Non lopsters...look here!

[Teresa82]

hm! makes some sense! what do you think fdyer. Be some pretty ****** off peeps over there!

[Kent]

Kent thanks for the info but I dont see how my 1st description was inaccurate, seems to me it's exactly what this brochure describes. I put the 2nd scenario because a lot people think thats what will happen. I still dont see how this would apply to Iraq, this looks like they would have to re-do the entire structure all over again but i think your point was it happens and you proved it.

Considering the dinar is a brand new currency this makes no sense for Iraq, thats not my dinar investor opinion thats my logical opinion. With the amount of investments in Iraq I don't see how that would a good thing for anyone. I'm still trying to grasp the idea of removing three zeros and how it affects exports and imports..... my head hurts now

Since you said "WTF would they would do that", I wasn't sure that you also understood that the prices and payroll change at the same time. We agree about what you said, I jumped to a conclusion about what you didn't say (sorry).

Since countries reprint paper money all the time to replace bills that only last a few years on average, changing plates and printing the new currency isn't quite as big a deal as people make it out to be. Lets face it. The reason people think of it as wallpaper money is because there is so much of it out there. The redenomination maintains the outstanding market value but drastically reduces the nominal (face) value that is out there. It puts them pretty close to 1 dinar being worth 1 dollar. You have to admit that sounds more credible.

Don't get me wrong, I have no reason to convince you differently, but answering your question about imports and exports, the idea is that 1). they get a more credible currency to trade with and 2). since the initial exchange rate changes in proportion to the redenomination, it has no practical effect on international trade at all.

The mind bender for me is the economic ramifications of declaring an increase in money supply x1000 overnight and how that would affect trade. That is far more complicated, but I hope my mind gets "bent".

[bootsintaji]

Thanks guys for taking the time to respond to my post. Kent, I will try screening through Enorrsete's comments for any ideas. Again, the responses are appreciated. Obviously no one knows what this thing will do for sure, we would be fools to expect that. I do not plan on dumping my dinar, either way. It is funny how some seem so afraid to look at another scenario, that they go to extremes. I mean, I don't have my gas money wrapped up in dinar. LOL...Seriously? Anyway...part of the fun of this whole situation is analyzing the info and seeing what we come up with right? Well, that is just me. But, I guess even with your head in the sand your gonna know if it kicks you in the A** so to each their own. All in good fun guys.

When i ask Iraqis to explain whats going to happen, they pretty much explain a LOP. Most are not sure about how many 0's will be dropped, but i always hear dropping some 0's and then revaluing from the Iraqis.

[john1025]

Fdyer, IMO, and believe me, I'm in the minority, the consistant information that has come out supports redenomination of the notes. taking your 25000 and making it 25. To do this and keep the same buying power for the Iraqi's they will have to rv- revalue at the same time. using the rate of the day it would probably be 1.17. so if you have 1 mi dinar now, it would become 1000. and 1000 x1.17 would be 1170.00 Us. Giving you a profit of $170.00. Now it is my belief that this is what will happen. Now, when this is done, allowing 90 days for exchanging the large notes or cashing in, the currency will be tradeable on the forex and be allowed to float on the exchange market. the float will decide what the currency is worth. It is concievable that it could then go up to the 3+ range, doubtful but concievable. I expect it will top out about 1.50 or so.

Anyway, no one knows what's going to happen and the people who won't even listen to another theory are probably over extended in their purchase. Good Luck, I would love a straight RV, but I don't think it's going to happen.

[john1025]

LMAO at you. Look, either get yourself a new calculator or go back to school to learn what you are dealing with. and a little math wouldn't hurt either. We were asked for our opinion. I gave mine. If you don't like my opinion that's your choice, but this continual bashing is tasteless and shows just how little you know, Grow up.

[ran36perry]

I'm new here too. And the last thing I want is to see a lop! I've only had my dinars for about six months and I've dreamed dreams of the good life day after day waiting for them to RV. Now this comes up wow I was depressed!! then I talked to a good friend of mine that shad a little light on this whole lop theory! He asked my what my plans were to cash in my dinars once they RV? I said " run to the bank and cash them in of coarse!" What bank? Well my bank!! Wrong!! My bank doesn't do foreign currency exchange and few do dinars and the ones that do that Ive called will only do $10,000 a day! Oh crap!! How many times will I have to go to the bank to cash in 10,000,000? Do the math! So I opened an account in Iraq at my friends suggestion! Now back to the lop! How would a lop affect me if I dont have any Dinars in hand??? It wouldn't!!! My money is in a bank! are they going to take my money that they have invested other places and devalue it? that would only hurt themselves! No !! their going to say thankyou for investing in Iraq! and I'm going to say your welcome as I transfer it to my account here!!! Just something to think about!

