Correct me if I'm wrong.

[Think about it]

Wouldnt the more that people cash-in, the faster the rate would began to go down? It seems like the more IQD that was being turned in, that the rate would drop quick. Although the IQD would be set at a certain amount, Banks would not buy even close to that amount because of the flow of IQD coming in. Just an honest question. I would like some other thoughts on this.

[speculator2]

Banks make their profit on the exchange spread. If the exchange can support a wider spread between the sell price and the buy price then the banks make money regardless of the actual value of the currency.

[securityguy]

Your comment is indeed one of the arguments for a lower initial RV. If they start low, some will cash in low,at least a portion of there holdings. For every Dinar they can get cashed in at say .10 they are money ahead compared to a high initial RV rate of say 1:1. Yes, in my openion, 1:1 is a high initial rate. What the true value of the Dinar is, is very much based on how strong their economy is. That, to me is why we will not see the true value of the Dinar for at least some time after the initial RV.

Kind of like when you go to a bank for a loan. If you can prove a strong financial history with good assets, you are a better risk for a loan and the amount you can barrow will be greater. JMO

[Think about it]

Your comment is indeed one of the arguments for a lower initial RV. If they start low, some will cash in low,at least a portion of there holdings. For every Dinar they can get cashed in at say .10 they are money ahead compared to a high initial RV rate of say 1:1. Yes, in my openion, 1:1 is a high initial rate. What the true value of the Dinar is, is very much based on how strong their economy is. That, to me is why we will not see the true value of the Dinar for at least some time after the initial RV.

Kind of like when you go to a bank for a loan. If you can prove a strong financial history with good assets, you are a better risk for a loan and the amount you can barrow will be greater. JMO

So you do not think supply and demand would come into effect? Just courious.

[easyrider]

Your comment is indeed one of the arguments for a lower initial RV. If they start low, some will cash in low,at least a portion of there holdings. For every Dinar they can get cashed in at say .10 they are money ahead compared to a high initial RV rate of say 1:1. Yes, in my openion, 1:1 is a high initial rate. What the true value of the Dinar is, is very much based on how strong their economy is. That, to me is why we will not see the true value of the Dinar for at least some time after the initial RV.

Kind of like when you go to a bank for a loan. If you can prove a strong financial history with good assets, you are a better risk for a loan and the amount you can barrow will be greater. JMO

I believe they could have Rved at .10 but they have waited far too long and they have came out and even said numerous times to be at par with the USD when the new currency is introduced. Well here we are, 6 months left of the year and they have stated they are introducing gradually the lower denominations in september so if they RV. @ .10 in june or july they would indeed need to RV again by the time they introduce the lower notes in september. This is why i think they will come out at .86-1.17 plus not nly that they are pumping more oil as well.

Edited May 23, 2012 by easyrider

[Think about it]

I believe they could have Rved at .10 but they have waited far too long and they have came out and even said numerous times to be at par with the USD when the new currency is introduced. Well here we are, 6 months left of the year and they have stated they are introducing gradually the lower denominations in september so if they RV. @ .10 in june or july they would indeed need to RV again by the time they introduce the lower notes in september. This is why i think they will come out at .86-1.17 plus not nly that they are pumping more oil as well.

I understand they can come out with any rate, my quetion is, I guess the buy back rate with so many people cashing in could it not go way down and quick?

[welcome007]

I believe they could have Rved at .10 but they have waited far too long and they have came out and even said numerous times to be at par with the USD when the new currency is introduced. Well here we are, 6 months left of the year and they have stated they are introducing gradually the lower denominations in september so if they RV. @ .10 in june or july they would indeed need to RV again by the time they introduce the lower notes in september. This is why i think they will come out at .86-1.17 plus not nly that they are pumping more oil as well.

but, that would call for double dipping

[one2one]

only a small number of people in my area even own dinar--or ever heard of it :

[securityguy]

Think about it: Yes, I do believe that supply and demand does come into the picture. That is why I believe the value will go no where but up. But also, I believe the value increases will be, at least for awhile, a managed float. If that is the case, supply and demand will be somewhat choked down by the control. I really should not say,"Supply and Demand will be choked down", I should say "the effects of supply and demand" will keep the increase choked back some. This whole process is going to be controled very carefully. They only have one chance to get it right and I believe they will errior on the side of caution. As for a .10 or a 1:1 rate, I only intended to use them as examples. I stand by my statement that a 1:1 RV is high for an INITIAL Rate. I to have a strong gut feeling for the .86 initial rate. Only time will tell, and as someone else said, the longer the RV is delayed, it seems that a higher rate is needed to make everything work.

[securityguy]

Think about it: I am sorry. I misunderstood your question. Now I understand what you ment by the banks offering less(a greater spread as the demand grows higher for cash in). My feelings on that are mixed. I am with you in the sense that the banks are not above scr.wing us out of all they can. Any way they can find and get away with it the will. On the other hand, they realize this cash in is going to be a short lived thing. The competation for he best spread rates is going to be fierce. If I were a bank president, my method would be to be as competative on the spread as possible and draw as many customers in as possible. At the same time I would be offering even better spreads for those who were considering long term deposits in my bank. There is definatelly different schools of thought.

[magawatt]

From what I've gleaned from this forum, we "little people" may only possess a small potion of the outstanding dinar and most of the dinar outside of Iraq may reside in national treasuries held as a reserve currency. So perhaps the tidalwave of cashing in will be more a ripple.

[eLemonator]

supply and demand will not come into it, the IQD held as investment will end up in the central bank of your country! IMO it will never make it back to Iraq, it will be a world reserve. also about the spread, IMF regulations say that a world currency must be within 15% of the issuing central banks rate, anywhere in the world. no bank or dealer can have more then a 15% spread from CBI's rate!

[securityguy]

No spread greater than 15%.....I have never heard that before. I recall Adam making the comment that the spread could be as high as 25% I hope you are correct.Now if we can keep the taxes below 15% maybe we can walk away with some money here.