Central Bank: It is time to re-evaluate the currency, commensurate with the price changes and the wage in the economy

[dinarck]

Wouldn't it be more condusive to the repayment of their debt to straight RV? Considering a 1=1 RV as an example, the 25k IQD becomes 25k USD equivalent. This gives them much more value to the dinar and it's ability to pay off their debt. Our investment aside, it seems that a straight RV with a removal of "3 zero" notes (5k,10k,25k) from circulation, keeping them for large transactions, would be in Iraq's best interest. Ex: If I owed a million US, and I had a million IQD worth only 1000, I would revalue to make the same equivalent amount of currency be able to do more. It seems to be a common sense thing, but who's ever accused any gub'ment of having common sense.

Fish

Iraq has been forgiven most of their debt. If they don't redenominate pre RV then they will know the true meaning of debt.

[thatoneguy]

I like the way ya think, Buck. We can't let them "in" when your not gonna get the facts, until.................

Sun Tsu......

Deception in the art of war has many forms.

People dont believe anything you read, They will try everything to make us look one way while DOING the opposite.

Sit back relax Have a double.........

[cashin]

Lambert, I was thinking the same thing as you stated "The lost in translation factor", but did not point it out. "Re-evaluate" can very well mean "Revaluation" in their meaning of the word...+1 my friend!

equally raise the zeros could read erase the zeros

just a thought

[FishmanTx]

Iraq has been forgiven most of their debt. If they don't redenominate pre RV then they will know the true meaning of debt.

If they redenom at all we're up the creek. Honestly, I'd rather they knew the meaning of debt.. sorry.

[Tr2]

Iraq has been forgiven most of their debt. If they don't redenominate pre RV then they will know the true meaning of debt.

One possible scenario:

- Re-domination (remove 3 zeros) followed by RV at 1 IQD to 1 USD

- IQD hits the world market post re-denomination with only billions in circulation vs trillions

- IQD sky rockets in value based on supply/demand and Iraqi asset figures...possibly reaching 1 IQD = 10 USD

- Iraq prints currency to fill demand bringing down the IQD value to pre-Gulf war levels of 3 IQD to 1 USD

- Iraq goes on spending spree and rebuilds infrastructure.

- Iraqi citizens are paid monthly oil revenue dividends as is done in neighboring countries.

- Iraq is debt free.

[MarchMadnes]

Lop Knot Untied

Many naysayers are mistakenly convinced that Iraq will LOP 3 zeros off the face value of their currency, in essence causing a 25,000-dinar note to take on the value of a 25-dinar note. The purpose of this web site is to show that this will not be the case. The 25,000-dinar notes and the 25-dinar notes will co-exist. Hence, the 25,000-dinar note will be worth 1000 25-dinar notes. In like manner, the 10,000s & 10s will co-exist as will the 5,000s & the 5s along with the 1,000s and the 1s … as they all should, simply put, straight-forward to our normal way of thinking. 4-5s = a 20, 5-20s = 100, etc.

Is it a LOP or an RD, aren’t they the same?

Some, again, erroneously, are of the opinion that redenomination (RD) and LOP mean the same thing. In reality, redenomination actually has nothing to do with the value of the currency in question. In redenomination, yes, the numbers in face value of the currency change, but, not necessarily to make them smaller. This method is often used to add zeroes as well. The misundestanding is in the fact that a LOP assumes a decrease in the value of the currency that is reflected in the numbers that appear on the new currency. If not for this fact, then yes, a LOP and RD would be the same thing. But, Iraqi officials announced their plans last year and have specifically called it a redenomination. You see, they have been trying to do this for some time, but, they don’t know how because it’s never been done before in the face of a global economic restructuring project.

In a LOP, the upper denominations take on the value of the lower denominations so that they both have the value of the new lower denominations, essentially, dropping zeros out of the face value. This might be done in the case of hyperinflation as a way to catch up with inflation. The old and the new can not co-exist. Holders of the old currency are required to bring their high denominations in to a bank or money changer and have them replaced with the new, lower denominations. Usually, there is a time limit to do so and after that period expires, the high denominations become obsolete and are no longer usable. That is how a LOP works. By the way, Iraq is not experiencing hyperinflation.

