No LOP for the Iraqi Dinar

[tjmunson]

So many people ask about the "LOP" theory. I may not have specifically and clearly addressed this in the past, so here it is: The Iraqi Dinar is not going to lop. With that said, let's examine the LOP theory so you all understand it.

At certain times in history, countries have chosen to "lop" the last 3 zeros off of their currency, which basically makes a 25,000 note 25. Fairly simple. The question we need to ask is this: Why do countries lop? One reason is hyperinflation.

Sometimes a country prints currency so fast and furious that the economy can't keep up, and the value of the currency goes down, down, down. Take the Zimbabwe currency, for example. A "Zimbabwean Millionaire" doesn't really have too much to brag about. That is Zimbabwe, though. Not Iraq.

Iraq does not have the inflation problem, Iraq is not a country with no way of obtaining wealth to increase the value of it's currency like Zimbabwe. Iraq doesn't even need to invent a gadget to make money like China could do...

Their pockets are already lined with Black Gold.

I have said many times that Iraq's currency is possibly THE most stable currency in the entire world, and Aswat Al-Iraq recently concurred with that statement: BAGHDAD / Aswat al-Iraq: The exchange rates of the Iraqi Dinar (ID) against the U.S. Dollar is currently constant and stable, an adviser of the Central Bank of Iraq (CBI) said on Thursday.

Currency policies are normally unstable in an absolute way, Modhihar Mohammed Selah told Aswat al-Iraq news agency. He said that the CBI intervenes to respond to legal demands of customers regarding the U.S. Dollar.

Currency policies are inherently unstable, but the Iraqi Dinar is stable. Iraq's central bank denied on Thursday the reports that talked about its decision to cancel three zeroes from the Iraqi currency.

The central bank will not cancel three zeroes from the Iraqi currency at this time to reduce inflation suffered by the Iraqi economy.... Canceling the zeroes will make things more complicated and would cost the state large sums of money and enormous economic cadres to implement this project. The head of the Central Bank Sinan Al-Shabibi told the Independent National News Agency of Kurdistan (AKnews).

This won't be applied at our current time. The central bank and Finance ministry will adopt rational solutions to reduce inflation that Iraq is suffering from currently because some important governmental institutions misused the money, Al-Shabibi added.

Removing the zeros from the currency will reduce the level of the Iraqi dinar in accordance with the American dollar.

Many members of the parliamentary Economic Commission urged the Central Bank and the Finance Ministry to address the Iraqi decreasing funds by removing the three zeroes from the Iraqi currency.

Article Source: http://www.articlesnatch.com

Read more: http://www.articlesnatch.com/Article/Addressing-The-Lop-Dinar-Rv-News-/1150881#ixzz1JDDpnCsN

Under Creative Commons License: Attribution No Derivatives

[Adam Montana]

The author could have at least given me credit as a source - considering several lines in that article are direct quotes from my blog.

[merry1]

Currency redenomination also can be a means by which governments attempt to reassert monetary sovereignty. If citizens lose confidence in the national currency, they may begin to use foreign currencies, particularly those with greater prestige. This may be both a psychological and an economic blow to the government: with widespread foreign currency substitution (or, more extremely, full dollarization), the central bank no longer controls the money supply, rendering it unable to provide lender of last resort functions (Cohen 2004). Economic policy is influenced not only by international capital markets (e.g. Mosley 2003), but also by foreign central banks. Currency redenomination, then, is a means by which governments can attempt to reverse this currency substituting behavior: if citizens are confident that the new Turkish lira will hold its value, they may be willing to shift from using euros and dollars to using lira. While the act of dividing a currencys value by a factor of ten is somewhat symbolic, it also can help to convince citizens of a currencys worth. As a result, redenominations often occur after economic crises, as governments attempt to convince citizens and markets that hyperinflation is a thing of the past. In some cases, the timing is correct, in that redenomination caps off high levels of inflation. In other cases, governments are not able to reign in inflation immediately after redenomination, and they may make multiple efforts at currency reform. Argentina and Brazil during the 1980s and early 1990s exemplify this pattern.

