what do the lopsters think of this ?

[dontlop]

i saw you earlier dinark and thought you would like to comment

[sandstorm]

Dontlop, you spend your time complaining about lopsters and end up getting nasty within every conversation with every so called lopsters. now you want the lopsters to screen your guru rumors to see if they hold mustard. no thanks.

i would advise every so called lopster to not engage with you. for someone who hates and complains about lopsters....why are you aalways the first to come down here and ask questions?

Youve argued and spend your time enticing members in lop discussions......just to have them rounded up and tanked for responding with you. Quit starting fires...that you spend all your time putting out. believe what you will.

[makecents]

You saw Dinarck logged in? Glad to hear that.

As for me, since we are all agreed that under no circumstances will a central bank even hint about future exchange rates, he can't be doing so, right? So the whole "restructuring" theme must be something else (like maybe a redenomination), though if so one might expect it to be called out as such. So I don't know what the speaker is talking about (even assuming the translations are correct, which might be suspect as well).

Edited January 29, 2013 by makecents

[RVPleaseToday]

If he has announced an RV, it would be all over the news everywhere and folks would be rushing to buy all the Dinar in existence. Any of the Dinar dealers raised their prices yet?

[dontlop]

I WOULD SAY IF THE TRANSLATION IS ACCURATE , THEY ARE TALKING ABOUT A RESET IN THE VALUE OF THEIR CURRENCY whether it be by float .. lop .. or a combination of both ,, no matter what .. OF COURSE IT WOULD NEED REDENOMINATED IF A HIGH VALUE WAS ATTACHED TO IT .. THEY WOULDNT NEED 25,000 DINAR BILLS FOR ANYTHING ,,

they would need smaller denominations..

i base this on this out of that article in this statement >>>

4) Mr. Turki said steps will be taken to "restructure" the Iraqi currency, which will be based on the country's resources, and the wealth of the resources will be reflected and applied to the value of the currency.

Read more:

we know they will be introducing new currency , by law the national local currency has to include kurdish language on it as well as arabic language on it .. im not sure if english is mandatory or not .. but from what ive read it will also include english language on it.

ive looked for the text transcript on his speech .. cannot locate it ... but would like to verify it thru google translator.. but cant find it .. i wonder if ministry of finance would have it ,

[RVPleaseToday]

I think the only transcript around is a translation. Translation errors are so easy, though. A misplaced, comma. A running of two ideas meant to be separate into one. There is simply no way to make anything of this translation of the speech.

Edited January 29, 2013 by RVPleaseToday

[keepmwlknfny]

I WOULD SAY IF THE TRANSLATION IS ACCURATE , THEY ARE TALKING ABOUT A RESET IN THE VALUE OF THEIR CURRENCY whether it be by float .. lop .. or a combination of both ,, no matter what .. OF COURSE IT WOULD NEED REDENOMINATED IF A HIGH VALUE WAS ATTACHED TO IT .. THEY WOULDNT NEED 25,000 DINAR BILLS FOR ANYTHING ,,

they would need smaller denominations..

i base this on this out of that article in this statement >>>

4) Mr. Turki said steps will be taken to "restructure" the Iraqi currency, which will be based on the country's resources, and the wealth of the resources will be reflected and applied to the value of the currency.

Read more: http://dinarvets.com.../#ixzz2JOcRUPKG

we know they will be introducing new currency , by law the national local currency has to include kurdish language on it as well as arabic language on it .. im not sure if english is mandatory or not .. but from what ive read it will also include english language on it.

ive looked for the text transcript on his speech .. cannot locate it ... but would like to verify it thru google translator.. but cant find it .. i wonder if ministry of finance would have it ,

So now your saying they will have to RD???

I thought you were dead set against it happening, but now your pretty much saying that they will?

[dontlop]

So now your saying they will have to RD???

I thought you were dead set against it happening, but now your pretty much saying that they will?

see what happens when you think

[keepmwlknfny]

see what happens when you think

I dont know....you tell me.....

Not sure though how you can harp on people for seeing a lop as a likely outcome if your coming to the same conclusion.....

[doctor robbins]

If they are talking about backing their currency with anything other fhan their foreign currency reserves that would be a major departure in policy. If they are talking about a restructure that doesn't include issuing new currency or deleting zeros from the exchange rate it would be equally significant. As was stated by others it all depends on the accuracy of the translation and the credibility of the translators. Based on what I've seen I have to be skeptical.