Conversely, in Redenomination, both upper and lower denominations co-exist with different values. The higher denominations have a value equal to a multiple of the lower denominations. During a Redenomination period, the high denominations are gradually drawn out of circulation and either vaulted, used to facilitate large transactions between banks or destroyed. This is what we did here in the United States. $10,000 notes still exist, they’re collector’s items, but they’re still legal tender for ten-thousand dollars. Read more…..

http://www.dinarfaqs.com/

[basketcase]

so it'sa lop then?

[skepticaldinar]

so it'sa lop then?

Pretty much looking that way

[Lilalbertus]

Without the Arabic language.

Central Bank: It is time to re-evaluate the currency, commensurate with the price changes and the wage in the economy

Tuesday, 19 نيسان 2011 15:58 GMT

May not remain there is a need to act for this counter so quickly if applied to the central bank project by deleting three zeros from the Iraqi currency .. Bank, which sets monetary policy for the country confirms that it is time to re-evaluate the currency to suit the changes in the wage-price and economy.

The appearance of Mohammed Saleh / adviser to the CBI:

(Iraq after five years on the verge of producing a large oil 6 million to 12 million barrels of Iraqi oil would be a regional power in the management of energy in the world and will be the proceeds of a large system and the current cash management system currency in this way is a product of phase lag like it or not needed reform the management of currency after five years claimed the block becomes large cash)

Shops, banking companies were not enthusiastic about the project, which says that its application may cause economic problems or technical unnecessary at the present time.

Shop owner Banking

(Mo is the time because if Mistqr country's economy and stabilize exchange rates, buying and selling of the dollar Menkdr use the lifting of the zeroes)

Shop owner Banking

(This thing we Menkdr TOGETHER we identify the issue depends on the application may show problems then the possibility of fractures disparity of individual things and things hobby art)

As for the citizens, the deletion of zeros memory bring them back to the days of the power of the Iraqi dinar which is welcomed by some, while others appeared unconvinced by the possibility of its application

Citizen

(God, Kalash Aoki suggested raising of the Iraqi economy and brings us back the dinar money days before the God who commissions Tasirlh value and purchasing power and the States they are)

Citizen

(Is the same thing if the lifting of the zeroes is the dinar Maltna and even abroad Mahd originally received by)

Citizen

(For the lifting of the zeroes FD Shi logical because the allowance Maiasir trillion words become even billions of people Fhm)

As for the economists Vitmonon The theme of the deletion of zeros will not make a difference in handling cash or in any way affect the Iraqi economy unless they take into account the changing value of exchange in relation to the dollar

Ali gnathion NA / Economist:

(This is an administrative process involving the central bank itself in the management of currency and the economy will remain only if the change rate of the Iraqi dinar for example, now is a dollar in 1180 JD permissible if Swoh means three whistle 118 or you will be 1.0 that Alukt if it has become one break zero dinar to the dollar means to improve the purchasing power of the dinar)

And show the Iraqi Central Bank reservation of criticism and reactions that have been raised about the project to delete the zeros from the currency, noting that his project is based on a thorough study to serve the Iraqi economy will be the case ended, the Council of Ministers and House of Representatives.

[seus]

Lop Knot Untied

Many naysayers are mistakenly convinced that Iraq will LOP 3 zeros off the face value of their currency, in essence causing a 25,000-dinar note to take on the value of a 25-dinar note. The purpose of this web site is to show that this will not be the case. The 25,000-dinar notes and the 25-dinar notes will co-exist. Hence, the 25,000-dinar note will be worth 1000 25-dinar notes. In like manner, the 10,000s & 10s will co-exist as will the 5,000s & the 5s along with the 1,000s and the 1s … as they all should, simply put, straight-forward to our normal way of thinking. 4-5s = a 20, 5-20s = 100, etc.

Is it a LOP or an RD, aren’t they the same?