Yet not every country with high levels of inflation, or with a low local currency/dollar exchange rate (so that thousands of local currency units are required for everyday transactions), chooses to redenominate its currency. Some governments are content for citizens to spend two thousand lira or manta for a cup of coffee, even if this leads citizens to question the legitimacy of the local currency. In other cases, governments do choose to redenominate, but only after a sustained period during which inflation has been reigned in; the time between hyperinflation and redenomination, then, may stretch to over a decade. Were redenomination a purely technocratic exercise, this pattern would be surprising: redenomination seems to have few real costs, beyond the short-run expense of printing new notes and advertising the change to citizens and financial markets.

This is exactly where we are with Iraq. Period of Hyperinflation is over, dependence on the U.S. is no longer an issue. The cost of redenominating relatively small.

This is a small excerpt of a paper written by Layna Mosely of the Dept. of Political Science at the University of North Carolina

mosley@unc.edu

www.unc.edu/~lmosley/

Edited April 11, 2011 by merry1

[Frozenflyhack]

Well

I don’t have any idea how many more times I can explain this

Look I’ve been here in Iraq now for seven years

I helped deliver and exchange the new currency for the old Sadam’s

Back in 04 I have been in this substantially 17 million and counting for a looooooooong time

And it brings me no joy to continue to point this out

This is straight from my students here in Iraq, not the corner 7-11 store in Fantasy Ville

There will be a lop and simultaneous Revaluation to the same rate as Kuwait This has been explained to the Iraqi people for several months now through text messages from their banks, on television, the radio and from their Mosques. I have seen the texts (I don’t read Arabic) so I have them translated by our terp

So it goes like this

I’m an Iraqi citizen and my current pre RV wage is 1,000,000 dinar per month

I have approximately $1000 dollars in buying power

Now after a Lop and RV my wage of 1,000,000 becomes 1000 dinar per month

But I have the buying power of approx $3600 US dollars

The CBI electronically knocks off 3 zeros from all accounts and rounds up or down

Like this pre RV I have 3,734,286 dinars in an account post RV I have 3,734 dinar

Simple huh? As far as the details are concerned larger notes and smaller notes can be used concurrently

And as the larger notes return to the bank they will be taken out of circulation

There will be no need for a 100000 dinar note as the purchasing power of a 25000/25 dinar note will be around $90 dollars us and anyone that has been to Kuwait will tell you will rarely ever see a KD bill larger than a 50

So what about all the foreign investors? You say what about them they all make a 350% profit on their investment. Not bad huh

Whatever!!

[Darin]

Well, in my honest opinion, doing a straight up LOP would have no bearing or positive impact to IQD holders. Actually, it seems they would have to introduce a brand new currency just to fix a simple annoying problem. We all know that figures suggestion near 27T of hard currency floating around. We also know that roughly each de la rue bill costed roughly $0.08 to make. Making the 50 IQD cost more to make than it is actually worth (So to speak)..

Now, if they were to LOP & RV, they'd benefit in the end. -- We as IQD speculators would benefit in the end as well... If they were to reach old rates, we all would have tripled our money.

But, if they have been sending txt messages out for months from banks of this process, it makes me wonder... Could it be smoke? Imagine those that would "Dump" large sums of money into their banks just to quickly triple the value... Just something to think about....

The only positive thing is, at least the banks/GOI/CBI are looking for solutions and considering options.

[easyrider]

The author could have at least given me credit as a source - considering several lines in that article are direct quotes from my blog.

So Adam correct me if im wrong but you as well believe there will be NO LOP!!!!????

[Adam Montana]

So Adam correct me if im wrong but you as well believe there will be NO LOP!!!!????

You've been around here long enough to know my opinion.

[Darin]

So Adam correct me if im wrong but you as well believe there will be NO LOP!!!!????

Many people do not see a LOP. But, we have to realize that it is a threat to the investment and a possibility.

In my opinion.... I do not see the justification for doing just a simple LOP unless it were to be followed up by a RV (I.e., drop 3 zeros and rv from that rate) Because, for a LOP to simply make sense, it would have to have new bills created (and replace the current bills) -- too much work was behind all that. Costs, shipping, exchanging, etc.

It may appear to be easier to just introduce some lower denoms as they pull out big bills...

Who knows - time will tell.

Many of us are just anxious to find out the answer.

[easyrider]

You've been around here long enough to know my opinion.

[tjmunson]

No LOP and an RV of between 30 and 50 cents. This is a win win for everyone. To LOP as speculated above by RH makes no sense as it would destroy the value of the dinar in the long term.