[nikkibomber]

Personally I'm not buying the LOP idea. They're not going to LOP for fear of paying us off. Look, they currently have the 25% reserves necessary to cover us "independent investors" & then some. If you were to sell your dinar back pre RV, it would be bought back at current value out of their reserves. If they RV at "for current discussion purpose let's say 1 to 1", their current reserves also increase in value at the same rate ours do. Having said that; if we all cash in now or after a nonlop RV the cost to them is the same either way. The real thing to look at, from their point of view that is, which kind of RV helps their country the most. IMO a non LOP RV gives them far more flexibility in the worlds economy then a LOP RV does.

[FDyer]

Kreativity28,

Obviously you are ticked off to say the least. Why don't you relax a little, have a margarita, dance naked in the bathroom mirror? If some of our opinions or questions bother you SOOOO badly that you lose it or have to be insulting, my advice to you would be....hmmm...ignore us??

Your snippy remarks and put out attitude (that could use a little adjustment), I would say, is probably just as annoying to deal with as us newbies. Well, I put my big girl panties on, I can deal with it... Can you?? I mean we put up with your "rudeness" and impatience when instead you could SIMPLY chose to move on to another thread....

Hopefully you are right concerning the RV. It would make all of us a lot happier....sounds like you need something to smile about. Maybe you r just having a bad week....if that's the case, you're not the only one and I'd be the first to buy you a drink. Cheers!

Now that is just my 2 dinar (oh, wait, that ain't worth **** right now).

[drox]

Hello,

And on going back to school, you might want to go back and learn the difference between NOMINAL VALUES and EXCHANGE RATE QUOTATIONS because you clearly are confused big guy. You cannot change a NOMINAL VALUE and expect it to affect the EXCHANGE RATE QUOTATION I don't care what any article says because I have my own brain. Let me ask you one question...."Does Iraq Have Weapons of Mass destruction?". How many articles said that they did ? Use your own brain in situations like the one we are clearly in. Another thing to think about, If we declared war on "terroism" and Bin Laden, how the **** did we end up in Iraq. How many people in the know told us we would be in Iraq ? Because it was marketed in newspapers or top shelf magazines that it was a war on TERROISM nobody thought twice about. Last Question, "How is the guy(who is on a dialysis machine) who is reponsible for killing everyone in the buildings on 9/11 still alive while the guy in Iraq ended up dead in a war targeted at Bin Laden and TERROISM ?

Not interested in a fight and I don't consider myself in lop camp necessarily either. Truth is we don't know what for sure is going to happen so it is good to address all angles.

I am up for a good debate though. You mention your exchange rate quotation often and I applaud you that you have a self derived theory. I am well aware you feel it is bulletproof. It is certainly one of many plausible options. My question for you. I understand nominal rate vs. real rate. Nominal rate is the face number you see and the real rate prices in inflation and other factors and is basically the moving number. Kind of like watching the stock exchange ticker. So that is basically your exchange rate quotation I believe. So in order for the CBI to use your number in your scenario which was .83, are you suggesting it will be traded on an international exchange first in order to use that number? If it is a real value then it will be constantly moving, so how would that be able to be stationary target at anytime unless it was a peg or a new float rate set by the CBI. I could see that the CBI could use it as a reference to target a potential value for an RV but your suggestion of how it will be used doesn't make sense to me. I suggest it must have an RV number assigned before an exchange rate quotation could be used. Your thoughts?

[gtrstringer]

Iraq will not Lop...to many countries involved in Iraq's well being!

[Mongo]

...........................

[Mongo]

Looks like a chicken fight in the hen house...........I say...I think I'll go have some fun with that dumb dog

[ATTACH=CONFIG]1040[/ATTACH]

[drox]

Hello,

-- I suggest it must have an RV number assigned before an exchange rate quotation could be used. Your thoughts? --

I am having a hard time digesting this one because, an RV is an effect of a cause which would be a change in the EXCHANGE RATE. So the RV is doing nothing more than reflecting a change in PURCHASING POWER. So in other words, the RV happens because of a change in purchasing power, not the other way around. Why ? Because it is an RV of the "REAL EXCHANGE RATE" to reflect the increase in purchasing power therefore affecting Nominal Values leading to a need for what........lower denoms. Which led me to say that them saying they are going to change NOMINAL VALUES in the article is just mis-leading and a bold face lie because you can't change Nominal Values and expect to affect purchasing power just because you changed the number on the currency. It doesn't work like that. But, people are still trying to calculate using Nominal Value to get an exchange rate and you just cannot do that. There is not an ECONOMIST in the world that would ever say NOMINAL VALUE determines PURCHASING power and if he does don't ever ask him for advice.