Some, again, erroneously, are of the opinion that redenomination (RD) and LOP mean the same thing. In reality, redenomination actually has nothing to do with the value of the currency in question. In redenomination, yes, the numbers in face value of the currency change, but, not necessarily to make them smaller. This method is often used to add zeroes as well. The misundestanding is in the fact that a LOP assumes a decrease in the value of the currency that is reflected in the numbers that appear on the new currency. If not for this fact, then yes, a LOP and RD would be the same thing. But, Iraqi officials announced their plans last year and have specifically called it a redenomination. You see, they have been trying to do this for some time, but, they don’t know how because it’s never been done before in the face of a global economic restructuring project.

In a LOP, the upper denominations take on the value of the lower denominations so that they both have the value of the new lower denominations, essentially, dropping zeros out of the face value. This might be done in the case of hyperinflation as a way to catch up with inflation. The old and the new can not co-exist. Holders of the old currency are required to bring their high denominations in to a bank or money changer and have them replaced with the new, lower denominations. Usually, there is a time limit to do so and after that period expires, the high denominations become obsolete and are no longer usable. That is how a LOP works. By the way, Iraq is not experiencing hyperinflation.

Conversely, in Redenomination, both upper and lower denominations co-exist with different values. The higher denominations have a value equal to a multiple of the lower denominations. During a Redenomination period, the high denominations are gradually drawn out of circulation and either vaulted, used to facilitate large transactions between banks or destroyed. This is what we did here in the United States. $10,000 notes still exist, they’re collector’s items, but they’re still legal tender for ten-thousand dollars. Read more…..

http://www.dinarfaqs.com/

That's inaccurate that Iraq has not experienced hyper inflation. Shabibi even states that in the 90s they had to add the 3 0's due to inflation. Directly after the gulf war, it took 2000+ IQD to equal 1 USD...Very similar to where we are now isn't it

[randalln]

I guess i need to read more into the LOP exchange than I have. Correct me if I'm wrong, but loosing 3 0's brings 1,000,000 to 1,000 correct? If so, 1,000 Dinar RVing at $1 US would mean a loss on the 1200plus paid for that 1Million Dinar. OR is it that they honor the amount of currency that you have and 1,000,000 Dinar now ='s $1,000,000?

I see so many questions about if the remove 3- 0's will that make a 25000 bill a 25 Just a suggestion check into a foreign currency account with a international bank Im not recommending any bank but there is one from china that i think you would be happy with, but there are some american banks that also have this option

As long as you have nothing to hide or try to circumvent the IRS its perfectly legal

PAY YOUR TAX

and when the time comes the bank will change your currency for you plus you will have a privet banker and then no one gets a cut.

now im sure thats not what the money dealers want you to know but check for yourself

[nepperson]

Folks... Why on Earth are you raving about this? Did you read it? Its like standing on the train tracks rooting for the train coming at you. Re-evaluate is completely different then Re-value.

Why would the shop owners not want this as stated in the article? They would be freaking drunk with excitement. This is not what you think it is. I want it too but for goodness sakes don't root for a LOP. You have been mislead about them removing the 3 zero currency from mistaken gurus. That would make cash transactions more difficult not less.

Means 1 Dinar is worth 1 Dollar after the removal of the 3 zeros. We think when they use the words "to improve purchasing power" that they mean they can buy more goods right? More value per Dinar. That is not what they mean. They are saying What you used to buy for 1000 Dinar you can now buy with 1 Dinar. This is a cultural difference in the use of purchasing power definition. Both correct, but not the way we investors want to view it. Please understand I am trying to help you see this and not trying to be negative. I don't want a lop. I want them to do it without a lop and see where the international market will take them. Our chance for ultimate profit resides in a non-lop non 3 zero removal scenario. Be well.

