Old article, but good read....from another site

[zul]

So you do at least agree that the CBI IS saying, repeatedly, that they are going to RD. You might think they are not telling the truth, but that is what they are saying. Right?

Do you understand what RD really means..? Whether they are going to RV or LOP..they need to redenominate ~ rescale their currency. That's is why CBI keep repeating that they will redenominate / rescale their currency.

[dvforumuser]

They will RD. That's what the new currency is about. Plain and simple. The currency has to be changed do to the constitution, and the fact they don't have small enough denominations for their currency to work.

Question is how. Rv before, or rv, or ri after they do the exchange. One way makes us a lot of money. One way makes us a bit, and last, God forbid, gives us a loss.

If the just do a big RV and release smaller denominations of dinars that is not an RD. An RD is releasing a NEW currency with its own exchange rate. They can do a 1000:1 RD, and some think (not me) that they could do a 1000:1 RV, but clearly they can not do both. They could do a 100:1 RD and a 10:1 RV, that would be good for us. But unfortunately no mention has every been made of "deleting the two zeros", or that 25,000 would go to 250.

So if you mean to say that they will do a 1000:1 RV and release smaller denominations of the existing IQD, please do not call that an RD, we confuse ourselves enough already! :-)

Do you understand what RD really means..? Whether they are going to RV or LOP..they need to redenominate ~ rescale their currency. That's is why CBI keep repeating that they will redenominate / rescale their currency.

I think I do, and as I just posted to fastarnie, releasing smaller denominations of the existing currency is NOT a redenomination as the new bills are part of the same currency as the existing bills, with the same exchange rate and the same currency symbol. Edited February 20, 2012 by dvforumuser

[keepmwlknfny]

Do you understand what RD really means..? Whether they are going to RV or LOP..they need to redenominate ~ rescale their currency. That's is why CBI keep repeating that they will redenominate / rescale their currency.

Even if you wanna call exchanging 1 to 1, old to new a redenomination, the CBI is not talking about exchanging evenly like that.....they are in fact talking about exchanging 1000 to 1...thats how they will reduce the money supply so drastically...

Wish it wasnt that way, but hopefully they are just lying about their intentions...

[zul]

If the just do a big RV and release smaller denominations of dinars that is not an RD. An RD is releasing a NEW currency with its own exchange rate. They can do a 1000:1 RD, and some think (not me) that they could do a 1000:1 RV, but clearly they can not do both. They could do a 100:1 RD and a 10:1 RV, that would be good for us. But unfortunately no mention has every been made of "deleting the two zeros", or that 25,000 would go to 250.

So if you mean to say that they will do a 1000:1 RV and release smaller denominations of the existing IQD, please do not call that an RD, we confuse ourselves enough already! :-)

I think I do, and as I just posted to fastarnie, releasing smaller denominations of the existing currency is NOT a redenomination as the new bills are part of the same currency as the existing bills, with the same exchange rate and the same currency symbol.

So you are saying, if they RD, their dinar will have 2 diff exchange rate..? NEW currency ~ new exchange rate. Old currency ~ diff exchange rate..? Confusing....

Didn't CBI practices one single rate for their currency..?

[fastarnie]

If the just do a big RV and release smaller denominations of dinars that is not an RD. An RD is releasing a NEW currency with its own exchange rate. They can do a 1000:1 RD, and some think (not me) that they could do a 1000:1 RV, but clearly they can not do both. They could do a 100:1 RD and a 10:1 RV, that would be good for us. But unfortunately no mention has every been made of "deleting the two zeros", or that 25,000 would go to 250.

So if you mean to say that they will do a 1000:1 RV and release smaller denominations of the existing IQD, please do not call that an RD, we confuse ourselves enough already! :-)

I think I do, and as I just posted to fastarnie, releasing smaller denominations of the existing currency is NOT a redenomination as the new bills are part of the same currency as the existing bills, with the same exchange rate and the same currency symbol.

Well then it will rv then rd. Gee that was simple.

[zul]

Even if you wanna call exchanging 1 to 1, old to new a redenomination, the CBI is not talking about exchanging evenly like that.....they are in fact talking about exchanging 1000 to 1...thats how they will reduce the money supply so drastically...

