Types/Central Bank of Iraq adviser: soon asadaramlh class 100 dinars

[EBJNYC]

To me... this is a great possibility. I haven't been a believer in the lower denominations theory as a "good" thing for some time if ever. When I see people rooting for the 3 zeroes articles I fill like they are tied to train tracks and rooting for the oncoming train. The re-denomination/lop idea is to make a currency normal, credible, and to make it easy to use and make calculations from. Taking a number from trillions down to a more manageable billions. The difference on the street in daily commerce will be much better for citizens. Adding fils and removing the 3 zeroes notes makes no sense. It would take backpacks and wheelbarrows of Dinar to buy many things. How would an ATM machine work to give you dinar back if they only use small notes? That would be like Americans getting quarters for a $100 bill to buy things. So why does this article make me happy?

Because I have been trying to find a way they could postpone the re-denomination in order to RV first. They have to increase purchasing power for numerous reasons especially since the ch. 7 has opened up international trading. Discussing creating 100k notes means they are delaying the re-denomination or at least discussing the delay. They would have to create and distribute the new 100k notes. Why pay out all that money to create them if they were prepared for the RD? That would have to be a move with a minimum 2 or 3 year delay for 3 zero removal wouldn't it? To me... they will be needing those big notes because they are preparing for the economy to take off without re-denomination. With the budget restrictions, it is entirely possible the Parliament is foiling the CBI's plans due to expenses. Trust me I am pro RV and this makes more sense to me.

Anything OTHER than a STRAIGHT RV -- is a CONFISCATION OF WEALTH -- plain and simple. If you SUBSCRIBE to this -- you'll believe that "MICRO-CHIPPING" humans in the name of SECURITY is a GOOD thing too I bet -- ONLY to be ENSLAVED thru DECEPTION !!!!

Edited December 20, 2010 by EBJNYC

[Inahurry]

MIcrochipping humnas is a concept that is way overdue...Marco.....polo

[MovieMaker]

Thanks for all your thoughts

[Bull Dog]

I for one am tired of delays delays and more delays. Let's just get this over with.

[EBJNYC]

MIcrochipping humnas is a concept that is way overdue...Marco.....polo

What ya waitin fo -- be first in the SLAVE line -- lol !!!!

[drox]

"To me... they will be needing those big notes because they are preparing for the economy to take off without re-denomination."

That was good drox..I have been thinking that this could be a likely outcome..drox do you know how many countries money trades around the .000X level?

The answer is here:

https://www.foreigne...erviceType=rate

Hey Chas32! I counted 4 : Columbia, Paraguay, South Korea, and Indonesia. I know Indonesia is preparing for an RD and said it would take 10years to complete from start to finish (Iraq is in year 7 of their discussion of it). Iraq and Iran are not in your link because the currency is not internationally recognized (yet). Many people discuss the smaller fils, but Iraq is going to need a note bigger than a 25 down the line too. A 100 would be logical maybe even a 50 as well. Hopefully we all benefit from an RD delay because the economy must proceed irregardless! I know I feel more comfortable with all the Dinar I have in hand without any 3 zero mumbo jumbo wild speculation. I feel it has a much better chance to increase in value that way. It can RD down the line when I am already cashed out sipping on a Corona on the beach somewhere.

Anything OTHER than a STRAIGHT RV -- is a CONFISCATION OF WEALTH -- plain and simple. If you SUBSCRIBE to this -- you'll believe that "MICRO-CHIPPING" humans in the name of SECURITY is a GOOD thing too I bet -- ONLY to be ENSLAVED thru DECEPTION !!!!

EBJNYC, sorry I am not sure what you are saying to even comment. Seems kind of nutty, surreptitious, and slightly obtuse to me to use that simile. If I have misunderstood you then sorry. Iraq wants to move from a centrally restricted economy into a market economy. A credible and calculatable currency is necessary. It has nothing to do with enslavement of anyone's freedom or rights. Country's have redenominated for a long time once their economy's experience hyper-inflation like Iraq did. They have to make it manageable once they fix the issues that led to the problem in the first place. What if the currency had 6 more zeroes onto the ones it already has? Would you say it was a conspiracy to consficate your wealth then or would you say...."okay, this is getting ridiculous we need an easier exchange method". At what point would enough be enough for you? What is the difference between now and then other than a few less zeros?

