UPDATE: Iraq Ctrl Bank Plans To Rebase Dinar; No Time Fixed Yet

[TexaSwa]

Rebase is another term for what some of you like to call "lop".

[brettr11]

a buck seventeen is a good opening amount for me! Thanks fo da info.

[kk4jl@home]

Is this article from Sept. 2008?

[JBrookes]

UPDATE: Iraq Ctrl Bank Plans To Rebase Dinar; No Time Fixed Yet

rocky Today at 7:38 am

UPDATE: Iraq Ctrl Bank Plans To Rebase Dinar; No Time Fixed Yet

Monday, Mar 15, 2010

(Adds more quotes, details.)

By Hassan Hafidh

Of DOW JONES NEWSWIRES

AMMAN (Dow Jones)--The Central Bank of IraqCentral Bank of Iraq is planning to rebase the Iraqi dinar but hasn't decided yet on the timing of the move, the bank said in a statement Monday.

"The Central BankCentral Bank affirms its commitment to its strategic projects, particularly knocking three zeroes from the Iraqi dinar," the statement said.

http://www.zawya.com/marketing.cfm?zi&p=/Story.cfm/sidZW20100315000097/iq/ Ctrl Bank Plans To Rebase Dinar?cc

"Despite the technical and logistical preparations for the project we have yet to decide on suitable timing to implement the project," it said. Choosing a suitable time wouldn't be linked to economic aspects only, but rather to the security situation as well, it added.

Separately, the bank's senior advisor Mudher Qasim told Dow Jones Newswires that knocking off the three zeroes would improve the value of the Iraqi dinar which is trading Monday IQD1,170 against one US dollar.

If the rebase decision is taken it means a current 25,000 Iraqi dinar banknote will become IQD25, and a dollar will equal only 1.17 dinars.

The bank said that knocking off three zeroes from the dinar would "improve management of the currency and facilitate cash dealing." The decision was the result of debate with the economic commission at the Iraqi cabinet, it added.

Currency rebasings are usually monetarily neutral and are introduced to make commercial calculations easier and cheaper. Turkey, for example, knocked six zeroes off its lira currency in 2005. Russia did the same for its currency.

Qasim said one of the reasons for rebasing the Iraqi dinar is because the bank has managed to reduce the country's high rate of inflation. The inflation rate fell to 6.1% in December 2009 from a record high of 60% in late 2006.

In July 2004, the now dissolved U.S. civilian authority in Iraq decided to print the current Iraqi banknotes replacing those that used to bear the picture of the former Iraqi leader Saddam Hussein. Iraqis then had three months to swap their old dinars with the new ones.

The central bank's advisor said that if the project was implemented the central bank would need to print new banknotes.

- By Hassan Hafidh; Dow Jones Newswires; +962 799 831 831; hassan.hafidh@dowjones.com

Copyright © 2010 Dow Jones & Co.

(END) Dow Jones Newswires

15-03-10 1036GMT

I'm confused though... This article says they are talking about taking the 3 zeros off the dinar.....not the value. Which yes would mean they would have to reprint the bills but it states that a 25000 would equal 25.....Any one clear this up for me?

[ClydeDriver]

Sooo... if after this is all said and done... and IF the lopsters end up being right... who is going to have the guts to post they were wrong and the lopsters were right?

Sorry folks, but I'm starting to buy into this whole lop theory. Better hope for a post-lop rate of $2+ or after fees and taxes we aren't going to make much... Remember, even if they lop, and say they RV at $3, the average Iraqi will triple his money... how happy would you be if the USD suddenly tripled in value? If they lop, the GOI didn't 'screw us' out of anything. They are simply following the rules set down for them by the IMF, WB, and UN for establishing a legitimate monetary policy. That means they had to start with monopoly money, and prove they could manage it. Thus the high denoms. This is how I see it happening.

Lop of all currency (physical and electronic). This covers bank accounts, electronic holdings by foriegn govts., etc. For us, and Joe Iraqi, it means a 25K dinar note becomes 25. If you have 10,000,000 dinar in the bank, it becomes 10,000 dinar. All current currency in circulation becomes the 'old' currency. They release the new currency (low denoms) and RV the value of this new Dinar against the dollar. The new currency (low denoms) become the standard currency of Iraq, complete with new value that is on par with other currencies in the Gulf. Now for everyone that thinks this will cause anarchy in Iraq... not so fast. It all depends on the new rate. Example as follows:

Currently: 25,000 Dinar note is worth $21.50 USD.

