My Hypothesis On The Alsumaria News Report

[RichNick123]

Ok, I have sat on the sidelines and observed for the past several weeks with no comments. This is my take on this issue, if this is a correct translation! Read and follow my hypothesis as to the verbage, which may have a tremendous impact on our investment. Understand the MAIN concern has been on the total amount of currency in the marketplace worldwide, the M1 and M2. If 27 trillion are truly in the float it would be IMPOSSIBLE to have any RV above .01 USD!

"In an earlier statement to Alsumaria News, Iraq's central Bank adviser Mothahhar Mohammed Saleh affirmed that the bank plans to remove three zeroes from the Iraqi Dinar noting that the zeroes which were added to the Iraqi currency previously constituted a large money supply estimated at 27 trillion Iraqi Dinar. In an earlier statement to Alsumaria News, Iraq's central Bank adviser Mothahhar Mohammed Saleh affirmed that the bank plans to remove three zeroes from the Iraqi Dinar noting that the zeroes which were added to the Iraqi currency "PREVIOUSLY CONSTITUTED" a large money supply estimated at 27 trillion Iraqi Dinar."

The phraseology of "PREVIOUSLY CONSTITUTED" is huge. Here is why if you understand the importance of the specifics of the English language;

PREVIOUSLY: (adverb)

1. existing or occurring before something else in time or order; prior

2. Informal acting, occurring, or done too soon; premature.

CONSTITUTED: (verb) past participle, past tense of constitute (verb)

1. Be (a part) of a whole

2. (of people or things) combine to form (a whole)

If, again I reiterate if, this is a proper translation, it tells us that there is no longer 27 trillion in circulation. It quantifies that there absolutely were 27 trillion in circulation but that is no longer the case.

You do realize that the average life expectancy of United states currency is as follows;

1.00 bill= 1.8 years

5.00 bill= 1.3 years

10.00 bill= 1.5 years

20.00 bill = 2 years

50.00 bill = 4.6 years

100.00 bill = 7.4 years

Most of us hold uncirculated bills. How many of the actual first print bills in Iraq can still be viable? This article does raise a valid question as to how much actual currency may be viable. For us the less the best!! I pray this is is good translation and that the money, except for that we hold, has totally worn out and has been disposed of!

Peace Out!

This post has been edited by RichNick123: Today, 02:53 AM

[ThePhantomRider]

I've not seen that break down, and I got to tell, you it's fresh, and very plausible. Well done.

TPR

[RichNick123]

I've not seen that break down, and I got to tell, you it's fresh, and very plausible. Well done.

TPR

Phantom, the one thing we do not know is if there were subsequent printings of the dinar. Another thing most people do not know is the breakdown of currency as we produce it in the United States. I bet there are not 5 people on this site that realize that the one currency we have with the largest total number is the penny! Currently there are over 1.65 trillion in circulation. Since almost all of of the Iraqi coins are out of circulation how many trillion does that encompass? Add to that the obviously now worn and removed notes after 7 years of circulation????

Edited April 15, 2011 by RichNick123

[yusofsabri]

Thanks for great job.

[MarchMadnes]

