To educate those who feel the Iraq Dinar will LOP

[icfaith]

I have been here for years and seen those that feel Iraq Dinar will RV, then there are those that feel Iraq will LOP.

My role here today is to explain to those either new to Dinar or the oldies that have somehow got it in their heads that Iraq will LOP.

In order to explain this properly and fairly, we need to understand what a LOP actually is and the reasons necessary for a LOP to happen.

Here is a great article LINK that explains an actual LOP by Russia and Afghanistan.

Both Russia and Afghanistan are countries who have zero lopped their currency. Lets look at their situations in relation to the Iraqi Dinar and the speculation and rumors about Iraq doing a zero lop on their currency:

Afghanistan had 4 types of currency in circulation as a result of a civil war. It was unknown how much of each was in circulation. For the people and the government, this was a very difficult situation. As a result, the currency kept losing it's value. They needed something both credible and efficient to use as currency. You did not want people carrying around bags of money since everything is cash based. Their zero lop happened at the same time as they printed new currency to replace the confusing mix they had before. This ensured everyone had the same currency, there was a known amount in circulation, and people could buy and sell things with few notes.

CBI has expressed in articles that there will be up to 10 years before they felt they will have retrieved all of the 3 zero notes. Even if you held the 3 zero notes for 25 years, you will still be able to redeem them at whatever the current rate would be. The new lower denom notes are not replacing the 3 zero notes, instead they are being added to the 3 zero notes and in time the 3 zero notes will be phased out.

It has little in common to the Iraqi Dinar and the speculation about the zero lop. Iraq has already printed and established a single national currency, with secure features and knows exactly how much is in circulation. The Dinar denominations are already designed to carry high or low values without carrying around sacks of money. It makes no sense for them to change the face of the currency, when they are talking about increasing the value to fit their economic goals.

Russia performed zero lopping to their currency in 1998. They did this in response to hyperinflation and to restore confidence in their currencies structure and value. Iraq has roughly only 20% inflation. Russia also had denominations that went too high - they had denominations of 5k, 10k, 50k, 100k, and 500k - which were replaced with denominations of 5, 10, 50, 100 , and 500.

In comparison, Iraq's highest denomination is the 25k and has denominations all the way down to 25 Dinar. If Iraq did zero lopping off the structure of the bills, they would overlap denominations that already exist. This does not make sense or fit the stated goals with the Iraqi Dinar. It seems that a zero lop, or zero lopping would not occur with the denominations of the Dinar, but by increasing it's value with a revalue that would benefit their economy and their poor in a positive way.

So a country LOP's its currency due to extreme inflation (which presently Iraq is at around 8.7%) or due to having an unestablished currency (which Iraq has an established currency).

Iraq CBI has told the world in articles that the new currency and the old currency will co-exist. Best way to explain this is to think Iraq is not replacing the old currency with new currency. They are adding the lower denom notes to the current currency and over time will be removing the 3 zero notes as they raise the value of the Iraqi Dinar.

United states did the same thing and this is being modeled in the same way. United states used to have a $10,000, $5,000 and $1,000 bills. We created lower denom currency and slowly phased out the 3 zero notes.

Edited June 1, 2012 by icfaith

[aliciadogz]

Good post,It work for the United State's and it will work for Iraq.

[Marj1st]

Well stated!

[keepmwlknfny]

In order to teach people whats real and what isnt, you must understand the material first.....

Let me ask you this.....Is what Russia did practically the same thing that Turkey did??

Swapped out currencies at an uneven ratio??

Had a certain time frame for exchange?? Accepted the currency up to 10 years after the exchange time frame was over? (at least Turkey did lol)

Did you know that successful redenominations were done once hyperinflation was under control?? (Turkey was at like 10% or so)

Did you know that in these countries, both currencies existed until the exhcange period was up?? You had two different set of prices...one for old currency, one for new....

[armondtoth]

I have been here for years and seen those that feel Iraq Dinar will RV, then there are those that feel Iraq will LOP.

My role here today is to explain to those either new to Dinar or the oldies that have somehow got it in their heads that Iraq will LOP.

In order to explain this properly and fairly, we need to understand what a LOP actually is and the reasons necessary for a LOP to happen.

