MUST READ

[AudiS4]

I can't imagine that this would help anyone including Iraq. The cost of bread in Iraq would remain the same, salaries, utilities ect. only they would be paid in a lower denomination, but the buying power would not increase. No wealth would be restored by anyone. If any thing I think the country would stand to lose out a great deal. Iraq was a very wealthy country before, the RV is not about creating wealth it is to restore the wealth that was already there, and it has more to do with the worlds view of Iraq, not the denominations of their currancy.

exactly what I was thinking. How would this help anyone? It doesn't increase buying power...

If this were the case... I think the US Gov would have some explaining to do on WHY we have spent so much on this country that we're not getting anything out of. It's ALWAYS about money... so show me the money... where is it? This could be described as a charity case if they really did LOP. Oh wait... I forgot, we OWE them money for the damages we did. I guess I agree, we owe these guys for all the nothing they've done for us. I'm willing to pay double for my property tax, just so we can give them the money they rightfully deserve for the damages we made while saving them.

[Drunken Irish]

THIS DOES NOT BELONG IN THE LOP SECTION IT IS NEWS!!!!!

YOU STIMGATIZE TALK ABOUT THE LOP AND THEN PUT IT IN ITS OWN SECTION SO YOU ONLY HAVE TO THINK ABOUT IT IF YOU GO THERE

YOU PUT IT IN THE LOP SECTION SO PEOPLE CAN GET BRAINWASHED BEFORE THEY EVER FIND IT.

I DON’T GIVE A "blankity-blank" WHAT'S ALL READY BEEN DISCUSSED READ THE ARTICLE!!!

YOU ALOW OTHERS TO READ THE ARTICLE FOR YOU, AND THEN FEED YOU SOME MISCONSTRUED PUMPER PHILOSOPHY ABOUT WHY IT WONT HAPPEN. THEIR STORIES ARE SO COMPLICATED THAT YOU CANT BEGIN TO UNDERSTAND HOW THERE LOGIC WORKS AND THEN WHEN YOU DO IT’S ONLY A SUBTLE OVERLOOKED NUANCE THAT DISCREDITS THE ENTIRE THEORY.

THIS IS IN BLACK AND WHITE! SIMPLE TO UNDERSTAND! AND STRAIGHT FROM THE SOURCE!

THEYE ARE NOT TAKING 0’S OFF THE RATE READ THE "blank" ARTICLE.!!!

BELIEVE WHAT YOU WILL CALL ME WHAT YOU WANT. IT DOES NOT MAKE IT ANY LESS TRUE.

IT IS A POSSIBILITY!!!!!

THIS DOES NOT APPLY TO EVERYONE WHEN I SAY “YOU”

I’M TALKING TO THOSE WHO ARE TOO DELLUSSIONAL TO ACCEPT AND CONSIDER THE POSSIBILITY

THIS IS A DISTINCT POSSIBILITY!!!!!!

IT MAKES MORE SENSE FOR IRAQ.

IT WOULD BE A BIG "blank" YOU TO THE WEST.

ONLY PEOPLE THAT WOULD BE PISSED IS SPECULATORS, ALL FOREIGN GOVT'S HOLD THEIR CURRENCY DIGITALLY.

I THINK IT WILL BE A LOP COUPLED WITH AN RV. STILL A GOOD RETURN BUT NOT WHAT THE PUMPERS WANT YOU TO BELIEVE IT WILL BE.

