Dinar News Iraq central bank takes steps to

[chas7471]

this lop is like 2 years old,,cmon people

[dinarded]

A "LOP" is like a reverse stock split. The "current value" of your Dinar (or stock) does not change, the "float" does. In a reverse stock split, as well as in a currency lop, the number of shares, or number (amount) of currency, trading on an open market, is REDUCED.

Markets, PURE MARKETS, are based solely on SUPPLY and DEMAND, period. So when the amount of stock outstanding or the amount of currency outstanding is REDUCED, the price automatically increases WITHOUT the MARKET VALUE (as a whole - meaning the value of every share or dinar on the market) of the trade-able asset (be it stock or currency) INCREASING.

Example: Stock

Company ABC wants to do a 1 for 2 REVERSE stock split. Current market value is 25.00 per share with 500Million shares outstanding.

The result would be 250Million shares outstanding at a price of 50.00 per share. If you owned 2,000 shares pre-split, you would then own 1,000 @ 50.00 value per share.

Example: IQD

Iraq decides that they have too much currency in the float so they do a 3 zero LOP. This reduces the number of dinar by a factor of 1000 and in so doing, brings the value of the Dinar to (by today's auction standard) 1.17 IQD per 1 USD (or roughly .85 cents per Dinar).

The reason for a reverse stock split, as well as a currency lop, are pretty much meant to address the same issue. The issue is supply and demand. Although the market price INCREASES as a result, the FLOAT (supply) DECREASES and the HOPE is that by "drying up" the float, the value will APPRECIATE more rapidly so long as the level of buying (proportioned of course by the same % as before) remains the same.

The fewer the shares, the more volatile the commodity becomes; so it can decrease in value just as quickly as it can increase in value.

Hope this helps shed a little light on the subject. For those, of course, who might not understand the concept.

A LOP IS NOT A NEGATIVE, OR A BAD THING. It would merely be a way to dry up the OVERABUNDANCE of IQD currently in the market. THIS MUST happen if you REALLY believe the Dinar can support a value of $1.+

There is NO WAY in, that place, that the Dinar can support or even justify $1.+, none the less $3.+ per Dinar with THAT MUCH currency on the market.