Lop: 25,000 Dinar note is equal to 25 Dinar note, and BOTH are worth $.02 USD. New currency (low denoms) is released.

RV: Assume a rate of $3.00.

25,000/25 Dinar note is now worth $64.50 USD.

Joe Iraqi is happy because he tripled the value of his savings/money in pocket. GOI is happy because they now have a tradeable currency that has value on the international economic front. And they did it without going broke. The problem for us is if the new rate comes in at only 1:1 or a little over, and they reqire all the large denoms to be turned in before the rate moves up to where it should be. At that rate we lose money on the exchange.

Let's not blame the GOI for the slick marketing campaign by currency traders and exchange sites that encouraged us to come to our own conclusions... I fell for it too. Nobody outright lied to me about the potential of this investment... but they did dangle some info out there that would lead me to conclude that I could make millions off of only a few thousand dollars... and neglected to mention a few things that would have made me a bit more cautious (like 4.5 trillion in physical paper currency in circulation alone).

This is the only feasable way we will ever see a $3+ RV. And this is why I only invested what I could afford to lose... lol...

I will make this promise. If I am wrong, I will come on this board and admit it... enthusiastically. And you guys can throw bricks at me all day... because I won't feel a thing. I can admit I was wrong and I'll eat my crow... all the way to the bank... 'cuz I'll be rich just like you. But... If I'm right... who is going to have the guts to come on here and say they were wrong? Hmmmm?

[ClydeDriver]

I'm confused though... This article says they are talking about taking the 3 zeros off the dinar.....not the value. Which yes would mean they would have to reprint the bills but it states that a 25000 would equal 25.....Any one clear this up for me?

The lower denom dinar notes are already printed. They were printed at or around the same time the current larger denoms were printed. They are currently being held back as they have no value until the RV happens. And, if the lop theory holds... they don't want someone exchanging all the current large denoms for small denoms in an attempt to avoid the lop...

[Rickybobby]

Did you notice this in the article:

Separately, the bank's senior advisor Mudher Qasim told Dow Jones Newswires that knocking off the three zeroes would improve the

value of the Iraqi dinar which is trading Monday IQD1,170 against one US dollar.

If the rebase decision is taken it means a current 25,000 Iraqi dinar banknote will become IQD25, and a dollar will equal only 1.17 dinars.

That is the reporters opinion. There isn't a quote that the interviewee stated that. My point is the reporter may have no clue to understanding this and clearly went off a similar article that Chief V pointed out. He is making an assumption I believe. The word separately could mean something entirely different than the way it was written. Especially when it talks about improving the value of the dinar.

Removing the 3 zeros by re-denominating the currency is (or can be) a mutually exclusive event from removing 3 zeros from the exchange rate. They are separate bodies but commonly linked together to the confusion of everyone. The CBI is using a float rate mechanism right now which is controlling the currency value for numerous reasons. I believe they want to keep that control to build their reserve to a comfortable level so that they can RV and peg it to the US dollar as another float, and then eventually to trade openly on the international exchange market. CBI is under a lot of pressure. The first was to make themselves transparent and independent from the GOI. Done. The second was to reign in inflation and build up reserves. Done. The third is to make the currency tradeable by becoming internationally recognized. In the works. That is basically the RV we are waiting for. It will occur before re-denomination/re-basing/lopping because Iraq needs to open up trade markets in order to facilitate rebuilding and growth for the people amongst other things. The unemployment rate in Iraq is around 40%... I read somewhere. How on Earth is simply re-basing going to help value as the interviewee suggests without an RV or even a second RV beforehand? That wouldn't help the people other than in using smaller bills in daily commerce.

If one dollar equals 1.17 dinars and I have 25,000 dinars, that sounds a lot like $29,250 usd.

[JBrookes]

The lower denom dinar notes are already printed. They were printed at or around the same time the current larger denoms were printed. They are currently being held back as they have no value until the RV happens. And, if the lop theory holds... they don't want someone exchanging all the current large denoms for small denoms in an attempt to avoid the lop...

Which is what we would do. Thank you very much!

[mrparrot]

...or convert to the smaller denominations and wash even and wait for an RV. (We would wash out even if they gave us ONE 25IQD for each 25,000IQD as they are the same in value.)

You can't wash even.

