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CBI GETTING READY


Don Paul
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I am thinking this is what we are realistically looking, but I am hoping for the better like everyone else, but I just can't see this country paying out millions/billions/and possibly even trillions of US Dollars to investors/speculators. The economy would collapse.

these were my thoughts before I purchased any Dinar at all...then I read a post on here sometime back that explained how the trade would go down that made more sense to me.

to sum it up it was explained that Iraq would "buy" the Dinar back from the FEDS with oil.. and if the exchange rate was 1USD:1IQD it would only cost Iraq $16,250 (production cost ) to buy back 1Million Dinar. EVERYBODY WINS!!!

Hope thats the case. :)

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shymysten, i appreciate your point of veiw and thanks for not freaking out when someone disagrees with you.The other thing your not taking into account is the other denominations of their currency are already printed.At worst they will ghive people a time limit for trading their 25000 Dinar note for 25 dinars equal in value to the 25ooo dinar note witch dosen't rob the people or de value the currancy.Both denomination's can exist with one another with the same unit of measure quite easily.Your scenario may have been used before like Pres. chavez did.This however is highly unlikely in iraq for many reasons.I don't see them pulling off stealling 24,975 dinar from it's citezens and other countries without the UN. US. IRAQI's not revolting over it.They will have to give every person what that 25000 dinar is worth as an exchange scenario or do as the article states slowly pull the larger notes out of circulation as the 2 notes coexist with the other.Just like they have done in the Us. with the $1000 ,$500 bill.They didn't just say sorry we're going to give you a dollar for your 1000 dollar bill.This tactic is so unnessasary for them.All they do is give their currancy a re-instated value or re- denominate the currancy's value above or equal to the USD and it will become pointless to hold onto the larger Dinar note;because now your walking around with way to much cash or puchacing power in your pocket for it to be usefull to use the 25000 denom's just like it would be way inconveiniant to tote a truckload of 25 dinar notes around for grocery needs.Either of these two make day to day buisness impossible.Also the Iqd is going to be a globely traded currency,they want foreign investor's to keep coming to rebuild Iraq, they want their currancy back to previous level's so they have greater buying power for import's.If they leave the 25000 dinar note in play until after RV their people have money to spend. Real money,not 20 buck's extra for the Bar on friday afternoon. :lol: This will fuel the internal economy and put many back to work and giverise to many old and new buisnesses in Iraq.

Ther are many logical reason's why i disagree with your scenario,but i'am not a banker or a country maker.I really hope that i'am not incorrect in my thinking .But like you i'am confident i'am not,for far more reason's than written here.This very subject has been discussed heavily on DV even before the article with selah put out the confusingly worded statement's [or bad translation at the least] talking about removing o's from the currency.Shabibi actually came out and stated to the media what you are talking about will not happen.Don't know the link but it was greatly cellabrated in the forum chat's and used as a pounding tool in the lopp debate about 4 to 6 monthe's ago. I looked at your link and it is interesting.Some one gave you a negative i guess for your point of veiw .I 'am going to give it a + because this is what this site is about different point's of veiw even if i don't want to agree with you! :D Thank's for the reply and i hope i gave you a new perspective to look at.Peace and have a Merry Christmas

B)

Yes les i know the math, i was just using rounded off number's for a simplified example for those earlir in the post who clearly had no idea how to do the math, hoping to cause less confusion using a rounded figure .

If you could find that post, I would be so grateful. I just bought another 1 MM Dinar this morning!!

Also, thanks for not insulting me for having a different perspective. I read the article about the Rothschild's having a very large stake in the ICB, and thought their scenario with the continental dollar was very plausible. It gave me alit of hope, however, i thought that this could also work in reverse with misinformation. For example Tim Geitner's statement that the US would never devalue it currency, yet that's exactly what they are doing printing more US Dollars. So why did he say it then? To instill confidence in the market and keep investers investing their money rather than fleeing from the dollar and stocks for solid currencies like gold and silver.

The ICB is a central bank, just like. The fed...which makes them capable of the same tactics of "damage control".

Thank you again for your civility, honesty and the discussion...it is very much appreciated!!!

Again, i would live to have a link to the article you spoke of. Thnx!!!

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Okay so I finally got a chance to read through everything in this topic. I REALLY hope there is not a redenomination. I've read a few articles as recent as September and August that say there's not, however, they were opinion pieces.

Secondly, I see alot of misinterpretations of what a redenomination in Iraq means. It is not a devaluation of any kind whatsoever, It's actually an deflation of a currency that has increased through inflation. Has anyone asked the question why there is a 25000 dinar note? The note is so high because it would have taken wheel barrows full of money to pay for anything, so they increased the size of the notes. Redenominating the currency would in effect DEFLATE the currency to "manageable" levels. The revaluation will then give it a proper exchange rate.

