Deleting the Zeros

[keepmwlknfny]

Let,s say you have a $200k mortgage. You make $100k per year in salary. You have $100k in the bank in cash. The U.S. decides to RD and now you technically still owe $200k on your house. You now only have $100.00 new USD in your bank account. I would also assume that your employer would now only pay you $100.00 per year. How would that work based on your mortgage contract? Additionally, if the U.S. owes China, for example only, $1,000,000 today, does that mean that the U.S. would then only owe the Chinese $1,000? I know I would not be too pleased with that, and would not think the Chinese would be either. Anyone have any thoughts how this would work? There are contracts out there which would need to be taken into consideration. Above scenario is based on dropping three zero's from USD.

Here is the catch, if the US were to lop zeros in your example, everything is adjusted accordingly......that 100 USD that you now have left after the zero drop is actually now worth what 100k used to be worth......when a country drops zeros, the remaining currency is worth more because the money supply is reduced drastically.....

Thats why if the CBI decides to drop zeros, your 25k note will be equal in value to what a single NEW 25 dinar note......

[nostradamus]

Here is the catch, if the US were to lop zeros in your example, everything is adjusted accordingly......that 100 USD that you now have left after the zero drop is actually now worth what 100k used to be worth......when a country drops zeros, the remaining currency is worth more because the money supply is reduced drastically.....

Thats why if the CBI decides to drop zeros, your 25k note will be equal in value to what a single NEW 25 dinar note......

This might be one of the best examples to argue against the Lop theory, if the scenario becomes this convoluted and cloudy for seemingly educated people, how are the majority of the Iraqi people going to grasp the concept of learning the actual value of the dinar old and new, how to convert between the two, as well as a change in the cost of goods and services, while being weaned off of the USD? That would be asking a lot of changes to make while continuing to conduct everyday business in a seamless fashion, it sounds more like chaos in the streets to me.

[zul]

LOL.....we are on the same side.....we both want it to.RV.....the only thing we differ on is that you seem to think that deleting the zeros isnt a lop and i cant for the life of me understand why when the CBI has made it pretty clear what it is between the 1000 to 1 exchange ratio, cutting the money supply fom trillions to billions, and referencing following the same path as many other countriesbthat have lopped like Turkey, Romania, Zimbabwe and so on.....

 

YOu got that right...I dont think delete 3 zeros is a LOP. To me it simply means, their new currency will be without 3 zeros. As simple as that. 

 

If you think Iraq is going to LOP when they delete the zeros, fine. But some of us do not think so. 

 

Sure, they talk about Romania, Zimbabwe and Turkey...but did you also notice that they dont want to be like these countries because the currency of these countries (that lopped) DID NOT improve significantly.  If you think (going by your analysis),. the value of the currency is already worth more after they deleted the zeros......well. apparently Iraq doesnt think so. It is just an illusion. The purchasing power of the citizen remains the same...( a neutral value event).

 

As for 1000 to 1, again ~ it simply shows the RATIO of their new value to the old. How else they are going to explain to their citizen the value of their new currency once they deleted the zeros. 

[boomer113189]

YOu got that right...I dont think delete 3 zeros is a LOP. To me it simply means, their new currency will be without 3 zeros. As simple as that. 

 

If you think Iraq is going to LOP when they delete the zeros, fine. But some of us do not think so. 

 

Sure, they talk about Romania, Zimbabwe and Turkey...but did you also notice that they dont want to be like these countries because the currency of these countries (that lopped) DID NOT improve significantly.  If you think (going by your analysis),. the value of the currency is already worth more after they deleted the zeros......well. apparently Iraq doesnt think so. It is just an illusion. The purchasing power of the citizen remains the same...( a neutral value event).

 

As for 1000 to 1, again ~ it simply shows the RATIO of their new value to the old. How else they are going to explain to their citizen the value of their new currency once they deleted the zeros. 

I dont think delete 3 zeros is a LOP .  LOL thats the joke of the year . i can't believe some people actually believe this

 

redenomination: a new unit replaces the old unit with a fixed

number of old units being converted to 1 new unit. If inflation is the

reason for redenomination, this ratio is much larger than 1, usually a

positive integral power of 10 like 100, 1000 or 1 million, and the procedure can be referred to as "cutting zeroes"

[staunch]

Has a country ever RD that was so heavily saturated with USD?