Edited February 18, 2011 by Dogmatic1
implied profanity

[gemini305]

1 question

where is the hyper inflation lol

without it there will be no lop

and iraq does not have hyper inflation

you need to study more

don't try make name for yourself newbie ok

been debunked a few years ago

Edited February 18, 2011 by gemini305

[Nelson0528]

This article was a discussion about the options being discussed to increase the value of the IQD. Sadly, most of the people who are trying to discuss this topic in Parliament, don't know much at all about economics. So, we end up with lots of unsound proposals that would only serve to undermine the recovery process for the Iraqi economy. The only truly fair and equitable way to increase the value,is to do it slowly over a long period of time; allowing the economy to grow gradually as reconstruction and infrastructure grow to support the increasing value. This would minimize the negative impact on things like long term contracts, interest rates, inflation, etc.. While this doesn't sound like the aspirin for our financial headeaches we've all been waiting for; it is sound, responsible and sustainable change that positively benefits Iraq in the long run,and consequently us as well. Of course JMO, but a good one... lol Cheers my friends. Stay hopeful and stress free!

Edited February 18, 2011 by Nelson0528

[vast]

This article was a discussion about the options being discussed to increase the value of the IQD. Sadly, most of the people who are trying to discuss this topic in Parliament, don't know much at all about economics. So, we end up with lots of unsound proposals that would only serve to undermine the recovery process for the Iraqi economy. The only truly fair and equitable way to increase the value,is to do it slowly over a long period of time; allowing the economy to grow gradually as reconstruction and infrastructure grow to support the increasing value. This would minimize the negative impact on things like long term contracts, interest rates, inflation, etc.. While this doesn't sound like the aspirin for our financial headeaches we've all been waiting for; it is sound, responsible and sustainable change that positively benefits Iraq in the long run,and consequently us as well. Of course JMO, but a good one... lol Cheers my friends. Stay hopeful and stress free!

What, are you running for office?

[CSTEP]

Currently 25,000 Dinar ~ $20.00 USD

Calculation [25,000 Dinar x .0008 (current exchange rate) = $20.00 USD

New Denomination 25 IQD = 25,000 Old IQD (the currency we currently hold) = $20.00 USD

This would mean a Redenomination and a Revaluation.

This means the old currency has a value of .0008 USD (25,000 IQD = $20.00 USD)

And the NEW LOWER DENOMINATIONS would have a value of $.80 [25 IQD (LOWER DENOMS) = $20.00 USD]

Weather you hold a 25,000 IQD note or a 25 IQD note you still have the purchasing power of $20.00 USD

IF THIS WERE TO HAPPEN,THEY WOULD HAVE IT LOOKS LIKE THEY WOULD HAVE TO RV THE OLD DENOMINATIONS $.8 FOR THE MATH TO WORK. 25000 OLD DINARS X.8 AND 25 NEW DINARS X.0008.UNLESS YOUR SAYING THAT THEY WILL JUST DO AWAY WITH THE OLD.NOT ARGUEING ABOUT YOUR POST ITS JUST TRYING TO MAKE SINCE OF THE MATH.

[Nelson0528]

What, are you running for office?

LOL - Who knows?.... I mean, I doubt I could do any worse! Heck, I think we could bolt a bunch of mannequinns into the chairs and have a more successful government at this point!

[Darin]

Hmm..

What about all those 50 IQD notes? Drop off 3 zeros off of a 50? Can't do it.. There is only 1 zero

Okay, so we'll move the decimal point over 3 spaces.

50 IQD note is equal to 0.05 USD.

This wouldn't make a whole lot of sense. They'd have to introduce lower denoms and take out basically all currencies.

The same currencies that must be used until 2013 I believe? Or 2014...

The same currencies that were not cheap to make since they are nearly impossible to counterfeit.

You LOP off the zeros, than you LOP off the zeros of what you pay for.

So a loaf of bread was 1,000 IQD, now it is 1 IQD.

It's a wash and does not benefit the Iraqi people.

It would create work for the government

Confusion to the people

And nothing to gain in the end.

[Workinchump]

This is my LOP opinion:

Dinar 25,000 = New - IQD 25

This does not change the value of the investment. But does bring the (.0008 or .80usd)

This is where I see the RV, taking the value of $0.80 to increase to $3.22.