Wish it wasnt that way, but hopefully they are just lying about their intentions...

IF they were to RD/LOP........ that's how it will goes down.

Edited February 20, 2012 by zul

[dvforumuser]

So you are saying, if they RD, their dinar will have 2 diff exchange rate..? NEW currency ~ new exchange rate. Old currency ~ diff exchange rate..? Confusing....

Didn't CBI practices one single rate for their currency..?

NO, its TWO currencies. All of the countries that have done RD issued a NEW different currency. Each currency has its own exchange rate with other currencies. The exchange rate between the two Iraqi currencies (old and new dinar) will be fixed, at most likely 1000:1 . This is explained in detail on the web, just google redenomination.

Well then it will rv then rd. Gee that was simple.

Oh good grief. If they RV at 1000:1 as people dream of, than it CAN NOT also RD as there is no "room" left. The exchange rate to the dollar would at that point already be 1:1 (well nearly). So they would certainly have to issue new lower denominations of the existing IQD, but that is NOT a redenomination.

[alan_coaks_3]

No ones aswered my question at all . i have never heard of another currency that droped the a certin amount of zeros that wansnt a rd . please if anyone has please tell me whice ones have and with the link to prove it. thanks you

[zul]

NO, its TWO currencies. All of the countries that have done RD issued a NEW different currency. Each currency has its own exchange rate with other currencies. The exchange rate between the two Iraqi currencies (old and new dinar) will be fixed, at most likely 1000:1 . This is explained in detail on the web, just google redenomination.

Oh good grief. If they RV at 1000:1 as people dream of, than it CAN NOT also RD as there is no "room" left. The exchange rate to the dollar would at that point already be 1:1 (well nearly). So they would certainly have to issue new lower denominations of the existing IQD, but that is NOT a redenomination.

So...Iraq will have 15 Billion dinar after RD ( as per Saleh) for their 30 million population.....averaging about 500 dinar per person. Sounds about right...

[dvforumuser]

So...Iraq will have 15 Billion dinar after RD ( as per Saleh) for their 30 million population.....averaging about 500 dinar per person. Sounds about right...

If after the RD its 500 new dinars per person, then now its 500,000 IQD per person which have exactly the same value.

But I think he said 25T going to 25B, not 15B. But in any case value per capita does not change with an RD.

Edited February 20, 2012 by dvforumuser

[J769]

Iraq has an M2 of 69 trillion. That's 69 billion after an RD, not 15 billion. The CBI also has 24 trillion dinar in excess reserves that they can put into circulation any time there is demand for it. That brings us up to 93 billion after an RD, not 15 billion.

And if that still isn't enough, they just will print more. Iraqs M2 has gone up by around 40 trillion in the last 5 or 6 years, if there's one thing they know how to do, it's print money

[leesburg]

They will RD. That's what the new currency is about. Plain and simple. The currency has to be changed do to the constitution, and the fact they don't have small enough denominations for their currency to work.

Question is how. Rv before, or rv, or ri after they do the exchange. One way makes us a lot of money. One way makes us a bit, and last, God forbid, gives us a loss.

I happen to believe they will rv before they rd. Looking at the big picture they said in a recent article that some of the currency won't ever make it back to the CBI as it will turn into a world reserve currency. To me, and I could be wrong, it doesn't matter what the CBI numbers are. We just have to wait and see what they'll do, cause ain't no way they're gonna tell us in these articles. Read between the lines all you want, but there will be no clues.

What country did a 1000-1 and became a reserve currency anyone? I don't know, so I ask.

the new currency is about the erbil agreement ..it must contain the kurdish language on the currency before the north would be on board with the rd rv menu...its in the kurdistan constitution the currency must have kurdish language on it ..

[zul]

I think Saleh said there are now 25Trillion in circulation (M1) so after the RD there would be 25 Billion (not 15B), of 1000x higher value. If after the RD its 500 new dinars per person, then now its 500,000 IQD per person which have exactly the same value.

blank

Now it's 500,000 IQD PLUS US dollars Most Iraqis are using dollar for the daily transactions.

so 500 dinar per person @ 0.86 ( after RD) = 430 USD....??