[boomer113189]

This might be one of the best examples to argue against the Lop theory, if the scenario becomes this convoluted and cloudy for seemingly educated people, how are the majority of the Iraqi people going to grasp the concept of learning the actual value of the dinar old and new, how to convert between the two, as well as a change in the cost of goods and services, while being weaned off of the USD? That would be asking a lot of changes to make while continuing to conduct everyday business in a seamless fashion, it sounds more like chaos in the streets to me.

many countries currency have redenominated what they do to let people know it by putting it in there local newspaper and news. and for the prices of good they have both old and new currency pricing on a board so when people buy things they see what the both cost

Has a country ever RD that was so heavily saturated with USD?

oh yeah alot of them

[zul]

I dont think delete 3 zeros is a LOP .  LOL thats the joke of the year . i can't believe some people actually believe this

 

redenomination: a new unit replaces the old unit with a fixed

number of old units being converted to 1 new unit. If inflation is the

reason for redenomination, this ratio is much larger than 1, usually a

positive integral power of 10 like 100, 1000 or 1 million, and the procedure can be referred to as "cutting zeroes"

 

The bigger joke is when some people use the word redenomination to mean LOP. Lol!

 

Redenomination simply means restructuring of the currency.  When Euro were introduced, many european stocks  were redenominated using the new currency. Did they cut the zeros..? No. They redenominated, as in restructure. 

Edited February 26, 2013 by zul

[JCTEXAN]

It,s a tough nut to crack. I like the merry go round analogy. In the interim, we go back to square one and wait for the quarter to run out one way or another on the merry go round ride. It,s been the best bang for my quarter I have ever received, however I am now dizzy and want the ride to be over.

[boomer113189]

The bigger joke is when some people use the word redenomination to mean LOP. Lol!

 

Redenomination simply means restructuring of the currency.  When Euro were introduced, many european stocks  were redenominated using the new currency. Did they cut the zeros..? No. They redenominated, as in restructure. 

iraq is taking about redenominating there currency not its stocks

[Markinsa]

iraq is taking about redenominating there currency not its stocks

 

Boomer the horse is dead...

 

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[zul]

iraq is taking about redenominating there currency not its stock

 

 

 

They redenominated their stock using the new currency.

 

 

Currency redenomination is the process where a new unit of money replaces the old unit with a certain ratio. It is

achieved by removing zeros from a currency or moving some decimal points to the left, with the aim of correcting perceived misalignment in the currency and pricing structure, and enhancing the credibility of the local currency.

The real issue is, with the transition period….do they LOP their existing currency or do they not?

 

If their plan is to LOP the existing currency, they better start working on the new currency code for the new dinar…./ until this day I have not heard or read, CBI or GOI talking about any new currency code.

And I have not seen them educating their citizen on the most important part of the process,  the prices. 

Will the prices will be quoted in both the ‘new dinar’ and the ‘old dinar’ so everyone can choose whether to pay in the new or old dinar…OR  do they just use the old and the new together, concurrently, until the old disappear gradually (this, they have said in some articles).

So much for educating their citizen. But then again, i could actually be missing some articles....

[hame55]

Again, Iraq wants to rd but is waiting for stability. Again your own article you posted yesterday states this! Did you not read you own article? Here's a quote from it:

Agreed politicians and economists Iraqis that the process of deleting three zeros from the Iraqi currency current risk because of conditions of the country and the lack of security and stability and the spread of corruption, where Iraq is seeking to reform the system of currency management and ease of use and reducing the number of banknotes of four billion to one billion and 800 million paper, from by deleting three zeros and the issuance of a coin . .

This is something you don't rush....yes Iraq could have done it long ago but they would have end up hurting themselves because they don't have stability.

No countries are going to be upset markinsa. Also there's no proof countries are hoarding dinar in anticipation of an RV. That's guru lies and forum facts with no substance. If a country does have dinar they will get EQUIVALENT amount back. No one is getting screwed you just won't get rich but you'll get your money back. It's so simple. C'mon already

This is such BS...

 

Answer me this zombie - Explain exactly how having more stability is absolutely necessary to simply redenominate.

I mean, please - there is no argument, no logic in this. You say It's so imple..."  I agree. If it is so simple, why ten years of going through hoops?

They have other plans...

[boomer113189]

This is such BS...

 

Answer me this zombie - Explain exactly how having more stability is absolutely necessary to simply redenominate.

I mean, please - there is no argument, no logic in this. You say It's so imple..."  I agree. If it is so simple, why ten years of going through hoops?

They have other plans...

Redenomination can sometimes reduce

inflationary tendencies in an economy if the underlying causes of

chronic or hyperinflation and low valued local currency are resolved

before the redenomination exercise and if the process is well managed.

This is why re-denomination should be implemented in the latter stages

of an economic stabilization package or reform. Historical evidence

suggests that redenomination had been very successful in an environment

of macroeconomic stability, declining inflation, stable exchange rates,

fiscal restraint and prudence and rational expectations of policy

credibility.

[Markinsa]

Boomer this is for you:

 

[boomer113189]

They redenominated their stock using the new currency.