1 trillion is 1 million millions or 1000 billion. Now multiply that times 27! Now multiply that times your $1-$3 RV number in your head. Iraq has has some 24-27 Trillion IQD in circulation. Have you really thought about the practicality of the fils RV (lower denom) theory? Have you thought about how much Dinar the CBI would have to destroy to get back to the 25 billion (or so) in circulation that a lop would conveniently fix? What for? Just to keep the same nominal value on the notes you are holding? They would have to destroy 99% of the existing currency!!! C'mon guys....DV has that much in the VIP member holdings. Iraq still has to manage the country and economy after an RV. This isn't a one hit wonder event. It is a very calculated and cautious move. Without question they will HAVE to lop at some point. I am rooting for it to occur well past a re-valuation period and we are out of the investment with some significant profit in hand. Don't believe everything you hear from others. Including me. Think for yourself and add in parts of other's perspectives for your own theory. No one person knows on any of these blogs. It is all best guessing with some grand standing.

[nathan1606]

Happy Holidays All ,

Can You Say " SMOKE & MIRRORS !!

JMHO ...

Have A BLESSED Christmas !

Gary .. aka Invest4later

i could'nt agree more ........

[chas32]

To drox:

“…counted 4 : Columbia, Paraguay, South Korea, and Indonesia…because the economy must proceed irregardless! …”

We, as investors can not win or lose unless we are able to play in the game..

Yes, you are correct. Now read articles 4, 14, and 8 in the IMF. How long would it take for the IQD to reach .27 and how would Iraq accomplish this? Links below:

http://www.imf.org/external/pubs/ft/aa/index.htm

http://www.ibb.ubs.com/Individuals/files/brochure/booken.pdf

Confiscation of wealth is explained here:

Effects of Rednominating the North Korean Won

http://seekingalpha.com/article/176077-effects-of-redenominating-the-north-korean-won

[drox]

We, as investors can not win or lose unless we are able to play in the game..

Yes, you are correct. Now read articles 4, 14, and 8 in the IMF. How long would it take for the IQD to reach .27 and how would Iraq accomplish this?

Chas32 thanks for the links although one was 130 pages... haha!

Everyone should read the IMF articles you pointed out especially 4! I am not sure where you are guiding me but I have an idea. There are many factors necessary. For one, the IMF will be extremely involved in the policing of the rate so that it is within alignment of member nations purchasing power parity. According to Article 14 it makes me worried that both the Kuwait and other creditor nation balances could postpone it longer. I thought that wouldn't be a factor with the recent sanctions being lifted but now I am not so sure. Do you feel those are potential factors? Also the remaining debt owed to IMF might factor in. With the rules the IMF have about sharing or providing information on import/export prices, gold and foreign currency numbers, GDP, etc... it has me wondering if the oil metering will be a sticking point since they only have it 50% complete. Article 4 also states:

Each member shall notify the Fund, within thirty days after the date of the second amendment of this Agreement, of the exchange arrangements it intends to apply in fulfillment of its obligations under Section 1 of this Article, and shall notify the Fund promptly of any changes in its exchange arrangements.

I am not sure what the 2nd amendment is but that is another 30 days people are not counting on. You chose .27 which is interesting in itself. That number is within many of the Middle East currencies including Saudi Arabia (it's closest comparable asset wise). That seems relatively cheap to many of the investors on this forum but is a big number in reality from where they sit now. It looks entirely reasonable on the surface but because the IQD is at 1170 a jump to .27 could create huge imbalances with trading partners and convertibility issues with those nations that they might deem unfair. The stability of the Iraqi economy is critical and must be able to support a revaluation in all facets. The key word be SUSTAINING stability. The import/export ratio has me concerned. Too high of an RV and they import everything reducing industry creation and leave themselves at the mercy of fluctuating oil prices. Too low and they miss an opportunity. What is interesting to me is that they will have job creation regardless of the import/export number. Simply because they need it and outsiders are wanting in. Could they offset the high import numbers by ratcheting up the oil exporting during the redevelopment stage? That way can get to a higher rate? Anyway... they must have the currency recognized to really give us a shot. So the IMF has a lot of approving to do I suspect. I believe oil exports must rise substantially to get to that rate as well. I do not how long it would take I would think months at a minimum... you tell me.