* Iraq working to reduce the mass of cash through the deletion of zeros

Baghdad, November 16 (Rn) – The Central Bank of Iraq on Wednesday that seeks to reduce the monetary mass of 25 trillion dinars to 15 billion dinars over the deletion of zeros to facilitate cash transactions in the financial markets and banks.

So 15 billion dinar after RD would have an equivalent value of ( @ 0.86 USD / dinar) = 12.9 Billion USD for 30 million popn.

Let's compare that to their neighbour

Bahrain : Popn 1.248 million. Currency ( USD equivalent) : 6.56 Billion USD

Kuwait : Popn 2.6 million ~ 23 billion USD

Saudi Arabia : 26 million ~ 206 Billion USD

UAE : 5.3 Million popn ~ 71 billion USD

Oman : 3 million popn ~ 53 billion USD

Edited February 20, 2012 by zul

[dvforumuser]

Now it's 500,000 IQD PLUS US dollars Most Iraqis are using dollar for the daily transactions.

Sure, but so what? Whatever dollars they have can be traded in for old or new dinars or used as dollars. An RD does not make the dollars change value.

so 500 dinar per person @ 0.86 ( after RD) = 430 USD....??

* Iraq working to reduce the mass of cash through the deletion of zeros

Baghdad, November 16 (Rn) – The Central Bank of Iraq on Wednesday that seeks to reduce the monetary mass of 25 trillion dinars to 15 billion dinars over the deletion of zeros to facilitate cash transactions in the financial markets and banks.

I think that is likely a typo or translation error etc. They have always talked about a 25,000 going to a 25, not a 25,000 go to at 15. So I think that is just the 2 got replaced by a 1.

So 15 billion dinar after RD would have an equivalent value of ( @ 0.86 USD / dinar) = 12.9 Billion USD for 30 million popn.

Let's compare that to their neighbour

Bahrain : Popn 1.248 million. Currency ( USD equivalent) : 6.56 Billion USD

Kuwait : Popn 2.6 million ~ 23 billion USD

Saudi Arabia : 26 million ~ 206 Billion USD

UAE : 5.3 Million popn ~ 71 billion USD

Oman : 3 million popn ~ 53 billion USD

Yea, Iraq is a poor country, they have just been through (or still are in) a war. Their economy is currently dominated by oil exports and those are pretty low. In the future that will go up and other dimension of the economy will hopefully grow. But right now they are pretty poor. Lets look at GDP (in dollars) per capita (IMF 2011 estimates http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita )

Bahrain - $23,410

Kuwait - $46,461

Saudi Arabia - $19.890

UAE - $66,625

Oman - $21,681

Iraq - $3,306

Edited February 20, 2012 by dvforumuser

[J769]

http://www.tradingeconomics.com/saudi-arabia/money-and-quasi-money-m2-as-percent-of-gdp-wb-data.html

Saudi's M2 as a percentage of GDP over the last few years has ranged from 48.5% to 70.7%.

Let's take a look at what Iraq should be at, using the same metric.

Their 2011 GDP was 170 billion according to here:

http://www.reuters.com/article/2012/02/19/us-iraq-economy-gdp-idUSTRE81I07320120219

So at the low end of the range (48.5%) they should have 82 billion USD worth of currency, at the high end they should have 120 billion.

What do they have right now? Here's their M2:

http://www.cbi.iq/documents/key%20financial.xls

69 trillion. At 1166 to 1 that's 59.1 billion USD. So AT BEST you could maybe see the value of the IQD double, that's put them at about 120 billion which is the most they should have.

But realistically, Saudi has their act together a lot better than Iraq does, so Iraqs currency really SHOULD be valued less than Saudi's, so even a 25% increase to the low end of Saudis scale (around 80 billion) is a long shot. Really Iraqs currency is probably valued right around where it should be.

[zul]

Sure, but so what? Whatever dollars they have can be traded in for old or new dinars or used as dollars. An RD does not make the dollars change value.

There are several sources that quoted 25 trillion dinar reduce to 15 billion dinar.....

How much dollars are there in Iraq..? They have been flooding the market with USD via their auctions since 2006... at an average 100 million USD per day, 5 times a week....all year round. So you think 15 billion dinar would be able to pull all those USD..? or 25 billion dinar for that matter.