Here is a great article LINK that explains an actual LOP by Russia and Afghanistan.

Both Russia and Afghanistan are countries who have zero lopped their currency. Lets look at their situations in relation to the Iraqi Dinar and the speculation and rumors about Iraq doing a zero lop on their currency:

Afghanistan had 4 types of currency in circulation as a result of a civil war. It was unknown how much of each was in circulation. For the people and the government, this was a very difficult situation. As a result, the currency kept losing it's value. They needed something both credible and efficient to use as currency. You did not want people carrying around bags of money since everything is cash based. Their zero lop happened at the same time as they printed new currency to replace the confusing mix they had before. This ensured everyone had the same currency, there was a known amount in circulation, and people could buy and sell things with few notes.

CBI has expressed in articles that there will be up to 10 years before they felt they will have retrieved all of the 3 zero notes. Even if you held the 3 zero notes for 25 years, you will still be able to redeem them at whatever the current rate would be. The new lower denom notes are not replacing the 3 zero notes, instead they are being added to the 3 zero notes and in time the 3 zero notes will be phased out.

It has little in common to the Iraqi Dinar and the speculation about the zero lop. Iraq has already printed and established a single national currency, with secure features and knows exactly how much is in circulation. The Dinar denominations are already designed to carry high or low values without carrying around sacks of money. It makes no sense for them to change the face of the currency, when they are talking about increasing the value to fit their economic goals.

Russia performed zero lopping to their currency in 1998. They did this in response to hyperinflation and to restore confidence in their currencies structure and value. Iraq has roughly only 20% inflation. Russia also had denominations that went too high - they had denominations of 5k, 10k, 50k, 100k, and 500k - which were replaced with denominations of 5, 10, 50, 100 , and 500.

In comparison, Iraq's highest denomination is the 25k and has denominations all the way down to 25 Dinar. If Iraq did zero lopping off the structure of the bills, they would overlap denominations that already exist. This does not make sense or fit the stated goals with the Iraqi Dinar. It seems that a zero lop, or zero lopping would not occur with the denominations of the Dinar, but by increasing it's value with a revalue that would benefit their economy and their poor in a positive way.

So a country LOP's its currency due to extreme inflation (which presently Iraq is at around 8.7%) or due to having an unestablished currency (which Iraq has an established currency).

Iraq CBI has told the world in articles that the new currency and the old currency will co-exist. Best way to explain this is to think Iraq is not replacing the old currency with new currency. They are adding the lower denom notes to the current currency and over time will be removing the 3 zero notes as they raise the value of the Iraqi Dinar.

United states did the same thing and this is being modeled in the same way. United states used to have a $10,000, $5,000 and $1,000 bills. We created lower denom currency and slowly phased out the 3 zero notes.

Well you need to check your facts, Iraq does not have in circulation a 25 dinar note. The U.S 5,000 and 10,000 were not currency but interest bearing notes these bills were used by banks and the Federal Government for large financial transactions.

[jackster]

When did the US redenominate its currency?

Please provide link to US RD.

[icfaith]

When did the US redenominate its currency?

Please provide link to US RD.

It stopped using the larger bills in 1969. Link

Edited June 2, 2012 by icfaith

[umbertino]

Icfaith.. I think it'd be good if you could post this also in the LOP Section....It'd be material for debate ( if that's fine with you).

Dinarck and I think a couple of others cannot exit the LOP section as they are confined there so there's no chance for them to reply to your post ( which would be interesting) unless you are the one going there... Just a friendly suggestion..

[icfaith]

In order to teach people whats real and what isnt, you must understand the material first.....

Let me ask you this.....Is what Russia did practically the same thing that Turkey did??

Swapped out currencies at an uneven ratio??

Had a certain time frame for exchange?? Accepted the currency up to 10 years after the exchange time frame was over? (at least Turkey did lol)

Did you know that successful redenominations were done once hyperinflation was under control?? (Turkey was at like 10% or so)

Did you know that in these countries, both currencies existed until the exhcange period was up?? You had two different set of prices...one for old currency, one for new....

I was looking for you to come out on this.

I am all for us teaching what is real and what isn't.

