Removing the Zeroes

[cocklebur]

I found 3 different articles stating the Iraqi's intent on removing the zeroes from their currency, and as 1 article stated revalue it back to the 1980's level of exchange. These articles can be found at Going Global East Meets West (Iraq).

[keepmwlknfny]

I found 3 different articles stating the Iraqi's intent on removing the zeroes from their currency, and as 1 article stated revalue it back to the 1980's level of exchange. These articles can be found at Going Global East Meets West (Iraq).

And the only way to revalue it back to the 80s is by reducing the physical money supply.....aka redenomination....or the dirty L word everyone uses lol same thing....

[umbertino]

I sure don't like it but there's nothing I can do about it......I'll just keep watching.........

[GasCan]

did it say removing or raising of the 0's?

this is why i ask. beginning of med and mailman chat

NEWS NEWS NEWS. OK I JUST GOT OFF THE PHONE WITH LANACHY. WE DISCUSSED THIS FOR AN HR….AND KUDO’S FIRST TO DANJ FOR KNOWING THE DIFFERENCE AND DOING HIS HOMEWORK ON THE DIFFERENCES OF RAISING THE ZERO’S AND REMOVING ZERO’S. THERE IS A DRASTIC DIFFERENCE. RAISING THE ZERO’S IS WHAT I SAID ALL ALONG MEANS REMOVING ZERO’S FROM THE NOMINAL VALUE AND INCREASING THE PURCHASING POWER OF THE DINAR AND REDUCING LIQUIDITY. THIS IS WHAT CBI IS DOING

I HAD TRIED FOR SO LONG TO EXPLAIN THAT REMOVING ZERO’S FROM THE CURRENCY IS NOT THE SAME AND IS NOT WHAT CBI’S INTENTIONS WERE. NO DID THEY EVER SAY THIS. WHEN YOU REMOVE ZERO’S FROM A CURRENCY YOU ARE ACTUALLY DIMINISHING THE VALUE OF THAT CURRENCY DUE TO HYPERINFLATION AND CONTINUING DEVALUATION OF A COUNTRIES CURRENCY. THERE IS NO ACTUAL CHANGE IN VALUE THE .00086 WOULD STILL BE THE SAME IN REALITY. NOTHING WOULD CHANGE AND IT DOES ALSO REMOVE LIQUIDITY BUT DOES NOTHING FOR PURCHASING POWER. WHAT IS SUBMITTED TO THE PARLIAMENT IS THE RAISING OF ZERO’S, TO INCREASE THE PURCHASING POWER. I DO NOT WANT TO HAVE TO DISCUSS THIS AGAIN, NOR WORRY ABOUT LOP TALK SINCE I HAD BANNED IT FROM THIS SITE A LONG TIME AGO.

THE ONLY THING LAN SAID WAS TIME FRAME, HOW FAST WILL THE COUNCIL OF MINISTERS MOVE AND FORWARD IT? NOW HE ALSO SAID THOUGH THAT SHABIBI IS VERY METHODICAL AND MOST LIKELY WILL NOT MEET MUCH RESISTANCE, THAT THIS IS NOT SOMEONE FROM THE LIST OR THE NA SUBMITTING IT. HE IS INDEPENDENT AND THAT HE CARRIES ALLOT OF CLOUT, SO HE FELT THAT HE WILL GET IT THROUGH AND THAT THERE IS AN URGENCY TO MOVE ON THIS AND THAT THE ECONOMY NEEDS IT. THEY NEED IT TO support THEM INTO THE WTO AND TO ACTIVATE THE VISA CARDS.

SO THAT IS THE INFO I HAVE

[RonSkilbeck]

And the only way to revalue it back to the 80s is by reducing the physical money supply.....aka redenomination....or the dirty L word everyone uses lol same thing....

What's with the red button (-) for expressing what everyone is thinking - we won't know what they are doing until they actually do it. Whether it's removing the zero's from the conversion rate (doubtful) or removing the zeros from the notes (more likely) - (I'm tipping my hat to you) You're always putting in effort on this site and are never rude - a valued member of our community -

To everyone else, "Hey guys, lay off that red button. Just becaue you see info you don't like; especially when it's somebody who is a credible and valued member of our site."

(I don't like it either; but at this point nobody is an expert on what Iraq will or won't do. The one thing that is certain is that the main power that Shabbi has is to control inflation by controlling the daily auction for the exchange rate. That's why he took the dinar off the dirty floart and put it on the daily auction. - who wouldn't want to win the lottery?) - especially when it's somebody who is credible and a valued member of our site."