[Darin]

No LOP and an RV of between 30 and 50 cents. This is a win win for everyone. To LOP as speculated above by RH makes no sense as it would destroy the value of the dinar in the long term.

What if they Re-denominated / LOP'd off 1 zero and RV'd at 3.00 USD?

It would nearly be no different than as if they RV'd at 30 cents.

This LOP talk can be confusing at times, but, a LOP will limit the growth the currency may have.

[keepmwlknfny]

Currency redenomination also can be a means by which governments attempt to reassert monetary sovereignty. If citizens lose confidence in the national currency, they may begin to use foreign currencies, particularly those with greater prestige. This may be both a psychological and an economic blow to the government: with widespread foreign currency substitution (or, more extremely, full dollarization), the central bank no longer controls the money supply, rendering it unable to provide lender of last resort functions (Cohen 2004). Economic policy is influenced not only by international capital markets (e.g. Mosley 2003), but also by foreign central banks. Currency redenomination, then, is a means by which governments can attempt to reverse this currency substituting behavior: if citizens are confident that the new Turkish lira will hold its value, they may be willing to shift from using euros and dollars to using lira. While the act of dividing a currencys value by a factor of ten is somewhat symbolic, it also can help to convince citizens of a currencys worth. As a result, redenominations often occur after economic crises, as governments attempt to convince citizens and markets that hyperinflation is a thing of the past. In some cases, the timing is correct, in that redenomination caps off high levels of inflation. In other cases, governments are not able to reign in inflation immediately after redenomination, and they may make multiple efforts at currency reform. Argentina and Brazil during the 1980s and early 1990s exemplify this pattern.

Yet not every country with high levels of inflation, or with a low local currency/dollar exchange rate (so that thousands of local currency units are required for everyday transactions), chooses to redenominate its currency. Some governments are content for citizens to spend two thousand lira or manta for a cup of coffee, even if this leads citizens to question the legitimacy of the local currency. In other cases, governments do choose to redenominate, but only after a sustained period during which inflation has been reigned in; the time between hyperinflation and redenomination, then, may stretch to over a decade. Were redenomination a purely technocratic exercise, this pattern would be surprising: redenomination seems to have few real costs, beyond the short-run expense of printing new notes and advertising the change to citizens and financial markets.

This is exactly where we are with Iraq. Period of Hyperinflation is over, dependence on the U.S. is no longer an issue. The cost of redenominating relatively small.

This is a small excerpt of a paper written by Layna Mosely of the Dept. of Political Science at the University of North Carolina

mosley@unc.edu

www.unc.edu/~lmosley/

BINGO!!! There are MANY other reasons why a country redenominates......just because they arent suffering from hyperinflation NOW doesnt mean it cant happen.....again we have 24 trillion in PHYSICAL CURRENCY that has to be dealt with...... I can go all day about this TJ You know what your doing dont you? Hahahaha wanna dance?? LOL LETS GO!! Like the article stated the other day......remove the zeros (aka lop) and return to the value that it was in the 80s.....thats a win situation for everyone.....sadly.....I want a straight up RV.....and it can happen.....if they reduce that money supply.....

[Darin]

BINGO!!! There are MANY other reasons why a country redenominates......just because they arent suffering from hyperinflation NOW doesnt mean it cant happen.....again we have 24 trillion in PHYSICAL CURRENCY that has to be dealt with...... I can go all day about this TJ You know what your doing dont you? Hahahaha wanna dance?? LOL LETS GO!! Like the article stated the other day......remove the zeros (aka lop) and return to the value that it was in the 80s.....thats a win situation for everyone.....sadly.....I want a straight up RV.....and it can happen.....if they reduce that money supply.....

Just curious.. I am not ruling out the possibilities of a LOP.. In my own opinion, it would not seem like a feasible event unless they changed the value of the IQD post-LOP. Either wise, to me, it seems like a waste of time. But, I question your information that backs up your claims.

24 Trillion in Hard-Currency that has to be dealth with? How do we know how much is in circulation? Do we have facts to back this up? Also, from my understanding, the article you were referring to was an opinions article.. This may be an option the GOI/CBI is considering, but, it may not be the end-result of what actually occurs. Now, from my understanding, the CBI has drawn in a large sume of the 000s bills. - But, than again, I don't necessarily have any hard-evidence to back that up. Just as you don't have much evidence backing the actual figure of how much hard currency is in circulation. I do know that they mostly deal with hard-currency over there, so is the 24T really that high of a number?? -- A lot of us deal with electronic currency, via using debit & credit cards. How often do we pay with cash?? We write checks, swipe cards, and so forth. Iraqis are different.. They prefer the use of cash.