You're forgetting the fees charged by the brokers.

No broker is going to let you just swap your Dinar.

They might buy back your large bills and let you order

smaller ones, charging you the additional shipping it costs

to move the larger quantity of smaller bills.

Just remember, and it's been said here before,

the brokers are the only ones that have made any

money up to this point.

[ClydeDriver]

You can't wash even.

You're forgetting the fees charged by the brokers.

No broker is going to let you just swap your Dinar.

They might buy back your large bills and let you order

smaller ones, charging you the additional shipping it costs

to move the larger quantity of smaller bills.

Just remember, and it's been said here before,

the brokers are the only ones that have made any

money up to this point.

Exactly... don't forget one broker is going to charge $150 per million dinar, plus a spread... which will still be lower than what most banks will charge you (6-8%). Gee... almost like he anticipated the possibility of a lop... thus why the per million fee instead of just a straight spread %... We would probably need a rate of at least 1.30:1 to just break even... under the lop theory anyway...

[Cherysh]

I'm confused though... This article says they are talking about taking the 3 zeros off the dinar.....not the value. Which yes would mean they would have to reprint the bills but it states that a 25000 would equal 25.....Any one clear this up for me?

I want to know also, my understanding was that no matter, you have the original starting amount (ie....1 mill) only would have to trade in for smaller bills. If that is not true, I might as well turn in my dinar and at least make a profit of $400.00.

[Cherysh]

I think alot of people and government investors would be pretty "more than" upset if this were to be true.

[Cherysh]

Sooo... if after this is all said and done... and IF the lopsters end up being right... who is going to have the guts to post they were wrong and the lopsters were right?

Sorry folks, but I'm starting to buy into this whole lop theory. Better hope for a post-lop rate of $2+ or after fees and taxes we aren't going to make much... Remember, even if they lop, and say they RV at $3, the average Iraqi will triple his money... how happy would you be if the USD suddenly tripled in value? If they lop, the GOI didn't 'screw us' out of anything. They are simply following the rules set down for them by the IMF, WB, and UN for establishing a legitimate monetary policy. That means they had to start with monopoly money, and prove they could manage it. Thus the high denoms. This is how I see it happening.

Lop of all currency (physical and electronic). This covers bank accounts, electronic holdings by foriegn govts., etc. For us, and Joe Iraqi, it means a 25K dinar note becomes 25. If you have 10,000,000 dinar in the bank, it becomes 10,000 dinar. All current currency in circulation becomes the 'old' currency. They release the new currency (low denoms) and RV the value of this new Dinar against the dollar. The new currency (low denoms) become the standard currency of Iraq, complete with new value that is on par with other currencies in the Gulf. Now for everyone that thinks this will cause anarchy in Iraq... not so fast. It all depends on the new rate. Example as follows:

Currently: 25,000 Dinar note is worth $21.50 USD.

Lop: 25,000 Dinar note is equal to 25 Dinar note, and BOTH are worth $.02 USD. New currency (low denoms) is released.

RV: Assume a rate of $3.00.

25,000/25 Dinar note is now worth $64.50 USD.

Joe Iraqi is happy because he tripled the value of his savings/money in pocket. GOI is happy because they now have a tradeable currency that has value on the international economic front. And they did it without going broke. The problem for us is if the new rate comes in at only 1:1 or a little over, and they reqire all the large denoms to be turned in before the rate moves up to where it should be. At that rate we lose money on the exchange.

Let's not blame the GOI for the slick marketing campaign by currency traders and exchange sites that encouraged us to come to our own conclusions... I fell for it too. Nobody outright lied to me about the potential of this investment... but they did dangle some info out there that would lead me to conclude that I could make millions off of only a few thousand dollars... and neglected to mention a few things that would have made me a bit more cautious (like 4.5 trillion in physical paper currency in circulation alone).

This is the only feasable way we will ever see a $3+ RV. And this is why I only invested what I could afford to lose... lol...

I will make this promise. If I am wrong, I will come on this board and admit it... enthusiastically. And you guys can throw bricks at me all day... because I won't feel a thing. I can admit I was wrong and I'll eat my crow... all the way to the bank... 'cuz I'll be rich just like you. But... If I'm right... who is going to have the guts to come on here and say they were wrong? Hmmmm?

I will pray that your wrong, and anyone else is wrong. I think alot of people all over the world banked on this investment...including government entities, I would hope and I actually think that Iraq is not willing to say 'SCREW THE WORLD" on this one... as usual, I could be wrong.

