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An IQD RV ~ from an Iraqi Citizen POV ~ fresh perspective wanted.


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I have read Adam’s rate thesis and cash in guide and Adam has even attempted to answer my questions during his March 6th and March 13th chats, but for whatever reason I still can’t seem to get a complete picture (at least not one that I can understand) regarding an overnight IQD RV ~ as seen from an Iraqi Citizen’s point of view.

Especially, if such an overnight RV happens before the new lower denomination IQD banknotes have been introduced into circulation in Iraq.

 

I’ve noticed that both ‘millionaire in training’ and ‘driver’ have asked similar questions that were (in my opinion) not quite answered fully either; so apparently I’m not alone in this need for a fresh perspective.

I’m not trying to drag either of them into what I’m saying here, but their questions (at least to me) felt like they were trying to get answers to similar (or maybe even the same) questions that I have and that’s the only reason I mention them now.

I’m seeking some fresh perspective on this issue ~ especially since RV related concerns have been dragging on since the initial start up of the current CBI in the Fall of ‘03.

 

First of all, a little background might be in order so that I’m not misunderstood.

I’ve had deployments to South Pacific islands such as Kwajalein (2 years) and Hawaii (1 year), to Japan (5 years) and to Iraq (3 years), so I feel that I have an understanding of other than just western cultures ~ and most especially of the far east and mid-east cultures. A 40 year study of far eastern (Chinese and Japanese) martial arts has also contributed to that feeling of understanding.

While deployed to Kwajalein, I also traveled to Truk and Ponope. 

While deployed to Japan, I also traveled to Singapore, Hong Kong, Malaysia, Thailand, Guam, the Philippines and Indonesia.

While deployed to Iraq, I also traveled to Latvia, Moscow, Kuwait and the UAE and met and interacted with Iraqis, UAE Arabs, Kuwaiti Arabs, Pakistanis, Iranians, Indians, Filipinos, Chinese, Bosnians, Russians, Sri Lankans, and people from Bangladesh.

The point being that I believe that I can understand where people from these eastern ~ mostly matriarchal ~ societies are coming from in terms of everyday life. I’ve found that their perspectives are usually 180 degrees out from typical western (or at least USA western) ~ mostly patriarchal ~ perspectives regarding social status, wealth, health, etc.

 

For example, every single Iraqi that I met and had any kind of daily interaction with (over terms of weeks, months & years, not just days) preferred the USD over the IQD ~ without exception.

These were day laborers, merchants, interpreters, bank employees, business owners and professional folks like barbers, tailors, doctors and lawyers.

Most (and probably all) viewed the Iraqi government regimes as just another strong man in charge and switching from Sadaam to Brenner (Coalition Provisional Authority) to Allawi (CPA appointed) to Maliki (elected) didn’t really make much difference to them because they all experienced the same lack of control over their own destinies, no matter who was in charge.

 

Switching from an IQD with Sadaam’s face on it to a high denomination IQD (made in England and imported along with the USD by the CPA) wasn’t any big deal either because they all knew that they couldn’t bring either the Sadaam IQD or the CPA made IQD out of Iraq. First of all, it was illegal to do so and secondly neither one of those currencies could be spent outside of Iraq, anyway ~ so why bother.

The Swiss made Iraqi Dinar wasn’t even considered, because any of that currency that was still around was for the most part rumored to be parked in offshore banks in the accounts of the very wealthy that had already fled the country. Most importantly, though, all the Iraqis that I interacted with over the 3 years I was in-country knew that the USD trumped all 3 versions of the IQD in terms of buying power and acceptability both inside and outside of the Iraqi borders.

The USD was and still is the de-facto international currency of Iraq.

 

Foreign citizens leaving Iraq were under the same laws as Iraqi Citizens insofar as it was illegal to transport any IQD currency out of Iraq ~ everybody was checked twice at the Baghdad International Airport prior to boarding.

The US Military went through US Customs in Kuwait when they left Iraq and US Customs officials didn’t care if you brought a duffel bag full of IQD with you or not.