I'm really not arguing that you are wrong, just that since you so firmly believe that it will LOP/RV, what information do you have that sustains your opinion.

Overall, I wouldn't mind finding or someone else finding articles that are Pinned (Stickied) on the forum with links to back-up the figures.

I.e., Such as 24T IQD in circulation

I.e., That the CBI supposedly has reclaimed 80% of the 000s, etc.

These are two statements that I would not mind finding the truth upon (Solid Facts) - And remember, we can easily be deceived due to a much higher reality...

[Froto]

At certain times in history, countries have chosen to "lop" the last 3 zeros off of their currency...

The number is closer to 50 countries in the last 80 years. And the number of zeros varies.

One reason is hyperinflation. and Iraq does not have the inflation problem

Another thing you "failed to make clear" is that in your extensive studies of redenominations, the successful LOP's happened after a period of hyperinflation has ended and stabilized at normal rates.

Their pockets are already lined with Black Gold.

Actually, it's still in the ground, and you might be a little premature in thinking they are going to give you the proceeds when they pump it out of the ground and sell it.

I have said many times that Iraq's currency is possibly THE most stable currency in the entire world, and Aswat Al-Iraq recently concurred with that statement: BAGHDAD / Aswat al-Iraq: The exchange rates of the Iraqi Dinar (ID) against the U.S. Dollar is currently constant and stable, an adviser of the Central Bank of Iraq (CBI) said on Thursday.

Since it is pegged to the dollar, it is "constant and stable". Don't think that the "constant" part is going to change any time soon.

Iraq's central bank denied on Thursday the reports that talked about its decision to cancel three zeroes from the Iraqi currency.

Link please. Even if they don't LOP, remember that there has never been anything factual about an RV.

Removing the zeros from the currency will reduce the level of the Iraqi dinar in accordance with the American dollar.

If you knew what you were talking about, you would know that in a LOP, there is no change in total value.

I followed your link and saw that you are not the author, but just copy and pasted some fake article from the internet. Did you happen to notice that the author owns an online company wants to sell you $855 worth of IQD for $1220?

Talk about getting your opinions right from the pumper's mouth. Next time pick one who knows at least a little bit about what he is talking about.

[Darin]

Froto,

Since you seem to think the LOP has a high % chance of occuring... I intend to run some #s by you to ask your thoughts.

First, lets look at the cost of printing all the new IQD.

We see reports of roughly 24-27T IQD.

From my recollection, it costs roughly $0.08 to print each bill.

The bills are also newly designed which are claimed harder to counterfeit than the US $20 bill.

Okay, let's plug in some #s here.

27,000,000,000,000 IQD / 25,000IQD would mean 1,080,000,000 (I used the 25,000 IQD bill because the end results gives a low # regarding amount of bills in created)

1,080,000,000 *x* $0.08 USD =86,400,000. Therefore, it roughly costed $86 million or more to just print the new currency. (This excludes costs of transportation, convoys to ship them within the country, paying bank employees to exchange Old for New IQD, etc.)

Now, if they were to LOP, would you not agree that they would need to print new bills for the Re-denominated currency?

Seems like a heavy waste of $86+ million.... Not to mention they'll have to spend that figure likely all over again as they print new bills.

And the necessary need for military assistance as they transport large sums of money all over the Country to supply the banks.

And the need yet for lower denoms to be introduced as well.

What does this do for the average citizen? Nothing - Old value = New Value --- If anything causes confusion and loss of trust with banks... Possibly causes civil unrest? Having to adjust to a new currency all over again? All that hard work and nothing to gain...

Who wins in this route? It means that the New IQD that is currently the IQD now, shows as a failure.

Regardless of a RV or LOP - lower denoms would be necessary.

RV prevents the need to entirely replace the currency. (Just draw in 000s & introduce small denoms)

LOP basically means currency needs to be entirely replaced.

RV means citizens have increased buying power, a sense of wealth, trust of govt., prosperity, and... Well you get the point.