Sorry but JMO,,,, you don't know what you're talking about.... if you understand currency then you know that they can not devalue a portion of their currency (by removing the zeros from the higher denominations) and let the other portion retain or increase in value, anyone who thinks this is just plain WRONG. if they remove the three zeros, it is because they are increasing the rate of exchange to be more valuble then it is at its current rate (this article mentioned 1.0 to 1.0) that means ( for anyone who is bad at math) that 1 dinar would be equal in value to 1 US Dollar. Don't act like you know something if you don't , if the purchasing power is raised to the level of the dollar and as you said that what they used to buy with 1000 dinar they now only need 1 dinar....... what does that tell you? come on please use your brain and think about what you're saying. look I am just as frustrated as anyone else when it comes to all of the cashin dates that were lies and RV rates and so on but, some people take everything they read as a sign of RV, you can say that the moon is turning purple and they will say it means RV tomorrow, but you are doing just the opposite, you're reading an article and saying that it means that our investment is trashed,,,, when the article you are reffering to (wether true or false) is not saying that, it said removing the zeros meaning RV of some kind but they will not remove the zeros to make the exchange rate lower then it is now that's stupid. I'm just sayin!

[hame55]

This is a very interesting discussion.

Drox - as always I really appreciate your comments.

To my thinking, if a LOP happens it won't mean what we think it means. In fact, I'm leaning quite heavily to the fact that it won't for the reasons that AudiS4 brought up as well as a few others.

If I'm understanding AudiS4's argument correctly, he is saying that even with the LOP Iraq isn't in any better situation than they are now. I agree with that.

For example, if the 3 zeroes are removed and 25,000 becomes 25 dinar then assuming a 1 dinar = 1 dollar scenario there is no real benefit to Iraqi citizens except that it will make handling the bills and doing transactions a lot easier.

Everyone who holds IQD basically starts from ground zero and then whatever value it gains going forward they benefit from.

The issue I have is that doesn't really make sense for Iraq to just raise the 3 zeros without increasing the value dramatically which doesn't make sense to me either if they do that with the LOP.

If they do a LOP and do the 1 dinar = 1 dollar ratio, what a IQD holder had before the LOP will be worth the same after. As a country they will go from X trillion dinar (no one knows how much X is) to X billion dinar.

If we assume that it's 25 trillion dinar outstanding, then a LOP would drop the amount of the currency outstanding to 25 billion dinar with a value of $25 billion. That sounds great for Iraq except the fact that reports say that they have $500+ billion in frozen assets and DFI.

Assuming that's true - no one knows those numbers accurately either - then it would mean that at just a 1 to 1 ratio of dinar to assets Iraq would need to increase the value of their LOP'd currency to $10 or more. That is unheard of because most countries have a ratio of assets to value so even at a 2 to 1 ratio which is very low that would make the IQD valued at $20 ... and that doesn't even take into account the oil Iraq has in the ground or any of it's other natural assets!

All of this doesn't even get to the LOP issue that would come up of new currency being needed since the 25,000 note would be the largest available.

People mention Turkey a lot but when Turkey LOP'd they came out with a new currency and the new currency was used side by side with the old currency for two years. That could happen with Iraq but if they do that it still puts them in a position where they need the value of their currency to be HUGE to reflect their asset base. That would make it the highest valued currency in the world by at least 3 times which I just don't think is reasonable or logical. Kuwait is one of the most expensive currencies now at $3.61 so the thought of IQD going to that very conservative $10 or $20 amount is not logical.

I can see it doing an RV then a natural LOP as a consequence of the RV but I just don't see how it can LOP or LOP then RV. I just can't wrap my head around it in such a way for that scenario to make sense to me.

One other thing that I haven't seen mentioned is that one of the goals of Iraq is to move their people from a cash based society to an electronic based society. A LOP won't accomplish that; however, an RV followed by a natural 'raising of the 3 zeros' will.

Since I'm going on anyway, there is another thing that comes up for me - if it was going to LOP which would mean basically very little profit for us why would the Treasury Department change the rules about currency exchange AND call Ali directly to tell him of the change? Why even make the change? If the change was made why not let it go through normal channels and be issued like a normal memo?

Personally, I think it will RV then do a natural raising of the zeros but it wouldn't surprise me at all if there were some type of 'twist' to it that we aren't even thinking about or aware of.

I have no idea what will happen with any of this. All I know is that I do believe we are close to the end, whatever that end may bring. Here's hoping good things for us all.

Excellent, level-headed argument here . Why would and LOP happen when to gain enough value to really be "on par" with other oil producing nations, they would have to RV at a huge, unreal rate. And no real value is regained that was lost post - Saddam.