[cocklebur]

And the only way to revalue it back to the 80s is by reducing the physical money supply.....aka redenomination....or the dirty L word everyone uses lol same thing....

Yes, one article stated, remove the zeroes from the currency, then revalue to 1980's rate of exchange. To me that means making a 25,000 dinar note currently worth 21dollars usd into a 25dinar note x,s say 3.20 usd = 80 dollars usd.

[easyrider]

Yes, one article stated, remove the zeroes from the currency, then revalue to 1980's rate of exchange. To me that means making a 25,000 dinar note currently worth 21dollars usd into a 25dinar note x,s say 3.20 usd = 80 dollars usd.

smoke just wait and see.

[leola]

I think,,,,and it does`t really matter what I think,,,if iraq deletes the zero`s( 000),,, there will not be enough currency in circulation to do all the things that need doing ... what say yea about that?????

[RonSkilbeck]

did it say removing or raising of the 0's?

this is why i ask. beginning of med and mailman chat

NEWS NEWS NEWS. OK I JUST GOT OFF THE PHONE WITH LANACHY. WE DISCUSSED THIS FOR AN HR….AND KUDO’S FIRST TO DANJ FOR KNOWING THE DIFFERENCE AND DOING HIS HOMEWORK ON THE DIFFERENCES OF RAISING THE ZERO’S AND REMOVING ZERO’S. THERE IS A DRASTIC DIFFERENCE. RAISING THE ZERO’S IS WHAT I SAID ALL ALONG MEANS REMOVING ZERO’S FROM THE NOMINAL VALUE AND INCREASING THE PURCHASING POWER OF THE DINAR AND REDUCING LIQUIDITY. THIS IS WHAT CBI IS DOING

I HAD TRIED FOR SO LONG TO EXPLAIN THAT REMOVING ZERO’S FROM THE CURRENCY IS NOT THE SAME AND IS NOT WHAT CBI’S INTENTIONS WERE. NO DID THEY EVER SAY THIS. WHEN YOU REMOVE ZERO’S FROM A CURRENCY YOU ARE ACTUALLY DIMINISHING THE VALUE OF THAT CURRENCY DUE TO HYPERINFLATION AND CONTINUING DEVALUATION OF A COUNTRIES CURRENCY. THERE IS NO ACTUAL CHANGE IN VALUE THE .00086 WOULD STILL BE THE SAME IN REALITY. NOTHING WOULD CHANGE AND IT DOES ALSO REMOVE LIQUIDITY BUT DOES NOTHING FOR PURCHASING POWER. WHAT IS SUBMITTED TO THE PARLIAMENT IS THE RAISING OF ZERO’S, TO INCREASE THE PURCHASING POWER. I DO NOT WANT TO HAVE TO DISCUSS THIS AGAIN, NOR WORRY ABOUT LOP TALK SINCE I HAD BANNED IT FROM THIS SITE A LONG TIME AGO.

THE ONLY THING LAN SAID WAS TIME FRAME, HOW FAST WILL THE COUNCIL OF MINISTERS MOVE AND FORWARD IT? NOW HE ALSO SAID THOUGH THAT SHABIBI IS VERY METHODICAL AND MOST LIKELY WILL NOT MEET MUCH RESISTANCE, THAT THIS IS NOT SOMEONE FROM THE LIST OR THE NA SUBMITTING IT. HE IS INDEPENDENT AND THAT HE CARRIES ALLOT OF CLOUT, SO HE FELT THAT HE WILL GET IT THROUGH AND THAT THERE IS AN URGENCY TO MOVE ON THIS AND THAT THE ECONOMY NEEDS IT. THEY NEED IT TO support THEM INTO THE WTO AND TO ACTIVATE THE VISA CARDS.

SO THAT IS THE INFO I HAVE

(lifting of the coffee cup) Hears hoping that Med is right!

[sheik]

Removimg the zeros makes sense.How to pay out 24 trillion at 1 Buck seems hard to swallow.

[leola]

If you make all the large bills,,,small,,,25000-25,,,,10000-10,,,5000 -5,,,1000 -1,,,It will leave the country 500 iqd as largest bill,,,that will have the the opposite effect,,,and leave them without enough to carry on day to day bus.... 25 million people who do not trust banks,,,think about all those hoarders..they would have to print more high bills to compensate...what say you now????/

[JuryPicker]

Exactly sheik...thats the whole point

1 more time!!!!!!!!!!!!!!! …………….Unless you know how much currency is REALLY in circulation, nobody can make a proper judgement on rate. Nobody, Nobody, Nobody. We have a good idea how much was printed but don't know where it is. In a previous post I stated that every person in Iraq would have to be holding over a years average salary in their possession to make up 22 trillion dinars. That is every man woman and child in Iraq. How many of you have a years salary in the bank. And your wife. And your kids. I still say their gov is holding most of it. Thank You.