I'm quite sure, after the RESTRUCTURING of the dinar....(RD/LOP or RV), CBI would only want dinar to be in their market......

[dvforumuser]

http://www.tradingeconomics.com/saudi-arabia/money-and-quasi-money-m2-as-percent-of-gdp-wb-data.html

Saudi's M2 as a percentage of GDP over the last few years has ranged from 48.5% to 70.7%.

Let's take a look at what Iraq should be at, using the same metric.

Their 2011 GDP was 170 billion according to here:

http://www.reuters.com/article/2012/02/19/us-iraq-economy-gdp-idUSTRE81I07320120219

So at the low end of the range (48.5%) they should have 82 billion USD worth of currency, at the high end they should have 120 billion.

What do they have right now? Here's their M2:

http://www.cbi.iq/documents/key%20financial.xls

69 trillion. At 1166 to 1 that's 59.1 billion USD. So AT BEST you could maybe see the value of the IQD double, that's put them at about 120 billion which is the most they should have.

But realistically, Saudi has their act together a lot better than Iraq does, so Iraqs currency really SHOULD be valued less than Saudi's, so even a 25% increase to the low end of Saudis scale (around 80 billion) is a long shot. Really Iraqs currency is probably valued right around where it should be.

Exactly. I did the same calculation a few months ago for the US, Saudi Arabia, Kuwait, and Iraq and all (including Iraq now) come out in the same order of magnitude for GDP/M2. If you figure that that ratio pertains to the value of the money supply to make the economy workable, and Iraq has a lot of dollars in their economy, then the dinar portion is valued even closer to the expected level. To keep that ratio in the workable zone, any RV would have to be compensated for by a proportional reduction in the size of the money supply. For a 10:1 RV (to about a penny) 90% of the dinars would have to be removed. That process takes time, so to keep the economy working during this reduction, dollars would have to replace them. In theory it could be done, but I see no evidence of such a dramatic shift. To RV to a dime, you'd have to remove 99% of the dinars.

[keepmwlknfny]

We cant forget about bills that would have to be exchanged for coins/fils......25 trillion to 15 billion COULD be just a rough estimate for how much physical bills would be left, not counting what they would have in coins or fils cause that might not be something that has been ironed out....

But in either case, there would be bills that wouldnt be exchanged for bills so its likely that it wouldnt be a straight 25 trillion to 25 billion physical dinar notes.....

[dvforumuser]

There are several sources that quoted 25 trillion dinar reduce to 15 billion dinar.....

Yea I agree, and I seem to recall some in the same article say 25,000 to 25. But its not that big of a difference.

How much dollars are there in Iraq..? They have been flooding the market with USD via their auctions since 2006... at an average 100 million USD per day, 5 times a week....all year round. So you think 15 billion dinar would be able to pull all those USD..? or 25 billion dinar for that matter.

I'm quite sure, after the RESTRUCTURING of the dinar....(RD/LOP or RV), CBI would only want dinar to be in their market......

Obviously 5 years of 1B dollars being sold per week has either not occurred or there has been some other compensating factor (like buying dollars back) as 250B dollars is far more dollars then the CBI has taken in from Oil (from the GOI of course). No way is there 250B dollars in Iraq's 75B dollar economy.

I'm sure the CBI indeed would like to de-dollarize. They can try to outlaw them and enforce it but easier to just make them less attractive. Note that 15 or 25 billion dinar (what is in circulation after an RD ) doesn't pull in the dollars in the economy. The dollars are traded in (if people start liking dinars better) and are replace with dinars that the CBI can print up as fast as they like.

We cant forget about bills that would have to be exchanged for coins/fils......25 trillion to 15 billion COULD be just a rough estimate for how much physical bills would be left, not counting what they would have in coins or fils cause that might not be something that has been ironed out....

But in either case, there would be bills that wouldnt be exchanged for bills so its likely that it wouldnt be a straight 25 trillion to 25 billion physical dinar notes.....

Sure I wasn't thinking that was referring to the number of notes, just the total number of dinars in the old and new money supply (M1 must be).

[keepmwlknfny]

Sure I wasn't thinking that was referring to the number of notes, just the total number of dinars in the old and new money supply (M1 must be).