LOP will likely upset the people of Iraq and others all over the world.

And... If the people could lose a vast amount of wealth overnight, we can argue the same thing can happen in reverse, right?

I'm not ruling out a LOP - I'm just saying for it to be successful, there would have to be a change in value...

Here is my biggest fear that "May" happen. The GOI/CBI decide to LOP - meaking our 25k IQD note = 25IQD, however, they exchange for newly redenominated notes. Upon the window of opportunity being closed for exchange, they "than" decide to RV and increase the value. -- Within a very short time span. Making most speculative IQD investors lose out on an opportunity. However, I think the chances of this scenario happening are less than a LOP itself.

But, just pointing out possibilities and using figures to back-up logic.

[Froto]

Froto,

Since you seem to think the LOP has a high % chance of occuring... I intend to run some #s by you to ask your thoughts.

First, lets look at the cost of printing all the new IQD.

We see reports of roughly 24-27T IQD.

From my recollection, it costs roughly $0.08 to print each bill.

The bills are also newly designed which are claimed harder to counterfeit than the US $20 bill.

Okay, let's plug in some #s here.

27,000,000,000,000 IQD / 25,000IQD would mean 1,080,000,000 (I used the 25,000 IQD bill because the end results gives a low # regarding amount of bills in created)

1,080,000,000 *x* $0.08 USD =86,400,000. Therefore, it roughly costed $86 million or more to just print the new currency. (This excludes costs of transportation, convoys to ship them within the country, paying bank employees to exchange Old for New IQD, etc.)

Now, if they were to LOP, would you not agree that they would need to print new bills for the Re-denominated currency?

Seems like a heavy waste of $86+ million.... Not to mention they'll have to spend that figure likely all over again as they print new bills.

And the necessary need for military assistance as they transport large sums of money all over the Country to supply the banks.

And the need yet for lower denoms to be introduced as well.

What does this do for the average citizen? Nothing - Old value = New Value --- If anything causes confusion and loss of trust with banks... Possibly causes civil unrest? Having to adjust to a new currency all over again? All that hard work and nothing to gain...

Who wins in this route? It means that the New IQD that is currently the IQD now, shows as a failure.

Regardless of a RV or LOP - lower denoms would be necessary.

RV prevents the need to entirely replace the currency. (Just draw in 000s & introduce small denoms)

LOP basically means currency needs to be entirely replaced.

RV means citizens have increased buying power, a sense of wealth, trust of govt., prosperity, and... Well you get the point.

LOP will likely upset the people of Iraq and others all over the world.

And... If the people could lose a vast amount of wealth overnight, we can argue the same thing can happen in reverse, right?

I'm not ruling out a LOP - I'm just saying for it to be successful, there would have to be a change in value...

Here is my biggest fear that "May" happen. The GOI/CBI decide to LOP - meaking our 25k IQD note = 25IQD, however, they exchange for newly redenominated notes. Upon the window of opportunity being closed for exchange, they "than" decide to RV and increase the value. -- Within a very short time span. Making most speculative IQD investors lose out on an opportunity. However, I think the chances of this scenario happening are less than a LOP itself.

But, just pointing out possibilities and using figures to back-up logic.

You brought up some good points. While I do think a LOP is the slightly probable outcome for the IQD, it is certainly not necessary. As I pointed out, there is absolutely no change in value in a redenomination, and a country like Korea is doing just fine with their similarly valued currency with all the zeros.

First, consider these points when you talk about the cost of replacing the entire set of banknotes with an entirely new set, which would happen if there is a LOP.

-The IQD is a totally paper currency, and it has to be replaced after a few years of use anyway.

-In a LOP, one 25K note is replaced with one 25 note. In an RV, you pointed out that they would need lower denoms. One 25K note would be replaced with one thousand 25 notes. That sounds more expensive to me. In a LOP, the smaller notes would be exchanged for coins, which have a much longer life.

-It seems that the costs of replacing paper currency is going to happen whether there is a LOP or not, and whether there is an RV or not.

You wrote "And... If the people could lose a vast amount of wealth overnight, we can argue the same thing can happen in reverse, right?". In a LOP, there is no change in the value of your holdings.

And last, everybody like to talk about some kind of scenario where there is a LOP and an immediate RV. There has never been anything like that.

