Parliamentary Finance committee: Iraqi Central Bank lingered in presenting the Zero loping bill

[aaronofnero]

Actually hopefultxn provided a link to where they used the same term lopping to describe russias redenomination so I guess its not really something that was made up here....I always thought that it was....

The end result of lopping is a smaller money supply and a higher valued currency since you cut the numbers down....the less of something you have, the more it is worth...

I don't know. If they were to lop and effectively make a 25,000 dinar bill worth 25 dinar, that doesn't shrink the current money supply, it just keeps them from having to print more than already exists (considering all bills in circulation that would need to be traded in). Given Iraq's current economy, citizens would still be using the same number of bills to buy things they regularly need. example: let's say an apple is 1000 dinar currently, and the 1000 dinar bill becomes a 1 dinar bill, and that apple now costs 1 dinar.. you're still spending the same amount, just changed the inherent face value of the bank note. It does bring the value of their bill closer to than of a USD bill, but that doesn't change the economy. That won't encourage people to invest or supply into the economy, when the economy only has so much money to begin with.. changing something's face value, ultimately, doesn't do anything. It's all about the demand of that item. If there is a higher demand for the currency, and there is less of that currency, then yes.. it becomes more valuable. if they RV 1:1, and a 1000 dinar becomes with 1000 USD, and the apple there is still worth roughly 1 USD, then an iraqi citzen won't have to spend their 1000 dinar in order to buy that apple. Instead, they can exchange that dinar for a thousand 1 dinar bills, and buy 1000 apples. Yes, this increases the amount of money that needs to be printed, but all of the sudden there is far more stimulation in the country thus more value to the country in its exports and desired imports, and therefore, there is more demand for the money because there is more of it to be made through services or supply.

[KiaKaha]

She noted that the deletion of zeros from the currency requires a "big job", because this task requires the provision of economic security for the commercial market in Iraq.

The Iraqi government says that the process of deletion zeros from the local currency will increase the phenomenon of money laundering and is working to convince the central bank need to stop work on the project.

The Securities Authority harmonizes with the government's position to delete the zeros and says that adversely affect the financial trading in the stock market.

http://www.iraqdirectory.com/DisplayNews.aspx?id=18214

So, to me she's saying don't lop, yes?

KK

[2fast4u2c]

KK....who knows.

[DinarDana]

Parliamentary Finance committee: Iraqi Central Bank lingered in presenting the Zero loping bill

"the central bank lingered in the provision of a bill to delete the zeros of the local currency to the Finance Committee to study and add some stuff it and then submitted to the House of Representatives for the purpose of voting upon approval."

She added that the "delete the zeros of the most prominent treatment of the local currency to solve the problem of inflation with the expansion of the investment plan of the budget and reduce spending."

The Iraqi government says that the process of deletion zeros from the local currency will increase the phenomenon of money laundering and is working to convince the central bank need to stop work on the project.

http://www.iraqdirec...s.aspx?id=18214

Please note they specify the deletion of the zeros form the local currency.

Deleting the zeros will effect the exchange rate? how? or will it? Soon to be revealed.....

I like what I am reading.

[2fast4u2c]

I hope we see some more movement this week....

[zigmeister]

I hope nobody tattled to the camel and told him what I had said.

I think it is interesting that lop is used in the title, but not in the body of the article.

Good observation.....perhaps to get our attention?

[keepmwlknfny]

I don't know. If they were to lop and effectively make a 25,000 dinar bill worth 25 dinar, that doesn't shrink the current money supply,

Sure it does....if you have to exchange a 25k note for a new 25 note, you just effectively removed 24,975 dinar.....

[aaronofnero]

Sure it does....if you have to exchange a 25k note for a new 25 note, you just effectively removed 24,975 dinar.....

But that's the problem.. you've reduced what "hypothetically could be" if they HAD to exchange a 25,000 dinar note for twenty-five thousand 1 dinar notes in the event of an RV or RI. This is all still fiat currency, it's not like they're all of the sudden creating 25,000 pieces of gold out of a single 25k note, but each piece of gold to be inherently equal to a 1k note.

I do see where you're coming from, and it does make sense, but there is really nothing achieved by doing this.