[keepmwlknfny]

If they are talking about backing their currency with anything other fhan their foreign currency reserves that would be a major departure in policy. If they are talking about a restructure that doesn't include issuing new currency or deleting zeros from the exchange rate it would be equally significant. As was stated by others it all depends on the accuracy of the translation and the credibility of the translators. Based on what I've seen I have to be skeptical.

Its only natural seeing as how much complete nonsense is spread around the forums as fact......

[dontlop]

I dont know....you tell me.....

Not sure though how you can harp on people for seeing a lop as a likely outcome if your coming to the same conclusion.....

adding small denominatins and replacing large notes with new lower denominations is not lopping its an exchange .. you should stick to your garage work .. typical lopster putting words in peoples mouth just for the sake of arguement .. im not here to argue with ignorance ..i dont know of one person that doesnt know iraq is going to replace their currency with new notes .. and the denominations will be smaller notes ,, and will have kurdish language on it ,, you should brush up on your reading skills , maybe thats your problem ..

we know your a lopster .. thats why your responding to the topic .. so what do you think about the information provided in the link .. your tactic of changing the subject to me .. is not getting you anywhere except out of the conversation ..

do you think the translation is incorrect ? if so maybe you could correctly translate it for everone

[sxsess]

adding small denominatins and replacing large notes with new lower denominations is not lopping its an exchange .. you should stick to your garage work .. typical lopster putting words in peoples mouth just for the sake of arguement .. im not here to argue with ignorance ..i dont know of one person that doesnt know iraq is going to replace their currency with new notes .. and the denominations will be smaller notes ,, and will have kurdish language on it ,, you should brush up on your reading skills , maybe thats your problem ..

we know your a lopster .. thats why your responding to the topic .. so what do you think about the information provided in the link .. your tactic of changing the subject to me .. is not getting you anywhere except out of the conversation ..

do you think the translation is incorrect ? if so maybe you could correctly translate it for everone

Yea right....

[makecents]

adding small denominatins and replacing large notes with new lower denominations is not lopping its an exchange

Nor does it impact the issue of their gigantic money supply (and I'm not saying you are claiming such), so its sort of moot since the money supply is the big issue for any sort of adjustment in the exchange rate.

[keepmwlknfny]

adding small denominatins and replacing large notes with new lower denominations is not lopping its an exchange .. you should stick to your garage work .. typical lopster putting words in peoples mouth just for the sake of arguement .. im not here to argue with ignorance ..i dont know of one person that doesnt know iraq is going to replace their currency with new notes .. and the denominations will be smaller notes ,, and will have kurdish language on it ,, you should brush up on your reading skills , maybe thats your problem ..

we know your a lopster .. thats why your responding to the topic .. so what do you think about the information provided in the link .. your tactic of changing the subject to me .. is not getting you anywhere except out of the conversation ..

do you think the translation is incorrect ? if so maybe you could correctly translate it for everone

LOL...calm down toto....no need to get defensive.....asked you simple questions on the topic YOU started. If you dont wanna discuss your own statements, then you should refrain from posting.....

You said "OF COURSE IT WOULD NEED REDENOMINATED IF A HIGH VALUE WAS ATTACHED TO IT .."

Simply issuing new bills, adding to the current series is not redenominating......and your right, its simply an exchange.....but you were saying that the dinar would have to be redenominated if a higher value was attached to it.

So, again, I was asking, your now saying that if they put out a higher valued dinar, then it would have to be RD? Or lopped in the terms the CBI has spoken of?

And just FYI....you sound really ignorant when classifying someone as a "lopster" as if it makes any sense that people would rather barely break even on something they invested money on vs making a nice profit....

Edited January 29, 2013 by keepmwlknfny

[dontlop]

1) Mr. Turki stated that Iraq has major resources; which, of course, oil is a part of, but there are also other major sources of wealth within Iraq.

2) Mr. Turki stated these resources will effect the Iraq economy strongly.

3) Mr. Turki went on to state Iraq soon plans on applying this wealth to back the currency of Iraq, for the benefit of the Iraqi peoples.

4) Mr. Turki said steps will be taken to "restructure" the Iraqi currency, which will be based on the country's resources, and the wealth of the resources will be reflected and applied to the value of the currency.

5) Mr. Turki stated that the measures taken to properly assign or instill the correct value of the currency, must be taken slowly and carefully, and so they will be.

6) Mr. Turki also stated the Central Bank of Iraq is currently in the process of applying these steps to the restructuring of the currency.

7) In conclusion, Mr. Turki said that 10% of the restructured currency will be retained by the CBI and 5% of the restructured currency will be distributed to exchange houses. It should be noted that Mr. Turki remained vague as to whether these changes would be put in place on a global scale, nor did he state that these changes effect only the Iraqi economy.