[quadraph0nic]

Well

I don’t have any idea how many more times I can explain this

Look I’ve been here in Iraq now for seven years

I helped deliver and exchange the new currency for the old Sadam’s

Back in 04 I have been in this substantially 17 million and counting for a looooooooong time

And it brings me no joy to continue to point this out

This is straight from my students here in Iraq, not the corner 7-11 store in Fantasy Ville

There will be a lop and simultaneous Revaluation to the same rate as Kuwait This has been explained to the Iraqi people for several months now through text messages from their banks, on television, the radio and from their Mosques. I have seen the texts (I don’t read Arabic) so I have them translated by our terp

So it goes like this

I’m an Iraqi citizen and my current pre RV wage is 1,000,000 dinar per month

I have approximately $1000 dollars in buying power

Now after a Lop and RV my wage of 1,000,000 becomes 1000 dinar per month

But I have the buying power of approx $3600 US dollars

The CBI electronically knocks off 3 zeros from all accounts and rounds up or down

Like this pre RV I have 3,734,286 dinars in an account post RV I have 3,734 dinar

Simple huh? As far as the details are concerned larger notes and smaller notes can be used concurrently

And as the larger notes return to the bank they will be taken out of circulation

There will be no need for a 100000 dinar note as the purchasing power of a 25000/25 dinar note will be around $90 dollars us and anyone that has been to Kuwait will tell you will rarely ever see a KD bill larger than a 50

So what about all the foreign investors? You say what about them they all make a 350% profit on their investment. Not bad huh

The rumors I heard from LNs one day in Jan was 1 dinar to 1 dollar at the end of the year but they could not clearly tell me if it was a lop. These were laborers but they were emphatic.

I also heard back in Jan from a shop owner that the 100,000 note was coming in 2 weeks and it would be a LOP. I literally wanted to die when I heard that but obviously that never happened. It also made me realize i really wasn't prepared emotionally if it didn't work out. (last time i go sniffin' around for info....)

If we see the dinar appreciate sometime this year to 900 or 800 dinar to the dollar, then that will ease my concern for the LOP as this will show me their intentions but if they expect to appreciate all they way to 1 to 1 we are in for a very very long wait but at least we will understand what they are trying to do that is if it doesn't RV to a rate we are wishing for which of course is what we all want to see happen but I would have to say that's highly unlikely....

ahem...$6.18!!

Until there is a change, obviously all possibilities are on the table.

TJMunson, I appreciate your enthusiasm but please take a closer look at the inflation issue. I used to believe that point but no longer...

Also I found pretty sobering....i went to other oil producing nations in the region and took a look at their central banks and compared their foreign reserves to whatever they were reporting M1 and M2.....and then you look at Iraq. Billions backing Trillions....Man Its tough....When we put that NID out, we made them carry over all the cr@p that sadam pulled while he was in power. I wish I had a link to this article from 03 or 04 in it, I just remember Shabibi saying it wasn't fair.

[marknet73]

Good point guys. It would be great to see it appreciate into the 900 to 800 range and maybe go up from there but I'm definitely not going to complain if we see the simultaneous lop then revalue to Kuwait's value. I was living in fantasyland there for a while and I still believe that anything's possible in this investment but you gotta look at reality too and that's why I stopped drinking all the Koolaid. lol. I can think of alot worse things than tripling my investment.

[The Eagle]

I'm confused. When I hear of a LOP it is always related to the triple-zero denominations (1K, 5K, 10K and 25K). I get the impression that the reason the lower denoms haven't been released is to allow the LOP of the big bills first. However, the lower denoms have been released and in circulation. What happens to the 50 Dinar note or the 500 Dinar note upon a LOP? LOP only makes sense to me if the ONLY bills in circulation are triple-zero notes. But with the lower denoms also available a LOP will make them valueless (a 100 Dinar note after LOP/RV to $3.22 would be worth a whole 32 cents! Even with a LOP/RV at $6 the IQD would still be worth only 60 cents.

Being a believer in Occam's Razor I believe the simplest and most direct solution is (most likely) the correct solution - NO LOP, RV at 5 cents. The only way I see to make the IQD equal the KUD in value would be through a simultaneous LOP and RV to $3.60 (raising the pre-LOP exchange rate to $0.0036 per Dinar (about a 350% increase in value). Any way I look at it a LOP doesn't make sense now or in the near future. A straight RV is the likely solution. A straight RV to 5-35 cents makes more sense. We'll just have to wait and see - not long now....