So... This would make the current Dinar investment worth $0.0322 per dinar. --- This is the number I have calculated over and over again. It always comes back to the $0.03, I know there is more to it then my simple and complex math.. but I keep getting the $0.03

[FMCC]

is Iijaith for the Iraqi people.

We always knew it would re denominate. That is not a lop pal. I had this argument over a year ago in 09

The redenomination is for the iraqis and will happen after the revalue or reinstatement. Yes, I read it and that is what I got from it.

[Zemaduvant]

But the big issue if there's a lop then there currency has the same purchasing power it has now which is NOTHING they can't buy anything with there currency now, food...if that. If it's done this way then i at least hope people in Iraq can get jobs and quickly..

[sfredieu]

well you are right that is a possibility,here is something to think about, if that is their plan Iraq government better give their souls to God because their arse belong to the protesters come the 25 of feb,because what you are saying is the purchasing power and value will be the same and that dont put the people of iraq in no better position and they will definately tear that country apart,so I think for their sake they better come with a little bit better plan than that.

[0331]

1 question

where is the hyper inflation lol

without it there will be no lop

and iraq does not have hyper inflation

you need to study more

don't try make name for yourself newbie ok

been debunked a few years ago

YOU'RE ON A VERY SLOW LEARNING CURVE. EDUCATE YOURSELF BEFORE YOU SPEW BAD INFORMATION.

YOU NEED TO LEARN WHAT HYPERINFLATION IS.

ALLOW THE NEWBIE TO HELP

http://www.econlib.org/library/Enc/Hyperinflation.html

I DON"T UNDERSTAND THE SIGNIFICANCE OF THIS WORD NEWBIE. DOES THAT MEAN BECAUSE YOU BLINDLY INVESTED IN SOMETHING YOU KNEW NOTHING ABOUT BEFORE I BOUGHT MY DINAR, AND JOINED A WEB FORUM BEFORE I DID THAT YOUR ABILITY TO COMPRHEND AND PROCESS KNOWLEDGE IS NOW ABOVE EVERYONE'S

LEARN WHAT HYPERINFLATION MEANS. IF YOU NEED HELP SEND ME A MESSAGE.

Edited February 18, 2011 by 331

[gemini305]

YOU'RE ON A VERY SLOW LEARNING CURVE. EDUCATE YOURSELF BEFORE YOU SPEW BAD INFORMATION.

YOU NEED TO LEARN WHAT HYPERINFLATION IS.

ALLOW THE NEWBIE TO HELP

http://www.econlib.org/library/Enc/Hyperinflation.html

I DON"T UNDERSTAND THE SIGNIFICANCE OF THIS WORD NEWBIE. DOES THAT MEAN BECAUSE YOU BLINDLY INVESTED IN SOMETHING YOU KNEW NOTHING ABOUT BEFORE I BOUGHT MY DINAR, AND JOINED A WEB FORUM BEFORE I DID THAT YOUR ABILITY TO COMPRHEND AND PROCESS KNOWLEDGE IS NOW ABOVE EVERYONE'S

LEARN WHAT HYPERINFLATION MEANS. IF YOU NEED HELP SEND ME A MESSAGE.

you obviously don't know what your talking about newbie

let me help you , study zimbabwe , duh

its ok , you will learn 1 day wanna be

[roger01]

While this may be a news article talking about a redonomination/LOP, what was discussed in the beginning and middle of the article wasn't the same at the end. I took away a contridiction at the end which in my opinion makes this " AN OPINION PAPER". While there were facts, it's someones opinion. We do have to consider all possibilities. Could it happen, yes! Will it happen, not sure?!! Though I suspect based on certain key factors it would be negitive for Iraq to do so, mainly through perception. I think it would turn off individiual investors, though they would still have larger investors I think there would be an outcry of negitive feelings towards them doing this. When they had nothing, we gave them something "a lot of something", now they're worth something they give us what we "Speculators" gave them 6,7,8 years ago with some interest if they RV directly afterwards. What about all of the tax payer dollars that went towards the war, hundreds of billions through our GOVT? I think that is what the writer was getting at near the end of the article. The only people that know what exactly they're going to do aren't saying...so it's an opinion! A valid point but not validated!