At no time during this speech, did Mr. Turki mention nor name the process "deletion of the zeroes", nor did he state within this speech, that Iraq is in the process of replacing the currency. In relationship to the Iraqi economy or currency, Mr. Turki continued to refer to the application of wealth to the currency, as "restructuring" of the value of the IQD.

Notes: : I asked my son in law in detail about the translation of this; "Does this mean 5% is going to other banks for distribution?" and he said no, he said, "Mr. Turki expressly stated that the five percent was going to be distributed to exchange houses so people may exchange the currency for the restructured currency". I also asked him (my son in law) "Did Turki mention anything about deletion of the zeroes or printing new money?" He said no.

Read more:

[dontlop]

3) Mr. Turki went on to state Iraq soon plans on applying this wealth to back the currency of Iraq, for the benefit of the Iraqi peoples

number 3 is strange .. to me hes saying iraq has wealth that is not yet attached or presently backing the currency of iraq.. which means the value 1166 is not the same as it will be once he attaches the other wealth to back the dinar .. and it seems like it will be more valuable than it currenctly is once this wealth is applied

i know if i have a home . i can liquify it through loans .. it stands to reason they have oil fields .. and they can liquify it through loans .. with thousands of square miles of oil rich real estate and proven reserves .. even if they finance it to themselves over 100 years

the us does it .. they buy their own debt ,, so it must be legal within the monetary system

they simply decree their dinars value to what ever they can work out figurativly openly and transparently .

[makecents]

3) Mr. Turki went on to state Iraq soon plans on applying this wealth to back the currency of Iraq, for the benefit of the Iraqi peoples

number 3 is strange .. to me hes saying iraq has wealth that is not yet attached or presently backing the currency of iraq.. which means the value 1166 is not the same as it will be once he attaches the other wealth to back the dinar .. and it seems like it will be more valuable than it currenctly is once this wealth is applied

i know if i have a home . i can liquify it through loans .. it stands to reason they have oil fields .. and they can liquify it through loans .. with thousands of square miles of oil rich real estate and proven reserves .. even if they finance it to themselves over 100 years

To make a significant difference in their reserves (by adding loans to increase them) they would have to get loans for at least several times their GDP, which means they have to spend much of their income on interest payments, especially given that this would be a high risk and thus high interest loan. This would be a disaster for their economy. The US is worried about our debt reaching parity with GDP, going to say 5x GDP would put their economy straight into the dumper even if anyone would lend them that much and if the IMF etc would allow it. No way can, or would they borrow their way to a big RV.

the us does it .. they buy their own debt ,, so it must be legal within the monetary system

Sure Iraq can loan itself dinars just like the US loans itself dollars, by printing more of them. And their value goes down. Iraq can not loan itself dollars.

[dontlop]

http://www.youtube.com/watch?v=z3DUe-hFQFM <<< i like this explaination of money as debt .. but if you open the utube and start on minute 36 and watch it for 3 minutes .. you might gain enough interest to watch the entire video .. and if you do .. you might even want to watch the first 3 videos in this series ..they are around 45 minutes each .. they are pretty interesting

[dontlop]

http://www.youtube.com/watch?v=lsmbWBpnCNk <<< money as debt part 2 ...

its not boring ,, its exactly what we are doing here in this investment . it explains the creation of money .. i suggest you watch part one and part 2 .. you will see part 3 when your watching them off to the side on the list of utubes

[Darin]

You saw Dinarck logged in? Glad to hear that.

As for me, since we are all agreed that under no circumstances will a central bank even hint about future exchange rates, he can't be doing so, right? So the whole "restructuring" theme must be something else (like maybe a redenomination), though if so one might expect it to be called out as such. So I don't know what the speaker is talking about (even assuming the translations are correct, which might be suspect as well).

Some people see a "restructuring of the currency" as either a Re-denomination or a potential revaluation. What if, and this very well could be likely & what I would argue is that the idea of the restructuring of the currency is simply a currency reform. Not "all" countries of the world that have their own domestic currency back the value with 100% liquid assets. At this present time, Iraq does... Referencing this particular topic with a good friend, he said that almost all countries with a Credit Rating of B or lower while being under Article VIII of the IMF back their currencies w/ 100% liquid assets.

So, we have some things we can look out for... 1.) A raising of the credit rating to more appealing levels. (Such as B or higher) 2.) A transition out of IMF Art VIII

Those are things that could help with more a drastic change in the value while increasing liquidity of the reserves may help on a much smaller level.