My question for you is the Ministry of Planning said in the 4 year plan and reiterated in the 5 year plan the following:

The Exchange Rate of Foreign Currency in Economic Feasibility Studies

http://www.mop.gov.i...&pid=295&lng=en

2. Justifications for exchange-rate adjustment: there are a number of important and powerful arguments which support the view that the official exchange rate reduces the real value of foreign currency for purposes of calculating the economic national profitability for investment projects and hence for the purposes of investment planning. It is demonstrated in this context to call for assessing the dinar for less than (3.208) dollar (official exchange rate) when assessing project outputs and inputs of traded goods of exports, substitute imports and imports... etc.

3. Estimate the amended exchange rate of the Iraqi dinar to be used in technical and economical feasibility studies and for (1.134) dollar per dinar. This price should be approved for 3 years until re-appreciation by the competent authorities.

What is your thought on these numbers and their purposes with what we know today?

Here is article 4 only section 1 of the Articles of Agreement of the International Monetary Fund link you gave. I think everyone should read it.

http://www.imf.org/e.../ft/aa/aa04.htm

Article IV - Obligations Regarding Exchange Arrangements

Section 1. General obligations of members

Recognizing that the essential purpose of the international monetary system is to provide a framework that facilitates the exchange of goods, services, and capital among countries, and that sustains sound economic growth, and that a principal objective is the continuing development of the orderly underlying conditions that are necessary for financial and economic stability, each member undertakes to collaborate with the Fund and other members to assure orderly exchange arrangements and to promote a stable system of exchange rates. In particular, each member shall:

(i) endeavor to direct its economic and financial policies toward the objective of fostering orderly economic growth with reasonable price stability, with due regard to its circumstances;

(ii)seek to promote stability by fostering orderly underlying economic and financial conditions and a monetary system that does not tend to produce erratic disruptions;

(iii)avoid manipulating exchange rates or the international monetary system in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage over other members; and

(iv)follow exchange policies compatible with the undertakings under this Section.

[Captain Hindsight]

It never fails, once bad news comes out it always gets spun so everyone can have happy feelings and big dreams again!

[concretr]

does anyone have a thought about the south korea currency. its at .000942 to the usd. i heard recently in the news US just sign a trade deal with them.. any speculations?

[Danneedsrvnow]

I don't think this is a bad thing at all...in fact I have thought from time to time that this rv will happen in a completely different way than we all think. Thinking outside the box is a good thing

Sorry to disagree........

If they indeed are issuing these huge notes, it would to me, mean no real chance for the rv.

The best scenario that I & everyone else should want to see is, small bills introduced......huge bills are the opposite of what we want to see!

It has to be an article meant to mislead or a translation error!

Like someone else stated....maybe it is meant to read as $100 Dinar bills, that would be great news!!

I am still hopeful the rv will happen this year!!

Dan

[VIZIOIRAQI]

The Iraqi Central Bank Advisor Madhur M'Hamed benefit the work of Iraq needs expansion we will release his class 100,000 dinars.

He told a reporter (information/news and) Central Bank examines the idea of currency restructuring where specifications and forms that will work on a new categories of currency have the ability to shorten the large quantities of funds, pointing out that deal in used $ 100 constant is the largest directory on the urgent need to work on this scale.

Mbinna that lifting zeros need time and formal approval of the Government and Parliament explained that the current time is mohia for deleting zeros from currency.