Edited February 19, 2011 by roger01

[trintrin]

I BIND UP A LOP IN JESUS NAME...

I PRAY FOR A RV NOW!!!!

AMEN

I stand in agreeance..In the name of Jesus!!

[0331]

you obviously don't know what your talking about newbie

let me help you , study zimbabwe , duh

its ok , you will learn 1 day wanna be

“Hyperinflation [is a term used] to describe episodes when the monthly inflation rate is greater than 50 percent. At a monthly rate of 50 percent, an item that cost $1 on January 1 would cost $130 on January 1 of the following year.” (http://www.econlib.org/library/Enc/Hyperinflation.html).

from 1990 – 2002 the Iraq Dinar decreased in value from 1 IQD/$3.20 USD to 2000 IQD/$1.00 USD. ( http://www.globalsecurity.org/military/world/iraq/currency-reform.htm )

Hyperinflation is defined when the cost of goods INTERNALLY increase markedly. And when a country excessively increases its money supply.

Durring Saddam’s regime and following war and UN embargos, the currency lost its value. 1 Dinar that was once worth > $3.00 was now worth less than a cent. What 1 IQD used to buy now cost thousands of Dinar because the currency was devalued.

In 2003 the New Iraqi Dinar was introduced, but due to the devaluation of the Dinar they were forced to print TRILLIONS of Dinars. This is an increase in the money supply.

The Dinar has remained at a hyper-inflated state ever since. THE CURRENT RATE OF INFLATION HAS BEEN STABALIZED, BUT THE CURRENCY REMAINS HYPERINFLATED.

There used to be BILLIONS of Dinar in Iraq. There are now TRILLIONS. This is because the cost of goods have skyrocketed. What used to cost 25 Dinar now cost 25,000 Dinar. That is hyperinflation.

http://www.noticias.info/archivo/2004/200410/20041028/20041028_38026.shtm

One year ago this week the Iraqi people, working with the United States and our coalition partners, embarked on a difficult economic mission: to replace completely Iraq's deteriorating and easily counterfeited currency and to restore economic and financial stability to their ravaged economy. [b]After years of hyper-inflation [/b]and falling incomes under Saddam's regime, everyone knew this was an essential reconstruction task. But many doubted that a nation-wide currency exchange could be accomplished -- What if the Iraqis didn't accept a new currency? How would the new currency be distributed to millions of people in hundreds of cities and towns? What if terrorists sabotaged the distribution?

Now, one year later, a new currency is circulating throughout Iraq and the Iraqi currency exchange is hailed as a success. The exchange rate is steady, price stability has been restored, and economic growth this year is 50 percent, one of the highest rates in the world. The new Iraqi dinar is a sturdy and secure

http://www.econlib.org/library/Enc/Hyperinflation.html

“hyperinflation” to describe episodes when the monthly inflation rate is greater than 50 percent. At a monthly rate of 50 percent, an item that cost $1 on January 1 would cost $130 on January 1 of the following year.

What causes hyperinflations? No single shock, no matter how severe, can explain sustained, continuously rapid growth in prices. The world wars themselves did not cause the hyperinflations in Germany and Hungary. The destruction of resources during the wars can explain why prices in Germany and Hungary would be higher after the wars than before. But the wars themselves cannot explain why prices would continuously rise at rapid rates during hyperinflation periods.