Another example:

Let's say I own an automotive business. If the average citizen in Iraq makes the equivalent of $2200 USD (http://www.unicef.org/infobycountry/iraq_statistics.html) per year, and I am interested in extending my business to Iraq to further my growth and simultaneously build their economy by offering jobs and automotive supplies / transportation, how do I expect to survive in their country as a growing business? If i'm selling vehicles in the United States for $20,000, and Iraq were to LOP their currency, then it would take a single Iraqi citizen almost 10 years to own one of my vehicles at the US competitive price -- and that's accounting for the individual to dedicate all that income solely to paying off the cost of that car. I'm sure we both know how unlikely that is, as surviving is more important than owning my products. So what would i have to do? Well, i'd have to lower the cost of my vehicles to maybe $1500-2000 USD. The problem though with this, is now not only am I making less money, but I'm starting to realize that people in the US are choosing to buy my cars from Iraq and have them shipped over, because it's FAR cheaper to do so -- and since Iraq LOP'd their currency to bring the dinar 1:1 with the USD, it's a pretty even trade to go and exchange USD for Dinar and buy materials in their country so they may save a ton of money from the latter of buying things in the US.

Now, if Iraq had absolutely no intentions of bothering with international trade and supply, and wanted to keep to themselves, then yes I could see this happening. But if they were to LOP and want to be up to speed with the rest of the world's developing, industrial countries.. they'd have to find a way to raise that average income to maybe 25,000-30,000 Dinar a year at a 1:1 rate very quickly, while keeping the cost of goods in the country the same, if not cheaper.. as well as the labor costs.

Edited February 1, 2012 by aaronofnero

[MrFnHappy]

Parliamentary Finance committee: Iraqi Central Bank lingered in presenting the Zero loping bill

Read more:

I've seen plenty of mistranslations, but I have yet to see an online translation program misspell a word

[aaronofnero]

Edit: I meant to include the point in the first sentence in my comment above that their is a limited supply of gold that has a high demand, which creates its value, versus Dinar and USD which are just paper given a specific value, and the demand is a reflection of what all you can obtain with that paper. As it stands, the USD is worth more because you have more options to purchase with the use of it over the limitations of owning a Dinar.

[aaronofnero]

I will say this though, there is some merit to a LOP in the event that the country is borrowing money solely to circulate into their economy through labor laws, minimum wage, insurance policies, grant programs for business incentives, income tax and sales tax laws/increases, international trade agreements and furthered governmental programs and policies. However, this would be quite extensive, and with everyone who's got some say about something over how decisions are made there, I don't think any of this could realistically be achieved in a reasonable time frame. Also, when you borrow a large amount of money, you gotta pay that back with interest, as we all know. But why borrow money and do all this when you could create your own "federal reserve" just like we have so comfortably done, and keep all the debt in-country. Well, I have a good feeling greed and power play a huge part of these decisions, and not only from those in Iraq. It seems much easier to allow an RV, increasing the fiat money supply (since fiat money is only worth what was used to make it if there is no resource material or government policy behind it), and allow the economy to grow just by the spawned wealth and consumer interest in spending the Dinar since more of it would be in circulation there. The only thing I can see holding up this process are the laws that have to go into effect to maintain the transitional costs of supplies, services, products and labor in the event of an RV. This way, that apple that once cost 1000 dinar doesn't end up being equivalent to 1000 USD. In this case, you could assume an "lop" applies to services and supply, but an RV reflects the currency stimulus that comes into play. So, let's consider a man who runs a business of selling apples and makes, lets say, the equivalent of $6,000 USD a year (around 7 million dinar... he has some of the healthiest, most desirable of apples). All of the sudden his $6,000 worth becomes $7 million, but the cost of his apple has to be lopped from 1000 dinar to 1 dinar.. well, that may seem discouraging, until he sees that he's now selling 10 or 20 times as many apples a day. All of the sudden he has to hire more people, keep up with the demand of people wanting to buy apples, and find a location to be able to service all these people who want his tasty apples! how is he going to afford to do that? well, he's 6.994 million dollars richer, so I think he just might have a way. Oh, and if people love his apples that much, why not bring in board some oranges and kiwi? Plenty of money to take a risk there and improve business even further. All of the sudden, you have a blooming economy.

Okay, i do realize there is a bit of a utopian factor to that analogy.. but, in the essence of a LOP versus an RV, part of me wants to believe there are entirely too many cooks in the kitchen and it would be more of a success to apply an RV to encourage an economic stimulus and appeal to other countries for imports, exports and established trade internationally. Politics are a bit more ruthless than an individual wanting to take money from a bank and build up his business internally and just pay back that bank later on. In politics, it seems as though if you're going to need financial help or support from another country.. they're going to want to know just exactly what all you're going to do with the help they provide, and if you could ever use that help against them in the future. It's a game of dominance and control, despite how much morality you'd like to think truly exists. If Iraq's economy is going to grow from the fruits of other countries, like the US, then you better believe the US has some say as to how Iraq's growth will benefit our government or economic system. with an LOP, i feel like there would be an extreme amount of pressure from varying sides politically, and it would only harvest more stress and debate with little conclusion. Sure we would be pretty bummed on a LOP, and in the event of a LOP, Iraq could still hypothetically survive and grow.. but with an RV, everyone is benefiting - not just us. Sure, it seems like an easy investment dream, but it puts more money into circulation internationally through exchange.

