Why it is Impossible for Dinar to Revalue to the level we thought

[qwerty00]

I think the idea of Dinar revaluating concept is practically impossible.

Instead .... I believe the idea .. iraq Government would knock off 3 zeroes

E.g 25,000 Dinar (currently) -> 25 Dinar (new) -- > 25$ or 75$

Why? if the revalue takes place directly .. e.g 25,000 IQD ----> 25,000$ or 75,000$, then

1st - Everyone in Iraq would be wealthy? over night ... even the beggars on the street

even the terrorist? I mean. .. i don't think any government want these also class to be rich?

2nd - Employment is high .... Business have taken lots of loan ...

What happens if the currency revalue like many people are expecting??

E.g A piece of bread costing 4,000 iraq dinar will cost 4 dinar???

Then what happens to this business who took million of loans in Dinar??

Remember million of loans in Dinar is not much in USD currently?

This business would sell things .. or provide services which people will pay with their new revaluated dinar?? e.g if they were selling for 1 million Iraq dinar product now .... after reevalation ... they would sell the same product for 1,000 IQD !!! The same 1 million IQD product is worth 1,000 IQD product

EVERYTHING BECOMES CHEAPER ... BUT THEN?? THE LOANS OF THOSE BUSINESSES REMAINS SAME .... EXPENSIVE ... DAMN EXPENSIVE .. THE CASH FLOW IS IMPAIRED .. SO MUCH THAT ALL BUSINESS WHO TOOK LOAN WILL BECOME INSOLVENT AND UNEMPLOYMENT RATE REACH THE MOON

Dev

[VIZIOIRAQI]

You have alot more home work to do my friend . Many posts on this subject in the forums, type in what subject your looking for in search , and have fun reading!

[BW3]

You have alot more home work to do my friend . Many posts on this subject in the forums, type in what subject your looking for in search , and have fun reading!

AGREED! Well Played Vizio!!

[qwerty00]

You have alot more home work to do my friend . Many posts on this subject in the forums, type in what subject your looking for in search , and have fun reading!

Ok ... i admit if i am wrong .... but this time i don't think i am

How would you explain the fact ... how are companies with huge loan debt .. are going to reimburse their loan after the revaluation take place???

The have the same loan ... with revaluated dinar ...

If you can't answer this .. .then ... anyone here can do that??

[rjboots1]

I love it when newbies come on and beat the same dead horse that newbies have been beating on for years. Comical.

Edited February 8, 2011 by rjboots1

[ScottF]

I too, was once like you grasshopper, ...I was not knowing. However, the power of the force has enlightened me and shown me the way. The RV is coming, for my master tells me so.

And, THERE WILL BE NO LOP!!! To thine own self keep thy bad vibes, you meathead, you. ...Just Sayin'

[qwerty00]

I love it when newbies come on and beat the same dead horse that newbies have been beating on for years. Comical.

I also laugh ... when people don't have answers .. and beat the same horse each time. Comical

I too, was once like you grasshopper, ...I was not knowing. However, the power of the force has enlightened me and shown me the way. The RV is coming, for my master tells me so.

And, THERE WILL BE NO LOP!!! To thine own self keep thy bad vibes, you meathead, you. ...Just Sayin'

OK .. admit there would be no lop ....

Then ... how do you explain the fact that if they revalue the currency like many people are expecting??? and how would people pay their loans?? Companies pay their loans?

They would get less salary ... suppose they were getting 1 Million Dinar ... but after revaluation they would get 1000 Dinar.

How about the loan?? It would remain the same amount? No lop Remember??

[MrRich]

I think the idea of Dinar revaluating concept is practically impossible.

Instead .... I believe the idea .. iraq Government would knock off 3 zeroes

E.g 25,000 Dinar (currently) -> 25 Dinar (new) -- > 25$ or 75$

Why? if the revalue takes place directly .. e.g 25,000 IQD ----> 25,000$ or 75,000$, then

1st - Everyone in Iraq would be wealthy? over night ... even the beggars on the street

even the terrorist? I mean. .. i don't think any government want these also class to be rich?