Let's use your Turkey example. The reason Turkey did a redenomination was due to EXTREME inflation. Turkish currency from the late 1970s, when chronic inflation, coupled with recessions in 1994 and 1999, as well as a banking crisis in 2001, saw the old Turkish lira depreciate heavily against other currencies. In 1966 the old Turkish lira was worth nine liras for every one US dollar, for instance. By 2004, you had to pay 1,350,000 lira for the same American dollar!

And let it be noted, this was not due to a war, it was completely due to poor governmental control on their economy. Big difference!!!!!

Inflation was so bad (up to 70% at times) and the exchange rate so dire that new notes with bigger denominations had to be introduced almost every two years from 1981 to match prices.

The Guinness Book of Records ranked the Turkey lira as the world’s least valuable currency in 1995, 1996 AND 1999 through to 2004.

Finally, the Turkish government had to act. As well as putting in place a plan to tackle inflation (now standing at 10.1% at the end of 2008, predicted by the Central Bank of Turkey to be between 5.4 and 8.2% in 2009) and putting more controls into the banking sector, they also decided to reissue their currency.

Again, one of the two reasons a LOP would happen is due to EXTREME inflation. Without extreme inflation a LOP would have a reverse effect on the economy.

Iraq is no where near in a situation of extreme inflation. At present, they are not even at 9% inflation. The currency auctions are keeping this in check.

So to use Turkey as an example of Iraq LOPPING their currency is a poor example. Like comparing apples and watermelons, not even close.

Icfaith.. I think it'd be good if you could post this also in the LOP Section....It'd be material for debate ( if that's fine with you).

Dinarck and I think a couple of others cannot exit the LOP section as they are confined there so there's no chance for them to reply to your post ( which would be interesting) unless you are the one going there... Just a friendly suggestion..

If the Admin wished this to be moved to the LOP section, thats fine. I am not wanting to debate LOP actually, moreso trying to get those to understand that Iraq has no situations that would cause a LOP to be a useful tool for their economy.

If a LOP is used on a country that does not have extreme inflation it actually would assist in bringing the country into a high inflation, which is what a LOP is designed NOT to do.

Edited June 2, 2012 by icfaith

[jackster]

It stopped using the larger bills in 1969. Link

That was NOT a redenomination. The $10,000 note did not become $10. The $10,000 was taken out of circulation. The US was not giving out $10 notes for $10,000 notes. $10,000 is still $10,000. The lower denoms were not just created. The currency did not change.

Iraq's plan is to remove 3 zeros. That means if you hold a 25K note, you would bring it to the bank for a 25 IQD note. That's how the RD will work.

What Iraq might do and what the US did are NOT the same.

[icfaith]

That was NOT a redenomination. The $10,000 note did not become $10. The $10,000 was taken out of circulation. The US was not giving out $10 notes for $10,000 notes. $10,000 is still $10,000. The lower denoms were not just created. The currency did not change.

Iraq's plan is to remove 3 zeros. That means if you hold a 25K note, you would bring it to the bank for a 25 IQD note. That's how the RD will work.

What Iraq might do and what the US did are NOT the same.

Take a look at this link, and read it carefully. Pay specific attention to "He added that large denominations equivalent to around $100 would be issued to simplify major purchases, and new coins and lower denominations would be introduced for smaller transactions." ??? Smaller transactions ??? hmmm what could be bought for 1 dinar in Iraq at this present time? Absolutely nothing! Oh, thats right, they plan on increasing the value of the dinar! Cool

Then, after this, " In the longer term, Saleh said a redenomination was needed wherein three zeros will be dropped so that the 25,000-dinar banknote -- currently the largest denomination -- becomes a 25-dinar note."

They will introduce the new lower denoms and ADD these to the currency already present. Increase the value of the dinar, then, over a period of time, they will remove the 3 zero currency or redenominate.

Its not what your thinking that the will just say,

hey floks, here is new currency, trade out like we made you do in 2003. Ya got 3 months. OK, now we got all that old stuff out the way, lets make it worth 3 bucks, we screwed them ole Americans.

Sorry, this is not happening.

[keepmwlknfny]

I was looking for you to come out on this.

I am all for us teaching what is real and what isn't.

