Guest views are now limited to 12 pages. If you get an "Error" message, just sign in! If you need to create an account, click here.

Jump to content
DaveD

Revalue or Lop

Recommended Posts

QUESTION: If they have say 65 trillion Dinar in circulation (true or false) and they remove the three zero's to give them 65 billion. Would that be a feasable amount of cash, presuming that its all in their possession to function, pay debts etc?

Thanks.

Share this post


Link to post
Share on other sites

They don't have 65 trillion in circulation. They have about 34 Trillion in circulation according to the last reports from the CBI. Thay have a M2 of 73.6 Trillion.

I keep hearing people say if they lop they wont have enough money. That's pretty silly.

Just rough numbers...

They currently have 70 Trillion dinar worth about $70 Billion

If they lop they will have 70 Billion dinar worth about $70 Billion.

It's the same amount. If they wont have enough after, then how have they survived the last eight years.

If you compare Iraqs money supply with their GDP, (size of econopmy). Theyare right in line with all other countries in the world. If they did this mythical 100,000% RV people talk about. It would give Iraq a money supply to GDP ratio about 1000 times more than any other country in the world.

It would be preposterous.

But as the RVrs like to say. Nobody knows what the outcome might be.

Yeah… I might be King Of The World next week too. You never know.

  • Upvote 2

Share this post


Link to post
Share on other sites

they keep saying it will be close to 1 Dollar per dinar . i think they will most likely exchange our old dinars for 1000 to 1 new dinar . k now lets do that math if 1 new dinar is worth 1000 that would mean that the newer iraq dinar will be worth 86 cents , if you go to coinmill.com and type in USD 1000 it says IQD = 86 cents . which equals close to a dollar rate

that would be a RD,

Share this post


Link to post
Share on other sites

they keep saying it will be close to 1 Dollar per dinar . i think they will most likely exchange our old dinars for 1000 to 1 new dinar . k now lets do that math if 1 new dinar is worth 1000 that would mean that the newer iraq dinar will be worth 86 cents , if you go to coinmill.com and type in USD 1000 it says IQD = 86 cents . which equals close to a dollar rate

that would be a RD,

I think you misstated what you wanted to say. But I understand it, though.

Click Iraqi Dinar under All Currencies. Enter 1000 beside Iraqi Dinar (IQD) and click "Convert". The numbers will populate for all currencies. The exchange becomes 0.86 United States Dollar (USD). I'm not contradicting your thoughts, just clarifying.

And like you said about exchanging old dinar for new. The 1000 IQD will become 1IQD. Then, 1 IQD will equal US$0.86. An increase in value of just 16% would bring the IQD to US$1.00. Take away the 20%-40% markup that everyone paid for their IQD and It's a wash.

  • Upvote 3

Share this post


Link to post
Share on other sites

Economists usually follow Cagan's description that hyperinflation occurs when the monthly inflation rate exceeds 50%.

The Iraqi dinar is not in a state of hyperinflation, Dinarck.

Iraq is not currently suffering hyperinflation.

The dinar is in a hyper-inflated state though.

Iraq’s inflation rates in the early and mid 90’s were in the 1000% percent rage. They suffered hyperinflation for a decade. The effects of that inflation are still present on the dinar.

Redenomination’s/lops are done to erase the effects of past inflation.

Iraq is a PERFECT example of a country that should redenominate/lop.

  • Upvote 2

Share this post


Link to post
Share on other sites

From the CBI

1990 - 2003

After the Gulf War in 1991, and due to the economic blockade, the previously used Swiss printing technology was no longer available. A new, inferior quality notes issue was produced. The previous issue became known as the Swiss dinar and continued to circulate in the Kurdish region of Iraq. Due to excessive government printing of the new notes issue, the dinar devalued quickly, and in late 1995, US$1 was valued at 3,000 dinars.

From a congressional report…

“This report was originally prepared at the request of the Senate Committee on Foreign Relations. With the Committee’s permission, it is being made generally available for the use of Members.”

During the 1990s, a period of hyperinflation occurred. The government continued to print money to meet expenditures while economic sanctions shut off the supply of imported goods leading to a classical monetary overhang. A yearly inflation rate of upwards of 2,000% per cent was reported in open market food prices between 1990-1991.36 Another source estimated that inflation increased 5,000% between 1990and 1995.

Kinda blows away the pumper/guru claim that the dinar was somehow artificially devalued by some entity.

  • Upvote 1

Share this post


Link to post
Share on other sites

Precisely what are those effects, and how long can they be expected to persist?

The effects are the zeros on the currency and high prices.

It last until the zeros are removed through a redenomination/lop. It is standard procedure and has been done about 100 times in the past when countries experience this. There are no other ways to do it. The mythical big RV of a currency in this situation does not exist. It is simply impossible and will never happen.

The only other option is to just live with it. Some countries are ok with having huge denominations. Vietnam is a good example. They don’t seem to care and I’ve never heard them even consider a redenomination. Iran has the same issue, they too have hinted over the last couple years they might redenominate. It is also very common for countries to talk about and plan redenominations for years.

Edited by DaveD

Share this post


Link to post
Share on other sites

One would certainly not expect them to talk about a "revaluation" unless they were conflating the terms "redenomination" and "revaluation." One would fully expect them to talk about redenomination if their plans were to revalue to any positive degree. In other words, it's misleading propaganda.

No surprise you saying that.

I just can’t imagine resting my investment hopes on the chance that all published facts and all stated intentions are somehow a lie.

  • Upvote 1

Share this post


Link to post
Share on other sites

IMHO by all the articals coming out the for years about taking the zeros are all true it just a matter of when they do it . they Will RD then after that there Currency will Grow to 3.00 mark within the 10 year mark after the new currency comes out

Share this post


Link to post
Share on other sites

Economists usually follow Cagan's description that hyperinflation occurs when the monthly inflation rate exceeds 50%.

The Iraqi dinar is not in a state of hyperinflation, Dinarck.

Brush up on your reading my friend this has been discussed many times in here.

There wouldnt be a single regular in the LOP section that thinks Iraq is currently in a state of hyperinflation.

They WERE ina state of hyperinflation,past tense, hence their current need to RD and get rid of the annoying 000's on their currency.

This section contains those with the best grip on economics on the entire forum.

The only way they can be wrong is if Iraq does some one of kind never seen before solution and who knows maybe they will.

Its never been done before so historically it is logical to assume this Iraq situation will result in an RD.

It just follows simple logic really in my opinion.

  • Upvote 1

Share this post


Link to post
Share on other sites

Just because they got their inflation mostly under control NOW does not mean the dinar is not hyperinflated. The fact that it takes 1500 dinar to buy a candy bar proves its hyperinflated.

Edited by BigFrankD

Share this post


Link to post
Share on other sites

After the zeros are deleted, and a 1-to-1 rate is established, that candy bar will cost $15. Only people who shop at The Gardens Mall in Jupiter, Florida would pay that much for a lousy candy bar.

For someone as critical as you of other english skills... you sure do have poor math skills.

1500 dinar, lop 3 zeros becomes 1.5 dinar, not 15 dinar

  • Upvote 1

Share this post


Link to post
Share on other sites

For someone as critical as you of other english skills... you sure do have poor math skills.

1500 dinar, lop 3 zeros becomes 1.5 dinar, not 15 dinar

That's not poor math, it's lack of understanding in terms of the mechanics of a redenomination.

  • Upvote 2

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.

  • Recently Browsing   0 members

    No registered users viewing this page.



×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.