Good News about deleting Zeros

[Realdinar]

Truthful, why would making it more expensive for businesses in the U.S. to invest in Iraq bring in more investors?

Because of the profitability of iraq. How iraq does business with foreign investors. Why are foreign car makers building cars in the us? The profitability. Businesses will invest in Iraq even more when iraq decides to establish itself with proper government, economics, laws, etc. The stability of a rising powerful nation is more likely to attract businesses than toilet paper currency. I mean seriously your logic is that iraq is only getting business because of its toilet paper currency. In my opinion they could be growing twice as fast by building its infrastructure. Thats profitability, right there. Then the rv, then we rich.

Edited February 2, 2012 by Realdinar

[keepmwlknfny]

A rd/lop does nothing to increase investors confidence. iraq is a wealthly country that needs rebuilt. Businesses will flock there for the energy market regardless of the outcome of the currency. Why would any business go to iraq, when the majority of people have no money to buy their goods and services????

The bigger factor in investor confidence would be stability....not if a country is going to redenominate....Iraq quadrupled the numbers for foreign investments the past couple years....I think last year they brought in like 70 or so billion dollars, the year before that it was like 40 billion.....Iraqs estimated GDP was like 110 billion or so for 2010....so foreign investment in Iraq is flurishing and makes up for the majority of money coming into the country it seems....

Does not appear that what happens to the currency is a deal breaker here.....either way this goes a stronger dinar is the end result...

[lotsofdinar]

If it was free floating and they removed significant currency from circulation, then the value of the remaining notes goes up automatically."

If it was free floating it wouldn't make a bit of difference if they removed currency or not. They are no longer in control of their exchange rate if free floating, the markets are. But it would be crazy for a country like Iraq with 90 percent of exports being oil to free float their currency. And the only reason an RV could make Americans rich is because the dinar is pegged to the dollar.

[Realdinar]

The bigger factor in investor confidence would be stability....not if a country is going to redenominate....Iraq quadrupled the numbers for foreign investments the past couple years....I think last year they brought in like 70 or so billion dollars, the year before that it was like 40 billion.....Iraqs estimated GDP was like 110 billion or so for 2010....so foreign investment in Iraq is flurishing and makes up for the majority of money coming into the country it seems....

Does not appear that what happens to the currency is a deal breaker here.....either way this goes a stronger dinar is the end result...

I agree keep.

[zigmeister]

History has shown that all re-denominations do not appreciate in value until the old notes are retired. This is likely due to several reason(s):

1. The bank can assess what they're liabilities truly are now that they have a more accurate account of what is in circulation

2. Demand for the domestic currency rises as citizens do not have to deal with as many currencies

3. Liabilities are less threatening, because those that currently hold will likely not cash-out.

4. Ease of accounting helps increase demand (supposedly)

And the appreciation after the project is complete? Not much... Maybe enough where we break even since most of us over paid and would have to deal with fees & spreads upon exchange.

If any one looks to the Lira as an example, the rate did adjust in appreciation against foreign currencies but has also been slipping over the last few years. So no sense in thinking long-term...

So, who would be the ones who make a sizeable profit? Those that purchase large quantities at an awesome rate while collecting interest over the years who cash out upon the re-adjustment of value when the project is complete.

Duration of the project, the words have been spoken that it may be anywhere from 2-3 years and as high as 8 to 10 to allow old notes in circulation to exist or be redeemable.

What you see here is simply they sure like to talk about numerous possibilities but no action has really taken place except a small apprecation of 0.34% with the 4 small pip movement.

So for many of us, a R/D (lop) is not necessarioy a value-neutral event since many purchased on the hopes of a better value. We didn't pay the actual value as we had a much higher mark-up.

Essentially, many of us may have paid near $1,200 for something that is worth $866... And upon new re-denominated notes to be released, we may even struggle to exchange for USD or new notes. And we have to consider spread & fees.

Darin am I understanding you correctly, in all redominations the value does not appreciate in value until the old is scopped up. According to Iraq this process may take two years to draw in the old currency, so in the meantime the value of the new currency really would not be of much help for Iraq economically would it?

[DinarDana]

And if some of you think that the CBI is going to just magically spell out every detail in their plan, then you have another thing coming....

I am almost sure that there are things happening behind the scenes as we speak.....

Yes, exactly, so shhhhhhhhhh, quiet, no one speak so we can hear them.

[cbs71]

Yes, exactly, so shhhhhhhhhh, quiet, no one speak so we can hear them.