Over the 3 years I was there, I brought back millions of IQD in CPA high denomination banknotes. I finally de-mobbed in the summer of ’07 with an injured right hand after spending a year at what was rumored to be the most dangerous FOB in Iraq (at least between the Summer of ’06 and the Spring of ’07).

5-1/2 years and 2 surgeries later I’m fit enough to re-deploy, but I’d rather not go to Afghanistan if I can help it.

 

I now have some high denomination IQD currency in my home safe, as well as funds at Warka Bank including in both my USD and IQD accounts.

At one time a person could fund a Warka account by FedExing high denomination IQD currency to the main Warka branch in Baghdad, but now it is illegal to do so.                 

The reason I’m giving this background outline is to make the point that I figure that I’ve paid my dues in terms of having a credible opinion and/or a valid perspective on this investment. Of course, not everyone will agree with what I have to say, but I’m not worried about that.

I, as much as anyone currently invested in the IQD, would love to see a high value RV so that I could take the money and run with it somewhere else; however, after almost 9 years of waiting for a significant RV, perhaps a fresh perspective is in order.

 

Anyway, enough background.

 

Here is an outline of a (hypothetical) scenario that I can’t quite wrap my mind around.

 

In this (hypothetical) scenario, there has been no redenomination process and so the new lower denomination IQD banknotes have not been issued; and in fact, the CBI and/or the MOF have both publicly stated that for various reasons the plan to RD has been put off until at least 2014 if not 2015 and later. So, no IQD banknotes in denominations of 100’s, 50’s, 25’s, 10’s, 5’s, or 1’s are in circulation or expected to be in circulation anytime soon and the same goes for coins in (possible) denominations of .50, .25, .10, .05 or .01.

Actually, there are supposedly already some IQD 50’s in existence, but I’ve never seen any and I was unable to bring any home.

 

In this (hypothetical) scenario, Iraqi Citizens have a combination of both high denomination IQD banknotes and USD banknotes in a variety of denominations at their homes ~ in their wallets and in their safes or under their mattresses. Some have IQD bank accounts where the actual cash is stored in bank vaults and can be accessed during banking hours, and some even have digital bank accounts with line items on electronic statements that can be accessed 24/7 via debit cards at ATM’s.

 

In this (hypothetical) scenario, however, it’s safe to say that the majority of Iraqi Citizens and Iraqi banks deal in cash and are led by the CBI policy of daily cash auctions of banknotes in bulk quantities ~ and that’s for both IQD and the USD. The Iraqi currency is not traded internationally and cannot be spent outside of Iraq’s borders and so the daily auctions set the rate against the USD. Since the USD is traded internationally, the rate of the USD against other world currencies may vary, but the CBI generally maintains the rate of the IQD against the USD by way of the cash auctions.

 

In this (hypothetical) scenario, Iraqi Citizens are well aware of the superior buying power of the USD and in fact prefer it over their own country’s currency. They keep both currencies around for the convenience of buying goods and services produced in Iraq with the IQD and for buying goods and services produced outside of Iraq with the USD.

 

In this (hypothetical) scenario, the Iraqi Citizens all know that if push came to shove, they could all more easily get by on just using the USD as opposed to just using the IQD because the preferred goods and services available for purchase are produced outside of Iraq and require the USD to buy them.

Goods such as generators for electricity to power foreign made water pumps, as well as cell phones, computers and mp3 players for social and business connectivity are all found outside of Iraq.

Basics such as clean water filters, toilet facilities and cooking appliances are produced outside of Iraq as well and require USD to buy them.

Iraq depends heavily on foreign made vehicles for transportation purchased with the USD, not the IQD.

For all practical purposes, right now it is far easier to make change for purchases of smaller everyday items with the USD currency than it is to make change with the IQD banknotes/coins and that’s even before any significant RV has happened.

 

In this (hypothetical) scenario, the CBI has a posted net foreign reserve of US$67Billion and has a posted foreign debt of approximately US$92Billion.