[brothers4751]

I don't think that the Iraqi's would allow this without a riot.

[Teresa82]

Yeah, it really has to be a win/win for everybody involved, or it is not to Iraq's advantage. The US isn't going to take a hit on what they have invested in it, and neither is China! The people of Iraq have nothing, so they have nothing to lose, but if Iraq rv's too low then they don't have the funds they have to have for paybacks...am I wrong? They would have the $ eventually, but they have to pay back NOW! so now is the time they must make some sort of a decision, that doesn't cause complete uproar with the other countries involved who are invested in them. I'm sure US had EVERY intention of being paid back for this war based on what they know about the wealth of Iraq.Should I be so bold as to say.....They had deeper motives than just getting RID of SADAM???? Are you kidding me? They want the MONEY! That's what power runs on.......We help you, you give us your money!

[Teresa82]

not that I'm saying we have a corrupt government or anything!

[ClydeDriver]

I will pray that your wrong, and anyone else is wrong. I think alot of people all over the world banked on this investment...including government entities, I would hope and I actually think that Iraq is not willing to say 'SCREW THE WORLD" on this one... as usual, I could be wrong.

Um... how are they 'screwing the world' if everyone triples their investment? They will only screw the world and thus, themselves, if the post lop RV is too low... like around 1:1... if they lop they can then justify an RV closer to what they want, which is around Kuwait's rate. So if they DO indeed RV at close to that... say 3:1... nobody is getting screwed. I don't remember seeing a sales pitch from the GOI stating we'd make millions tomorrow if we invest thousands today. There isn't enough oil in the entire Gulf region to justify the 10s of trillions in USD we are talking about if they don't lop, debase, devalue, (whatever you want to call it) the current Dinar and try to RV at just 1:1. You people realize that just one trillion is a million million, right? And estimates of the amount of physical and digital dinar floating around vary from between 10 and 30 trillion, right? Iraq is a country of 30 million people, with a current GDP of around 70 billion... Saudi Arabia's GDP is probably the best in the region, and it is around 370 billion... and they have an established economy with a fully functional infrastructure!

[FDyer]

ClydeDriver,Actually, your posts here make a lot of sense.* If they are correct I am disappointed!!* I am new to this, so learning the different scenarios.* I hope you are wrong...but.....I have a feeling you may right on target. * Thanks for your insight.

[BRANDON43]

I am not really sure how creditable this site is be here is the link and what is posted yesterday....

Monday, Mar 15, 2010

(Adds more quotes, details.)

By Hassan Hafidh

Of DOW JONES NEWSWIRES

AMMAN (Dow Jones)--The Central Bank of Iraq is planning to rebase the Iraqi dinar but hasn't decided yet on the timing of the move, the bank said in a statement Monday.

"The Central Bank affirms its commitment to its strategic projects, particularly knocking three zeroes from the Iraqi dinar," the statement said.

"Despite the technical and logistical preparations for the project we have yet to decide on suitable timing to implement the project," it said. Choosing a suitable time wouldn't be linked to economic aspects only, but rather to the security situation as well, it added.

Separately, the bank's senior advisor Mudher Qasim told Dow Jones Newswires that knocking off the three zeroes would improve the value of the Iraqi dinar which is trading Monday IQD1,170 against one US dollar.

If the rebase decision is taken it means a current 25,000 Iraqi dinar banknote will become IQD25, and a dollar will equal only 1.17 dinars.

The bank said that knocking off three zeroes from the dinar would "improve management of the currency and facilitate cash dealing." The decision was the result of debate with the economic commission at the Iraqi cabinet, it added.

Currency rebasings are usually monetarily neutral and are introduced to make commercial calculations easier and cheaper. Turkey, for example, knocked six zeroes off its lira currency in 2005. Russia did the same for its currency.

Qasim said one of the reasons for rebasing the Iraqi dinar is because the bank has managed to reduce the country's high rate of inflation. The inflation rate fell to 6.1% in December 2009 from a record high of 60% in late 2006.

In July 2004, the now dissolved U.S. civilian authority in Iraq decided to print the current Iraqi banknotes replacing those that used to bear the picture of the former Iraqi leader Saddam Hussein. Iraqis then had three months to swap their old dinars with the new ones.

The central bank's advisor said that if the project was implemented the central bank would need to print new banknotes.