[Papster]

There are two different articles talking about the three 0's........one says the raising or lifting.......and the other says remove......imo.....remove could be removing the large denoms from circulation......and the raising or lifting.....could be from the nominal rate........00086 to .86......then take .86 and divide into 1 USD....should come out around 1.16.......but who knows.....but i think we will all know soom jmho......GO DINAR

[MrRich]

And the only way to revalue it back to the 80s is by reducing the physical money supply.....aka redenomination....or the dirty L word everyone uses lol same thing....

Hey keepm. Couldn't you reduce the money supply by RVing high enough to get the 000s turned in and then destroy them? Suppose we could just push a button and destroy 90% of the dinars today. Any problem with a $2.50 RV then? (Or whatever the rate was back then) So what's the difference between destroying them before or destroying them after, as long as the money supply end up where it needs to be? If I'm not mistaken this is what Scooter is saying. Correct me if I'm wrong.

[pleasantvalleySunday]

moving this to the l o p section - bondlady has some interesting perspectives/possibilities regarding the slew of news the last few days regarding just this.

[Mrose001]

Two of the links referred to in the post:

http://articlesofinterest-kelley.blogspot.com/2011/04/iraqi-dinar-revaluation-redenomination.html

http://www.alsumaria.tv/en/Economics-News-Iraq/3-62912-Iraq-Central-Bank-to-remove-three-zeroes-from-Iraqi-Dinar.html

[gbrlgms]

And the only way to revalue it back to the 80s is by reducing the physical money supply.....aka redenomination....or the dirty L word everyone uses lol same thing....

THERE YOU GO MR ECONOMIST THE AUTHOR OF THE PLAN.

CHEER UP!

The purpose of this post is to cheer up keep and to talk about big umm numbers OK not really not sure how thats suppose to cheer him up but here we go

I been reading a lot of opinions like Iraq has way to much currency in circulation and there is just no way that they can revalue without lopping. This is where people start to doubt this is were they become lopsters

(have patience with me keepmwlknfny I am trying to keep you from driving that funny looking Volkswagen)

So the real question here is how much money is in the world? Can it support an Iraqi revalue. This seems to be where everybody is losing faith. So lets start with America. How much money does America have?

The different types of money are typically classified as "M"s. The "M"s usually range from M0 (narrowest) to M4 (broadest) but which "M"s are actually used depends on the country's central bank. In America we have M1, M2, and M3The typical layout for each of the "M"s is as follows:

M1: The total of all physical currency part of bank reserves + the amount in demand accounts ("checking" or "current" accounts). This is 1.7 trillion

M2: M1 + most savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000). This is about 8.5 trillion

M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements. This sum was about 11.5 trillion in 2007. The federal reserve stopped reporting M3 in 2006. I have seen some sites that have had this number as high as 14 trillion for 2010. but there is no way to verify this

Link 1

Link 2

Link 3

M3 is suppose to be the total money supply the whole ball of wax, but not many economist understand fractional reserve banking. A description of which goes like this.

Link 4

If you watched this short video you now know how the money supply can be vastly expanded through this process. In America the M2 money supply would be the base for expansion which is 8.5 trillion. Now times that by ten that’s 85 trillion. This is money that is not even reported in the Ms. Now the problem is there are no reserve limits. This means that there are no limits to the money expansion process. If the banks can expand the money supply this much ask yourself this question. Why would the feds remove the reserve requirements?

Link 5

like I said on many occasions money = debt and debt = money so if you want to know exactly how much money is really in circulation take the total federal debt + the total consumer debt + the M3 and then factor in Q1 and Q2 now you have some idea of how much money is out there.

This is the basic argument from some economist as to why our financial system is in so much trouble. When our debt becomes monetized through fractional reserve banking then you will see there is more than enough money to cover the RV. Two thirds of Americas money is overseas. The rest is here.

Now this is just America. Once sanctions are lifted and the currency becomes global then demand for the dinar will rise. There are 150 central banks throughout the world. Each one has their own reserve requirements and they expand their money supply the same way.

To give you an idea of just how much money is floating around the world look at the rothchild family. The Rothschild family is the richest family in the world. It is estimated that their wealth is worth 500 trillion. That is suppose to be a little over half the worlds money supply.