 

In this (hypothetical) scenario, the CBI has so far issued approximately IQD64.6Trillion worth of currency in high denomination banknotes; which is worth approximately US$55.5Billion if traded in at the current posted rate of 1/1166.

 

In this (hypothetical) scenario, the Iraqi HCL has been passed, Iraq has been released from UN Chapter 7 sanctions and the CBI has completed a satisfactory (2nd) Stand-by Arrangement (SBA) probationary period with the IMF. The IMF Board of Directors has released the CBI from probation, thereby giving the CBI Board of Directors the green light to conduct business on a truly international scale ~ including trading currencies with the other approximately 170 countries in the IMF. The CBI has a free hand to set the international rate of the IQD as it sees fit.

 

In this (hypothetical) scenario, the rate of exchange for IQD against the currencies of these approximately 170 countries may at first seem complicated, but the CBI board realizes that if they just revalue their currency to a satisfactory rate against the USD, then all the other rates will quickly be reconciled because those other currencies already have existing rates against the USD ~ the most used and recognized currency in the world.

 

In this (hypothetical) scenario, even though RV rates of the USD against one IQD have been predicted to be coming out at anywhere from US$0.10 to US$4.00, I’d like to look at a relatively small RV rate with an easy to calculate figure ~ let’s say US$0.01 or a single penny for every IQD. It seems to me to be just as plausible as any other predicted rate and especially if the RV happens prior to any newer low denomination IQD banknotes and coins being introduced into circulation.

 

In this (hypothetical) scenario, of an overnight IQD RV of US$0.01 per IQD1.00:

IQD 25,000 would be worth US$250 (a 1066% profit margin from a $21.44 cost)

IQD 10,000 would be worth US$100 (a 1066% profit margin from an $8.58 cost)

IQD 5,000 would be worth US$50 (a 1066% profit margin from a $4.29 cost)

IQD 1,000 would be worth US$10 (a 1063% profit margin from a $0.86 cost)

IQD 500 would be worth US$5 (a 1063% profit margin from a $0.43 cost)

IQD 250 would be worth US$2.50 (a 1090% profit margin from a $0.21 cost)

IQD 50 would be worth US$0.50 (an 1150% profit margin from a $0.04 cost)

 

In this (hypothetical) scenario, every Iraqi Citizen that I ever encountered or even heard of during my 3 years in-country would literally jump at the chance to make a 1000% plus profit margin on a currency exchange that he or she didn’t even have to work for since the necessary IQD banknotes and coins would already be in his or her possession.

 

In this (hypothetical) scenario, every Iraqi Citizen (including the Kurds up north) would rush to the nearest bank or to the nearest ATM machine to make the exchange and the devil take the hind-most for the consequences ~ those consequences could be figured out later and besides the USD already spends very well inside Iraq ~ thank you very much!!

 

In this (hypothetical) scenario, there would be an extremely hard run on the CBI’s cash reserves of US$67Billion and the CBI would have to scramble hard just to supply its banks, ATM’s and Citizens with USD to keep up with the demand for this once in a lifetime exchange.

 

In this (hypothetical) scenario, it certainly wouldn’t take long for everybody in Iraq to possess nothing but USD banknotes, with all the high denomination IQD banknotes overflowing the local bank vaults waiting to be physically shipped back to the CBI for further redemption and/or destruction depending on the CBI Executive Board’s intention for initiating the RV in the first place. At the same time most banks would be empty of USD cash reserves and would be waiting for the CBI to supply more.

 

In this (hypothetical) scenario, even the CBI would be getting in on the act since the approximately IQD64.6Trillion dinar worth of currency that has already been issued in high denomination IQD banknotes and which was previously worth approximately US$55.5Billion would overnight jump to a new value of about US$646Billion.  

 

In this (hypothetical) scenario, the CBI’s next move would be hard to predict; therefore, one can only speculate on any move that would potentially fix the country being suddenly overwhelmed with USD in lieu of IQD.

