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A better veiw of what a lop will mean for you as a Investor


willie
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Willie,

You did a great job explaining things with this LOP. However, for me one thing remains unclear.

It sounds like the redinomination is moving forward especially in Iraq.

Now, what about all of us here in the US that are holding a bag full of the 25's , 1000's & 10,000's. I think I am holding onto nearly 5 million of these Dinar in total.

Where will we be able to exchange these notes if no official RV has been anounced yet by the end of December?

I just don't want to be holding a bag full of wall paper if there is no action by then. Am I missing something here, and please explain.

Thanks

I dont think this will be any issue honestly, I guess at worst if they had an rv there but not here ( i cant see this happening) or did not do anything (also dont see this happening) I would say find someone in the middle east that could exchange it for you or sell it to ali.

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I like this the fact would be equal to getting a sledgehammer in the face! Now think of it this what happened when you were a kid and just hitting high school and you freshmen year and decided to stand up to that senior big dawg and take a swing. It was a first omg I just did that but what soon follows after the shock wears off??? Well thats what would happen to Iraq if they decided to screw over the rest over the world they will have destroyed all confidence in what they have worked towards. And guess what no more aid money no more support and if at worst we will be back to do what we have done once before, kinda of sad to say but its the truth. I believe this is going to be done one time and thats it they dont want the world to come down on them for a act of greed,because we all have bailed them out of the last few years be it a war or aid or forgiving debts.

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Willie,

I also thought about payback, as well. If they pulled a crappy thing like that, I think the world would have a hard time forgiving them. Still this is a Dog-eat-dog world! I hope it doesn't happen and I hope we all get some monetary relief!

Thanks for your posts and thanks for stimulating the thought processess!

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***** Just a thought ******

Willie,

I recommend that you have this wonderful explanation as a "Sticky" at the top

of the page, THEN, when someone in the future wants/needs an explanation, simply

direct that person to the sticky note.

HEY........ Maybe the LOP needs a "sticky" too...... then we wouldn't see the endless

posts trying to explaIn.

Just my opinion, and we all know about those.

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[

I also thought about payback, as well. If they pulled a crappy thing like that, I think the world would have a hard time forgiving them. Still this is a Dog-eat-dog world! I hope it doesn't happen and I hope we all get some monetary relief!

Thanks for your posts and thanks for stimulating the thought processess!

Well they are the new kid on the block do they really want to upset anyone or piss a super power off? And yes its a dog eat dog world, we have given them as much as they could ever ask for; money, debt forgiveness and most important the live of our young guys and gals over the for them to have a better life.

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They will remove the "000"s from their currency by taking in all "000" notes or declaring what is not turned in by the drop dead date worthless. They are removing the "000"s not the "value" of the "000"s. All "000" notes will be toilet paper permanently. No lower value just NO value. No LOP was or is planned for this currency EVER!! The use of this term has no place here but to confuse peeps. The "000" notes will join the "saddam" notes in that worthless currency bucket. Soooo can we PLEASE stop trying to find some small crack to squeeze another LOP theory through? I thought this was a dead horse.

Earnest T .. I don't think anyone knows exactly how this will play out, after the exchange period, Iraq may not honor the higher notes or you may only get the lower value. The theory is still pretty much the same. Whether there is no value or lower value, everyone will have the incentive to exchange the higher notes.

Asa reminder .. if this topic is so offensive to you, you don't have to read these threads.

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If you go through a bank and order your dinars at small denominations, they are available. I think a 50 is the smallest you can get now. According to the CBI webiste (http://www.cbi.iq/index.php?pid=Banknotes) the following notes are now in circulation : 50, 100, 250, 500, 1,000, 5,000, 10,000 and 25,000.

When Iraq does make even smaller denominations available, it seems reasonable to expect that banks world-wide would also have these available (those that deal in foreign exchanges). Iraq/CBI knows there are many investors. If Iraq wants to avoid having excess small bills being held by "investors," then an RV in tandem with or before a redenomination would make sense.

Since no one knows what Iraq's plans are, all these statements are just explanations of how various scenarios COULD play out.

If you read Tant's interview (), you will see how well planned the original exchange was. I appreciate Tant's analysis that this is all carefully thought out and planned down to the most minor details. I doubt they Iraq is trying to rip off anyone by allowing investors to buy the larger notes and leaving them holding worthless notes. Such a plan would harm their credibility at a time when they want to attractive investors and join the World Trade Organization.

Just my thoughts.

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Willie,

You are so right! Our fighting men and women are so precious to us! Without them, our freedoms wouldn't exist. On a personal note, Out of 5 of my uncles that participated in WWII, only 2 came back. I would suppose that the Iraqi's are probably de-sensitized by death so they probably wouldn't feel our pain, in terms of our human losses. But they have to know, if they pull a stunt (like the theory I threw out), the world won't be so forgiving!