T. P a/1

http://www.microsoft...ws%2F40131.html

lol in the real article look at the decimal point .100,000 dinars wasn't that hard was it I'm almost positive it is the translation , but any who it throws a curve in it

Types/ Baghdad/h. b

20/12/2010 3:52pm

The Iraqi Central Bank Adviser Mohamed Saleh that appearance of Iraqi currency needs to expand and we will issue currency category .100,000 dinars.

He told a reporter (information/news and) Central Bank examines the idea of currency restructuring where specifications and forms that will work on a new categories of currency have the ability to shorten the large quantities of funds, pointing out that deal in used $ 100 constant is the largest directory on the urgent need to work on this scale.

Mbinna that lifting zeros need time and formal approval of the Government and Parliament explained that the current time is mohia for deleting zeros from currency.

T. P a/1

[Nelson0528]

Seems to me to be the introduction of the $100 IQD notes; a natural step for increasing the value of the IQD. It is my recollection that many countries in that part of the world use the comma as a currency separator; and since the Iraqis use fils (1,000 to the Dinar), it naturally infers 3 "decimal" places for them. So, to me this is great news. 100 IQD notes will definitely be needed at some point in the future; and if we are looking at a modest revaluation, $100 notes seem a natural next step. JMO but it makes sense to me...

[carlablum]

lol in the real article look at the decimal point .100,000 dinars wasn't that hard was it I'm almost positive it is the translation , but any who it throws a curve in it

Types/ Baghdad/h. b

20/12/2010 3:52pm

The Iraqi Central Bank Adviser Mohamed Saleh that appearance of Iraqi currency needs to expand and we will issue currency category .100,000 dinars.

He told a reporter (information/news and) Central Bank examines the idea of currency restructuring where specifications and forms that will work on a new categories of currency have the ability to shorten the large quantities of funds, pointing out that deal in used $ 100 constant is the largest directory on the urgent need to work on this scale.

Mbinna that lifting zeros need time and formal approval of the Government and Parliament explained that the current time is mohia for deleting zeros from currency.

T. P a/1

Nice catch!!

Thank you VIZIOIRAQI

Carla

[quadraph0nic]

lol in the real article look at the decimal point .100,000 dinars wasn't that hard was it I'm almost positive it is the translation , but any who it throws a curve in it

Types/ Baghdad/h. b

20/12/2010 3:52pm

The Iraqi Central Bank Adviser Mohamed Saleh that appearance of Iraqi currency needs to expand and we will issue currency category .100,000 dinars.

He told a reporter (information/news and) Central Bank examines the idea of currency restructuring where specifications and forms that will work on a new categories of currency have the ability to shorten the large quantities of funds, pointing out that deal in used $ 100 constant is the largest directory on the urgent need to work on this scale.

Mbinna that lifting zeros need time and formal approval of the Government and Parliament explained that the current time is mohia for deleting zeros from currency.

T. P a/1

So it is a small denomination they will issue? What denomination? 100?

What good is a small denomination unless they can use it?

Frank said that certain words do not translate mbinna means “to build” or “to build on” or “to stay on”….

The word Mohia means not.

So I think this article means that to lift the zeros they will need time and approval from the GOI and parliament and that the time is not now for this. Keep in mind this is coming from Saleh as Doc and Zantac have stated over and over info from him is not to be trusted. Personally I hope this is smoke.

In other instances where countries have made changes to the currrency I have noticed that they usually pass some legislation for the changes to become law so that all citizens and vendors can abide by the rules. This is a very necessary step and the reason why a lot of gurus said that Shabibi needs to see a government formed.

I wonder if we will see more articles in the near future from parliament debating the three zeros strategy or are they on board to punch this through?

Thanks Vizio for the nice catch on the .100,000.

Edited December 21, 2010 by quadraph0nic

[chas32]

To drox:

“It looks entirely reasonable on the surface but because the IQD is at 1170 a jump to .27 could create huge imbalances with trading partners and convertibility issues with those nations that they might deem unfair. The stability of the Iraqi economy is critical and must be able to support a revaluation in all facets.”