 

Speculation: Perhaps the CBI decided that emptying the country of all the high denomination IQD banknotes inside of days or just weeks with an overnight RV was way easier than an RD which allowed 3 currencies to co-exist over a 90 day to 2 year period followed by an on-par RV.

 

Speculation: Perhaps the CBI executive board and the MOF figure that in order to re-establish the IQD as the official legal currency they would plan to introduce the new lower denomination banknotes and coins after a significant once in a lifetime overnight RV had settled down a bit. Perhaps the CBI and the MOF figured that after all those Iraqi Citizens who had missed out on the lottery type overnight RV (because they didn’t have very much IQD at the time) had got over their “mad as hell” attitudes and all those Iraqi Citizens who had been able to take full advantage of it had gotten over their initial giddiness, it would be time to get back to reality with some new currency.

 

Speculation: Perhaps one way to re-introduce the new lower denomination IQD banknotes as the official Iraqi currency would be to announce that despite the fact that most everyone had exchanged their high denomination IQD banknotes for USD, they still lived in Iraq and all debts public and private such as taxes and mortgages had to be paid only in IQD. In addition, an announcement that all public officials such as police, military personnel, politicians, teachers, utility employees, health care workers, etc would be paid only in the new lower denomination IQD banknotes which would be subject to the new rate of US$0.01 per IQD1.00.

 

Speculation: If that were the case, then the new lower denomination IQD banknotes and coins would have values like this:

IQD 100 would be worth US$1.00

IQD 50 would be worth US$0.50

IQD 25 would be worth US$0.25

IQD 10 would be worth US$0.10

IQD 5 would be worth US$0.05

IQD 1 would be worth US$0.01

All the new IQD coins would be worth less than a US penny.

 

Speculation: It seems that an Iraqi Citizen would still need lots of IQD to buy stuff.

 

Speculation: It seems that most Iraqi Citizens would still prefer the USD over the IQD.

 

Speculation: It seems that the intent of the CBI/MOF to re-establish the IQD over the USD as the official currency (after a significant RV) wouldn’t quite work with this (hypothetical) scenario since even those 2 establishments would have to spend a large portion of that new found (hypothetical) US$646Billion to buy back all the high denomination IQD now in circulation and then have to find even more dough to finance the cost of printing and issuing the new notes and coins.

 

Anyway, that’s an outline of a (hypothetical) scenario for the RV of the IQD (sometime in the future) that I can’t quite wrap my mind around as being a legitimate plan that will work.

 

Whatever the case, I’m already fairly busy getting my house and other affairs ready for me to ship out again and I might not be able to respond to any replies to this post.

Therefore, thanks in advance for any fresh perspective that might help me see the way for a significant RV to work in Iraq so that those of us who are foreign investors might realize an overnight financial windfall too.

 

Good luck to us all who at least took the chance!!

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The problem with that long and detailed exposition is that the likely first decision of the CBI would be to limit, at the same time as the RV, the amount of IQD that could be exchanged for USD in Iraq to a very small amount. Trump card played. Problem solved for the CBI.

 

The in-country effect of an RV would be...zero. Inside of Iraq, a Dinar is a Dinar.

 

The ONLY people that could benefit from an RV would be those of us outside the country who bought Dinar for almost nothing, and then only if the CBI doesn't keep us from cashing in our Dinar.

 

That's why what we are doing is called speculation.



Folks are trying to obfuscate the obvious with unnecessary complexity. The CBI holds the cards and makes the rules. Should they decide to do a huge RV, they will stack the cards in their favor. This isn't magic. It's simple math.

Edited by RVPleaseToday
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If I am an Iraqi, in Iraq , and I have Dinars and US dollars, i would NOT cash in my Dinars for US dollars because MY Dinars have more buying power now IN Iraq as well as OUTSIDE of Iraq. There would not be a run on the bank to get more US Dollars. IMO! IN IRAQ!

