Ore Posted March 31, 2011 Report Share Posted March 31, 2011 I respectfully disagree, on this point: One $25,000 Dinar note is the equivalent of $21.28 USD. I hardly think that bringing that $25,000 Dinar note to a $250 Dinar note will create "civil unrest" or a civil war if its value is still worth $21.28 USD, nothing changes... NOTHING, except the amount of zeroes on the bill. The VALUE of that note is still the same internationally, and within Iraq, the only thing that has changed is the numbers (the zeroes) themselves on the bill... again... NOT the VALUE of the bill. Of course, this is just my take on things. There are numerous other countries that have done LOP's, so just read up on them. I really don't understand why people say that a LOP "cannot happen", it sure as hell can and there are more than a dozen examples in history to prove this point. Heck, Brazil alone had something like 4-5 LOP's before that last one finally took and their currency stabilized. I agree that inflation is under control in Iraq, whether that be for the short, or long, term we don't know. I've posted under LOP Talk the links from an Iraqi Gov't official who said that they are using Turkey's 2005 "redomination", or LOP for us here at DV, as a model for their own "redomination". I know it isn't pleasant to hear and none of us want this, but to say definitively that a LOP "won't happen so get off of it" is, IMHO, foolhardy. BTW, I think about 99% of us on this site are UNQUALIFIED to give EXPERT opinion on what will, or will not, happen. So suggesting that the people who broach the LOP talk, "HAVE NO CLUE" is to insinuate that you do. I, for one, would like to see your credentials showing me that your economic expertise outweighs those opinions, thoughts, that do not align with your own. You should take a closer look to the countries that previously lopped their currencies, and as to why and how it was done.... In order for any country to lop its currency, it must issue a completely new currency andt with a new name to set it apart from the previous one. Issuing lower denominations of the same (current) currency is not lop. For example, When Venezuela devalued and looped its currency in 2008, the New currency was named (new) Bolivar Fuerte Vs (Old) Bollivar. Same with Brazil, Russia, etc... For example, the only reason a 25 (new) Bolivar Fuerte bill coexisted with the 2500 (Old) Bollivar (with a vallue of (New) Bolivar Fuerte) for a short amount of time while the (Old Bolivar was phased out, was only because they were 2 different types of currencies. All the countries that have lopped their currency have done so primarily because of their massive inflation rates; have introduced a completely new currency with a new name to replace the previous currency (not just lower denominations of the same); and all of those countries have also devalued their currencies after they have lopped it, since it makes it less expensive to buy foreign goods (so the country's imports are greater than they would otherwise be). It also makes it more expensive for foreigners to buy the country's goods (so the country's exports are less than they would otherwise be), but that does not really matter with Iraq since oil is still sold in USD, at least for now... - Iraq's inflation is really not bad, although it used to be: History of Iraq's inflation rates - Iraq originally printed 14 IQD denominations:http://www.cipe.org/regional/mena/iraq/pdf/bttv_synopsis_ep6.pdf - Only 7 (or 9 if you count the 2 non-released coins) have been released: http://www.cbi.iq/index.php?pid=Banknotes (we have yet to see the other 5 or 7) Again, introducing those 5-7 lower denominations of the SAME currency and phasing out the larger denominations of the SAME currency is not a lop. -Iraq's main exports are necessities in high demand that people need, consumables, common goods(such as oil and agriculture), not just things that foreign nations want (ei. wanted products, electronics, machinery, accessories). Usually, countries that lop their currencies will auction off their foreign currency reserves, like the CBI has done. It is usually done in order to fight of inflation but looping also causes all those countries to default on foreign loans, unlike with Iraq. Most importantly, remember that in those CBI auctions, the CBI is actually selling an average of $130-$170 million USD (not selling IQD), (every weekday, about 210 weekdays within 1 year) , from their foreign reserves in order to reduce the amount of IQD in circulation, which by using simple math, equates to selling about $31.5 billion usd from their foreign reserves per year, thus collecting and reducing about 31.5 trillion IQD per year from circulation. That leads me to believe that there was in fact much more IQD than the previously reported 27 trillion stated in circulation at one point. But that's okay... Iraq is not in the position that most countries (Brazil/Venezuela,etc) that have lopped (and always devalued their currencies) were in. And that itself can cause a completely different result from their results. Hey, I'll be happy with 350% return, but if they were to lop like these other countries, they would have to introduce a completely new currency, with a new name in order to lop. 1 Link to comment Share on other sites More sharing options...