The dinar used to be valued at more than the US dollar, as much as $4 at one point. So by your logic all Iraqis at that time were rich. But as we know from history that wasn't the case. The value of a currency vs. foreign currencies doesn't have much impact on the daily lives of the people holding that currency in country. But the country's purchasing power for imports and contracts is much greater of course, and that has a positive effect on the country's economy over time. A lop as you have described would give them no greater purchasing power and would provide no benefit to their economy.

[AmyM]

Because a loan has a finite value. Whether you make me a $100 loan with a check, two fifties, or 4000 quarter, you still loaned me $100. No matter how I repay you, I owe you $100. It is only the form of repayment that would be affected, not the value of the loan.

Most of the large loans you are refering to would have been electronic transactions anyway...... not a sackful of dinar. The value of those transaction will not be affected in any way by changes in the value of cash currency.

Thats like saying that if the value of the dollar went up, I would owe more on my mortgage. Not the way it works.

[qwerty00]

Because a loan has a finite value. Whether you make me a $100 loan with a check, two fifties, or 4000 quarter, you still loaned me $100. No matter how I repay you, I owe you $100. It is only the form of repayment that would be affected, not the value of the loan.

I understand you.

But what i wish to point out is the following.

Company X took 100 Million Iraq Dinar loan in year 2010. ( this is approx 100,000 Usd)

The company sells products/services ...and profit money that comes in is about 2 million Dinar each month

From the 2 million DInar .. the company pays 1 Million DInar to the bank each month

---> Now after the revaluation ... the company would need still to reimburse the 1 Million Dinar to the bank but this time .. the company services/Products would sell cheaper and get less profit .... but still has to make the same 1 Million Dinar Payment of loan.

The only different this time .. is that everything is cheaper and the 1 million loan is very very much to be paid each month??

and many companies/people won't be able to do that??

Edited February 8, 2011 by qwerty00

[ScottF]

OK .. admit there would be no lop ....

Then ... how do you explain the fact that if they revalue the currency like many people are expecting??? and how would people pay their loans?? Companies pay their loans?

They would get less salary ... suppose they were getting 1 Million Dinar ... but after revaluation they would get 1000 Dinar.

How about the loan?? It would remain the same amount? No lop Remember??

REPLY - You bring up a good point and I appreciate your consideration in the matter. I would imagine that any existing contracts and/or agreements would be adjusted/restructured to meet the new currency valuation. But remember also, these people are living on THEIR economy, not ours. The vast majority of whom are not sitting around wondering what their Dinar is worth in relation to the dollar; Their Dinar buys what their Dinar buys.

An RV is nothing but a huge benefit to the Iraqi people as it dramatically elevates their purchasing power as consumers, both individual and industrial.

[AmyM]

I understand you.

But what i wish to point out is the following.

Company X took 100 Million Iraq Dinar loan in year 2010. ( this is approx 100,000 Usd)

The company sells products/services ...and profit money that comes in is about 2 million Dinar each month

From the 2 million DInar .. the company pays 1 Million DInar to the bank each month

---> Now after the revaluation ... the company would need still to reimburse the 1 Million Dinar to the bank but this time .. the company services/Products would sell cheaper and get less profit .... but still has to make the same 1 Million Dinar Payment of loan.

The only different this time .. is that everything is cheaper and the 1 million loan is very very much to be paid each month??

and many companies/people won't be able to do that??

Again.... here is where you are missing it...... company X does not owe 1 million dinar to the bank every month. They owe whatever is the equivilent value of 1 million dinar. Lets say (just using easy figures....... NOT trying to give real numbers) that the pre rv million dinar equals $1000......... the post rv payment is now whatever dinar still equals $1000. If it rv's at 1 to 1 ....... the payment is now 1000 dinar, not one million dinar. And the products and services are not cheaper, they are the same value, it's only the value of the Actual Hard Cash Currency in your hand that has changed.

Additionally, remember that very few Iraqi people have much dinar...... they have had to use every penny on basic existance! Not nearly as many of then will become wealthy as you are thinking.