[truthful1]

The bigger factor in investor confidence would be stability....not if a country is going to redenominate....Iraq quadrupled the numbers for foreign investments the past couple years....I think last year they brought in like 70 or so billion dollars, the year before that it was like 40 billion.....Iraqs estimated GDP was like 110 billion or so for 2010....so foreign investment in Iraq is flurishing and makes up for the majority of money coming into the country it seems....

Does not appear that what happens to the currency is a deal breaker here.....either way this goes a stronger dinar is the end result...

I agree.

[yota691]

This is what the CBI has in plan

He Abtan, that "the steps the bank will impact more on the Iraqi economy and the lives of citizens in the event and placed within an economic plan to be one components central bank. Call me crazy but this is all about the Citizens of Iraq!!

Edited February 2, 2012 by yota691

[fnbplanet]

Once again....

There is no such thing as deleting, raising, whatever, and ending up with a dinar valued at $.86 !

taking 3 zeroes from .00086 gets you .86 dinars per dollar, OR...........$1.17 period.

Either they literally take 3 zeroes away from .00086 or 1166, as above, and you get the $1.17 or they just change it to a dollar for convenience for the everyday Iraqi to figure out. Once they remove the larger bills, it will probably go up.

Edited February 2, 2012 by fnbplanet

[Realdinar]

This is what the CBI has in plan

He Abtan, that "the steps the bank will impact more on the Iraqi economy and the lives of citizens in the event and placed within an economic plan to be one components central bank. Call me crazy but this is all about the Citizens of Iraq!!

Wow sometimes I need a translation for the translation. So in other words: One component of the central banks steps, within the economic plan, will impact more on the economy and the lives of the citizens. Thats what I think it says.

I hope it means it will impact my dinar positively!

[R Veyron]

it means deletion of the zeros on the currency not the currency rate

And please tell us, how this would raise the "exchange value" against the dollar ?

[lotsofdinar]

And please tell us, how this would raise the "exchange value" against the dollar ?"

Simple, it reduces the Dinar in country. To get to 1:1, you need 1 dinar for each dollar in reserves.

Edited February 2, 2012 by lotsofdinar

[Dinarhopeful1256]

it means deletion of the zeros on the currency not the currency rate

If this was Shabibi Saleh being quoted I might agree with you. This is someones opinion. The fact is the new lower denominated notes are going to co-exist with the larger notes......how can they LOP or "delete the zeroes from the currency" when the large and small notes will co-exist?? That would be a devaluation of their currency. This is a money supply issue and the CBI has come out and said they are reducing the money supply....= increased exchange rate. Look at what the CBI says directly, not someone's opinion on how the project will be conducted.

[lotsofdinar]

.how can they LOP or "delete the zeroes from the currency" when the large and small notes will co-exist??"

It has happened many times in RD's over the decades. What you are saying can't happen has certainly happened before. Google it.

[keepmwlknfny]

If this was Shabibi Saleh being quoted I might agree with you. This is someones opinion. The fact is the new lower denominated notes are going to co-exist with the larger notes......how can they LOP or "delete the zeroes from the currency" when the large and small notes will co-exist?? That would be a devaluation of their currency. This is a money supply issue and the CBI has come out and said they are reducing the money supply....= increased exchange rate. Look at what the CBI says directly, not someone's opinion on how the project will be conducted.

You know that a lot of the time they take quotes directly from Saleh and Shabibi about redenominating. When that happens you normally have two currencies co-existing at the same time....the older currency holds the same value, and the new currency carries a higher value. In the marketplace they have two prices listed...one in the old currency, and one in the new....

[Dinarhopeful1256]

You know that a lot of the time they take quotes directly from Saleh and Shabibi about redenominating. When that happens you normally have two currencies co-existing at the same time....the older currency holds the same value, and the new currency carries a higher value. In the marketplace they have two prices listed...one in the old currency, and one in the new....

Yes they do take quotes for both talking about the project. How can they have the same currency hold different value?? That makes no sense and seems unreasonable. I don't believe what you are saying is accurate, thats just my opinion.

The idea is to reduce the money supply by having ALL (not some) of the currency (larger & smaller notes) available at the same rate....as people exhange the higher denominated notes for the lower notes, they are drastically reducing the money supply with the exchange. My thought is they've been managing this currently with the daily auctions; however, most of the reduction is money supply will come from the exchange period. IMO, they'll RV around $1, and as the money supply shrinks via the exchange, the rate will gradually increase (as money supply decreases) to be on par with Kuwait but, that will take years.

