My View of "Delete Three Zeros"

[Pat H]

The term “delete three zeros” is a phrase that strikes worry into the hearts of thousands. This is my take on what that phrase really means. First, please note that it is always used in conjunction with some words about “not changing the value”. This is, of course, directed at an internal audience. The Iraqis are pushing for RV a lot harder than we are. Here is my translation of all that: If an Iraqi goes to the market today and buys a loaf of bread for 1,000 dinars and the zeros are removed overnight, tomorrow they will go to market and buy a loaf of bread for 1 dinar. The zeros will come off both the currency and the prices. A very simple matter, internally. What about externally? Externally, if a dinar is worth .000854 dollars, remove the zeros and it will now be worth .854 dollars (the origin of the recurring 85 cent RV rumor). After all, they have no ability to adjust the price of a dollar. Removing the zeros only, would not affect prices internally, but would garner them a whole lot more buying power externally. Now, think about the contracts they have out and the money they still owe. They could just as well choose to make that 1 dinar worth 2.00 dollars or 3.00 dollars, without changing the internal promise to “delete zeros but not change prices”. The market would adapt to the influx of goods and prices of non-government sponsored goods and would reflect the new wealth of goods and services that become available as the people get back on their feet.

“Delete three zeros is not a term to fear, it is another way of saying “RV”.

[pop]

I have to change my strategy if this is all of the change in value they are going to do.

It would make our dinar worth .85 of a usd .

I can't see this happening unless it is just the first move and will be used to draw in all the large bills for distruction. If they do this and issue a time period for us to exchange then this is all we will get and not be able to hold our dinars to cash in later at the higher rate?? If I am right would someone please confirm if they know for sure??

THANKS, REV DAN

[thegente]

If they RV @ .85, speculation will destroy them. They will not risk a run of EPIC proportions to pull in some larger notes held by smaller speculators, it would leave them wide open to hedge-funds and the like. Exactly what they DON'T want. If they RV at a rate similar to their neighbors, they will avoid this, and make some smaller speculators (like us) millionaires, which is a drop in the bucket to them.

[moneydude]

If they RV @ .85, speculation will destroy them. They will not risk a run of EPIC proportions to pull in some larger notes held by smaller speculators, it would leave them wide open to hedge-funds and the like. Exactly what they DON'T want. If they RV at a rate similar to their neighbors, they will avoid this, and make some smaller speculators (like us) millionaires, which is a drop in the bucket to them.

I, too, think that an RV that is too low could cause unwanted world speculators to jump in. However, let us not forget that the #1 oil nation in the world is Saudi Arabia and their currency is only worth $.27 to our dollar.

[JugDawg1]

The truth of it is, my view of this whole thing is :blink: The sad part of this is I'M NOT JOKING. Well kind of, sort of, OKAY, I'm joking but not really.

[SoldierOfIndependence]

I, too, think that an RV that is too low could cause unwanted world speculators to jump in. However, let us not forget that the #1 oil nation in the world is Saudi Arabia and their currency is only worth $.27 to our dollar.

.27

.85

3.22

Even if it is .10, it would grow a 1000$ investment into 100,000$. I've never seen a return that huge (not that I'm some big investor). That's perspective! However, I REEEAAAALLY like the idea of 3.22, or higher....

[Joe P]

I, too, think that an RV that is too low could cause unwanted world speculators to jump in. However, let us not forget that the #1 oil nation in the world is Saudi Arabia and their currency is only worth $.27 to our dollar.

The reason their money is valued so low is because they share their oil revenues with their citizens. Conversely, the Bahrain Dinar is at $2.65ish because they don't share among the populous.

Just so you know.

Now...for all the other readers, the dinar basis point of .86 is the nominal value from which their GDP resources increase from. Now this is very important...in order to de-dollarize Iraq the exchangeable rate MUST be higher than the dollar by at least a couple pennies. If not, the citizens will continue to use the dollar. All if us are going to be blessed at least 1:1. If the IMF is certain Iraq can sustain a higher rate then it is even better.

This very special event is for the billions of our globe, not just us. Now...be very aware if the coming depression this will bring.