Kreativity28

Thanks for the responses... It would seem that you are creating tension where tension does not exist. I was NOT trying to put you down. You do have a theory because it has yet to be proven that it is going to happen. Simmer down now... Surely you realize that you do not know anymore than any of us what will really transpire and are making an educated guess. I applaud your effort and commitment to your theory. We have similar ideas as to what is going to happen but have different methods as to which arrive at those numbers.

I understand what you are saying but people are suggesting that the CBI are indeed trying to assign a nominal value. You have seen numerous rumors of $2.65, $1, $1.17, $.86, $3.22, $3.86, etc. being thrown around as an potential RV rate. I believe you are saying it has to relate to a particular rational (exchange rate quotation) and cannot just be some arbitrary number thrown out. The truth is it could be an arbitrary number because sometimes emotion comes into play on these types of decisions. Maybe political, maybe artificial interpretation based on neighboring countries currencies, maybe pegging to the basket of international currencies? It doesn't necessarily have to make sense. The CBI could just say we won't change the current float of 1170 but will just let it trade openly on market and naturally find its value. They may set a rate first and then let it trade openly. They have made numerous suggestions through articles of 1170IQD as an appropriate rate and that they plan on maintaining the use of the float.

So let me explain what I think will happen so maybe we can bridge our misunderstandings. I believe it will be a 3-tiered process. I think they will move the managed float to 1000 IQD as the first RV. This has been mentioned numerous times as a target in articles but has has also been debunked also many times. In either case they keep talking about the number which makes me think it is an important target (mostly for ease of divisibility for a future re-denomination of the currency). After a couple months they will then drop the 3 zeros from the exchange rate itself and the value will be 1 dinar for $1 us dollar. That will be the second RV. Towards the end of summer and before the August US troop removal, I think they will start the re-denomination of the currency which will only change the notes used, prices on goods, salaries, etc. It will maintain the same value but all things will have the 3 zeros removed at that time. Everyone's net worth is already worth much more because it had already revalued earlier at $1US per 1 dinar. Now at or around that same time, I believe it will then be opened on the international exchange market because they will have already created a peg that more aptly reflects the "real value" of the dinar. Thus making it a more internationally recognized currency. The UN will have released Iraq from Chapter 7 and the Development Fund. Countries will rush to trade with Iraq and it will create a huge new value for the dinar. As the dinar trades on Forex, I believe the value will go up substantially from $1US to possibly a $2-$3 range. That is my 3rd tier. The 3 tiered process allows the CBI to get investors to cash in at various times before the real value truly reveals itself in on the Forex market. Iraq... gets people to cash in early at lower values and in effect make money by betting on themselves. Kind of luck a corporation buying back its own stock when they know the value will increase in time.

So, what I have been trying to say is that I believe the exchange rate quotation you suggest happens in the 3rd tier or is possibly being considered as to help justify the new float rate (RV) adjustment of $1US at the 2nd tier. I think it will be $1 instead of $.83-$.86 because a pending re-denomination is coming later in the year and that number is much easier to work with than others for simplicity reasons. Essentially, we are talking the same language aren't we? I am not hating bro... Just furthering the discussion. What do you think?

[mdddek6]

if they lop at .85 cents to the dollar and you have 1 mil dinar, if i am correct that is 850,000 if you can't live off of that you have problem's.

[quadraph0nic]

No mddek6 if they LOP you will not have 850,000 on your mil at .85. You will have lost money at that exchange rate. Your 1 mil becomes a 1,000 now multiply that at .85

If a LOP were to happen, I think there would have been legislation first. That means they would have passed a LAW to do this. Does anyone know of such a thing? If not, don't worry about the LOP anymore at least for now.

This is just my opinion or level of understanding, but a LOP is something countries do when they are facing great inflation, look at how concerned they are about the inflation. So now its 7%. A few years ago I think it was 60%. The LOP is a very final, decisive move to get the economy under control. Is Iraqs economy out of control? No. It's being held down but its under control. Feel free to correct me if I am wrong about this so far.

So, if what I have said is true then why would they have waited this long just to LOP? The exchange rate on the new dinar hasn't moved all that much the last years. I understand the M2 and reserves don't add up. I have busted my head thinking about that. I have come to the conclusion that either I dont have enough understanding about economics to make sense of it or they are not playing by the rules that we expect. We will not know until a change in the Dinar exchange rate happens.

I think they will RV first and try to keep this under control based on what cbi has done so far. The LOP is the last thing they want to do. For social, political, and economical reasons I'm telling you this is the last thing they want to do and if it means we have to wait longer for them to be successful as Maliki has said when he actually acknowledged the issue, then we will but personally, I think we already went through that the last few years. Look at the IMF, UN articles. There all over the forum research this for yourself and have an open mind to all possibilites.