Let's use your Turkey example. The reason Turkey did a redenomination was due to EXTREME inflation. Turkish currency from the late 1970s, when chronic inflation, coupled with recessions in 1994 and 1999, as well as a banking crisis in 2001, saw the old Turkish lira depreciate heavily against other currencies. In 1966 the old Turkish lira was worth nine liras for every one US dollar, for instance. By 2004, you had to pay 1,350,000 lira for the same American dollar!

And let it be noted, this was not due to a war, it was completely due to poor governmental control on their economy. Big difference!!!!!

Inflation was so bad (up to 70% at times) and the exchange rate so dire that new notes with bigger denominations had to be introduced almost every two years from 1981 to match prices.

The Guinness Book of Records ranked the Turkey lira as the world’s least valuable currency in 1995, 1996 AND 1999 through to 2004.

Finally, the Turkish government had to act. As well as putting in place a plan to tackle inflation (now standing at 10.1% at the end of 2008, predicted by the Central Bank of Turkey to be between 5.4 and 8.2% in 2009) and putting more controls into the banking sector, they also decided to reissue their currency.

Again, one of the two reasons a LOP would happen is due to EXTREME inflation. Without extreme inflation a LOP would have a reverse effect on the economy.

Iraq is no where near in a situation of extreme inflation. At present, they are not even at 9% inflation. The currency auctions are keeping this in check.

So to use Turkey as an example of Iraq LOPPING their currency is a poor example. Like comparing apples and watermelons, not even close.

If the Admin wished this to be moved to the LOP section, thats fine. I am not wanting to debate LOP actually, moreso trying to get those to understand that Iraq has no situations that would cause a LOP to be a useful tool for their economy.

If a LOP is used on a country that does not have extreme inflation it actually would assist in bringing the country into a high inflation, which is what a LOP is designed NOT to do.

Do you know that Iraq also suffered from hyperinflation?? It doesnt matter the cause....either way it was failed monetary policies. Turkey and Iraq both suffered from hyperinflation which also caused a low purchasing power, and inflated money supply.

Turkey got their inflation under control and when they got it down to 10% they finally lopped....its not a matter of what caused the hyperinflation....its just the simple fact of it happening and the after effects of that which I listed above.

Not to mention the many articles referring to following in the footsteps of other countries that lopped and specifically naming Turkey, Romania, and Brazil....

It seems as if you are unclear still on the topic....what questions can I answer or try to answer for you??

[jackster]

Take a look at this link, and read it carefully. Pay specific attention to "He added that large denominations equivalent to around $100 would be issued to simplify major purchases, and new coins and lower denominations would be introduced for smaller transactions." ??? Smaller transactions ??? hmmm what could be bought for 1 dinar in Iraq at this present time? Absolutely nothing! Oh, thats right, they plan on increasing the value of the dinar! Cool

Then, after this, " In the longer term, Saleh said a redenomination was needed wherein three zeros will be dropped so that the 25,000-dinar banknote -- currently the largest denomination -- becomes a 25-dinar note."

They will introduce the new lower denoms and ADD these to the currency already present. Increase the value of the dinar, then, over a period of time, they will remove the 3 zero currency or redenominate.

Its not what your thinking that the will just say,

hey floks, here is new currency, trade out like we made you do in 2003. Ya got 3 months. OK, now we got all that old stuff out the way, lets make it worth 3 bucks, we screwed them ole Americans.

Sorry, this is not happening.

Restating:

"That was NOT a redenomination. The $10,000 note did not become $10. The $10,000 was taken out of circulation. The US was not giving out $10 notes for $10,000 notes. $10,000 is still $10,000. The lower denoms were not just created. The currency did not change.

Iraq's plan is to remove 3 zeros. That means if you hold a 25K note, you would bring it to the bank for a 25 IQD note. That's how the RD will work.

What Iraq might do and what the US did are NOT the same."

What part of "That (US currency) was NOT a redenomination" do you not understand?

The Iraqi government is proposing to introduce lower denoms to "replace" the higher denoms. The newer notes will be a different currency. "In the longer term, Saleh said a redenomination was needed wherein three zeros will be dropped so that the 25,000-dinar banknote -- currently the largest denomination -- becomes a 25-dinar note." The 25,000-dinar banknote becomes a 25-dinar note. They will not add to the currency already present. It will replace it.