Edited April 21, 2011 by hame55

[nepperson]

I guess i need to read more into the LOP exchange than I have. Correct me if I'm wrong, but loosing 3 0's brings 1,000,000 to 1,000 correct? If so, 1,000 Dinar RVing at $1 US would mean a loss on the 1200plus paid for that 1Million Dinar. OR is it that they honor the amount of currency that you have and 1,000,000 Dinar now ='s $1,000,000?

If they remove the three zeros, that does not diminish your investment, 25,000 dinar note will still be worth 25,000 dinar and if you change it to USD at a rate of 1 dinar to 1 USD then you will have $25,000.00 USD. Think about it, if they want to be a part of the WTO and they pull a move like making the 25000 dinar note only worth 25 dinar and say they no longer except the 25000 notes then how much confidence do you think that the other members of the WTO will have in investing into their currency,,,, Answer,,, NONE! that means it's pointless to even become a member of WTO cause NO ONE will trade your currency because there is nothing keeping you from changing your mind and LOPing your currency always in your favor so the investors loose and you win..... ZERO CONFIDENCE! the removal of the three zeros would only be done if the curency revalues and it would no longer make sense to carry 25,000 dinar notes around in your wallet worth 25000 dollars do any of you walk around town, maybe try to go into a store for a pair of shoes and tell the person at the register " I'm sorry these shoes only cost 25.00, you got change for 25,000.00?" makes no sense.

[nepperson]

Iraq has been forgiven most of their debt. If they don't redenominate pre RV then they will know the true meaning of debt.

Not so, are you suggesting that they would get rid of the higher denominations altogether and what? just use small notes for all purchasing? that my friend is rediculous! "Uh, yeah I want to buy that house right there in cash,,,, can I pay you in 1s and 5s?" that is the dumbest thing I've ever heard! we currently have much stronger currency then the dinar and we have large denominations like 100,000.00 bills they have to have a range of small to large denominations for practicle purposes, but as I have stated in other areas, if they remove the three zeros they will still have to honor the higher notes in circulation, I repeat HAVE TO! as much as you and others don't like to admit it, they can NOT simply make the rules up as they go and screw millions of investment companies and individual investors and expect to ever have investor confidence again. they WILL pull alot of the higher notes from circulation over time as they come back in, but they still have to honor their currency notes, no matter the route they take, PERIOD!

[dinarck]

Not so, are you suggesting that they would get rid of the higher denominations altogether and what? just use small notes for all purchasing? that my friend is rediculous! "Uh, yeah I want to buy that house right there in cash,,,, can I pay you in 1s and 5s?" that is the dumbest thing I've ever heard! we currently have much stronger currency then the dinar and we have large denominations like 100,000.00 bills they have to have a range of small to large denominations for practicle purposes, but as I have stated in other areas, if they remove the three zeros they will still have to honor the higher notes in circulation, I repeat HAVE TO! as much as you and others don't like to admit it, they can NOT simply make the rules up as they go and screw millions of investment companies and individual investors and expect to ever have investor confidence again. they WILL pull alot of the higher notes from circulation over time as they come back in, but they still have to honor their currency notes, no matter the route they take, PERIOD!

Yeah they will honor its worth. Guess what a 25,000IQD is worth around 25 USD. That's what they will honor. Do you really believe that your 25,000IQD notes are worth 25,000USD. If so you need to lay off the pipe dream for a while. Maybe they will in the future or maybe they won't. I have also had it with this whole they are screwing all of us notion. Even Steven isn't screwing anyone. As a matter of fact we will all make profit off this deal. Sorry it's not the millions you were promised but it is what it is.

[dinarck]

If they remove the three zeros, that does not diminish your investment, 25,000 dinar note will still be worth 25,000 dinar and if you change it to USD at a rate of 1 dinar to 1 USD then you will have $25,000.00 USD. Think about it, if they want to be a part of the WTO and they pull a move like making the 25000 dinar note only worth 25 dinar and say they no longer except the 25000 notes then how much confidence do you think that the other members of the WTO will have in investing into their currency,,,, Answer,,, NONE! that means it's pointless to even become a member of WTO cause NO ONE will trade your currency because there is nothing keeping you from changing your mind and LOPing your currency always in your favor so the investors loose and you win..... ZERO CONFIDENCE! the removal of the three zeros would only be done if the curency revalues and it would no longer make sense to carry 25,000 dinar notes around in your wallet worth 25000 dollars do any of you walk around town, maybe try to go into a store for a pair of shoes and tell the person at the register " I'm sorry these shoes only cost 25.00, you got change for 25,000.00?" makes no sense.