Now, is this morally a good idea? To magically push even more currency into existence? Probably not. But, that's an entirely different debate.

Again, this is just my perspective.. and i'm not an individual with a degree in economics. Just someone who likes to read a good bit and be as logical as possible. Sorry if I come off sort of scatter-brained. There are so many details to these sorts of issues.

[keepmwlknfny]

But that's the problem.. you've reduced what "hypothetically could be" if they HAD to exchange a 25,000 dinar note for twenty-five thousand 1 dinar notes in the event of an RV or RI. This is all still fiat currency, it's not like they're all of the sudden creating 25,000 pieces of gold out of a single 25k note, but each piece of gold to be inherently equal to a 1k note.

I do see where you're coming from, and it does make sense, but there is really nothing achieved by doing this.

There are two sides to this debate of course....the average income does need to increase for the Iraqis and this can be done regardless of if they choose to lop or straight up RV....both scenarios, the end result is a higher valued currency....but for countries like Iraq that experienced times of hyperinflation and because of this they end up with an inflated money supply as well. They simply dont have the means to accomplish a 1 to 1 rate and it be accepted by the global community if they have more physical cash then almost the rest of the world combined....

The main objective of lopping a currency is to rid the past affects of hyperinflation while increasing purchasing power (although its just a monetary illusion because all pricing is adjusted accordingly) and cutting an inflated money supply down to more manageable numbers....this all of course is IF Iraq really does have over 25 trillion dinar in circulation....if those numbers are off by a massive amount, then there probly isnt much of a reason to redenominate....but if those numbers are correct, its the fastest way to get the dinar on par with the USD....

[Alex38]

Aren't we going to find out soon enough? Ha! I really can't believe this is STILL being discussed. Wild!!! I also can't understand why some people are still in this speculative investment. IMO, its either "dream big or drop the hell out".... Why else waste your time with this 25k equals 25 dinar nonsense. That's not why ANY of us are involved. At all. Crazy days..

RV me, Iraq!!!!!!

[zigmeister]

It appears "As The Dinar Turns" is slotted for its final chapter, and we will all be glued the last episode.

[caz1104]

Aren't we going to find out soon enough? Ha! I really can't believe this is STILL being discussed. Wild!!! I also can't understand why some people are still in this speculative investment. IMO, its either "dream big or drop the hell out".... Why else waste your time with this 25k equals 25 dinar nonsense. That's not why ANY of us are involved. At all. Crazy days..

RV me, Iraq!!!!!!

I agree. I've never quite understood the mentality tho I believe that Iraq is going to RD/LOP based on the info provided I'll stick around to see if I brake even or make a slight profit. I've own businesses and have been invested in many a stock. If I thought or had unequivocal proof of either loosing me money In most cases I washed myself of that investment and moved on. I invested in the Dinar after years of prodding by my former financial advisor and enjoy the possibility of what might happen. I did not get into this thinking without a doubt I would be rich overnite but with the thought that I just might. I invested what I could loose and am happy I did,its been an exciting ride. I'm a optimist at heart so I look for positives even in negatives. I wish the best to all & oh have'nt done this in awhile GO RV!! That felt good

[Alex38]

I agree. I've never quite understood the mentality tho I believe that Iraq is going to RD/LOP based on the info provided I'll stick around to see if I brake even or make a slight profit. I've own businesses and have been invested in many a stock. If I thought or had unequivocal proof of either loosing me money In most cases I washed myself of that investment and moved on. I invested in the Dinar after years of prodding by my former financial advisor and enjoy the possibility of what might happen. I did not get into this thinking without a doubt I would be rich overnite but with the thought that I just might. I invested what I could loose and am happy I did,its been an exciting ride. I'm a optimist at heart so I look for positives even in negatives. I wish the best to all & oh have'nt done this in awhile GO RV!! That felt good

Glad you could vent

[Realdinar]

If an article surfaces with the word lopster in it....we will know whats up then.

come on iraq, you can do this!

Show us how awesome you are by rving your notes!

[lakeliving]

I think it is interesting that lop is used in the title, but not in the body of the article.

I noticed that too. Also the article was translated by Iraqdirectory.com which has ads for TampaDinar & Forex and they can be followed on Twitter. This site is very connected to the dinar community, of course they know the lingo!