One more thing is important in this equation. Iraq does not have 27 trillion in circulation read to find out more

Link 6

Link 7

Of course this just one side of the coin if you want to find out other reasons why there will be no lop then click here

Link 8

Hope this helps keep, or at least puts a smile on your face

Read more:

[DinarMillionaire]

IMO, One way to introduce the 25 IQD... and have them "co-exist with the 25,000 IQD"

Iraq wants to make it so the Iraqi citizen won't have to carry so much cash for daily purchases and to make it easier for banking transactions.

Now- the exchange rate is 0.0008547 (or 1170 IQD to 1 USD)

Now- the 25,000 IQD is worth $21.37 USD [ 25,000 x 0.0008547 = $21.37 ]

Now- 1,000,000 IQD cost $854.70 ($1,220.00+/- from dealer) [ 1,000,000 x 0.0008547 = $854.70 ] +$365.30 +/- dealer

[ 25,000 x 40 = 1,000,000 ] [ 21.37 x 40 = 854.80 (per million)] (spread not incl)

SCENARIO: LOP 3 zeros ( to get rid of the high denomination currency)

If they were to lop three zeros from the currency, to replace the 25,000 IQD with the 25 IQD, and "co-exist together", they could also simultaneously remove the three zeros from the exchange rate of 0.0008547 making it 0.8547 this would mean even steven (less the spread). keep reading. From that point anything with 3 zeros would be considered the lower denomination.( "to co-exist")

They can afford to increase the value of the Dinar above that because of the oil.

After removing zeros from both the currency and the rate...

The exchange rate would be 0.8547 ( or 1.17 IQD to 1 USD)

The 25 IQD would still be worth $21.37 (same as the 25K note) [ 25 x 0.8547 = $21.37 ]

[25,000 x 40 = 1,000,000 ] becomes [ 25 x 40 = 1,000 ] [ 21.37 x 40 = 854.80 ] (spread not incl) same value as the million was before.

1,000,000 IQD would become 1,000 IQD after "lop", but remember, both still worth $854.70. ($1,220.00+/- from dealer)

-------------------------

Rate needs to be at least $1.22 to break even with what would be now 1,000 IQD costing $1,220.00 USD,

For example I'll use 3.22 IQD per 1 USD, then our profit would be...

1,000 x $3.22 = $3,220.00 less orig. $1,220.00 = $2,000.00 profit per million, (minus the spread.)

But this is just an example, they could go 4+, 5+, or whatever they feel their oil ,gold, etc., can support.

-------------------------

BEST CASE SCENARIO: "THE DREAM"

If they still honor the fact that you bought 1,000,000 IQD, at trade in it could be something like this...

IF they let us cash in 25,000 IQD note for 1,000 25 IQD notes which would be 40,000 25 IQD per 1,000,000 IQD, in which case means...you still have 1,000,000 IQD.

1,000,000 IQD x any new rate would mean $BUCKS$ but let's use new rate of 0.86 = $860,000 per million IQD.

Just for fun and because so many believe this is what will happen (Even though many know feel different)...

Get to trade in 1 million dinar (just smaller denoms or electronically)...$3.22 x 1,000,000 IQD = $3,220,000.

Hope this makes sense.

Maybe someone can confirm or deny what I'm saying. "Don't BASH it, just BEAT it up, bruise it or kick it around." it's JMHO

[marknet73]

I see Mr. Rich's point. Anything can happen here but it seems like a low RV would be the most beneficial - that is if they can afford it. Like Adam was saying in his chat they can come out low and then make money off the spread as people continue to buy and sell, buy and sell... Plus it would do a lot more to stimulate numerous economies by putting more money in investors pockets. A lop followed by an RV would handcuff the growth potential to under 400% and get the value back to pre-war levels but what I'm trying to understand is which would be better for their economy - a value of $3.22 (from a lop then 3x RV) or a value of say 25 cents (RV with no lop)? In the 1st case they'd have a much higher currency value and also have to pay out less to investors but in the 2nd case they'd have to pay out more but the value would have much more room to increase. The math here is what gets confusing to me. I definitely want to make alot of money off this but I'm trying to stay grounded in reality you know? I guess the bottom line is they'll do what's best for them and hopefully it'll benefit us as well.

[speculatorsRIDE]

THERE YOU GO MR ECONOMIST THE AUTHOR OF THE PLAN.

CHEER UP!