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Im going say first of I did not write all this I did add some and delete some information. So here we go

Ok, in the interest of trying to figure out what is going onwith the IQD investment, all the talk of removing 000s and redenomination bythe end of 2010.

First, the term LOP is redenominated. Redenomination is defined as :

The process whereby a country's currency is recalibrated dueto significant inflation and currency devaluation.

To understand this definition better, we need to know thedefinition of devaluation, so devaluation is defined as:

A deliberate downward adjustment to a country'sofficial exchange rate relative to other currencies.

I think we can ALL agree that the IQD has been devalued. So with the above definitionsin mind, here we go.

The article that brought this topic to the forefront of ourdiscussions over the past couple of weeks stated that, the CBI has announcedtheir plans to redenominate the Iraqi Dinar to ease cash transactions. By the end of 2010, they intend to drop three zeros from the nominal value of banknotes. It should be noted that the actual value of the dinar will remainunchanged. That means that 1,000 IQD (pre-redenomination) and 1 dinar(post-redenomination) will both be worth the same amount in US Dollars.

Ok, to understand this section a little better, lets look atthe “nominal value”, this is defined as:

The stated value of an issued security that remains fixed,as opposed to its market value, whichfluctuates.

If we look at a currency as a issued security, which it is,the nominal value is the “face value” of the currency, ie $1.00 today = $1.00 tomorrow, the market value can change meaning that you may be able to buy more or less with $1.00 on any givenday, however the face value is still $1.00.

So what they are intending to do is change the “face value”without removing the “actual, or market” value of the IQD. So if you get paid 1000 IQD today, and it isworth 0.86 cents USD, then when the “face value” is changed, and you get paid 1dinar, you still make 0.86 USD.

So, how does this apply to the revaluation that we are all waiting for?

The CBI has stated also, “by the end of 2010, new banknotes will be fully introduced while the current banknotes will be gradually removed fromcirculation ( the small notes and the large notes). Both (current and new) denominations will be legal tender in Iraq until the current banknotes are completely withdrawn over a period of time. Economic analyst Hilal al-Tahhan was quoted as saying “the bank’s move is overdue.” He said he expects the currency change to go smoothly because of the decision to allow both the current and new smaller banknotes to coexist during an extended exchange period, leading to less turbulence in the economy.”

Based on the information , we know that they intend the “actual value” to remain the same after the “face value” is altered. We see that for a period of time, they intend to allow both the “current”, or “unaltered” currency to be useable, or traded at the same time as the “newer lower faced” currency. So the conclusion that is drawn here, is that for a time, presumably until the end of this year, the old currency which wehave, will be redeemable for the “face value”, ie 25,000 Dinar note will behonored as 25,000K. After the removal,or the expiration of the coexistence period, (presumablely 60-90 days) the old banknotes will no longerbe honored for their “face value”, but for the new value of 25 Dinars.

This allows both we as investors, and the Iraqi’s themselves to transition into the redenomination without any up heavle by those who do not understand what the actual value of their currency is.

Willie, I hope your analysis is correct if it is? I'll kiss YOU! and shave extra close just for you!

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Hey Willie,

Thanks for the explanation. I was of the same mindset as Sean, so your further explanation really helped.

I also wonder, too, if the reason for the change in currency, is to keep us Americans from becoming rich. I think the rv will come out low, and as we cash in our higher denomination bills, the lower denomination bills will be available to Iraqi's. When they quit accepting the higher denomination bills, then the rv will probably go up to $3.00 per dinar, and then and only then, would we be able to get the smaller denomination bills. They can't be too happy that we are getting rich off of them.

What are your thoughts?

The reason for the change in currency is because of the problem of counterfit bills being made everywhere....believe it or not even though they went through alot of trouble designing those bills, when there is a will there is a way....why do you think the US changes the bills every now and then?? because sooner or later someone finds a way to make a fake so it a way of staying ahead of the game and trying to keep counterfitting down to a minimum......

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rolleyes.gifThere still will not be a LOP......by your own admission.......60/90 days to turn in 25k's for 25k one dollar bills then you only get 25 one dollar bills after the 60/90 days. THAT is not a LOP if your smart enough to cash in before the 60/90 days are up. That my friend gives us an option. The LOP everyone been talking about in the past gives you no option. This is not a LOP in a practical sense. .........good post willie rolleyes.gif

I totally agree with you MONGO B):lol:

If Iraq Lops the entire planet will bomb them into antediluvian pre-history.

:lol::lol::lol:

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This makes so much sense! Thanks Willie. I would also like to point out that I would imagine Ali could possibly have an inside track on this. You can be sure he is or has set up his business to be able to handle the exchanging of the bills.....at a price! Smart business man. Either way, I'm ok to pay Mr. Ali for this service.

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