And once "demand" plays a larger role, that very well can shoot up a value. The CBI may take steps to increase liquidity to maintain stability, but they're actions can only be so much. If the demand were to go through the roof, they can only act so fast.. Just as they can only act by doing so much to a falling value.

[makecents]

Some people see a "restructuring of the currency" as either a Re-denomination or a potential revaluation. What if, and this very well could be likely & what I would argue is that the idea of the restructuring of the currency is simply a currency reform. Not "all" countries of the world that have their own domestic currency back the value with 100% liquid assets. At this present time, Iraq does... Referencing this particular topic with a good friend, he said that almost all countries with a Credit Rating of B or lower while being under Article VIII of the IMF back their currencies w/ 100% liquid assets.

If you float your currency you don't have to back it as the market does so (things like gold reserves may play a part in the market's assessment of course). But this also means you lose control. Most Arab nations peg. Kuwait is AA and back M1 100+% but under 100% for M2, Saudi Arabia at AA- backs their M2 by 300% if i recall correctly. Iraq (I would guess due to not really having a bond market yet) doesn't even get rated. SInce M1 is on-demand cash (plus cash itself) its not clear at what point for a pegged currency, residents are going to start to think "if only half is backed, I want to be in the half that gets out" and its a classic bank run. Even if we say that can go to 50% of M1 for Iraq, that only doubles the exchange rate.

Why would doubling Iraq's exchange rate be good for Iraq?

* since they export little there may be little impact wrt the usual increase in prices aboard for Iraqi goods

* imports will go down in price (in dinars) and be cheaper for Iraqi's

* but more value chasing goods will push prices up (not sure how that balances, I'd guess at lower levels prices remain better, but with bigger exchange moves more buying dominates and pushes prices up due to supply not being able to meet demand, at least initially)

* oil revenue stays the same as its in dollars, so the dinars the GOI has (after exchange) go down by half, so the budgets goes down by half so all the things driven by the budget go down by half. This seems like the biggest thing, and its a bad thing.

All of those are magnified at higher levels of course.

So, we have some things we can look out for... 1.) A raising of the credit rating to more appealing levels. (Such as B or higher) 2.) A transition out of IMF Art VIII

Those are things that could help with more a drastic change in the value while increasing liquidity of the reserves may help on a much smaller level.

For Iraq's bonds to be rated they have to have a bond market so that isn't going to happen too soon I don't think. Their reserves are in dollars, which is about as liquid an asset as you can get, so I don't know what you mean by "increasing liquidity of the reserves".

And once "demand" plays a larger role, that very well can shoot up a value. The CBI may take steps to increase liquidity to maintain stability, but they're actions can only be so much. If the demand were to go through the roof, they can only act so fast.. Just as they can only act by doing so much to a falling value.

Foreign demand for dinars will only go up (from zero at present) if there is something people can buy that is sold in dinars. Going through the roof is just not going to happen even if a major new Iraqi export industry takes hold.

[Darin]

If you float your currency you don't have to back it as the market does so (things like gold reserves may play a part in the market's assessment of course). But this also means you lose control. Most Arab nations peg. Kuwait is AA and back M1 100+% but under 100% for M2, Saudi Arabia at AA- backs their M2 by 300% if i recall correctly. Iraq (I would guess due to not really having a bond market yet) doesn't even get rated. SInce M1 is on-demand cash (plus cash itself) its not clear at what point for a pegged currency, residents are going to start to think "if only half is backed, I want to be in the half that gets out" and its a classic bank run. Even if we say that can go to 50% of M1 for Iraq, that only doubles the exchange rate.

Why would doubling Iraq's exchange rate be good for Iraq?

* since they export little there may be little impact wrt the usual increase in prices aboard for Iraqi goods

* imports will go down in price (in dinars) and be cheaper for Iraqi's

* but more value chasing goods will push prices up (not sure how that balances, I'd guess at lower levels prices remain better, but with bigger exchange moves more buying dominates and pushes prices up due to supply not being able to meet demand, at least initially)

* oil revenue stays the same as its in dollars, so the dinars the GOI has (after exchange) go down by half, so the budgets goes down by half so all the things driven by the budget go down by half. This seems like the biggest thing, and its a bad thing.

All of those are magnified at higher levels of course.

For Iraq's bonds to be rated they have to have a bond market so that isn't going to happen too soon I don't think. Their reserves are in dollars, which is about as liquid an asset as you can get, so I don't know what you mean by "increasing liquidity of the reserves".

Foreign demand for dinars will only go up (from zero at present) if there is something people can buy that is sold in dinars. Going through the roof is just not going to happen even if a major new Iraqi export industry takes hold.