Dr. Sinan Al-Shabibi Specializes in Econometric Model-Building, External debt management, with emphasis on macroeconomic and analytical aspects, Debt Sustainability Analysis and Analysis of Balance of Payments. With Dr. Shabibi experience in modeling the CBI has run through many of the different possible outcomes when the Dinars becomes tradable. If the 100,000 notes are for real, the starting point could be at .0008. Along with agreements with the IMF and partner countries on appreciation time tables for the Dinar, that should coincide with the development of Iraq‘s port, banks, job creation, security, government stability, hospitals, education, roads, increase of oil production, etc. Iraq needs the infrastructure to work and function properly to support the Dinar. My .27 would take about 1-2 years to achieve as Iraq improves the liquidity of Iraq’s local banks and the other items mention above. That in turn will support the Iraq citizen on attaining loans, and help sustain the Dinar in the future at a higher rate.

“they must have the currency recognized to really give us a shot.” Correct all we need is a chance…

“The Exchange Rate of Foreign Currency in Economic Feasibility Studies”

My take on the numbers: this is Iraq’s goal at the end of the 5 year plan and how Iraq achieves the mention numbers is what we all are curious about. In other posting I stated that there is a 75% chance of a positive outcome and 25% chance for a negative outcome.

“According to Article 14 it makes me worried that both the Kuwait and other creditor nation balances could postpone it longer. I thought that wouldn't be a factor with the recent sanctions being lifted but now I am not so sure. Do you feel those are potential factors?”

No.

The IMF will monitor Iraq… In the Letters of Intent, when IMF wants a country to delete zeros, it would have been mentioned. So far IMF has been silent about that issue. What I was trying to explain is that Iraq needs to start at some point and at some rate. So be it, if it is low and the market moves it up or down. At least the investors can play. I am under no illusions of higher rate, but can dream about a starting rate at a higher figure.

I retired at 52, and work 30 years in the auto industry, 12 years as a Education Training Coordinator, 6 years as a process engineer and 12 years on the line. I do not have to go back to work...

If missed anything...sorry.

[iqdheadlines]

This is all smoke and mirrors, a 100,000 dinar bank note is impossible.

The CBI already has smaller bank notes in a 10,20, 50 and 100 ready to be given out when the RV happens.

[carlablum]

This is all smoke and mirrors, a 100,000 dinar bank note is impossible.

The CBI already has smaller bank notes in a 10,20, 50 and 100 ready to be given out when the RV happens.

If only I could see these notes with my own two eyes.

[drox]

To Chas32

Dr. Sinan Al-Shabibi Specializes in Econometric Model-Building, External debt management, with emphasis on macroeconomic and analytical aspects, Debt Sustainability Analysis and Analysis of Balance of Payments. With Dr. Shabibi experience in modeling the CBI has run through many of the different possible outcomes when the Dinars becomes tradable. If the 100,000 notes are for real, the starting point could be at .0008. Along with agreements with the IMF and partner countries on appreciation time tables for the Dinar, that should coincide with the development of Iraq‘s port, banks, job creation, security, government stability, hospitals, education, roads, increase of oil production, etc. Iraq needs the infrastructure to work and function properly to support the Dinar. My .27 would take about 1-2 years to achieve as Iraq improves the liquidity of Iraq’s local banks and the other items mention above. That in turn will support the Iraq citizen on attaining loans, and help sustain the Dinar in the future at a higher rate.

Awesome analysis chas32! I completely agree and have posted many of your points in random threads. The 100,000 notes have to be real. The question is... are they already made and ready for release? I think folks don't realize how good this news is. They are essentially postponing the re-denomination to grow the rate organically. Unfortunately, the lower fils to RV theory was flawed in every aspect and was a poor man's attempt to pretend the re-denomination wasn't there. They so badly want it to RV over $3 without a lop, that they have thrown common sense out the window. I expect that light of realization will come on in more and more peoples heads soon enough. I think Shabibi has a target in his head of where he really wants this to ascend to before they re-denominate down the line. I have always thought around the .30 mark. Really between .27 and .33 to be specific.