[TQueezy]

You know that a lot of the time they take quotes directly from Saleh and Shabibi about redenominating. When that happens you normally have two currencies co-existing at the same time....the older currency holds the same value, and the new currency carries a higher value. In the marketplace they have two prices listed...one in the old currency, and one in the new....

How would that be fair to the citizens of Iraq, for whom this entire project is being conducted? To have two currencies each with its own exchange rate would be like dangling a bag of riches in front of people and saying, well, here's what you could be in possession of if we didn't have an old exchange rate and honored the older bills at the new exchange rate. Na na na na boo boo! that's not exactly promoting stable economics and increasing the value of the currency in the eyes of the citizens and the international community. It comes across as moneygrubbing, greedy, and downright villainous. No one in the United States (a democratic, capitalistic country) would ever tolerate that. No one in Iraq should either.If you're to introduce a new currency, with a new exchange rate, you honor all currency at that new exchange rate for the face value of the banknotes you put into circulation.

[brandedbabe]

i want everyone to do me a favor i want you all to GOOGLE deletion or removing or lifting of zeros that other currency did and then tell me if they took it off the exchange rate or the currency. i am like 90.5 % in every other place took theM of the CURRENCY. AND FOR THOS AY THEN IT WOULDNT GO UP IN VALUE YOU CAN STILL CHOP OR REMOVE THE ZEROS AND THEN GRAUDLLY THE CURRENCY WILL RISE IN VALUE

Not being a jerk I hope...but you have to be a detective. If a wife kills a husband in self defense would you take her word or do some investigating?

Fact...If they were going to Lop then why increase the rate, remove it from an artificial peg....why not work with the Arab league for loans instead of the IMF....it is because they want a prosperous country....they actually want to become the leading supplier of oil to the world....how many countries that have lopped have been this ambitious! How many of these countries that have lopped have a democracy. I have read all of the lop articles in the past....how many of the countries who lopped had a growth rate of 9%, on par with China....wake up!!!

[truthful1]

If this was Shabibi Saleh being quoted I might agree with you. This is someones opinion. The fact is the new lower denominated notes are going to co-exist with the larger notes......how can they LOP or "delete the zeroes from the currency" when the large and small notes will co-exist?? That would be a devaluation of their currency. This is a money supply issue and the CBI has come out and said they are reducing the money supply....= increased exchange rate. Look at what the CBI says directly, not someone's opinion on how the project will be conducted.

Its common for two currencies to exist during rd.

This is 100% about the money supply. The cbi had an instrument through the auctions to possibly withdraw billions of dollars in the dinar off the market. 1 Billion dollars flowed through the auctions approx. every 7 auctions. there are expenditures to subtract, but any remaining balance could be.withdrawn. if the audits are yearly, the cbi still has/had a full-year to possibly withdrawl large amounts of dinar. How much, we dont know?? thats the speculation

Edited February 2, 2012 by truthful1

[lotsofdinar]

branded, RDs have happened many times, and in exactly the way you say is not possible.

[easyrider]

LOP=pissed off iraqis

Devaluing currency even more= VERY pissed off iraqis

RV=happy iraqis and happy investors

[Elixirbaby]

Thanks alan_coaks_3. My ignore list is getting longer.

Go RV

[easyrider]

branded, RDs have happened many times, and in exactly the way you say is not possible.

yes but we are talking about a country Iraq here this is a country that has potentially vast amounts of wealth that are endless. You can't base other RD's off this particular situation and the way things are going as of now it just cant happen we dont know whats gonna happen.

[TQueezy]

branded, RDs have happened many times, and in exactly the way you say is not possible.

I'd like to make a point on semantics here...

Re-denomination would be changing the denominations of the SAME currency that is in circulation. In this instance, you are not "Lopping" in the sense that you are removing value (or hypothetical value that could be gained on speculation) from the currency. You are simply introducing new banknotes with different face values and/or security, pictures, etc.

Currency replacement would be an entirely different story. You are making an entirely new currency that has no economic ties to the previous one. In these instances, you make a new exchange rate relative to others, or a peg, and you have a new code for the currency. Typically there is a value-neutral exchange period for currency holders in that country/state alone and after that period all of the old currency is no longer legal tender that can be exchanged. Simple. That's the LOP, RD, whatever you want to call it that people keep advocating is what Iraq is going to do. I say NAY.

Iraq will introduce new denominations of the same currency, increase the value of the currency through lowering the exchange rate ratio, and voila! there you have it! We can exchange the older denominations at the new exchange rate for a profit. How is that so hard to believe? They're still reducing the money supply.