worth one ten thoundsands each. IMO, this would only tick off the people even more than they are now. Instead of a wheelbarrow full of paper dinar, it would be coins. Sound reasoning, thanks!

[Joker017]

I have been putting much thought into why the rate should be 1:1. If you listen to what the CBI is saying, we are currently in phase 2 of this process. They stated that in phase 2, new currency is to issued. We can also assume that these are the lower denoms. Now, I have also seen where it has been stated that the next move by the CBI is to move the rate to 1000:1. While this is a move in the right direction, the impact will not be sufficient enough to give the iraqi citizens the purchasing power they want and need. Also, with an issuance of the lower denoms, there must be a higher rate associated with those notes, if not, then the iraqi citizens will not turn in the USD they are holding, and therefore the dedollorization process wouldn't work. Also, this is why the theory about the CBI moving the rate a few pips at a time rally doesn't make sense. My theory is that along with the issuance of the new currency, we will see the new rate. No small pips, no small movements, there will be one significant rate change, and that will be it. Anyway, this is what I have been thinking about. Please feel free to tell me what you guys think. Thanks

SteveFlex7, I'm definately in agreement with your therories, If they don't go at least 1 to 1 with the usd, I can't see it raising the Iraqi Citizens Confidence in the Dinar enough for them to stop using the usd in daily transactions and I can't see that it would do any good to stop the hemmoraging of usd's at the Boarders. Just My Thoughts...

[pudge]

I have been putting much thought into why the rate should be 1:1. If you listen to what the CBI is saying, we are currently in phase 2 of this process. They stated that in phase 2, new currency is to issued. We can also assume that these are the lower denoms. Now, I have also seen where it has been stated that the next move by the CBI is to move the rate to 1000:1. While this is a move in the right direction, the impact will not be sufficient enough to give the iraqi citizens the purchasing power they want and need. Also, with an issuance of the lower denoms, there must be a higher rate associated with those notes, if not, then the iraqi citizens will not turn in the USD they are holding, and therefore the dedollorization process wouldn't work. Also, this is why the theory about the CBI moving the rate a few pips at a time rally doesn't make sense. My theory is that along with the issuance of the new currency, we will see the new rate. No small pips, no small movements, there will be one significant rate change, and that will be it. Anyway, this is what I have been thinking about. Please feel free to tell me what you guys think. Thanks

It doesn't matter what ratio the CBI RV's the Dinar. The purchasing power you say the Iraqi citizenry want and need will stay neutral. Nothing will change. Arbitrarily adding value to the Dinar will only arbitrarily raise the cost of goods and services in Iraq. Basic inflationary policy. People in the Dinar world unfortunately believe that an RV is the ticket to create and jump start a viable, stable and growing economy. But it's the other way around. A growing robust economy and a demand for Iraqi imports will raise the Dinar's value.

Demand for Dinars is the key. The rate is where it is because that's what the demand is. Raising the cost of the Dinar to 1 US Dollar will have the opposite effect. It will make the Dinar even more worthless if that's possible and the demand for dollars will go up.

[Joker017]

It doesn't matter what ratio the CBI RV's the Dinar. The purchasing power you say the Iraqi citizenry want and need will stay neutral. Nothing will change. Arbitrarily adding value to the Dinar will only arbitrarily raise the cost of goods and services in Iraq. Basic inflationary policy. People in the Dinar world unfortunately believe that an RV is the ticket to create and jump start a viable, stable and growing economy. But it's the other way around. A growing robust economy and a demand for Iraqi imports will raise the Dinar's value.

Demand for Dinars is the key. The rate is where it is because that's what the demand is. Raising the cost of the Dinar to 1 US Dollar will have the opposite effect. It will make the Dinar even more worthless if that's possible and the demand for dollars will go up.

I don't believe that any of this has anything to do with the purchasing power of the Iraqi Citizen or in making the Iraqi Citizen Rich. It's about convincing the Iraqi Citizen to have Confidence in using the IRD instead of the USD. And also about stopping the USD's from crossing the boarders into the Neighboring Countries! JMO...

[geman]

It doesn't matter what ratio the CBI RV's the Dinar. The purchasing power you say the Iraqi citizenry want and need will stay neutral. Nothing will change. Arbitrarily adding value to the Dinar will only arbitrarily raise the cost of goods and services in Iraq. Basic inflationary policy. People in the Dinar world unfortunately believe that an RV is the ticket to create and jump start a viable, stable and growing economy. But it's the other way around. A growing robust economy and a demand for Iraqi imports will raise the Dinar's value.

Demand for Dinars is the key. The rate is where it is because that's what the demand is. Raising the cost of the Dinar to 1 US Dollar will have the opposite effect. It will make the Dinar even more worthless if that's possible and the demand for dollars will go up.

I agree with the demand for the dinar is the key. BUT I believe the people of Irac want the dinar in there pockets not the usd, I know if we were using dinar here in America and had a chance to use usd at 1 for 1 we would jump at it to support our country. imo

now lets just get her done.

[pudge]

I don't believe that any of this has anything to do with the purchasing power of the Iraqi Citizen or in making the Iraqi Citizen Rich. It's about convincing the Iraqi Citizen to have Confidence in using the IRD instead of the USD. And also about stopping the USD's from crossing the boarders into the Neighboring Countries! JMO...

I agree. It doesn't have anything to do with it. But you don't build confidence in the DInar by charging 1000 times more than its worth. It would make the US dollar even more attractive to Iraqis and create massive inflation. Confidence, what little there is of it, will plummet. The outside world markets will certainly not honor any forced exchange rate coming out of Iraq

[R Veyron]

I will take your humble theory and raise you a point .+ 1

[Rudolph_the_Red]

It could easily go to a 1:1 ratio if they drop the zeros from the currency. It would be a 1:1.166 ratio! Doesn't dropping the zeros seem so realistic now?

[stonewall67]

It doesn't matter what ratio the CBI RV's the Dinar. The purchasing power you say the Iraqi citizenry want and need will stay neutral. Nothing will change. Arbitrarily adding value to the Dinar will only arbitrarily raise the cost of goods and services in Iraq. Basic inflationary policy. People in the Dinar world unfortunately believe that an RV is the ticket to create and jump start a viable, stable and growing economy. But it's the other way around. A growing robust economy and a demand for Iraqi imports will raise the Dinar's value.

Demand for Dinars is the key. The rate is where it is because that's what the demand is. Raising the cost of the Dinar to 1 US Dollar will have the opposite effect. It will make the Dinar even more worthless if that's possible and the demand for dollars will go up.

This is not entirely true. Most of the goods consumed inside the borders of Iraq are imported goods. If the value of the dinar is higher on the world market then the cost of those imports on the local Iraqi market will be lower thereby increasing their buying power. As for the rate being what it is because that is where the demand is...... Once again, not true. Because the Iraqi Dinar is not allowed to float, we really have no idea what the true value is on the world market. The rate is what it is because that is the rate the CBI has given.

[SgtFuryUSCZ]

***///

1-to-1...ok...

But the GooRuse said 8,

So I'll get my 1-to-1 then go to them to get my other 7.

Hope they're up to THAT meeting!