UUUMM...

Have to disagree. If they remove the three zeros your 25,000IQD becomes 25IQD. If they want to be a member of the WTO then I would think they would need to bring their liability down from trillions to billions. Again the 25,000IQD is not worth 25,000USD. It is worth 25 USD. Bringing it down to 25IQD worth 25 USD isn't screwing anyone except for destroying our dreams of becoming millionares at the expense of Iraq. Yes people will invest in their country anyway. There is billions to be made there. I know that the notion that a redenomination would hurt Iraq and no one would have confidence and all this has been the status quoe for some time but that doesn't mean it's true. For all we know big wig investors and large corporations and countries have known all along that Iraq would have to redenominate before the IQD would raise in value. Just because we don't like it means nothing.

[drox]

Sorry but JMO,,,, you don't know what you're talking about.... if you understand currency then you know that they can not devalue a portion of their currency (by removing the zeros from the higher denominations) and let the other portion retain or increase in value, anyone who thinks this is just plain WRONG. if they remove the three zeros, it is because they are increasing the rate of exchange to be more valuble then it is at its current rate (this article mentioned 1.0 to 1.0) that means ( for anyone who is bad at math) that 1 dinar would be equal in value to 1 US Dollar. Don't act like you know something if you don't , if the purchasing power is raised to the level of the dollar and as you said that what they used to buy with 1000 dinar they now only need 1 dinar....... what does that tell you? come on please use your brain and think about what you're saying. look I am just as frustrated as anyone else when it comes to all of the cashin dates that were lies and RV rates and so on but, some people take everything they read as a sign of RV, you can say that the moon is turning purple and they will say it means RV tomorrow, but you are doing just the opposite, you're reading an article and saying that it means that our investment is trashed,,,, when the article you are reffering to (wether true or false) is not saying that, it said removing the zeros meaning RV of some kind but they will not remove the zeros to make the exchange rate lower then it is now that's stupid. I'm just sayin!

Thanks for the questions/opinion. Everyone calling me stupid must mean I am stupid. Thank you for showing me that. Before I accept that label let me comment first.

I made no remarks insinuating that removing zeros will be from "just" the higher denominations at all. Not sure where you got that nonsense. 3 zero removal will be from all Dinar denominations as well as from the exchange rate. It is all relative. That is why a LOP would be very expensive to perform. They would have to replace most or all of the currency. The cost must outweigh the benefits. What are the benefits of a lop? Ease of use for cash transactions, confidence and pride in the rate and M2 number for Iraq, and some may argue international credibility although plenty of nations have fractional numbers for an exchange rate. One more reason might be that the Iraq constitution states that the Kurdish language must be on the currency. As you probably know the Kurds mostly used Swiss Dinar when they saw that Saddam was running the Saddam Dinar into the ground by printing currency to pay for everything. That was a big agreement that help to unite the country if you think about it.

So you say that Iraq is going to make 1 Dinar equal 1 Dollar and that "removing the zeros means RV" . Why??? Why would they make everyone holding Dinar rich while you make your country severely indebted to do so at astronomical numbers? Before we argue the point of HOW (fractionalizing and spreading the burden) or IF they become indebted, lets stick to why Iraq would do it. Is it for the same reasons I stated above? Confidence and credibility? Why would Iraq do that? To make many of their citizens rich while making the majority of their citizens with no savings DIRT POOR? Whereby creating an unheard of social class chasm within their already security challenged borders???