Ask someone else here in the forum to verify this.

Edited June 2, 2012 by jackster

[strolld2]

Great Post and well stated!

[goldengoose]

'icfaith',

Good morning!

The articles, combined with your common-sense explanation is very refreshing and most definitely rebuffs the many attempts by the "hard-core' naysayers who constantly enumerate their negativity relating to this venture.

I would surely like for you to join 'forces' with the likes of 'SWFloridaGuy' and others who can articulate the process of the "Plan!"

Thank you for post!

Have a good day,

GG

[caz1104]

This thread is why it's difficult to have conersations in regards to LOP/RD vs RI/RV.Alot head strong personalities with very distinct differing opinions.

[jackster]

This thread is why it's difficult to have conersations in regards to LOP/RD vs RI/RV.Alot head strong personalities with very distinct differing opinions.

Can you be more specific?

[umbertino]

This thread is why it's difficult to have conersations in regards to LOP/RD vs RI/RV.Alot head strong personalities with very distinct differing opinions.

That's what a Forum should be about...No?

[SPRAYERDUDE]

Thanks for the excellent post icfaith +1 "Just ignore the funny walker I doubt that he's is even invested" ? possibly just an attention seeker ?

[jackster]

When did the US redenominate its currency?

Please provide link to US RD.

I got negged for asking when the US currency RDed and requested a link?

Step forward and take up the challenge. Don't hide.

Of course, I wouldn't be surprised and it would be completely understandable.

[doctor robbins]

Take a look at this link, and read it carefully. Pay specific attention to "He added that large denominations equivalent to around $100 would be issued to simplify major purchases, and new coins and lower denominations would be introduced for smaller transactions." ??? Smaller transactions ??? hmmm what could be bought for 1 dinar in Iraq at this present time? Absolutely nothing! Oh, thats right, they plan on increasing the value of the dinar! Cool

Then, after this, " In the longer term, Saleh said a redenomination was needed wherein three zeros will be dropped so that the 25,000-dinar banknote -- currently the largest denomination -- becomes a 25-dinar note."

They will introduce the new lower denoms and ADD these to the currency already present. Increase the value of the dinar, then, over a period of time, they will remove the 3 zero currency or redenominate.

Its not what your thinking that the will just say,

hey floks, here is new currency, trade out like we made you do in 2003. Ya got 3 months. OK, now we got all that old stuff out the way, lets make it worth 3 bucks, we screwed them ole Americans.

Sorry, this is not happening.

I agree it's not happening. It will take 2 years if they do it.

[Bumper64]

This has been in the general forum section for 2 days now so I am going to move it to the LOP section so that some of the people who are restricted to that section have a chance to express their thoughts on this post!

Have at it Guys and Gals!!!!!

[RRSport]

'icfaith',

Good morning!

The articles, combined with your common-sense explanation is very refreshing and most definitely rebuffs the many attempts by the "hard-core' naysayers who constantly enumerate their negativity relating to this venture.

I would surely like for you to join 'forces' with the likes of 'SWFloridaGuy' and others who can articulate the process of the "Plan!"

Thank you for post!

Have a good day,

GG

You're kidding right?

That was a satirical post I hope.

[jackster]

icfaith, where is your evidence that the US RD'd. What? Can't find it? Yea, I thought as much.

Again, getting rid of the higher denoms is NOT an RD. A $100 bill is still worth $100. Nothing changed. NO US dollar RD.

[caz1104]

That's what a Forum should be about...No?

Not necessarily,but hey some enjoy the name calling & the talking down to that some here engage in. But to each his/her own,for me it's not enjoyable and detracts from the reason I come here. And just like everyone else I have the option of not participating,and I find myself doing such less & less.

Not necessarily,but hey some enjoy the name calling & the talking down to that some here engage in. But to each his/her own,for me it's not enjoyable and detracts from the reason I come here. And just like everyone else I have the option of not participating,and I find myself doing such less & less. My bad I see this has been moved to the dreaded LOP section,if I had seen that first I would not have responded-disregard