Hyperinflations are caused by extremely rapid growth in the SUPPLY of “paper” money. They occur when the monetary and fiscal authorities of a nation regularly issue large quantities of money to pay for a large stream of government expenditures. In effect, inflation is a form of TAXATION in which the government gains at the expense of those who hold money while its value is declining. Hyperinflations are very large taxation schemes.

http://www.globalsecurity.org/military/world/iraq/currency-reform.htm

officially introduced at the end of the British mandate (1932), the dinar [consisting of 1,000 fils or 20 dirhams] was equal to, and was linked to, the British pound sterling, which at that time was equal to US$4.86. Iraqi dinar (ID) equaled US$4.86 between 1932 and 1949 and after devaluation in 1949, equaled US$2.80 between 1949 and 1971. Iraq officially uncoupled the dinar from the pound sterling as a gesture of independence in 1959, but the dinar remained at parity with the pound until the British unit of currency was again devalued in 1967.

One Iraqi dinar remained equal to US$2.80 until December 1971, when major realignments of world currencies began. Upon the devaluation of the United States dollar in 1973, the Iraqi dinar appreciated to US$3.39. It remained at this level until the outbreak of the Iran-Iraq War in 1980. In 1982 Iraq devalued the dinar by 5 percent, to a value equal to US$3.22, and sustained this official exchange rate without additional devaluation despite mounting debt. In early 1988, the official dinar-dollar exchange rate was still ID1 to US$3.22; however, with estimates of the nation's inflation rate ranging from 25 percent to 50 percent per year in 1985 and 1986, the dinar's real transaction value, or black market exchange rate, was far lower-- only about half the 1986 official rate.

The Iraqi dinar was worth $US3.20 before the United Nations embargo that followed Iraq's 1990 invasion of Kuwait. By August 2002 it was trading at just below 2000 to the US dollar, and by mid-April 2003 it had slipped to anywhere between 3500 and 4000 against the dollar. In July 2003 one US dollar equaled about 1,500 Iraqi dinars. Nearly all the bank notes issued after the 1991 Gulf War were without watermark or metal line due to technical difficulties, which is why so many forgeries took place.

In April 2003, following the end of major combat operations, the Iraqi economy was in distress because of closure of oil sales, imposition of UN sanctions. At that time, United States officials said that a new currency was needed, to introduce some stability. Without a proper currency in circulation there was a fear of inflation. The US decided to distribute $20 bills to the civil servants to boost the economy. This was not an issue of "dollarizing" the economy, but to get money that had real value into people's hands.

[roger01]

This is my LOP opinion:

Dinar 25,000 = New - IQD 25

This does not change the value of the investment. But does bring the (.0008 or .80usd)

This is where I see the RV, taking the value of $0.80 to increase to $3.22.

So... This would make the current Dinar investment worth $0.0322 per dinar. --- This is the number I have calculated over and over again. It always comes back to the $0.03, I know there is more to it then my simple and complex math.. but I keep getting the $0.03

No offense but your math is off! I'm not bashing, just assisting! Using your thoughts... The exchange rate you used...(.0008) if increasing the exchange rate to (.8) the exchange rate would equal 1.25US per dinar. How to do this...1/.8. So .0322 doesn't become 3.22 US. What does is: 1/.3105= 3.220 US per dinar. Now onto... .03 US= 33.33 dinar, not quite... Essentially, What I'm saying is that the current rate of 1170 is aqually equated to (.00085). If using your idea... (.85) becomes (1.17 US) under your theory, if the exchange rate is LOP'd. By the way, LOPing the zeros off of the notes is actually a redonomination of bills. If they raise the exchange rate it is a revaluation, if lowered is a devaluation. If they do both as your idea seems to lead to (I agree, it is possible that they can do this!) Then we can still make alittle money if they RV right afterwards, but it kills our dreams of hitting it big! I've looked at a lot of factors and I think they can still do an RV without LOPing the bills but by just introducing smaller denominations, so have hope my friends!

[R2d2dc]

Well, I still hope that they do not lop, but it is a possibility that stays in my mind all of the time unfortunately

[roger01]

aqually?? WTF was I typing? LOL... typo...It should have said, "actually".

[0331]

GEMINI I don't know what else to say.

Tell your side to the IMF.