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In summary, what you are saying is ~ "No foreign investor or any Iraqi citizen for that matter is suddenly going to be a millionaire based just on a new revaluation of the IQD, but that doesn’t mean the investment is a bad idea" 

 

Haven't we heard this before..? 



If I am an Iraqi, in Iraq , and I have Dinars and US dollars, i would NOT cash in my Dinars for US dollars because MY Dinars have more buying power now IN Iraq as well as OUTSIDE of Iraq. There would not be a run on the bank to get more US Dollars. IMO! IN IRAQ!

 

Exactly...

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In summary, what you are saying is ~ "No foreign investor or any Iraqi citizen for that matter is suddenly going to be a millionaire based just on a new revaluation of the IQD, but that doesn’t mean the investment is a bad idea" 

 

Haven't we heard this before..? 

 

Exactly...

iranmaybe.pngheard it way too many times.

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Since this guy is invested, I wonder if he ever thought about finding out how people handled a currency appreciation in Kuwait...if knowing so much about what a currency change will be in his opinion?...It's said Kuwait's currency went down to .10, some say as low as .06...then returned to appx. $2.40?....From what I've heard...it did'nt disrupt Kuwait one bit by the change when the value returned, and they had access to US Dollars, as pretty much all countries do...

 

What else I find strange regarding Kuwait...is they are just smidgen on the map upside Iraq...they have the highest priced currency in the world, at appx. $4.00 per Kuwaiti Dinar....from 4 men that I speak to regularly, who worked that entire region, claim that Kuwait had always stolen oil from Iraq, mostly through directional drilling, even up to many miles into Iraq...the border demarcation issues are also predominently concerning oil/money as well...this is not to mention that Kuwait just put billions into the ISX..The Iraqi Stock Echange, Kuwait is building Hotels and Banks in Iraq, Kuwait bidded on oil in last auction and Kuwait said that they would be invested in every sector in Iraq...so, if Kuwait has been accomodating off of Iraq as per their oil, even for decades now, and even want to do more, as soon as legally allowed...would it not stand to reason for Iraq to be sitting on something that most assuredly would drive their currency to higher levels and soon...as you have the neighbor Kuwait, with the highest priced currency in the world..investing head over heels in everything you've got...wealth follows wealth and not poverty...this is the real picture..follow the money...in other words, Kuwait is already rich...but they are chasing Iraq and trying to invest with all their being into everything they can get their hands on in Iraq...and always have took advantage of Iraq...so, as Iraq advances with all the superpowers in there building, investing & drilling for oil...it would seem..IMO...Iraq must return to a valuable currency again..as per driving all of this for the future!...we will see?... 

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I’ve noticed that both ‘millionaire in training’ and ‘driver’ have asked similar questions that were (in my opinion) not quite answered fully either; so apparently I’m not alone in this need for a fresh perspective.

 

You are spot on, nobody wants to talk about the practical issues and how they will be addressed.

Since this guy is invested, I wonder if he ever thought about finding out how people handled a currency appreciation in Kuwait...if knowing so much about what a currency change will be in his opinion?...It's said Kuwait's currency went down to .10, some say as low as .06...then returned to appx. $2.40?....From what I've heard...it did'nt disrupt Kuwait one bit by the change when the value returned, and they had access to US Dollars, as pretty much all countries do...

 

You tell me, did Kuwait drop the salaries and prices overnight.

 

I do not think so, the Kuwait dinar became worthless during the invasion because the Kuwait people had to use the Iraqi dinar. After the invasion the KWD was reinstated as the national currency, it was not revalued. Anyone who had bought the KWD when the Kuwait people were giving it away obviously made a huge profit. Not quite the same.

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Phil.........Thanks for taking the time to thoughtfully look for some answers.......I like the others have responded may not be understanding what you are looking for..........

 

but I'll try anyhow.....???