[qwerty00]

OK .. admit there would be no lop ....

Then ... how do you explain the fact that if they revalue the currency like many people are expecting??? and how would people pay their loans?? Companies pay their loans?

They would get less salary ... suppose they were getting 1 Million Dinar ... but after revaluation they would get 1000 Dinar.

How about the loan?? It would remain the same amount? No lop Remember??

REPLY - You bring up a good point and I appreciate your consideration in the matter. I would imagine that any existing contracts and/or agreements would be adjusted/restructured to meet the new currency valuation. But remember also, these people are living on THEIR economy, not ours. The vast majority of whom are not sitting around wondering what their Dinar is worth in relation to the dollar; Their Dinar buys what their Dinar buys.

An RV is nothing but a huge benefit to the Iraqi people as it dramatically elevates their purchasing power as consumers, both individual and industrial.

OK ... i assume you are right. The existing contracts and/or agreements would be adjusted/restructured to meet the new currency valuation.

If i hold 1 Million Dinar in the bank e.g Warka .. then there is a risk ... they would be adjusted/restructured (as the loans).. to meet the new currency valuation compared to my friend who hold hard dinar currency??

There is too much inconsistency

[ScottF]

I'm not sure I follow your line of thinking. If you have a Million Dinar sitting in Warka Bank (which wouldn't be my first choice, I assure you) and the currency RV's, you still have the same 1 Million Dinar. The only change is what your 1 Million Dinars then affords you in purchasing power.

Again, for the Iraqi people, their Dinar is Still a Dinar, it just increases in purchasing power upon RV. Forget the exchange rates, unless their ordering something from overseas, it doesn't really matter. For the Iraqi people living on their economy, in the short term, their cost of living just went down dramatically.

[imgesing]

NEWBIE, QWERTY Listen and learn... Read and do research first and then come back and ask...

I understand your doubts, but haven't you been reading since joining in December?

Below is a link, take the time to listen....

https://www.freeconferencing.com/playback.html?cn=94-43-28-63&e=1297659600000&cid=conferences/-17-65-6710181-17-65-6744-17-65-676211657866420-42-1193151.mp3

It might clear up SOME of your misunderstandings.

Good Luck.

[JLT]

OK ... i assume you are right. The existing contracts and/or agreements would be adjusted/restructured to meet the new currency valuation.

If i hold 1 Million Dinar in the bank e.g Warka .. then there is a risk ... they would be adjusted/restructured (as the loans).. to meet the new currency valuation compared to my friend who hold hard dinar currency??

There is too much inconsistency

You bring up some great points. If I put 1 mil dinar in Warka and Warka loans 50% of my money out to a company, say 500 thousand dinars at what ever interest rate I think its 25%. If after a revalue the contract is changed to say he only owes the equivalent to 500 dollars worth of dinars. Well who is going to pay me my 500 thousand dinars. There would be massive bank failures. The only valid way is to have the company still owe 500 thousand dinars. DEBT is how the bank steal things from you. YOU will wake up one day and the banks will own everything!

[keepmwlknfny]

You have a lot to learn about how money, currency, values, purchasing power is ALL adjusted when a currency is revalued or changes value period........some of the things you are saying doesnt even make sense so I dont even know where to start with you......just know that with in country changes you must take the exchange rate completely out of the question because that plays no effect......purchasing power is increased inside the country and ALL prices and values are adjusted accordingly........whether you have physical dinar or electronic dinar.....and please understand that a LOP/redenomination is a very real possibililty......if you had made the same title for the topic and then talked about the money in circulation then you would have a very valid point.....but from what you described is no reason why they cant raise the value of the dinar.....

[qwerty00]

You bring up some great points. If I put 1 mil dinar in Warka and Warka loans 50% of my money out to a company, say 500 thousand dinars at what ever interest rate I think its 25%. If after a revalue the contract is changed to say he only owes the equivalent to 500 dollars worth of dinars. Well who is going to pay me my 500 thousand dinars. There would be massive bank failures. The only valid way is to have the company still owe 500 thousand dinars. DEBT is how the bank steal things from you. YOU will wake up one day and the banks will own everything!