I'm finished trying to help you understand

http://iier.org/i/files/docs/IMF_Regional_Outlook.pdf

REGIONAL ECONOMIC OUTLOOK: MIDDLE EAST AND CENTRAL ASIA

48

Table 5. Consumer Price Inflation(Year average; percent)Average Proj. Proj.

2000–04 2005 2006 2007 2008 2009 2010

MENAP 5.0 6.2 6.9 8.9 15.6 7.0 6.6

Oil exporters 5.8 6.5 6.8 9.9 15.4 5.3 6.2

Algeria 2.4 1.6 2.5 3.6 4.5 4.6 3.4

Bahrain -1.8 2.6 2.0 3.3 3.5 3.0 2.5

Iran 14.2 10.4 11.9 18.4 25.4 12.0 10.0

Iraq 16.4 37.0 53.2 30.8 2.7 6.9 6.0

Kuwait 1.2 4.1 3.1 5.5 10.5 4.6 4.4

Libya -4.5 2.9 1.4 6.2 10.4 5.0 4.5

Oman -0.3 1.9 3.4 5.9 12.6 3.3 3.0

Qatar 2.5 8.8 11.8 13.8 15.0 0.0 4.0

Saudi Arabia -0.2 0.6 2.3 4.1 9.9 4.5 4.0

Sudan 7.5 8.5 7.2 8.0 14.3 11.0 9.0

United Arab Emirates 3.0 6.2 9.3 11.1 12.3 2.5 3.3

Yemen 11.9 9.9 10.8 7.9 19.0 8.4 8.9

Oil importers 3.6 5.7 7.1 6.9 15.9 10.1 7.2

Afghanistan 9.5 12.7 7.2 8.6 30.5 -7.6 6.2

Djibouti 1.8 3.1 3.5 5.0 12.0 5.5 5.0

Egypt 4.7 4.9 7.6 9.5 18.3 12.3 8.2

Jordan 1.9 3.5 6.3 5.4 14.9 0.2 4.0

Lebanon 0.8 -0.7 5.6 4.1 10.8 2.5 3.5

Mauritania 7.1 12.1 6.2 7.3 7.3 4.9 5.8

Morocco 1.6 1.0 3.3 2.0 3.9 2.8 2.8

Pakistan 4.2 9.1 7.9 7.6 20.3 13.9 9.4

Syria 1.8 7.2 10.4 4.7 15.2 7.5 6.0

Tunisia 2.7 2.0 4.5 3.1 5.0 3.5 3.4

CCA 9.9 8.1 9.2 11.4 16.5 6.5 6.4

Armenia 3.0 0.6 2.9 4.4 9.0 3.0 3.2

Azerbaijan 3.0 9.7 8.4 16.6 20.8 2.2 5.3

Georgia 5.0 8.3 9.2 9.2 10.0 1.2 3.0

Kazakhstan 8.2 7.6 8.6 10.8 17.2 7.5 6.6

Kyrgyz Republic 7.0 4.3 5.6 10.2 24.5 8.0 6.7

Tajikistan 21.4 7.3 10.0 13.2 20.4 8.0 10.9

Turkmenistan 8.0 10.7 8.2 6.3 14.5 0.4 3.5

Uzbekistan 19.5 10.0 14.2 12.3 12.7 12.5 9.5

Memorandum

GCC 0.6 2.6 4.3 6.3 10.8 3.7 3.8

Maghreb 1.2 1.8 2.9 3.6 5.4 4.1 3.5

Sources: National authorities; and IMF staff estimates and projections

Edited February 19, 2011 by 331

[MSgt of Marines]

What does LOP stand for? Thanks in advance for responding

[roger01]

MSgt,

LOP refers to getting rid of the zeros on the face of the bill. Essentially a redonomination (25,000 becomes 25). It is also being used to assume that they may get rid of the zeros from the current exchange rate (.00085) becoming (.85). Its being used a couple of different ways but either way "its getting rid of the zeros".

