Central bank: a plan to raise the exchange rate of the Iraqi dinar

[skeptic1138]

Correct. Iraq is not experiencing hyperinflation now, but the results of past hyperinflation remain, which is why the money supply is so big (so one could say the currency remains hyperinflatED).  LOP is not a standard economic term as far as I know, where redenominatino is used.  If you RD during hyperinflation it doesn't really accomplish much if anything as it does not correct the problem, only the results of the problem.  Technically any replacement of one currency with anohter is an RD, so the move to the Euro is a redenomination as well but unrolling the results of past hyperinflation is the more common reason to do one I think.

[hame55]

Gee I would agree with a world that looks out for others.  Too bad your an atheist because when you die you won't have anywhere to go.

How do you know?

Buddhists don't have a God, yet they believe they go somewhere - into the spirit world, then back into a body again.

 

Hopefully not a Republican one...

Correct. Iraq is not experiencing hyperinflation now, but the results of past hyperinflation remain, which is why the money supply is so big (so one could say the currency remains hyperinflatED).  LOP is not a standard economic term as far as I know, where redenominatino is used.  If you RD during hyperinflation it doesn't really accomplish much if anything as it does not correct the problem, only the results of the problem.  Technically any replacement of one currency with anohter is an RD, so the move to the Euro is a redenomination as well but unrolling the results of past hyperinflation is the more common reason to do one I think.

You and Dinark seem like twins....LOL

 

So you are saying there is little chance they are collecting dinar in country, using the dollar, and then allowing other countries' treasuries to pay out a reasonable, say dime to fifty cent RV? 

That can't happen? It just HAS to be an RD given the circulation numbers, and of those you are SURE? Right?

What many argue as this news meaning the exchange rate or an RV miss the two as tied together.

I want you to know that if its internal its a rise for us as well. An argument that Iraq will benefit and we won't is nonsense. To think any of their financial shifts up or down doesn't affect (our dinar value)us IMHO makes me wonder if some of you truly understand economics or this speculative investment. As for a lop its impossible in this type of economy. An RV or RD is possible. This type of information is much more secretive than inside trading. I believe they are using the media to evoke very specific tactics and shifts and we Dinar holders are not even a concern of theirs... The picture is much larger than you and me. The strength of trade and economic stabilty and strength is paramount to Iraq and investors in Iraq and to the USA. This is a very thought out plan and the USA is extremely entrenched along with some other nations. Bush opened this door and we are all mearly scrap pieces of a bigger picture.

If I didn't believe in a nice benefit I have wasted a lot of time and money. The signs are on the wall... Lets see what the next couple of weeks bring... I am all in either way, those nay Sayers should gracefully bow out... Peace all. Go RV !

Imagesing...I always like your thoughtful posts. Thanks.

All the ego bashing gets tiresome, but it is part of human nature. Sort of like, what would happen if people were sitting in a waiting room for YEARS. They would talk, and eventually compete for ego supremacy.

 

As for the dinar...that's why we're here, right? I think you are right on. I am confused by "LOP not possible" - explain in relation to "RD possible" that you mentioned. I see LOP and RD as the same. They would not do a completely new currency unless to drop the zeros and correct past hyperinflation - and I still see that as a tragic possibility. Your thoughts?

[Darin]

The way we use LOP around here and how it could mean Loss of Profit -

Look at it this from this point of view:

You make a buy a good at a certain cost & you sell that good for cost + markup. The markup is your profit, right?

Well lets say that you left that in your bank account for years and inflation took hold.

That profit that you once had is no longer a profit as the value was diminished. You could hope that the value appreciates to the value it was at the point of the profit to maintain that profit, however a R/D would reduce that appreciation from taking an effect and therefor you would have a loss of profit.

Highly unlikely that anyone sat on a profit in a bank for years in terms of dinars, but you get the idea.

[skeptic1138]

How do you know?

So you are saying there is little chance they are collecting dinar in country, using the dollar, and then allowing other countries' treasuries to pay out a reasonable, say dime to fifty cent RV? 

That can't happen? It just HAS to be an RD given the circulation numbers, and of those you are SURE? Right?

Since the auctions have been taking in around 60T dinar a year for many years (and the GOI's budget pumping it back out), I'd say there are plenty of dinar around.  There is no indication that they have reduced the money supply (replacing it with dollars).  It also doesn't really help even if they were as it lowers both the dinar money supply and the dollar reserves in exact proportions and the exchange rate for a pegged currency is dominated by that ratio.

 

As for "allowing other countries treasures to pay out an ....  RV" I assume you are referring to the suggested schemes of other treasuries keeping dinar and then turn it in for highly discounted oil.  I see no reason why Iraq would want to give away its oil, but in any case how investors get paid is largely irrelevant to the problems making a big RV (even to a penny) impossible.  Its the dinar in Iraq that will be used to buy lots of foreign stuff that is the issue.

 

I'm not saying Iraq will RD, they might, they might not.  But an RD is possible, unlikely a huge RV (to a penny or more).

[zul]

Just a question....