I am sorry but take fractional banking I believe is the correct term, as well many other things this will not come out lower then a few dollars! I know some believe it will be low but consider the debts that were paid off by our country for the war, other countries involved, and many other variables this will come in high! On top of it you wont see a LOP and if its low the big wig billionaires will own Iraq investing in there currency! Also we have a big wig banker in the family who has a huge economic back ground and has stated you wont see a LOP (Not enough Inflation), wont be 5 cents,10 cents, 50 cents, a dollar, much higher above $3+ as the dinar in circulation like 80% are held in Iraq if not higher percent! There is no way unless inflation, or other variables this will be low or a LOP! I stake my families reputation on this as he (bank exec.) has been correct about every investment he has got us into to date so I have to trust in his word! Please look at everything as well this will crush there citizens and hurt them with Kuwait as I was also told they have to be comparable to there rate as well! I know its a good point to look at and I dont discredit you for studying everything but raising the 000s is different from deleting now if they said deletion over raising I would have some concern! I base my opinion somewhat on people I trust that have proven themselves for many years as well the facts and there is no way in hell our country (govt) would have paid there debt if this was going to come in at .01, 10 cents, or a LOP! It just wouldnt make any sense as well the big dawgs will jump on Iraq knowing it will get to $3+ some day which a lot of people are going to be shocked that this is going to be a lot higher then what they believe! I believe a big problem for many of us is the saying "its to good to be true then its not true" which we been programed to believe this way but this is one of those situations its going to happen and I am sure of this! Good post though since we have to look at all angles yet there is to much riding on this to be low as well the affect will hurt more then it will do them good and all involved coming out low! God Bless and best wishes to us all having a big return shortly!

[Jimsdandy]

bet there are not 5 people on this site that realize that the one currency we have with the largest total number is the penny! Currently there are over 1.65 trillion in circulation.

Don't forget the ones that are in the ponds and wishing wells. Lots of peeps won't bend over and pick one up off the sidewalk. Only little kids and some oldies if the heads are showing faced up. Supposed to be bad luck to pick up one with the tails up. My kids laughted at my penny loafers with a penny in them. Moma always said you could tell alot about a person by their shoes, Run Forest run

[Fred A]

March! plus for for you. i like it!

[smee2]

Very good post ... well thought out and very well laid out. Information I didn't have before, which makes it very interesting to me at least. I find a lot of similar posts are hard to read because they are not written in a logical, sequential, explanatory manner. But yours is superb in that way.

Thank you very much for posting.!

smee2

[MarchMadnes]

Thank you Fred a good debate from both perspectives is important for us all to meet in the middle at some point! It makes sense this wont come in low I would seriously scratch my head after all the security features they put in the dinar to start off low! Another thing is that I remember if I am correct this will only raise up like 2% every 90 days so in essence it would take a very long time to get back to the $3.22 it was at when Saddam was in power! I know I am not always correct or I do not profess to be a super intellectual person but looking at all the facts presented you can see this being one of those moments people will freak out! Why is there all this misinformation, scam reports, and many things to discredit people to even invest which I believe they want to keep people away because this is going to be that good! I am excited for you all and believe everyone of us made the right decision in this investment! I just feel sorry for those who didnt take the risk who will cry about this after the RV that they did not take our word it would be a life changing experience!

[MarchMadnes]

Ok fess up who gave me a negative go ahead state your case why you believe low its alright we all have a right to our own opinions! I tell you whether its your belief system or your studies do not hesitate to state your case! Please educate us I am open to everyone giving us the best info and not rumorville that has drove us all insane or well most of us insane up to this point!

[keepmwlknfny]

Phantom, the one thing we do not know is if there were subsequent printings of the dinar. Another thing most people do not know is the breakdown of currency as we produce it in the United States. I bet there are not 5 people on this site that realize that the one currency we have with the largest total number is the penny! Currently there are over 1.65 trillion in circulation. Since almost all of of the Iraqi coins are out of circulation how many trillion does that encompass? Add to that the obviously now worn and removed notes after 7 years of circulation????

We know how much is in circulation......24 trillion....thats outside the banks....Im not sure how you can take these articles as anything good when it clearly mentions redenomination many times.....there is only one definition for redenomination and its not just removing the larger bills from circulation so they can revalue.....its pretty clear what they mean when they say redenomination.....if you wanna hang on to hope by believing its all a misinterpretation because of the language then thats your perogative.....but I can pretty much comprehend what is being said in all these removing the zeros articles based off the stats...