Im sorry, I think I might have been confusing in how I said it.... lol I am pretty much talking about the total number of dinars that will be left, just that they might not be counting how much of those would be in the form of coins or fils....like they are saying there will be 15 billion dinar left, and they have another 10 billion in fils....you could still get 25 billion TOTAL after dropping the zeros if they do have 25 trillion....

Just throwin possible ideas out there because I have seen it say odd ball numbers before like 25 trillion to 15 billion and it has confused the crap out of me but this seems like it could be a possible answer as to why they report it as such....

[fastarnie]

View Postfastarnie, on 19 February 2012 - 09:47 PM, said:

We just have to wait and see what they'll do, cause ain't no way they're gonna tell us in these articles. Read between the lines all you want, but there will be no clues.

Right you are. This is like a Rorschach test from hell. The articles are smoke! Why do people keep knocking themselves out, doing the same thing, over and over, expecting a different result? It's an exercise in futility.

Thanks thought I would have some fun tonite. I'm done now though. Got a few laughs. People are taking this way too serious. What I don't understand is that they do so knowing they're going to lose money. Time to go back to school and take some psych. classes.

[dvforumuser]

Im sorry, I think I might have been confusing in how I said it.... lol I am pretty much talking about the total number of dinars that will be left, just that they might not be counting how much of those would be in the form of coins or fils....like they are saying there will be 15 billion dinar left, and they have another 10 billion in fils....you could still get 25 billion TOTAL after dropping the zeros if they do have 25 trillion....

Just throwin possible ideas out there because I have seen it say odd ball numbers before like 25 trillion to 15 billion and it has confused the crap out of me but this seems like it could be a possible answer as to why they report it as such....

Oh I see what you mean. Maybe. 10T dinars worth of notes of denominations less that 1,000 seems like a lot, and it would be 2/5ths of the money supply so if it was that much it seems odd not to include it. Oh well. Its annoying but doesn't change the overall argument.

View Postfastarnie, on 19 February 2012 - 09:47 PM, said:

What I don't understand is that they do so knowing they're going to lose money. Time to go back to school and take some psych. classes.

Obviously people don't get into it thinking they will lose money. That conclusion comes later as they learn more about what they got into (or at least such was the case with me, and I've read others say the same thing). Edited February 20, 2012 by dvforumuser

[MrFnHappy]

Even if you wanna call exchanging 1 to 1, old to new a redenomination, the CBI is not talking about exchanging evenly like that.....they are in fact talking about exchanging 1000 to 1...thats how they will reduce the money supply so drastically...

Wish it wasnt that way, but hopefully they are just lying about their intentions...

So your at it again, eh keep? You've got to stop making sense.

you're clueless

get a clue

you need to do your research

you live in your mom's basement

you exist on ding dongs and cheetos

you don't have a life

get a life

why are you here

you must be getting paid

the CBI is lying

the audits are qualified, no wait, the audits are un-qualified

it doesn't matter, the audits are no good...

sell your dinar

do you even HAVE any dinar?

Are you a beaten man yet, or should I go on?

[zigmeister]

So your at it again, eh keep? You've got to stop making sense.

you're clueless

get a clue

you need to do your research

you live in your mom's basement

you exist on ding dongs and cheetos

you don't have a life

get a life

why are you here

you must be getting paid

the CBI is lying

the audits are qualified, no wait, the audits are un-qualified

it doesn't matter, the audits are no good...

sell your dinar

do you even HAVE any dinar?

Are you a beaten man yet, or should I go on?

Your in a good mood Mr. Wabbit.

[MrFnHappy]

Your in a good mood Mr. Wabbit.

And why not zig, I got to open my eyes again this morning, might as well make the most of every day given to me...

Truth be told though, the sarcasm in my last post isn't without intent. Like yourself, there are those that post with stated reasoning and I can respect that even if I do think the reasoning is skewed, but those that post crap like I did in my previous post, really burn my azz.. Posts that contain nothing but derogatory and inflammatory remarks are nothing but a waste of forum bandwidth and do nothing but sidetrack honest and civilized debate.

I should add that my remarks are not driven by this thread alone.

<<<<drops the mic and jumps of the soapbox.

Edited February 21, 2012 by MrFnHappy