After the 300,000 of us drop billions into the economy from cars and houses and unimaginable trinkets, the spike will not be sustainable. The drop will be just as dramatic as the peak. So prepare for that...buy precious metals 6 months from now because their prices will fall so rapidly 60 days after the RV.

Just so you know.

God bless all of us that we become great stewards of the blessing. If each of us can help 10 people then those 3 million will help others. I am awed at thus event.

[JugDawg1]

The reason their money is valued so low is because they share their oil revenues with their citizens. Conversely, the Bahrain Dinar is at $2.65ish because they don't share among the populous.

Just so you know.

Now...for all the other readers, the dinar basis point of .86 is the nominal value from which their GDP resources increase from. Now this is very important...in order to de-dollarize Iraq the exchangeable rate MUST be higher than the dollar by at least a couple pennies. If not, the citizens will continue to use the dollar. All if us are going to be blessed at least 1:1. If the IMF is certain Iraq can sustain a higher rate then it is even better.

This very special event is for the billions of our globe, not just us. Now...be very aware if the coming depression this will bring.

After the 300,000 of us drop billions into the economy from cars and houses and unimaginable trinkets, the spike will not be sustainable. The drop will be just as dramatic as the peak. So prepare for that...buy precious metals 6 months from now because their prices will fall so rapidly 60 days after the RV.

Just so you know.

God bless all of us that we become great stewards of the blessing. If each of us can help 10 people then those 3 million will help others. I am awed at thus event.

Different slant on things. Thanks for sharing that, it's food for thought and that's for certain

[thegente]

Thanks for the info JoeP. I'll take a buck+!

[SuperFlyJr]

If they RV @ .85, speculation will destroy them. They will not risk a run of EPIC proportions to pull in some larger notes held by smaller speculators, it would leave them wide open to hedge-funds and the like. Exactly what they DON'T want. If they RV at a rate similar to their neighbors, they will avoid this, and make some smaller speculators (like us) millionaires, which is a drop in the bucket to them.

All this talk about speculators destroying their currency only holds true if they don't do a managed or controlled float. But the consensus seems be that they will peg it to a basket of currencies so it cannot fluctuate wildly. Makes sense to me, so they can come out at whatever value they want without worries over huge spikes or drops.

GO RV!!!!

Edited October 11, 2010 by SuperFlyJr

[Joe P]

All this talk about speculators destroying their currency only holds true if they don't do a managed or controlled float. But the consensus seems be that they will peg it to a basket of currencies so it cannot fluctuate wildly. Makes sense to me, so they can come out at whatever value they want without worries over huge spikes or drops.

GO RV!!!!

HEY FLY,

I am certain that I am right about this...however the last time I walked on water I SANK. LOL

They can choose three options only: fixed, managed, and free float. Those three terms have other labels but mean the same thing. Pegging is a process of "marriage" for lack of better word. Because they peg to the USD or WAN or STERLING or EURO...nine if which manage fluctuations. Market, supply & demand, etc will dictate the pendulum swings. On a managed float or fixed, Iraq can protect its reserves.

Here is the true test...if they come out too high or too low is not an issue with speculators per sue. It's protecting their "other country currency reserves" within the CBI. Too low or too high will require them to expend their reserves. This cannot happen or Iraq will go broke. The pendulum swings will not BREAK THE BANK.

I truly expect a managed float "pegged" to the USD. This gives Iraq protection and negates China trade imbalances. It will strengthen the USD and solidify the USD as the primary global currency again. This talk if GCC Basket is not going to happen for years.

Finally "pegging" to the USD ensures Iraq's stability in the eyes of the US lead IMF and UN.

[Guest Ratatap]

Thanks PatH for the post - interesting going backwards with it....We make out anyway it goes really!!!!!

GO RV !!!!!

[SoldierOfIndependence]

Pegging is a process of "marriage" for lack of better word.

....I KNEW IT!!!! I got pegged.... .....