[keepmwlknfny]

Aren't we going to find out soon enough? Ha! I really can't believe this is STILL being discussed. Wild!!! I also can't understand why some people are still in this speculative investment. IMO, its either "dream big or drop the hell out".... Why else waste your time with this 25k equals 25 dinar nonsense. That's not why ANY of us are involved. At all. Crazy days..

RV me, Iraq!!!!!!

Well until the CBI and other media outlets stop bringing it up then it will continue to resurface and be discussed....Of course none of us got involved for that to happen, we all wanna make bank on this....we are all speculating on what they can do or will do by the information provided but should we just ignore everything that talks about the currency? Thats what we are invested in....

[Alex38]

Well until the CBI and other media outlets stop bringing it up then it will continue to resurface and be discussed....Of course none of us got involved for that to happen, we all wanna make bank on this....we are all speculating on what they can do or will do by the information provided but should we just ignore everything that talks about the currency? Thats what we are invested in....

hmmmmm... ok... but all I keep reading lately is "raising the exchange rate of the dinar against the dollar".... to me, that says $$$$$$$$$$$$$$$$$$$.... IMO.

Edited February 2, 2012 by Alex38

[aaronofnero]

There are two sides to this debate of course....the average income does need to increase for the Iraqis and this can be done regardless of if they choose to lop or straight up RV....both scenarios, the end result is a higher valued currency....but for countries like Iraq that experienced times of hyperinflation and because of this they end up with an inflated money supply as well. They simply dont have the means to accomplish a 1 to 1 rate and it be accepted by the global community if they have more physical cash then almost the rest of the world combined....

The main objective of lopping a currency is to rid the past affects of hyperinflation while increasing purchasing power (although its just a monetary illusion because all pricing is adjusted accordingly) and cutting an inflated money supply down to more manageable numbers....this all of course is IF Iraq really does have over 25 trillion dinar in circulation....if those numbers are off by a massive amount, then there probly isnt much of a reason to redenominate....but if those numbers are correct, its the fastest way to get the dinar on par with the USD....

that's an extremely valuable point.

[keepmwlknfny]

hmmmmm... ok... but all I keep reading lately is "raising the exchange rate of the dinar against the dollar".... to me, that says $$$$$$$$$$.... IMO.

Because somehow they are going to raise the exchange rate....they did a little already, they are talking about moving it more, but anything is still possible.

Even in these redenomination articles they speak about raising the exchange rate....because thats the 2nd path they could take.....in either scenario RV or LOP, they will be able to raise the exchange rate....

Thats why I think these deleting the zeros articles are somewhat important....I of course prefer the ones that say they are against it or trying to convince the CBI that its a bad idea.....

[Footer]

Because somehow they are going to raise the exchange rate....they did a little already, they are talking about moving it more, but anything is still possible.

Even in these redenomination articles they speak about raising the exchange rate....because thats the 2nd path they could take.....in either scenario RV or LOP, they will be able to raise the exchange rate....

Thats why I think these deleting the zeros articles are somewhat important....I of course prefer the ones that say they are against it or trying to convince the CBI that its a bad idea.....

I evened you out with a couple of ++... I agree that an RD needs to be taken in to consideration as it is a possibility. So for sure deleting zeros articles are some what important. I also believe that an RV is a possibility also. I do know for sure, with out a doubt that ALL of us here would like to wake up rich one morning whether we believe in a LOP or an RV... So thanks for your opinions keep....

[yota691]

bump

[truthful1]

If the cbi announced or recorded to the world, we have removed 70% or more of the money during the time we were on the program rate, everyone would be buying up dinar waiting for the program rate to be lifted. You couldnt curve the speculation if you showed only billions in circulation. We only see whats recorded in cbi financials. if your looking for the smoking gun to see the currency has been reduced, you wont find it. anyone with any research, knows what a rd is and how they work. If you believe the data and financials, great. if your still in this investment and think theres 30 trillion dinar in circulation, then Rd is it, thats it theres the end result. if all the cards were laid out so all the speculators can know exactly whats going on, that wouldnt work. Some want to believe everything the cbi says or shows on paper. if the cbi is being honest, then rd is it. why stay in?? People want to defend the financials like its the holy grail. so you can either believe what the cbi says, which is rd. but if any scenario of a rv exists, we wont see all the cards or facts. thats why this is speculation. If you arent going to speculate and take a risk, then walk away knowing the cbi is being totally honest and plans on redenomination. the same people come on this site everyday, and we cant have a conversation beyond defining a rd.

Edited February 7, 2012 by truthful1