 

some of the theme you had was the perception of the USD....and how the Iraqi people would favor it over the IQD.........I believe at the time of an RV...where Iraq is welcomed into the international community.........they would simply convert any USD in bank accounts to IQD...... the citizens would have so many days to turn in the USD they have....and these would be converted to IQD at what ever the new rate was.........there would be no option to this.........if you miss the time frame........you lose.........

 

This forces the change over in country.....even if the people prefer USD........

 

as for a rate......that's anyones guess......I do believe a lower rate makes more sense initially.....but I don't know any more than anyone else on that......

 

My major concern before we see any RV would be that by definition there needs to be a stable Govt.......That is hard to define with Iraq!!!    With Maliki still sitting in his position it is hard for me to believe that whoever is controling all of this would allow a major revaluation to occur with a dictator like Maliki still in place.......especially with his pro Iranian tendencies.......JMO on that one.....

 

Hope this is has helped........thank you for your service..........I too, hope you can avoid Afganistan......

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To support my speculation that most Iraqi Citizens would still prefer the USD over the IQD here’s a link to a 3 page news article that originally came from an on-line Middle East news journal called Al-Monitor at http://www.al-monitor.com/pulse/home.html

 

There are some die-hard DV individuals who claim that this particular Iraq Business News web-site is supported by western minded “opinion” pieces rather than real news stories and is therefore not to be referenced or believed. I would say that this particular story carries weight as news, not just opinion, but you can judge for yourself.

 

http://www.iraq-businessnews.com/2013/03/20/irans-role-in-iraqi-dinar-devaluation/

            

Here are a couple of quotes from the article:

 

“The increase in government spending means higher per-capita income. Subsequently, spending increases, and there is an increased need for importing goods. Providing these goods requires an increased demand for foreign currency, which led to the increased exchange rate.”

 

“Iran has nothing to do with the increased exchange rate. The CBI sells foreign currency to Iraqi customers to be used in funding trade transactions outside the country.”

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First of all, Philip, thank you for your service to our Nation.

Given the parameters you use in your scenario, it seems it would be best for Iraq to revalue the dinar to at least 10 cents to provide the Iraqis with some proprietary pride in their currency.

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The Iraq government has and always will attempt to keep their own people in poverty. They can care less if the average citizen lives at a higher standard. As long as there are no uprisings, demonstrations, or over throw of power, they are happy & rich.

 

The Iraq government wants the average Iraq to use US dollars. If they held their Dinar and it revalued - they would be rich. Who wants that?

The Iraq government will be happy if the average working person used dollars up until the revalue then switched to using dinars AFTER the revalue so that they are kept in their place.

After the revalue the government will be able to easily afford to restore the basic services (electrical, water, sewage) and the ecomomy will grow and the country will prosper. The average Iraq will be able to make a decent wage, afford decent housing, have cell phones, food, clothing and cars and they will be happy.

And the rich will become mega rich. Just like America. :)

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They would prefer the usd if the dinar was at $3.42

 

Why would you want dollars if dinar is worth more? In Kuwait, they do NOT use dollars at all. Our money ain't worth much there. After the Iraq Dinar revalues above 1 - 1, they will spend dinar because it is worth more. Just like Kuwait & other Middle Eastern countries with money worth more than ours. :)

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Hello Phlip and thank you for your post.  I read it a few times and understand you are coming from a place of respect for cultures of other peoples and also for their point of view in terms of their currency and that they have expressed to you their preference for using another country's currency instead of their own.  Your post made me think.  I know we all have opinions and the below comments are mine.  I am not expressing my opinion based on any information I may have read or by the views of others.  This is my opinion, and I have no credentials to back me up, but would like to have a go at how I see things.  In doing so, I imagine the following scenario in terms of how i would like to be living in my own country using another country's currency instead of my own country's currency. So....