The purpose of this post is to cheer up keep and to talk about big umm numbers OK not really not sure how thats suppose to cheer him up but here we go

I been reading a lot of opinions like Iraq has way to much currency in circulation and there is just no way that they can revalue without lopping. This is where people start to doubt this is were they become lopsters

(have patience with me keepmwlknfny I am trying to keep you from driving that funny looking Volkswagen)

So the real question here is how much money is in the world? Can it support an Iraqi revalue. This seems to be where everybody is losing faith. So lets start with America. How much money does America have?

The different types of money are typically classified as "M"s. The "M"s usually range from M0 (narrowest) to M4 (broadest) but which "M"s are actually used depends on the country's central bank. In America we have M1, M2, and M3The typical layout for each of the "M"s is as follows:

M1: The total of all physical currency part of bank reserves + the amount in demand accounts ("checking" or "current" accounts). This is 1.7 trillion

M2: M1 + most savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000). This is about 8.5 trillion

M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements. This sum was about 11.5 trillion in 2007. The federal reserve stopped reporting M3 in 2006. I have seen some sites that have had this number as high as 14 trillion for 2010. but there is no way to verify this

Link 1

Link 2

Link 3

M3 is suppose to be the total money supply the whole ball of wax, but not many economist understand fractional reserve banking. A description of which goes like this.

Link 4

If you watched this short video you now know how the money supply can be vastly expanded through this process. In America the M2 money supply would be the base for expansion which is 8.5 trillion. Now times that by ten that’s 85 trillion. This is money that is not even reported in the Ms. Now the problem is there are no reserve limits. This means that there are no limits to the money expansion process. If the banks can expand the money supply this much ask yourself this question. Why would the feds remove the reserve requirements?

Link 5

like I said on many occasions money = debt and debt = money so if you want to know exactly how much money is really in circulation take the total federal debt + the total consumer debt + the M3 and then factor in Q1 and Q2 now you have some idea of how much money is out there.

This is the basic argument from some economist as to why our financial system is in so much trouble. When our debt becomes monetized through fractional reserve banking then you will see there is more than enough money to cover the RV. Two thirds of Americas money is overseas. The rest is here.

Now this is just America. Once sanctions are lifted and the currency becomes global then demand for the dinar will rise. There are 150 central banks throughout the world. Each one has their own reserve requirements and they expand their money supply the same way.

To give you an idea of just how much money is floating around the world look at the rothchild family. The Rothschild family is the richest family in the world. It is estimated that their wealth is worth 500 trillion. That is suppose to be a little over half the worlds money supply.

One more thing is important in this equation. Iraq does not have 27 trillion in circulation read to find out more

Link 6

Link 7

Of course this just one side of the coin if you want to find out other reasons why there will be no lop then click here

Link 8

Hope this helps keep, or at least puts a smile on your face

Read more:

Wait just a gosh darn minute! You mean to tell me there is more money out there then what has been reported in prior posts? I am just dumbfounded.

[MrRich]

I see Mr. Rich's point. Anything can happen here but it seems like a low RV would be the most beneficial - that is if they can afford it. Like Adam was saying in his chat they can come out low and then make money off the spread as people continue to buy and sell, buy and sell... Plus it would do a lot more to stimulate numerous economies by putting more money in investors pockets. A lop followed by an RV would handcuff the growth potential to under 400% and get the value back to pre-war levels but what I'm trying to understand is which would be better for their economy - a value of $3.22 (from a lop then 3x RV) or a value of say 25 cents (RV with no lop)? In the 1st case they'd have a much higher currency value and also have to pay out less to investors but in the 2nd case they'd have to pay out more but the value would have much more room to increase. The math here is what gets confusing to me. I definitely want to make alot of money off this but I'm trying to stay grounded in reality you know? I guess the bottom line is they'll do what's best for them and hopefully it'll benefit us as well.

I agree that a low RV is likely. Probably from $.30 - $1.50 at first. What I was addressing was just the money supply issue. I don't really think it's a problem if they structure the RV right. If they monetize their oil and shrink their money supply enough they could support the $4+ rates that some people are throwing out there. I'm not saying that they will do that, of course. In the first place the international community wouldn't go along with it and in the second place it would probably do more harm than good for Iraq's economy. But the reserves are there to back up higher rates. When things stabilize in Iraq and the economy grows to the point where people are working and making a good living and security is no longer a big issue I have no doubt that Iraq's currency will be right up there with Kuwait's.

[Jimsdandy]

I see that when they pulled the origional 27 trillion dinars and then they put it back in the system, it could have been in USD to contractors or electronic transfers. Thus taking the physical dinars off the streets.