Ore Posted March 31, 2011 Report Share Posted March 31, 2011 But hey, if Iraq were to a new currency, then yes, LOP would be confirmed. Here is a little history of Brazil's LOP. Notice how each an every time, they introduced a completely new currency, with a new currency name; even if the name only changed 1 letter or adding 1 word (ei. "new"/"real"/"Fuerte" etc), it was considered a new currency: The Cruzeiro was the monetary unit of Brazil from 1942 to 1985. It was divided into 100 centavos. In 1967, Brazil issued New Cruzieros, with one New Cruzeiro equal to one thousand old cruzeiros. Old banknotes were revalued with a simple handstamp, e.g. a "10 centavos" stamp on a 100-cruzeiro note. In 1986, Brazil switched to a new currency unit, The Cruzado. One Cruzado was valued as 1000 (new) Cruizeros. In 1990, Brazil switched back to the Cruzeiro name for its currency, using it until 1993, when it was replaced by the Cruzeiro Real. One Cruzeiro Real was set equal to 1,000 Cruzeiros. They key to LOP, is currency the names, not denominations of it, although the denominations change as well.. 1 Link to comment Share on other sites More sharing options...
Roadrunner Posted March 31, 2011 Report Share Posted March 31, 2011 Thanks for a good post, Bang. I agree 100%. Hope we're right. Link to comment Share on other sites More sharing options...
Jim1cor13 Posted March 31, 2011 Report Share Posted March 31, 2011 Thank you my friend for the effort and details. No matter the actual time it takes to get to what we hope for, the details you gave are sound and well done. I personally do not look for any rate near 3 + at this time, would not at all complain if we actually saw it But we are witnessing much more progress in the last 12 months than we have in the last 5 years. That is what we need to see to even hope for an eventual revaluation. We are seeing it now...with much more to come over time. Thanks again my friend! Well done. All my best to you BANG! Jim --- Link to comment Share on other sites More sharing options...
preston Posted March 31, 2011 Report Share Posted March 31, 2011 Thanks for your post! You seem to really make sense when you post! Greatly appreciated! Go RV!!!!!!!!!!!!!!!1 1 Link to comment Share on other sites More sharing options...
Bumper64 Posted March 31, 2011 Report Share Posted March 31, 2011 Nice post BanG 1 Link to comment Share on other sites More sharing options...
keepmwlknfny Posted March 31, 2011 Report Share Posted March 31, 2011 Great thoughts but I think you should read up a bit more on redenomonations, the purposes, and the effects........I don't think you quite understand it all.....I'm not trying to tell you that's it going to lop or that's what I'm expecting. Its just a bigger part in this investment then u realize..... Link to comment Share on other sites More sharing options...
littlesam Posted March 31, 2011 Report Share Posted March 31, 2011 Bang........I couldn't have written it any better. Your thoughts are logical and should be read by anyone with doubts in their mind. This site would be a much poorer place if you didn't share with the rest of us. Thank you. yeah veneta your backkkkk. ..sorry bang..just got excited seeing her back by the way thanks for your insight always nice to read your post.. Link to comment Share on other sites More sharing options...
Yabadabado Posted March 31, 2011 Report Share Posted March 31, 2011 Great job BanG... Keep up the great work... Link to comment Share on other sites More sharing options...
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