But what we cannot forget is that currency IS a MEASURE of wealth, and there are UNITS to measure that wealth. When they released the article with the 2km = 2 meters explaination they were trying to point this out.

There are 5 attributes of currency:

  1. It has accepted value to everyone. That's obvious.
  2. It is durable. What's the use of money if it falls apart in a short time? It had to hold its value as long as possible.
  3. It is easily divisible. It could be broken down into small pieces or amounts for small purchases.
  4. When it is broken down into small pieces, however, it still has to be consistent in value and quality. One unit of it, gram, ounce or whatever, has to be the exact same as any other unit of the same weight or appearance.
  5. Finally, money has to be convenient to use. That's obvious, too.

What is important to us here is Attribute #3 and #4.

Knowing that the currency has been articficially inflated (through Inflation), thus the higher denominations on the bills, if we were to redenominate those bills by removing the 000's, while introducing an actual bill with a deflated denomination, those two bills could co-exist and remain equivilant to one another, just like 2km and 2000 meters can co-exist and remain equal in value. What everyone is worried about is how that will affect its conversion into US Dollars...and that's where all the misinterpretations and misrepresentations are happening...

Let's do that very simplistically using the 2km and 2000 meters example first.

If 2km = 2000 meters and 2000 meters = 6561.679 feet then wouldn't it be safe to say that 2km also equals 6561.679 feet?

TRUE STATEMENT

2km = 2000 meters = 6561.679 feet

Okay so lets move to dinars and we'll just say there is a 1IQD:1USD ratio for simplistic conversions

1000 dinars (inflated currency) = 1 dinar (deflated currency) = 1 USD

There is no devaluation, the currency is currently in an Super-inflated state think about it...

If 1 IQD used to equal 3.20 USD, how did we get to a 1170 IQD = 1 USD ratio?

Well according to every single article I have read and most of them in these forums, it was through inflation because of the war. The dinar was inflated to some 27 trillion in circulation which significanly reduced the value and purchasing power of those dinars.

In contrast, in 2009 there were some 2.585 trillion US Dollars in circulation

This puts into perspective the purchasing power of the dollar compared to the dinar. What they are proposing to do is remove 000's from the 27 trillion to make it 27 billion by redenominating the currency, exchanging the 25k, 10k, 5k and 1k notes, then destroying them. We've all read this article and that was very clear.

Again, lets take a look at what this does to the value of Iraqi currency as a whole when taking this into perspective.

Currently there are:

27 TRILLION Iraqi dinar in circulation

2.585 TRILLION US Dollars in circulation

If they do as they redenominate and destroy those denoms with 000's they then reduce the currency circulation to 27 BILLION.

Now lets do that contrast/comparison of value and purchasing power of the dinar next to the dollar, both before and after any said redenomination

Before

27 TRILLION Iraqi dinar in circulation

2.585 TRILLION US Dollars in circulation

After

27 BILLION Iraqi dinar in circulation

2.585 TRILLION US dollars in circulation

Tell me, has the currency been revalued? Well, yes and no. The dinar has decreased it's purchasing power to the iraqi citizen and, the exchange rate to the US Dollar currently remains the same, however, in order for the purchasing power to increase globally, there must still be a revaluation to take into account that there are now less of the dinar in circulation. Even less than the US - This would inherintly affect the Global value of the dinar and a revaluation would have to come VERY soon after. Why? Because Attribute #1 has now been affected by the law of supply and demand. With the decrease in circulation of the dinar by a HUGE number this will force a revaluation to occur worldwide. It will have to be accepted.

Just as our US dollar is being depegged from most economies around the world - because we have fired up the printing press, countries are accepting less and less that the dollar retains the value it once did. This happened to the Roman Empire around 193 AD when Septimus Serverus reduced the silver content of the denarius, in effect, debasing the currency and devaluing it by over 61%. Within a very few years, the denarius stopped being the world’s leading international currency. After Serverus, it completely stopped being accepted by the rest of the world.

India was the first foreign country to stop accepting the denarius and insisted on payment in pure gold. And then the rest of the world followed. This blow to Roman trade translated into a huge decline in Roman living standards. Imports became beyond the reach of any but the very wealthy.

This is exactly what IRAQ is coming out of. They inflated their money so much by printing 27 Trillion dinars, it stopped being accepted and traded around the globe. A huge decline from once being worth far more than the US Dollar, and many other currencies around the Globe.

Do I want the lop to happen? ABSOLUTELY NOT!!! However, knowing the history of world currencies and a strong dose of skepticism helps me to keep one foot flat on the ground. I am a business man, and to be a good business man you must ALWAYS - hope for the best, but PLAN FOR THE WORST...

I hope I haven't thoroughly confused anyone.

I hope we all become DRFSR (Dirty Rotten Filthy Stinken Rich) I wanna light my cigars with $100 bills!!

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