Edited October 11, 2010 by SoldierOfIndependence

[jshannon3]

The term “delete three zeros” is a phrase that strikes worry into the hearts of thousands. This is my take on what that phrase really means. First, please note that it is always used in conjunction with some words about “not changing the value”. This is, of course, directed at an internal audience. The Iraqis are pushing for RV a lot harder than we are. Here is my translation of all that: If an Iraqi goes to the market today and buys a loaf of bread for 1,000 dinars and the zeros are removed overnight, tomorrow they will go to market and buy a loaf of bread for 1 dinar. The zeros will come off both the currency and the prices. A very simple matter, internally. What about externally? Externally, if a dinar is worth .000854 dollars, remove the zeros and it will now be worth .854 dollars (the origin of the recurring 85 cent RV rumor). After all, they have no ability to adjust the price of a dollar. Removing the zeros only, would not affect prices internally, but would garner them a whole lot more buying power externally. Now, think about the contracts they have out and the money they still owe. They could just as well choose to make that 1 dinar worth 2.00 dollars or 3.00 dollars, without changing the internal promise to “delete zeros but not change prices”. The market would adapt to the influx of goods and prices of non-government sponsored goods and would reflect the new wealth of goods and services that become available as the people get back on their feet.

“Delete three zeros is not a term to fear, it is another way of saying “RV”.

Pat H, below is a link I found regarding nominal value vs real value of currency. If I read this correctly. it would appear that the nominal value of the IQD is the value as printed on the face of the note and not the real value (exchange value). Am I wrong? see below. mfs.rutgers.edu/mfc/mfc11/.../MFC-236%20SvedsaterGambleGarling.doc

The money illusion is an economic phenomenon that has been recognized for a long time (Fisher, 1928; Patinkin, 1965). It refers to the tendency to disregard the real worth of money and instead focus on the nominal value, that is, the numbers printed on notes and coins. Shafir et al. (1997) conducted a series of experiments demonstrating its existence in a number of contexts, such as in association with earnings, transactions, contracts, and issues of fairness. They found that participants facing hypothetical monetary transactions did not fully take into account the change of the value of money over time due to inflation. Instead of choosing the most economically beneficial alternative, they confused the real value of money with its nominal representation. These results were explained in part by the salience of the nominal representation, in part because thinking in nominal terms is easier than thinking in real terms. Similar examples of the money illusion have recently been reported by Fehr and Tyran (2001), who also demonstrated that a weak money illusion at the individual level may cause considerable effects on the aggregate.

MFC-236 SvedsaterGambleGarling.doc

[Freedom Biz]

The reason their money is valued so low is because they share their oil revenues with their citizens. Conversely, the Bahrain Dinar is at $2.65ish because they don't share among the populous.

Just so you know.

Now...for all the other readers, the dinar basis point of .86 is the nominal value from which their GDP resources increase from. Now this is very important...in order to de-dollarize Iraq the exchangeable rate MUST be higher than the dollar by at least a couple pennies. If not, the citizens will continue to use the dollar. All if us are going to be blessed at least 1:1. If the IMF is certain Iraq can sustain a higher rate then it is even better.

This very special event is for the billions of our globe, not just us. Now...be very aware if the coming depression this will bring.

After the 300,000 of us drop billions into the economy from cars and houses and unimaginable trinkets, the spike will not be sustainable. The drop will be just as dramatic as the peak. So prepare for that...buy precious metals 6 months from now because their prices will fall so rapidly 60 days after the RV.

Just so you know.

God bless all of us that we become great stewards of the blessing. If each of us can help 10 people then those 3 million will help others. I am awed at thus event.

Thanks for this assessment, Joe. I started buying physical silver in the spring. I didn't get much because I held off to buy dinars. But it's already gone up by about $4 per ounce. Wish i had more. But now you're thinking it's going to drop after RV? And that is the time to buy more?

One thing is for sure, I agree with your assessment that a sudden influx of massive value into the global economy is going to have some serious consequences. We don't know for sure what they will be. What is certain is that when we cash in, we will not be "set for life" as some believe. Once you have money, you need to be vigilant and stay on top of the shifting sands of financial markets and trends if you want to hold onto it. With money comes the responsibility to manage it.

I will be watching closely. To manage any possible bounce back, I will make sure that I have physical assets (like silver) and farmable land. I don't know whether there will be a depression, but no matter what happens I want to make sure I have access to food and water. That means getting back to basics of providing for myself and my family. Land, seeds, animals, off-grid energy, food storage capacity. In a word, self-sufficiency. That's more important to me than a fancy car or other toys. Of course, if we come in over $1 then I'll have plenty for a few luxuries too!

Thanks again.