 

If Iraq were to LOP, what happens to their "paid" IMF subscription/quota..? And what happens to the 75% "member's own currency" that become part of IMF assets. I'm sure ;like other members of IMF, Iraq has been paying quite a sum in their own currency since IMF introduce quota system (#was it in 1950s?). Will IMF allow their own asset to be LOPPED? 

 

"A member must pay its subscription in full upon joining the Fund: up to 25 percent must be paid in SDRs or widely accepted currencies (such as the U.S. dollar, the euro, the yen, or the pound sterling), while the rest is paid in the member's own currency."

[keepmwlknfny]

Just a question....

 

If Iraq were to LOP, what happens to their "paid" IMF subscription/quota..? And what happens to the 75% "member's own currency" that become part of IMF assets. I'm sure ;like other members of IMF, Iraq has been paying quite a sum in their own currency since IMF introduce quota system (#was it in 1950s?). Will IMF allow their own asset to be LOPPED? 

 

"A member must pay its subscription in full upon joining the Fund: up to 25 percent must be paid in SDRs or widely accepted currencies (such as the U.S. dollar, the euro, the yen, or the pound sterling), while the rest is paid in the member's own currency."

The value of what they paid doesnt change in a lop......Im not sure Im seeing what your getting at.

[unirod]

The value of what they paid doesnt change in a lop......Im not sure Im seeing what your getting at.

I'm not so sure about that statement Keep. If monitary policy is not stable, the day after a lop, inflation could erode that value thereby effectively screwing the holder (IMF) of that currency value. I would agree with Zul's reasoning and post....IMO

[Maggie123]

Since the auctions have been taking in around 60T dinar a year for many years (and the GOI's budget pumping it back out), I'd say there are plenty of dinar around.  There is no indication that they have reduced the money supply (replacing it with dollars).  It also doesn't really help even if they were as it lowers both the dinar money supply and the dollar reserves in exact proportions and the exchange rate for a pegged currency is dominated by that ratio.

 

As for "allowing other countries treasures to pay out an ....  RV" I assume you are referring to the suggested schemes of other treasuries keeping dinar and then turn it in for highly discounted oil.  I see no reason why Iraq would want to give away its oil, but in any case how investors get paid is largely irrelevant to the problems making a big RV (even to a penny) impossible.  Its the dinar in Iraq that will be used to buy lots of foreign stuff that is the issue.

 

I'm not saying Iraq will RD, they might, they might not.  But an RD is possible, unlikely a huge RV (to a penny or more).

 

I am always amazed at your ability to stay detached... and your knowledge.

 

Kudos To You.

 

I enjoy reading your post.

[keepmwlknfny]

I'm not so sure about that statement Keep. If monitary policy is not stable, the day after a lop, inflation could erode that value thereby effectively screwing the holder (IMF) of that currency value. I would agree with Zul's reasoning and post....IMO

The same could happen at anytime period......any currency could suffer instability at any point and crash.....the situation your giving isnt something that could happen ONLY after a country redenominates/lops zeros......

 

So dont you think that regardless, there are measures in place for adjusting/adjusted currencies values?  

 

The point I was making is that just simply the process of deleting zeros, doesnt change the value of the amount of currency that the IMF may hold......

[skeptic1138]

I am always amazed at your ability to stay detached... and your knowledge.

 

Kudos To You.

 

I enjoy reading your post.

thanks.  given the trashing I get from some, its most welcome.

[zul]

The value of what they paid doesnt change in a lop......Im not sure Im seeing what your getting at.

 

Let's make this more easier..

You are saying the subscription Iraq pays between 2003 and now (in their own currency, IQD, which currently in the possession of IMF), does not change? Meaning, they will be LOP? 

Edited June 5, 2013 by zul

[Maggie123]

Let's make this more easier..

You are saying the subscription Iraq pays between 2003 and now (in their own currency, IQD, which currently in the possession of IMF), does not change? Meaning, they will be LOP? 

 

I certainly see your point.

 

But kinda like China wouldn't they WANT to keep it low?

 

Just Asking  

 

 

 

PS. I know they don't export much more than oil... but they have "high Hopes" and not to mention they really don't like us much.

 

Might they be waiting out the fall of the "petro dollar"?

 

I wouldn't blame them.

[willy1der]

Like we said in the '70s: ... soliiiiiiiiiiiiiid.

My goodness, I haven't heard that since... oh probably the '70's. Tattling on yourself vomer!

[zul]

I certainly see your point.

 

But kinda like China wouldn't they WANT to keep it low?

 

Just Asking  

 

 

 

PS. I know they don't export much more than oil... but they have "high Hopes" and not to mention they really don't like us much.

 

Might they be waiting out the fall of the "petro dollar"?

 

I wouldn't blame them.

 

Maggie, It would be more attractive for Iraq to keep them low. But i heard some of their debts to foreign countries are gov bonds (#payable in dinar), worth billions before sanctions were imposed . . Will those countries be willing to accept billion of dinars at current value..? 

 

Not to mention, some of their frozen assets could very well be in dinar, worth billions at one time. Will they settle for millions at current rate.

 

I'm just thinking aloud Keep, 

Edited June 5, 2013 by zul

[staunch]

I am always amazed at your ability to stay detached... and your knowledge.