 

 

Currency redenomination is the process where a new unit of money replaces the old unit with a certain ratio. It is

achieved by removing zeros from a currency or moving some decimal points to the left, with the aim of correcting perceived misalignment in the currency and pricing structure, and enhancing the credibility of the local currency.

The real issue is, with the transition period….do they LOP their existing currency or do they not?

 

If their plan is to LOP the existing currency, they better start working on the new currency code for the new dinar…./ until this day I have not heard or read, CBI or GOI talking about any new currency code.

And I have not seen them educating their citizen on the most important part of the process,  the prices. 

Will the prices will be quoted in both the ‘new dinar’ and the ‘old dinar’ so everyone can choose whether to pay in the new or old dinar…OR  do they just use the old and the new together, concurrently, until the old disappear gradually (this, they have said in some articles).

So much for educating their citizen. But then again, i could actually be missing some articles....

we wont know the new codes till they actually implement or decide for sure they will do that. that why were waiting for them to do there currency reform. http://goo.gl/vKnKI

 

prices would be quoted in both old and new dinar prices but banks and gov urge everyone to take the new currency because the old ones will be obsolete after a certain

time

[keepmwlknfny]

This might be one of the best examples to argue against the Lop theory, if the scenario becomes this convoluted and cloudy for seemingly educated people, how are the majority of the Iraqi people going to grasp the concept of learning the actual value of the dinar old and new, how to convert between the two, as well as a change in the cost of goods and services, while being weaned off of the USD? That would be asking a lot of changes to make while continuing to conduct everyday business in a seamless fashion, it sounds more like chaos in the streets to me.

 Its not.....people refuse to educate themselves....and are more apt to believing what they wanna hear.....

 

We are all here for the same purpose...we all want a RV....but its almost like some are afraid to face the reality of the situation in fear of being deemed negative?  I cant quite put my finger on it....cause there are some intelligent people here but its like they shut off their brains for certain things. And of course having multiple "gurus" confusing people and misleading them, it only causes more problems.

 

Spend time outside these forums to learn about redenominations and you will see that what the CBI is saying they want to do......

 

If I told you that your 25k note will be able to purchase the same amount of goods as (1) new 25 note would that be tough to understand?

 

If I told you that the exchange ratio between old and new currencies was 1000 old for 1 new would that be tough to understand?

 

If you went to the store and you saw two prices on the shelf for lets say a coke for instance, 1000 old dinar OR 1 new dinar, would you be able to deduct that the 1000 dinar note (old) has the same purchasing power as a 1 dinar note (new)??  That they are equal in value?  That they are worth the same?  One just doesnt have all the zeros on it....

[Darin]

 Its not.....people refuse to educate themselves....and are more apt to believing what they wanna hear.....

 

We are all here for the same purpose...we all want a RV....but its almost like some are afraid to face the reality of the situation in fear of being deemed negative?  I cant quite put my finger on it....cause there are some intelligent people here but its like they shut off their brains for certain things. And of course having multiple "gurus" confusing people and misleading them, it only causes more problems.

 

Spend time outside these forums to learn about redenominations and you will see that what the CBI is saying they want to do......

 

If I told you that your 25k note will be able to purchase the same amount of goods as (1) new 25 note would that be tough to understand?

 

If I told you that the exchange ratio between old and new currencies was 1000 old for 1 new would that be tough to understand?

 

If you went to the store and you saw two prices on the shelf for lets say a coke for instance, 1000 old dinar OR 1 new dinar, would you be able to deduct that the 1000 dinar note (old) has the same purchasing power as a 1 dinar note (new)??  That they are equal in value?  That they are worth the same?  One just doesnt have all the zeros on it....

2 prices?? You will be seeing 3 prices after R/D

USD, OLD, & New dinars...

 

How much of a PITA will that be?

[Flatbush Zombies]

Zul, I've never witnessed someone so much in denial before. "lop" is SLANG for a Redenomination....end of story. When Iraq talks about removing or deleting 3 zeros that's a RD.....end of story. Let it go. You're a smart guy so stop the denial about it. None of us want a RD!!!! We are pointing out what it means and Iraq has been VERY CLEAR on what they want to do...will they do it....I hope not!

[keepmwlknfny]

This is such BS...

 

Answer me this zombie - Explain exactly how having more stability is absolutely necessary to simply redenominate.

I mean, please - there is no argument, no logic in this. You say It's so imple..."  I agree. If it is so simple, why ten years of going through hoops?

They have other plans...

Would you agree that being stable is important for supporting a higher valued dinar??

 

If so, then its not different.....either scenario you end up with a dinar on par with the USD....if you are not stable economically, politically etc, the chances of holding that new value will not be in your favor....

 

The CBI has seen that these countries that have RD before, started losing value in their currency soon after......it doesnt cure everything....neither does a RV....