Edited April 13, 2011 by The Eagle

[Froto]

I'm confused. When I hear of a LOP it is always related to the triple-zero denominations (1K, 5K, 10K and 25K). I get the impression that the reason the lower denoms haven't been released is to allow the LOP of the big bills first. However, the lower denoms have been released and in circulation. What happens to the 50 Dinar note or the 500 Dinar note upon a LOP? LOP only makes sense to me if the ONLY bills in circulation are triple-zero notes. But with the lower denoms also available a LOP will make them valueless (a 100 Dinar note after LOP/RV to $3.22 would be worth a whole 32 cents! Even with a LOP/RV at $6 the IQD would still be worth only 60 cents.

Being a believer in Occam's Razor I believe the simplest and most direct solution is (most likely) the correct solution - NO LOP, RV at 5 cents. The only way I see to make the IQD equal the KUD in value would be through a simultaneous LOP and RV to $3.60 (raising the pre-LOP exchange rate to $0.0036 per Dinar (about a 350% increase in value). Any way I look at it a LOP doesn't make sense now or in the near future. A straight RV is the likely solution. A straight RV to 5-35 cents makes more sense. We'll just have to wait and see - not long now....

It's actually rather simple. A LOP is a redenomination, or RD. The "three zero LOP" thing is just a term used to describe a 1000:1 redenomination, it doesn't mean only the notes with three zeros. A 100:1 redenomination would be a two zero LOP. Turkey chopped six zeros, or a 1,000,000:1 RD.

If the IQD RD's, all of the currency needs to be replaced (50, 250, 500, 1000 and so on). It will be exchanged for an entirely new set of currency at a set exchange rate such as 1000:1 (a three zero LOP if you must).

This idea of a simultaneous LOP and RV doesn't make much sense to me, and I have found no record of anything like that ever happening. An RD by itself can make the dinar any value they want. The rounder the RD exchange rate, the easier it is for people to understand and accept. And these examples are like things that HAVE happened in recent history.

Some examples using 1,000,000 old dinar (OD) worth $0.00086 each being exchanged for new dinar (ND):

1000:1 RD you would end up with 1,000 ND worth $0.86 each.

2000:1 RD you would end up with 500 ND worth $1.72 each.

3000:1 RD you would end up with 333 ND worth $2.58 each.

4000:1 RD you would end up with 250 ND worth $3.44 each.

And so on.

Unfortunately or fortunately for us, in each and every case, our $860.00 worth of dinar ends up being worth $860.00.

[Hirsch]

^{CBI: Iraqi parliament is to decide to raise zeros from currency}

CBI: Iraqi parliament is to decide to raise zeros from currency

Posted: April 13, 2011 by THE CURRENCY NEWSHOUND - Just Hopin in Iraqi Dinar/Politics

Baghdad, 13 April – The adviser to the CBI on Wednesday, the House of Representatives is the owner of the latest decision to raise zeros from the local currency or not.

He said the appearance of Mohammed Saleh told the Kurdish news agency that “the Central Bank of Iraq has to submit a law regulating the process of lifting and sends it to the Council of the Prime Minister and then to the House of Representatives to decide then, if that revolver there is a need to raise three zeroes from the local currency or not.”

He added that “the central bank works to write a law regulating mechanism for lifting the three zeros and the valuation of local currency in circulation external economic and internal.”

The Ministry of Finance of Iraq last February that the deletion of zeros from the local currency will liberate the Iraqi economy from the constraints and enhance the value of the Iraqi dinar in the International Monetary Fund.

And Saleh said that “the central bank deal with this issue cautiously and carefully because it may cause economic problems in the event of Altchera or do anything else confuses economic situation in Iraq.”

In the view of the central bank to raise the three zeroes from the local currency is a complex process and need to be thorough economic study.

He expressed the International Monetary Fund in August last support of the Iraqi economy in the event of having a number of economic measures, including privatization of banks and raise three zeroes from the local currency and to meet debt and compensation is the responsibility of Iraq.

The Iraqi government has denied conducting any change in the local currency this year in order to reduce inflation.

The news had recently indicated that the Iraqi government plans to make changes to the local currency, including raising three zeros in order to reduce inflation suffered by the Iraqi market, as well as add the language Kurdish paper currency.