Adding value would decrease cost of imports. I'm not talking about adding value significantly in a short period of time, I am speaking of adding value in terms of a gradual pace.

We import gas, imagine if the value of gas were to slowly decrease (We've been seeing the opposite) Wouldn't we in the U.S. be thrilled to see that?

More value chasing goods can simply happen in a country with a dollarization threat if more currency enters there market. Imagine if they had a significant increase of foreign currency in their market. Would that NOT have an impact of too much cash chasing goods? With that said, would it NOT be bad for the IQD if people continued to prefer to use foreign currency over the dinar? I would imagine the street value would continue to decrease.

I wasn't talking about rating the bonds.. Just briefly stating saying an increase of their credit rating. Their reserves are diverse, they hold more than just dollars, but dollars make up a good portion of it (reserves include other foreign currency and gold assets that are market as a liquid asset).

At this present time, a good portion of dinars held by foreign markets may be through speculation. Other than those that hold simply to provide as a service (i.e., banks).

Going through the roof is unlikely, unless demand far outweights what the CBI can handle. Very low probability, but don't ever underestimate the power of demand at times...

[makecents]

Adding value would decrease cost of imports. I'm not talking about adding value significantly in a short period of time, I am speaking of adding value in terms of a gradual pace.

We import gas, imagine if the value of gas were to slowly decrease (We've been seeing the opposite) Wouldn't we in the U.S. be thrilled to see that?

More value chasing goods can simply happen in a country with a dollarization threat if more currency enters there market. Imagine if they had a significant increase of foreign currency in their market. Would that NOT have an impact of too much cash chasing goods? With that said, would it NOT be bad for the IQD if people continued to prefer to use foreign currency over the dinar? I would imagine the street value would continue to decrease.

I don't see it being bad to continue to use foreign currency wrt prices. Its the change in exchange rates that improves buying power that can drive rising prices.

And if only talking about small changes (1% etc, like normal currency fluctuations), sure those do not create big problems and a small rise would generally lower prices also a small amount on all the stuff Iraq imports (but lower oil revenues and hence the budget too, I notice you did not comment on that).

I wasn't talking about rating the bonds.. Just briefly stating saying an increase of their credit rating.

Countries don't have credit ratings per say, as they way they borrow money is to sell bonds, so a countries credit rating is the rating of their national bonds (e.g. US Treasuries).

Their reserves are diverse, they hold more than just dollars, but dollars make up a good portion of it (reserves include other foreign currency and gold assets that are market as a liquid asset).

Yes but small amounts, like $1B USD worth of gold vs $70B in USD.

At this present time, a good portion of dinars held by foreign markets may be through speculation. Other than those that hold simply to provide as a service (i.e., banks).

Going through the roof is unlikely, unless demand far outweights what the CBI can handle. Very low probability, but don't ever underestimate the power of demand at times...

A "good portion of dinars held by foreign markets", well foreignERS, are likely speculators but I doubt that is more than around 1T or 2T (that is a LOT of dinars). So its a small factor and in any case a central banker would never want to let speculators control enough of their currency so that trading action was dominating prices. Stability is the mantra of central bankers while currency traders thrive on volatility.

[Darin]

I don't see it being bad to continue to use foreign currency wrt prices. Its the change in exchange rates that improves buying power that can drive rising prices.

And if only talking about small changes (1% etc, like normal currency fluctuations), sure those do not create big problems and a small rise would generally lower prices also a small amount on all the stuff Iraq imports (but lower oil revenues and hence the budget too, I notice you did not comment on that).

Countries don't have credit ratings per say, as they way they borrow money is to sell bonds, so a countries credit rating is the rating of their national bonds (e.g. US Treasuries).

Yes but small amounts, like $1B USD worth of gold vs $70B in USD.

A "good portion of dinars held by foreign markets", well foreignERS, are likely speculators but I doubt that is more than around 1T or 2T (that is a LOT of dinars). So its a small factor and in any case a central banker would never want to let speculators control enough of their currency so that trading action was dominating prices. Stability is the mantra of central bankers while currency traders thrive on volatility.

Depends on how that additional cash entered the market. Lets say a wealthy individual walked into Iraq and gave each citizen $1,000... Just out of his pocket... You trying to tell me that wouldn't drive up prices?

Now lets say the street value continued to fall for the dinar and more USD enters the market... And than the dinar goes back to a stabilized street credit value. For reference, lets say the street value dropped to 1500 and stabilized at around 1200. Would that not HURT the market?