[amcit]

It is very simple, when it was worth $3.25

there were 25 billion dinar's issued. Now

there are 25 trillion dinar issued. So take

3 zeros off and triple the new price with an

rv and you have roughly the same value.

It is insane to think Iraq can justify a 75

trillion dollar value in dinar currency which

is what it would be at $3.00 without a lop.

[quadraph0nic]

I get your point of view. I've had the same thoughts before.

but...

Why havent they LOP'd already? they could have done this last year or even earlier.

Where is the Legislation that says they are going to do this?

Where is the high inflation or economic conditions associated with the LOP?

I agree the reserves and the M2 are out of whack! I dont know how they will reduce the money supply assuming the figures reported by cbi are correct...

Dont get me wrong, like i said I get your point of view and I have the LOP down as worst case scenario but it doesnt add up.

For me, theres just nothing clear cutt about this investment. Its best to try and understand all scenarios and risk only what you can afford to lose that way you can see it out to the end.

It is very simple, when it was worth $3.25

there were 25 billion dinar's issued. Now

there are 25 trillion dinar issued. So take

3 zeros off and triple the new price with an

rv and you have roughly the same value.

It is insane to think Iraq can justify a 75

trillion dollar value in dinar currency which

is what it would be at $3.00 without a lop.

[Nate]

Quad I couldn't agree with you anymore. I too have hurt my brain trying to figure out how Iraq would cover the trillions (?) of dinars out there. IMO they wont have to, it's all paper when you really think about it. And I ask myself the same questions, if LOP is their intention then why all the suspense and mistery? Why haven't they done so already if it could help Iraq easily?.

I think of it this way, imagine the great depression on a global scale, (not far from today's reality) everyone feels it from Superpowers to 3rd world countries. Then at the very same time you have Iraq, a 3rd world nation with the resources of a superpower and then some. All of the existing superpowers who were originally invested heavily into Iraq for oil but all of a sudden Iraq presents an unbelievable oppurtunity to kick start their economies. Why would the US, Japan, China, UK, etc let this slip by? If the dinar RVs then they all win, I dont see it as Iraq having to pay these countries back for the dinar exchange I see it as everyone wins becuase it's all just paper in the end.

[houpster]

yeah no lopsters around here!

[Kent]

No mddek6 if they LOP you will not have 850,000 on your mil at .85. You will have lost money at that exchange rate. Your 1 mil becomes a 1,000 now multiply that at .85

If a LOP were to happen, I think there would have been legislation first. That means they would have passed a LAW to do this. Does anyone know of such a thing? If not, don't worry about the LOP anymore at least for now.

This is just my opinion or level of understanding, but a LOP is something countries do when they are facing great inflation, look at how concerned they are about the inflation. So now its 7%. A few years ago I think it was 60%. The LOP is a very final, decisive move to get the economy under control. Is Iraqs economy out of control? No. It's being held down but its under control. Feel free to correct me if I am wrong about this so far.

So, if what I have said is true then why would they have waited this long just to LOP? The exchange rate on the new dinar hasn't moved all that much the last years. I understand the M2 and reserves don't add up. I have busted my head thinking about that. I have come to the conclusion that either I dont have enough understanding about economics to make sense of it or they are not playing by the rules that we expect. We will not know until a change in the Dinar exchange rate happens.

I think they will RV first and try to keep this under control based on what cbi has done so far. The LOP is the last thing they want to do. For social, political, and economical reasons I'm telling you this is the last thing they want to do and if it means we have to wait longer for them to be successful as Maliki has said when he actually acknowledged the issue, then we will but personally, I think we already went through that the last few years. Look at the IMF, UN articles. There all over the forum research this for yourself and have an open mind to all possibilites.

Quad, dropped the guitar and taken up a hockey stick? I like it (but I liked the last 2 as well). Just a few comments based on the red highlights from your post. Personally, I think monitary policy is in the hands of the CBI, just like it is in the hands of our Fed. Truthfully, you never want them to mix. When they do, you have governments trying to print themselves out of budget problems. For that reason they set them up separately (and God forbid that our congress ever gets their hands on the printing press!).

Your other statements about a lop I believe are misstatements. Lops have NO effect on inflation. They are however done because of inflation - and often that is an inflationary PAST. These are quotes from the Mosley study:

No effect on inflation

[retirementafterrv]

FDyer, I hope all of this stuff, is helping you, I know it doesn't even sound like anyone read your post at all. it also sounds like everyone just wanted to put there two cents in.

I don't know about the Lop, I guess it one of those things. I think we both know it is mathematical, and it all depends on Iraq. thanks