The local Iraqi currency has gone through several changes in its history, most recently in 2004 when the former Governing Council replaced the previous currency, which was a symbol of the former regime.

Edited April 13, 2011 by Adam Montana

[rnldtippitt]

So many people ask about the "LOP" theory. I may not have specifically and clearly addressed this in the past, so here it is: The Iraqi Dinar is not going to lop. With that said, let's examine the LOP theory so you all understand it.

At certain times in history, countries have chosen to "lop" the last 3 zeros off of their currency, which basically makes a 25,000 note 25. Fairly simple. The question we need to ask is this: Why do countries lop? One reason is hyperinflation.

Sometimes a country prints currency so fast and furious that the economy can't keep up, and the value of the currency goes down, down, down. Take the Zimbabwe currency, for example. A "Zimbabwean Millionaire" doesn't really have too much to brag about. That is Zimbabwe, though. Not Iraq.

Iraq does not have the inflation problem, Iraq is not a country with no way of obtaining wealth to increase the value of it's currency like Zimbabwe. Iraq doesn't even need to invent a gadget to make money like China could do...

Their pockets are already lined with Black Gold.

I have said many times that Iraq's currency is possibly THE most stable currency in the entire world, and Aswat Al-Iraq recently concurred with that statement: BAGHDAD / Aswat al-Iraq: The exchange rates of the Iraqi Dinar (ID) against the U.S. Dollar is currently constant and stable, an adviser of the Central Bank of Iraq (CBI) said on Thursday.

Currency policies are normally unstable in an absolute way, Modhihar Mohammed Selah told Aswat al-Iraq news agency. He said that the CBI intervenes to respond to legal demands of customers regarding the U.S. Dollar.

Currency policies are inherently unstable, but the Iraqi Dinar is stable. Iraq's central bank denied on Thursday the reports that talked about its decision to cancel three zeroes from the Iraqi currency.

The central bank will not cancel three zeroes from the Iraqi currency at this time to reduce inflation suffered by the Iraqi economy.... Canceling the zeroes will make things more complicated and would cost the state large sums of money and enormous economic cadres to implement this project. The head of the Central Bank Sinan Al-Shabibi told the Independent National News Agency of Kurdistan (AKnews).

This won't be applied at our current time. The central bank and Finance ministry will adopt rational solutions to reduce inflation that Iraq is suffering from currently because some important governmental institutions misused the money, Al-Shabibi added.

Removing the zeros from the currency will reduce the level of the Iraqi dinar in accordance with the American dollar.

Many members of the parliamentary Economic Commission urged the Central Bank and the Finance Ministry to address the Iraqi decreasing funds by removing the three zeroes from the Iraqi currency.

Article Source: http://www.articlesnatch.com

Read more: http://www.articlesnatch.com/Article/Addressing-The-Lop-Dinar-Rv-News-/1150881#ixzz1JDDpnCsN

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[Sucma]

You've been around here long enough to know my opinion.

Keep has been adamant on his argument about the money supply could you debate his take?

[bombguy]

Pretty obvious to me as stated in the opening thread a lop is when you take the three zeros off a 25,000 note and make it a 25. note. THIS IS WHAT IS HAPPENING SO WHY I SAY WHY can't people accept we are having or had a LOP??????????????????????? You can call it what you wat a lop a flop a toot I don't care what I do know if it rv at a 1.00 I will have 25 dollars not 25,000 dollars. THAT MY FRIENDS IS LOP!

[marknet73]

Pretty obvious to me as stated in the opening thread a lop is when you take the three zeros off a 25,000 note and make it a 25. note. THIS IS WHAT IS HAPPENING SO WHY I SAY WHY can't people accept we are having or had a LOP??????????????????????? You can call it what you wat a lop a flop a toot I don't care what I do know if it rv at a 1.00 I will have 25 dollars not 25,000 dollars. THAT MY FRIENDS IS LOP!

Because some people like to read something positive into news articles when there's nothing positive there or twist them around to say they're removing the zeros from the exchange rate instead of the currency. If you believe some of the news articles then it does look like straight up lop to me. I don't see where anything concrete has happened yet and maybe they're putting this crap out to keep us all off track. The one thing I've learned in 6 months of this investment is that I still have a lot to learn!