[RichNick123]

We know how much is in circulation......24 trillion....thats outside the banks....Im not sure how you can take these articles as anything good when it clearly mentions redenomination many times.....there is only one definition for redenomination and its not just removing the larger bills from circulation so they can revalue.....its pretty clear what they mean when they say redenomination.....if you wanna hang on to hope by believing its all a misinterpretation because of the language then thats your perogative.....but I can pretty much comprehend what is being said in all these removing the zeros articles based off the stats...

KeepM,

Deeply respect your opinion and follow all of your posts. With that in mind how do we take into consideration the following;

1. Can anyone give a determination on how many dinar were printed in 2004?

2. Considering the deterioration of bills on the US scale, how does that correlate with bill wear and tear in Iraq where they hold many bills in their waistband and they are broken down by sweat and the elements? Can we truly expect them to last longer or be made superior to US currency?

3. With the current exchange rate does it not make sense that the largest denominations, 25,000 and 10,000 get the most use and would be worn out and have a limited shelf life comparable to the US 1.00 and 5.00 bill which the average life span is only 1.3 and 1.5 years?

Look, I am the eternal pessimist in this investment but, when you factor in the life expectancy of a bill is less than 3 years maximum on well used currency then how many have died due to attrition? We are 7 years into this and I have seen no evidence of a fresh printing of the Dinar. I do not deny it may have happened, no evidence to prove it did or did not happen. Unless new bills were introduced and the original printing was no more than 27 trillion then it is safe to apply cognitive reasoning which is as follows:

1. Let's say they printed a total of 30 trillion in 2004.

2. Those issued in 2004-2008 have reached their total wear and tear and can no longer be used.

3. Due to the exchange rate which fluctuated from .00049 to .0008 this should have encompassed around 15 trillion of the bills printed that are now worn and of no use. I take an unusual step of faith here and assume like other banks worldwide that worn and destroyed notes are removed from circulation, I may be wrong but make the assumption anyway.

4. After 7 years with the life expectancy of a banknote being only 3 years maximum under ideal conditions that their is only 15 trillion left. If 80% is in country this leaves 3 trillion outside the country, in mostly uncirculated banknotes.

5. With 15 trillion outstanding, at the current amount of 40 billion USD which is the total amount of the original 27 trillion in circulation( do a little research and you will find this is the total amount of the dinar floating at 27 trillion converted to USD) this would translate to an exchange rate of .0026666.

6. This would make one million dinar today worth $2,666.66, or basically worth double the cost being charged the last year by traders.

Now let's take the CBI at their word, I know that was funny, and expect them to remove the 3 zeroes from the in country money which stands at around 12 trillion. In quick fashion they could bring this amount down to around 6 trillion, nothing they can do about money out of country. Now with around 10 trillion the exchange rate would jump to .004 which equates to an exchange rate of $4,000.00 per 1 million Dinar.

This is all speculation as NOBODY knows JACK as to how many dinar are truly out there. The figures I posted about lifespan of a bill however are issued by the US government and should be fairly reliable. The original dinars issued and actually in Iraq have got to be totally worn out and have been exchanged by now. I rest my case. Love ya and praying for the best!!

[ThePhantomRider]

So there was 27T printed, allegedly 24T in circulation outside of Iraqi hands, that leaves less than 3T in Iraqi hands less what has been taken out of circulation due to wear and damage. Hmmm, and what about the bills that the CBI takes in and destroys from time to time? The numbers just don't work, plus, the whole total amount in circulation will not be paid out at a high rate, only what is exchanged or "cashed in" will Iraq have to pay for.

Get me the numbers that will cash in based on even a 1-1 ratio and you'll have what the real cost will be. Plus, not everyone will cash in right away, especially large investors and such, the key here is what rate will give them the highest probability that small timers like us, cash out and big timers buy in a similar volume. The closer they get to net zero the better for them because the big fish will buy in anticipation of even better future returns.

TPR

[coldwarvet]

GReat discussion, everyone. I learned a lot from Rich and March, especially. +1 for both. Thanks!