Sgt K

[0331]

What does LOP stand for? Thanks in advance for responding

MSgt, Sgt K is absolutely correct. The term LOP is a somewhat made up and ambiguous term.

Many articles mention removing 3 zeros from the Nominal Value of the current IQD. The popular term for removing zeros is LOP.

When articles mention removing 3 zeros from the nominal value of the Dinar (nominal refers to denomination - 25 New IQD = 25,000 Old Dinar notes) some argue they are talking about taking three zeros off the exchange rate ($00085. USD = $.85 USD).

Some who understand and acknowledge the possibility, believe the currency could revalue and redenominate at the same time in a coordinated effort.

Imagine this:

You are the only citizen of Iraq. You currently hold a 25,000 Dinar note. The central bank of Iraq calls you and says “We have new currency (new lower denominations 25 Dinar note). We want you to come in and trade your 25,000 Dinar note for our new 25 Dinar note.

They then explain to you: “the 25,000 Dinar note you currently hold is worth $21.25USD (25,000 x .00085). The new 25 Dinar note has a new exchange rate of $.85USD it is worth $21.25USD (25 x $.85USD).

You go in and trade your old note for a new one. You have not lost or gained in the transaction.

BUT instead of the central bank of Iraq having 25,000 in circulation as they did when you held that note, They now have only 25 Dinar in circulation.

If Iraq does this they will reduce the amount of currency they have in circulation from 27 TRILLION to 27 BILLION. This is referred to as the Money supply. It is abbreviated M1, M2 & M3

If you look at M1, M2 M3 for other counties, it is difficult to believe Iraq’s will be in the trillions rather than billions.

Now there are many other things at play here. There are other economic tools that can be used to obtain their objective. This is one possibility that people do not like to talk about.

Hope that helps??

[andy3978]

MSgt, Sgt K is absolutely correct. The term LOP is a somewhat made up and ambiguous term.

Many articles mention removing 3 zeros from the Nominal Value of the current IQD. The popular term for removing zeros is LOP.

When articles mention removing 3 zeros from the nominal value of the Dinar (nominal refers to denomination - 25 New IQD = 25,000 Old Dinar notes) some argue they are talking about taking three zeros off the exchange rate ($00085. USD = $.85 USD).

Some who understand and acknowledge the possibility, believe the currency could revalue and redenominate at the same time in a coordinated effort.

Imagine this:

You are the only citizen of Iraq. You currently hold a 25,000 Dinar note. The central bank of Iraq calls you and says “We have new currency (new lower denominations 25 Dinar note). We want you to come in and trade your 25,000 Dinar note for our new 25 Dinar note.

They then explain to you: “the 25,000 Dinar note you currently hold is worth $21.25USD (25,000 x .00085). The new 25 Dinar note has a new exchange rate of $.85USD it is worth $21.25USD (25 x $.85USD).

You go in and trade your old note for a new one. You have not lost or gained in the transaction.

BUT instead of the central bank of Iraq having 25,000 in circulation as they did when you held that note, They now have only 25 Dinar in circulation.

If Iraq does this they will reduce the amount of currency they have in circulation from 27 TRILLION to 27 BILLION. This is referred to as the Money supply. It is abbreviated M1, M2 & M3

If you look at M1, M2 M3 for other counties, it is difficult to believe Iraq’s will be in the trillions rather than billions.

Now there are many other things at play here. There are other economic tools that can be used to obtain their objective. This is one possibility that people do not like to talk about.

Hope that helps??

Anyone with half a brain knows there is a possibility for a LOP, just as they know there is a possibility for Iraq to spiral into civil war and the IQD can become completely worthless. Why do you keep harping on it? You've been beating the shiit out of this dead horse for a few days now. If people dont get it that a LOP is a possibility then screw them. If one didn't know any better it would seem you are cheer leading for a LOP.

Enough

Edited February 20, 2011 by andy3978