 

Neither outcome for the CBI is simple.....either way they are also dropping the programmed rate....which kept the dinar stable for years now.....there is MUCH uncertainty in either direction.....

[Markinsa]

 Its not.....people refuse to educate themselves....and are more apt to believing what they wanna hear.....

 

We are all here for the same purpose...we all want a RV....but its almost like some are afraid to face the reality of the situation in fear of being deemed negative?  I cant quite put my finger on it....cause there are some intelligent people here but its like they shut off their brains for certain things. And of course having multiple "gurus" confusing people and misleading them, it only causes more problems.

 

Spend time outside these forums to learn about redenominations and you will see that what the CBI is saying they want to do......

 

If I told you that your 25k note will be able to purchase the same amount of goods as (1) new 25 note would that be tough to understand?

 

If I told you that the exchange ratio between old and new currencies was 1000 old for 1 new would that be tough to understand?

 

If you went to the store and you saw two prices on the shelf for lets say a coke for instance, 1000 old dinar OR 1 new dinar, would you be able to deduct that the 1000 dinar note (old) has the same purchasing power as a 1 dinar note (new)??  That they are equal in value?  That they are worth the same?  One just doesnt have all the zeros on it....

 

What is wrong with having 1000 25 Dinar notes equaling one 25,000 Dinar note?  What's so hard about understanding that increasing the value of the Dinar does not have to equate with having two different denominations of the same currency having equal value?  With your reasoning, the 10000 dinar note will be worth 10 Dinar, and the 100 Dinar note will be worth 10 cents? What happens when they have two 100 Dinar Notes, which one is going to be with $100 and which one is going to be worth 10 cents?

 

With your thinking the will have to replace ALL of the current notes in circulation and replace them with new notes.  How are they going to handle the electronic funds?  Are they just going to divide every bank balance by 1,000 to come to a new balance? 

 

 

 

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[Flatbush Zombies]

Yes markinsa....one 10000 dinar will equal one new 10 dinar....guess what...they both have same purchasing power...they both will equal the same amount in united states dollars. Ta Dah!!!!!!! They want to do this to ease transaction as they've explained over and over and over again. Once they do this then the new dinar has a better chance of gaining more value against the dollar. It's hard to gain value with 72 trillion in M2 and you cannot RV 72 Trillion. I can't understand how you don't understand this. Please, if you know anyone that knows economics please get them to explain this to you. It's so simple it's elementary

[Markinsa]

Are they going to issue a whole NEW series of Dinar notes, or just the missing lower denominations, if they just issue the lower denominations, the RD and LOP theories won't hold up.

 

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[keepmwlknfny]

What is wrong with having 1000 25 Dinar notes equaling one 25,000 Dinar note?  What's so hard about understanding that increasing the value of the Dinar does not have to equate with having two different denominations of the same currency having equal value?  With your reasoning, the 10000 dinar note will be worth 10 Dinar, and the 100 Dinar note will be worth 10 cents? What happens when they have two 100 Dinar Notes, which one is going to be with $100 and which one is going to be worth 10 cents?

 

With your thinking the will have to replace ALL of the current notes in circulation and replace them with new notes.  How are they going to handle the electronic funds?  Are they just going to divide every bank balance by 1,000 to come to a new balance? 

 

 

 

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Nothing is wrong with having (1000) 25 notes equaling (1) 25k note.......except it goes against everything they are trying to accomplish by RD.....by your example, the number of banknotes would skyrocket, and you wouldnt reduce the money supply at all.....thats been a couple of their main reasons for wanting to RD....so how could you add value to the dinar with it being still so inflated??

 

And again, there is nothing wrong with increasing the value without having two different denominations being equal.....thats just not what the CBI has been describing.....would love to see them increase the value over time and just ADD notes to the current series....thats just not what the CBI is talking about doing.....

 

Why would they have two different 100 dinar notes??  I think I lost you on that.....

Are they going to issue a whole NEW series of Dinar notes, or just the missing lower denominations, if they just issue the lower denominations, the RD and LOP theories won't hold up.

 

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A whole NEW series with a new currency code and all.....two different currencies.....

[boomer113189]

when countries RD everyone bank account automatically change to the redenominated value value.     lets say you have 10 million in ur warka account  and they make the old to new banknotes 1000 to 1 your 10  million dinar will be changed to 10 k worth of new dinar

[Flatbush Zombies]

Are they going to issue a whole NEW series of Dinar notes, or just the missing lower denominations, if they just issue the lower denominations, the RD and LOP theories won't hold up.

 

-

It will be a whole new series replacing all current currency. Will also have a new ISO number too

By the way.....this process has been done dozens of times with other countries. It's not a "theory" it's reality