OK ... I think you understand me.

Could you or someone explain more .. regarding the above? Bank failure due to revaluating?

[hammy]

Qwerty, your arguement goes both ways, How can they Devalue a currency overnight to be worth nothing and what happens to contracts and the Iraqi people? Just as it Devalues overnight it can Revalue overnight. It is that simple.

Edited February 8, 2011 by hammy

[imgesing]

OK ... I think you understand me.

Could you or someone explain more .. regarding the above? Bank failure due to revaluating?

WATCH THE LINK I GAVE YOU! Educate yourself. BANKS WONT FAIL. In fact quite the opposite.

[hammy]

WATCH THE LINK I GAVE YOU! Educate yourself. BANKS WONT FAIL. In fact quite the opposite.

Damn straight, they pose to gain the most. Central Banks all over the World are looking forward to this.

[JLT]

OK ... I think you understand me.

Could you or someone explain more .. regarding the above? Bank failure due to revaluating?

I understand you and I agree with you. I don't understand why others don't seem to understand it. You don't see BoA or any other banks changing your loan amounts because the value of the dollar is decreasing. The only reason banks have so much to gain in Iraq is because they are holding on to their Dinar and not loaning it out. When warka gives a 11% rate for dinar savings its because they need your money.

Now if someone else can explain something different I would like to hear it. But I believe that if you owe a bank 50 dinars you will need to pay them 50 dinars, because if I loan them 50 dinars(deposit in savings) I expect my 50 dinars.

[qwerty00]

I understand you and I agree with you. I don't understand why others don't seem to understand it. You don't see BoA or any other banks changing your loan amounts because the value of the dollar is decreasing. The only reason banks have so much to gain in Iraq is because they are holding on to their Dinar and not loaning it out. When warka gives a 11% rate for dinar savings its because they need your money.

Now if someone else can explain something different I would like to hear it. But I believe that if you owe a bank 50 dinars you will need to pay them 50 dinars, because if I loan them 50 dinars(deposit in savings) I expect my 50 dinars.

Well .. i guess they have blind trust.

I listen to the call the other person " imgesing" referred to ... but this does not answer my question.

Guess .. no one can reply to this question. Anyway

[keepmwlknfny]

I understand you and I agree with you. I don't understand why others don't seem to understand it. You don't see BoA or any other banks changing your loan amounts because the value of the dollar is decreasing. The only reason banks have so much to gain in Iraq is because they are holding on to their Dinar and not loaning it out. When warka gives a 11% rate for dinar savings its because they need your money.

Now if someone else can explain something different I would like to hear it. But I believe that if you owe a bank 50 dinars you will need to pay them 50 dinars, because if I loan them 50 dinars(deposit in savings) I expect my 50 dinars.

Then I think you just answered your own question.......what you owe is what you owe.......and to the contrary (sp) banks are loaning money out.....its why they pulled in the excess liquidity......to funnel it back through the banks for financing, loans and things of that nature....but again....saying that because of the money supply they cant revalue would be a more legitimate reason why they cant RV....not the reason you posted

Edited February 8, 2011 by keepmwlknfny

[qwerty00]

Then I think you just answered your own question.......what you owe is what you owe.......and to the contrary (sp) banks are loaning money out.....its why they pulled in the excess liquidity......to funnel it back through the banks for financing, loans and things of that nature....

Good ... what you owe .. is what you owe and you should reimburse the money when you take a loan

Say an IRAQI person took a loan of 10 Million Dinar (Approx 10 thousand USD) before the RV while he was making 1 Million Dinar (Approx 1 thousand USD) at his job before the RV

Before the RV, he was paying his monthly loan of e.g 100,000Dinar each month ... without any problem

But after the RV ... his salary won't remain 1 Million Dinar??? It would decrease considerably ....

So how does the guy continue to make his monthly payment of 100,000 Dinar??? What you owe is what you owe as you said

The idea of big revaluation is flawed. I think it would revaluate in small amount ... and that too would take years.