 

Kudos To You.

 

I enjoy reading your post.

Unfortunately I have to agree with this. You don't say what I want to hear , but you stay calm and mostly respectful and clearly have a great deal of knowledge on the subject.

[SocalDinar]

The same could happen at anytime period......any currency could suffer instability at any point and crash.....the situation your giving isnt something that could happen ONLY after a country redenominates/lops zeros......

 

So dont you think that regardless, there are measures in place for adjusting/adjusted currencies values?  

 

The point I was making is that just simply the process of deleting zeros, doesnt change the value of the amount of currency that the IMF may hold......

 

Every Fiat Currency eventually fails including sea shells

[PD41]

Every Fiat Currency eventually fails including sea shells

My Abalone collection has always gone up in value.

PD41

[SocalDinar]

My Abalone collection has always gone up in value.

PD41

GM MB

And thats quite the collection you have.

Edited June 5, 2013 by SocalDinar

[zigmeister]

I don't know why we are discussing and RD or Lop, or restructuring their currency.  At the present time those agenda's have been put back or set aside or locked in a closet.  Until we see a new country code I would venture to say there are other ways around it.  I would like to see a discussion on other possibilities to bring strength to the dinar.  

[sandstorm]

If the central bank is announcing plans to increase the value......we can guarantee if the rate moves it will be very little. central banks dont announce large appreciations. central banks dont tip off speculators. they announce corrective measures to control an out of control situation. Central banks have announced hundreds of corrective actions through the years. its what they do.

[zigmeister]

As far as I can tell they have not announced an RV, but more of a promise to the people.  The dinar exchange rate will be brought under control against the dollar.  What mechanisms they have in mind is hard to say.  We do know they are selling Tbills as they did this yesterday in an auction.  Apparently they have been doing this for at least 3 years.  This is a good thing.  

[imgesing]

They weren't and aren't in a HYPERinflated economic situation. They were the opposite. When we went to war they went down... They were never up except for a fictitious dollar amount printed on an easily copied paper currency. Smartly, we reprinted their dollars after they were economically ruined. We knew they had many rich reserves of oil, metals, gems, and history of location. It's a perfect situation different from others you have stated.

To say LOP or loss of profit is 180 degrees off. Their currency is very under valued in trade and the zeros make it more complicated and difficult for them on a global scale. Will they RD? Or will they RV? This is the question as well as when and how or what order..? Those who think the USA isn't involved do not stay abreast of the past news. It is convoluted and yet aligned with a path.

They can't LOP or lose profit by taking away the zeros. They will only win by doing this. It would be an RD, if this is how they handle this. This is the proper term. Yet, if you want to continue to use the term LOP go ahead... Just in my view makes me question the knowledge of those who say that. Of course as always this is based on my knowledge... Or lack there of....

[fib1618]

If the central bank is announcing plans to increase the value......we can guarantee if the rate moves it will be very little. central banks dont announce large appreciations. central banks dont tip off speculators. they announce corrective measures to control an out of control situation. Central banks have announced hundreds of corrective actions through the years. its what they do.

The truth is refreshing. Thanks

[keepmwlknfny]

They weren't and aren't in a HYPERinflated economic situation. They were the opposite. When we went to war they went down... They were never up except for a fictitious dollar amount printed on an easily copied paper currency. Smartly, we reprinted their dollars after they were economically ruined. We knew they had many rich reserves of oil, metals, gems, and history of location. It's a perfect situation different from others you have stated.To say LOP or loss of profit is 180 degrees off. Their currency is very under valued in trade and the zeros make it more complicated and difficult for them on a global scale. Will they RD? Or will they RV? This is the question as well as when and how or what order..? Those who think the USA isn't involved do not stay abreast of the past news. It is convoluted and yet aligned with a path.They can't LOP or lose profit by taking away the zeros. They will only win by doing this. It would be an RD, if this is how they handle this. This is the proper term. Yet, if you want to continue to use the term LOP go ahead... Just in my view makes me question the knowledge of those who say that. Of course as always this is based on my knowledge... Or lack there of....

If Iraq.never experienced really high inflation, how do you explain all the zeros on the notes?

[MyLadiesDaddy]

If the central bank is announcing plans to increase the value......we can guarantee if the rate moves it will be very little. central banks dont announce large appreciations. central banks dont tip off speculators. they announce corrective measures to control an out of control situation. Central banks have announced hundreds of corrective actions through the years. its what they do.

One thing that I have learned over the yrs is that people of a

 

negative state of mind can never handle the TRUTH. 

 

And with regard to Iraq there is NO guarantee's. 

 

You can't put Iraq in with the rest of the world when it comes to 

 

an rv as no other nation in the world has the resources that Iraq does

 

and been in the exact same situation as Iraq now is. With the exception of 

 

one. AMERICA. We used to have three zeros and over time we did indeed 

 

bring up the value to become a world reserve currency. And our triple zeros 

 

notes are actually still viable currency today, Though you would get more for 

 

the historical value of one than the face value. If you want to see a model of 

 

what Iraq will most likely do then look to our own history.