I have a hunch that we will see Shabibi move the rate himself to around 900-750 soon as a prepping point before internationalization of the currency. Possibly another chunk soon after that. They will be political in nature but also necessary. First one for him and then one for the GOI as they "pressure" him. Never underestimate a good pat on the back from the ego. That will get us to the eventual launch pad rate. I think he wants to improve the purchasing power immediately for the citizens while the Parliament goes on a law approving spree like we haven't seen the likes of. They will actually rush to approve many outstanding agreements in a very short time. Opposite of their normal turtle pace precedence I know. We will see a modified Investment Law on the docket soon to address the fairer competition in business, laws against bribery and collusion, modifications from foreign based incentive laws to also include and encourage Iraqi citizen participation w/ loans and tax breaks, new banking standards and benchmarks for enforcing private lending and e-commerce tech improvement, further private security measures, and modifying tariff and tax laws. Not sure if HCL fits in before or after.

All to provide the base necessary to support and sustain a stable economy and a stable eventual exchange rate.

Edited December 21, 2010 by drox

[chas32]

From The Wall Street Journal

“The expected announcement of Iraq's new government marks the culmination of a remarkable process. The former bully-boy of the Arab neighborhood has become its only functional democracy. What may be the world's richest resource economy, once the closed shop of a murderous clique, is today wide open for business…

The Saudi comparison suggests that as Iraq's oil production rises, its economy could grow approximately six-fold over the coming decade—gross domestic product is currently $66 billion—and add a mind-boggling $300 billion in annual GDP. This means one of the largest economic reconstruction and development booms in history…

There is strong evidence that Iraq can avoid much of the "oil curse" and build a more cosmopolitan and modern economy than those of its autocratic neighbors….

The quality of Iraq's economic management is visible in the soundness of its macroeconomic picture. Inflation is under control at 5% per year, the government budget will likely be balanced with increased exports in 2011, and the Iraqi dinar soon to appreciate as exports take off has held steady against the U.S. dollar since early 2009. GDP growth, forecast by the International Monetary Fund to be 11.5% for 2011, is already among the highest in the world, with the investment boom barely in its infancy and the export surge yet to begin…”

http://online.wsj.com/article/SB10001424052748703886904576031510722493874.html?mod=googlenews_wsj#articleTabs%3Darticle

[BW3]

If only I could see these notes with my own two eyes.

Ali has never spoken of a 100k note, only the smaller ones & coins that have been in circulation for YEARS now...

BELOW IS AN ARTICLE from 2006 that VIZIOIRAQI brought to us in OCT 2010

http://dinarvets.com/forums/index.php?/topic/38009-printing-a-series-of-14-new-iraqi-dinar-notes-and-coins/

Also, Remember he has been trying to get his own bank in Iraq for years now as well, (without the govt/state having ownership in it), so he is still working with the CBI to have a bank for himself that he will own 100% of it!

I am sure this is a misinterpretation, AS USUAL

Hang in there gang... ALMOST COMPLETE...

[quadraph0nic]

Drox that is an interesting possibility and I belive you have the short history of the new dinar on your side I think. Wasn't it originally 4000 to 1 dollar when it came out? Was it allowed to appreciate to where its at or did they bump the exchange rate?

There are so many aspects to this invesment. There is much to consider. In your scenario, how does the WTO fit into this? Can they join the WTO with this program exchange rate they have? Would their exchange rate being what it is now cause a trade imbalance? I honestly don't understand that's why I'm asking.

I'm sure you are more than aware of the HCL, the portion of the HCL law I think is really important is what will go back to the people. If that is the case do you see that as a necssary piece to put in place before they start adjusting the currency?

I appreciate your opinion on this. I really don't know what to think of this new batch of articles. I just sort of take it with a grain of salt.

Thanks again

[chas32]

Here is good read on Optimal Currency Appreciation Path.

http://www.economics.uoguelph.ca/Research/DisPapers/2009_5.pdf

[jmw]

wow....great thread.....sorry Drox..i have a new hero...it's chas32....but thanks for the heads up on it....I'll try to spend some time on it tomorrow to see if I can understand it better.