Chances of LOP are low if they RV low

[AudiS4]

Ok so with all the recent hype of “looping” as some have been calling it… it got me to thinking. A few weeks ago it was all about Keep and how his theory of a low RV was the only option (other than lop or high RV). Everyone gave him crap, but honestly we should be HAPPY with a low RV. Not because we should be thankful for whatever we receive (which that is true too), but for the fact that IF they RV instead of lop, the chances of a future lop are much more unlikely.

Assuming that IF they lop now, they’ll most likely RV also at 3.XX for a 300% gain. If they don’t, well, the MOST we could get out of this investment at some future point is about 300%... this is assuming no currency will ever be worth 100x, 1000x, 50x, etc more than the USD. It’s unlikely the highest valued currency (KWD) will be 3.xx and IQD is 15.xx+… just isn’t going to happen. So to conclude this point, 300% is about all we could see as a return, ever.

If we RV at even $0.15, we still make 15000%. From what I’ve seen, $0.15 ISN’T out of the question… it’s very possible. Now think about this… a 25k note is worth $3750 USD… which is highly unlikely they’ll keep that note circulated. They’ll end up pulling all those in eventually (along with probably 10k and maybe 1k). If they do this, their highest currency note will be 500. At this point they’re not carrying around truckloads of cash to buy milk, so a lop would be highly unlikely. Over time, they can slowly pull in more notes and raise the value even more. The sky is the limit as far as overall investment return goes in this route… it’s just going to take time.

You might ask where I’m going with this. To conclude, my point is that IF they lop, they will never see more than a 3x increase in value. If they RV, even for a small amount, they have much more room to grow in value. In the end it probably doesn’t matter to them whether they RV and lop to take out a LARGE amount instantly, or to RV and slowly take out large notes (thus reducing the overall amount in circulation). I guess the way I see it is that we’re in the clear if they RV low without a lop. We may have more waiting to do, but we’ll be sitting much better off than the instant lop.

Alright, I need coffee now. Does this make sense or am I slightly brain dead this morning?

[TXPoleman]

Good points, I was looking at it from a different perspective - if I'm an Iraqi citizen, and I hold Dinar (which I suspect many do), then why would the GOI decide to unilaterally lop/slash whatever you call it and de-value the cash I already hold? That would seem to be a senseless thing to do (even for the GOI) and would cause all sorts of public outcry. Would be no different if something like that happened here in the US. So, my thought is, the GOI needs to make their currency worth more than it is today, but by how much? Just addressing the concerns that some have voiced over losing money on this deal, just don't see that happening. So, yes, I would think a conservative increase will happen, but will be thrilled if the higher numbers come in.

[kinglizzy99]

Good points, I was looking at it from a different perspective - if I'm an Iraqi citizen, and I hold Dinar (which I suspect many do), then why would the GOI decide to unilaterally lop/slash whatever you call it and de-value the cash I already hold? That would seem to be a senseless thing to do (even for the GOI) and would cause all sorts of public outcry. Would be no different if something like that happened here in the US. So, my thought is, the GOI needs to make their currency worth more than it is today, but by how much? Just addressing the concerns that some have voiced over losing money on this deal, just don't see that happening. So, yes, I would think a conservative increase will happen, but will be thrilled if the higher numbers come in.

I see your point, but with a Lop/slash/loop/etc., the value change would be neutral (if an RV were to follow, then obviously there would be an increase in value from 0% - several 100%, that's all)

Obviously we'd all rather have a smaller more realistic RV occur (vs. Lop then RV), however there are strong counterpoints to this happening (Keep's thread)

IMHO

[mentalmagic]

Very intelligent post. We absolutely want a low RV over a LOP and high RV. No question about it. Anything between 5 cents and 15 cents with no lop would be outstanding. Over time as their economy improves, our dinar investment could grow to a valuation of perhaps .25 cents or .30 cents per dinar. That would be fantastic.

No way it can RV at $3 or more without a LOP. They simply cannot support a $72 Trillion USD economy. That's bigger than the USA and China. No way!

Very good posting. Good to read comments from smart people who think!

[marknet73]

Excellent post my friend! A lop followed by an RV would definitely handcuff the growth to under 400%. We are MUCH better off with a small RV or even if it increases gradually in value over time. Either way is a possibility but I think the only way we're gonna see $3+ is with a lop followed by a 3 to 1 RV. A $3 RV without a lop would amount to more money than all the world's major economies combined! Not gonna happen but I think 5 to 15 cents is possible. They're totally gonna do what benefits them and hopefully it'll benefit us as well. I hope the recent news articles talking about deleting the zeros from the currency soon are just a bunch of bull. Any increase in value will be good because it'll show that they're gonna let it grow on its own.

Edited April 13, 2011 by marknet73

[cocklebur]

If you google Dinar News there is an article posted there stating they intend to drop the zeroes. I have seen similar posts but I do not know if this is an old one or a new one.

[umbertino]

Very intelligent post. We absolutely want a low RV over a LOP and high RV. No question about it. Anything between 5 cents and 15 cents with no lop would be outstanding. Over time as their economy improves, our dinar investment could grow to a valuation of perhaps .25 cents or .30 cents per dinar. That would be fantastic.

No way it can RV at $3 or more without a LOP. They simply cannot support a $72 Trillion USD economy. That's bigger than the USA and China. No way!

Very good posting. Good to read comments from smart people who think!

Agreed on all accounts.

[MPG350]

I agree no way do I want a LOP an RV even if it was $5

Even if we have a one penny RV we are making over 800%

No way can they afford a straight RV of $3 with no LOP, not enough money in the world to cover that.....haha