 

say my country was invaded, and, at the time of the invasion, my currency was worth 3 times that of the US dollar.  During the period of war my country printed new currency, and the value of this currency, lets call it dinar, was practically worthless by quantity (as per prior to the invasion) and I would need 1600 of the new dinar currency to meet the value of the dollar that was being used more and more in my country.  All prices for consumer items began to relate to the dollar value rather than the dinar.  Just imagine that my 50 dinar note was worth less than 10 cents, and there was nothing I could buy for 10 cents.  So I began to prefer the dollar.  When the war ended the dollar remained and my own currency remained virtually worthless in terms of its face value as against the face value of the dollar.  So, as a resident of my country, do I want to stay forever using another country's currency?  The answer for me is simple - it is no I do not.  I want my own currency and I want it to regain its status both within my country and globally to the value it was prior to the invasion.  I want my Government to take on the responsibility of doing everything that needs to be done both within country and internationally to ensure that my country is using its own currency again and that it is both internally and externally acceptable and tradeable and of a realistic value.  I want my country to figure out how to achieve this in a well managed and balanced way so that myself and everyone else living in my country are not disadvantaged in this process.  We already suffered disadvantage when our original dinar became worthless, then when our new dinar had no real expendable value unless we had millions of it.  I would want the revaluation of my currency needs to contain no further disadvantage but rather advantage for myself and the people of my country.  MY opinion is also that one way to commence redressing the existing disadvantage is to take a quantum leap and align my dinar to the dollar being used in my country.  Our thinking is already in dollars so an easy transition.  After the dust settles and everyone has adjusted, then let my dinar slowly increase in value until it settles at a worth that is comparitive to the reality of what it is really worth on a global level.. which, I firmly believe, is a lot lot more than 1162 to 1 dollar.  I understand that currencies float around and some can even make largers value shiftst suddenly but irregardless of this there is always a status quo being a median to align to.  I would like the value of the currency of my country to settle on that status quo.

 

I cannot, even for a moment, consider that i would ever like to be living in my country ad infinitum using another country's currency.  My personal feelings of patriotism would not allow me to accept anything less than my own country having its own currency. 

 

The above post is based only what I would feel and want if my country was in a similar position to that of Iraq.  If the Iraqi people think differently about what they want for their currency and prefer to use the US dollar indefinitely I would need to respect this as it is their country and their decision.

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There is also a flip side of this equation.  They are also about to (over the coming decade) become a larger and larger exporter of oil (and other) resources.   Correct me if I'm wrong, but typically if you are an exporter of goods, a weak currency benefits you because you can get more for your goods.  Iraq currently (as you rightly point out) imports just about all of thier stuff.  They also have a unique situation where they currently operate with two  currencies, mainly the one that happens to be the World reserve currency.

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Can you spend Kuwaiti dinar in the U.S.?

if someone is willing to accept it .. theres no law that says you have too .

 

 the only way for iraq to rv ..is ..they would have to dollarize right now at these rates .. collect as manny dinars as possible ...  then rv ..  then de-dollarize ...

 

we all understand iraq cannot  rv 75 trillion existing dinars  to a dollar ,,, but they can do a currency swap  within the cbi  after dollarization  and before de-dollarization .. dollar value for dollar value .. with the  bremmers and the new dinar lower denominations  with a nutral effect on value ...//.. 72 trillion dinars worth 72 billion dollars  within the cbi  would become 72 billion  lower  denominations within the cbi .. same value  72 billion dollars  nutral  value exchange within the cbi ... but they would have to honor the rest of the dinars that still exist  at its new value for a dinar .. unless they totally  come up with new currency and not  just add new lower denominations  to the large  notes that still remain ..

 

 the co-existance of the  large notes and newly added smaller denominations .. would further eliminate the need for the large notes   with a new value of the single dinar .. and over a time period .. those large notes would be gone from circulation .. just like the 10,000 dollar bill in the us was eliminated .. it had no use  in the daily lives of ordinary citizens ..

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heck they could even peg an exchange rate to the new lower denominations  after they rv  ..for an exchange rate between the bremmer and the lower revalued dinars . at 10 cents .. or 50 cents . or 30 cents ..  or a penny .. its the govt of iraq and the cbi that will make that determination

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