- By Hassan Hafidh; Dow Jones Newswires; +962 799 831 831; hassan.hafidh@dowjones.com

Copyright © 2010 Dow Jones & Co.

(END) Dow Jones Newswires

15-03-10 1036GMT

Any thoughts!!!!!!

http://www.zawya.com/Story.cfm/sidZW20100315000097/Iraq%20Ctrl%20Bank%20Plans%20To%20Rebase%20Dinar%3B%20No%20Time%20Fixed%20Yet

[houpster]

well we will just have to wait and wait and wait some more! surprise surprise!

[TexaSwa]

Dow Jones owns many media outlets, such as: The Wall Street Journal, Market Watch, Barron's...

But hey, some guy called Ali the other day and he swore it wasn't true. And I cant think of any dog he has in the hunt.

[NotReallyTex]

Sooo... if after this is all said and done... and IF the lopsters end up being right... who is going to have the guts to post they were wrong and the lopsters were right?

Sorry folks, but I'm starting to buy into this whole lop theory. Better hope for a post-lop rate of $2+ or after fees and taxes we aren't going to make much... Remember, even if they lop, and say they RV at $3, the average Iraqi will triple his money... how happy would you be if the USD suddenly tripled in value? If they lop, the GOI didn't 'screw us' out of anything. They are simply following the rules set down for them by the IMF, WB, and UN for establishing a legitimate monetary policy. That means they had to start with monopoly money, and prove they could manage it. Thus the high denoms. This is how I see it happening.

Lop of all currency (physical and electronic). This covers bank accounts, electronic holdings by foriegn govts., etc. For us, and Joe Iraqi, it means a 25K dinar note becomes 25. If you have 10,000,000 dinar in the bank, it becomes 10,000 dinar. All current currency in circulation becomes the 'old' currency. They release the new currency (low denoms) and RV the value of this new Dinar against the dollar. The new currency (low denoms) become the standard currency of Iraq, complete with new value that is on par with other currencies in the Gulf. Now for everyone that thinks this will cause anarchy in Iraq... not so fast. It all depends on the new rate. Example as follows:

Currently: 25,000 Dinar note is worth $21.50 USD.

Lop: 25,000 Dinar note is equal to 25 Dinar note, and BOTH are worth $.02 USD. New currency (low denoms) is released.

RV: Assume a rate of $3.00.

25,000/25 Dinar note is now worth $64.50 USD.

Joe Iraqi is happy because he tripled the value of his savings/money in pocket. GOI is happy because they now have a tradeable currency that has value on the international economic front. And they did it without going broke. The problem for us is if the new rate comes in at only 1:1 or a little over, and they reqire all the large denoms to be turned in before the rate moves up to where it should be. At that rate we lose money on the exchange.

Let's not blame the GOI for the slick marketing campaign by currency traders and exchange sites that encouraged us to come to our own conclusions... I fell for it too. Nobody outright lied to me about the potential of this investment... but they did dangle some info out there that would lead me to conclude that I could make millions off of only a few thousand dollars... and neglected to mention a few things that would have made me a bit more cautious (like 4.5 trillion in physical paper currency in circulation alone).

This is the only feasable way we will ever see a $3+ RV. And this is why I only invested what I could afford to lose... lol...

I will make this promise. If I am wrong, I will come on this board and admit it... enthusiastically. And you guys can throw bricks at me all day... because I won't feel a thing. I can admit I was wrong and I'll eat my crow... all the way to the bank... 'cuz I'll be rich just like you. But... If I'm right... who is going to have the guts to come on here and say they were wrong? Hmmmm?

Stop making sense will ya

[jaq]

Sadly, ClydeDriver, you have nailed it on the head. That said, I still make a nice lil profit and no crocodile tears from me... Plan for the worst, Hope for the best!

[calguy]

Dow Jones owns many media outlets, such as: The Wall Street Journal, Market Watch, Barron's...

But hey, some guy called Ali the other day and he swore it wasn't true. And I cant think of any dog he has in the hunt.

http://en.wikipedia.org/wiki/The_Wall_Street_Journal

http://en.wikipedia.org/wiki/News_Corporation

Which in turn is owned or run by ..... http://en.wikipedia.org/wiki/Rupert_Murdoch

[gman51]

Oh well, it was nice to dream for a while. You know the old saying,"If it sounds too good to be true, it usually is".