You see, the CBI is ultimately responsible for paying that RV. If you go to Vegas you give them money for chips right?. They take your cash. You win more chips you cash out at the casino. You might take those chips to another casino and they will let you play with another's chips. Why? Because that casino wants your bet. They know they can go at a later time to the other casino and cash the chips in for the cash. Kind of like how an interbank exchange works like Forex. Minus a skim off the top. That time frame created a delay in the cash out for Iraq but one that is limited. Iraq will still eventually have to cash out. Lets say the CBI and Iraqi banks have 25% of the M2 in reserves. Then lets say 25% stays out in the world spread across numerous countries reserves, banks, exchanges, and in investor hands... Iraq still has the 50% cash in to contend with inevitably. My percentage might not be exact but I bet they are close. So how on Earth will Iraq pay for that at such an astronomical increased bump to the exchange rate? 50% of 27 Trillion is $13.5 Trillion dollars to cash out everyone. That is a lot of cash to have on hand or to borrow from somewhere to pull off what your putting down. Doesn't the CBI only have about $60 Billion in foreign reserves now. So how?

Oil? They have lots of oil right now and they can't even pay back Kuwait the $20 Billion they owe them. They can't provide their citizens with basic utilities with those oil proceeds now. They are using the DFI to duck and dodge the outstanding creditors. They are borrowing money from the IMF to fund the budget shortfalls. But oil is going to pay for the CBI in order to suddenly give you $1,000,000 cash for your $1000 worth of Dinar. Seriously bro you have not thought this through have you? Then again... I'm just stupid. Just remember... I said I do not want a lop. I want an entirely different scenario but I am not going to sit idly by while Pollyanna cheerleaders that don't know what they are talking about mislead others into making poor choices. Such as... Dinar purchases over mortgage or rent payments. This is a gamble, a bet, a hope, even an investment... but it is not a sure thing. Got it?

[dinarck]

Thanks for the questions/opinion. Everyone calling me stupid must mean I am stupid. Thank you for showing me that. Before I accept that label let me comment first.

I made no remarks insinuating that removing zeros will be from "just" the higher denominations at all. Not sure where you got that nonsense. 3 zero removal will be from all Dinar denominations as well as from the exchange rate. It is all relative. That is why a LOP would be very expensive to perform. They would have to replace most or all of the currency. The cost must outweigh the benefits. What are the benefits of a lop? Ease of use for cash transactions, confidence and pride in the rate and M2 number for Iraq, and some may argue international credibility although plenty of nations have fractional numbers for an exchange rate. One more reason might be that the Iraq constitution states that the Kurdish language must be on the currency. As you probably know the Kurds mostly used Swiss Dinar when they saw that Saddam was running the Saddam Dinar into the ground by printing currency to pay for everything. That was a big agreement that help to unite the country if you think about it.

So you say that Iraq is going to make 1 Dinar equal 1 Dollar and that "removing the zeros means RV" . Why??? Why would they make everyone holding Dinar rich while you make your country severely indebted to do so at astronomical numbers? Before we argue the point of HOW (fractionalizing and spreading the burden) or IF they become indebted, lets stick to why Iraq would do it. Is it for the same reasons I stated above? Confidence and credibility? Why would Iraq do that? To make many of their citizens rich while making the majority of their citizens with no savings DIRT POOR? Whereby creating an unheard of social class chasm within their already security challenged borders???

You see, the CBI is ultimately responsible for paying that RV. If you go to Vegas you give them money for chips right?. They take your cash. You win more chips you cash out at the casino. You might take those chips to another casino and they will let you play with another's chips. Why? Because that casino wants your bet. They know they can go at a later time to the other casino and cash the chips in for the cash. Kind of like how an interbank exchange works like Forex. Minus a skim off the top. That time frame created a delay in the cash out for Iraq but one that is limited. Iraq will still eventually have to cash out. Lets say the CBI and Iraqi banks have 25% of the M2 in reserves. Then lets say 25% stays out in the world spread across numerous countries reserves, banks, exchanges, and in investor hands... Iraq still has the 50% cash in to contend with inevitably. My percentage might not be exact but I bet they are close. So how on Earth will Iraq pay for that at such an astronomical increased bump to the exchange rate? 50% of 27 Trillion is $13.5 Trillion dollars to cash out everyone. That is a lot of cash to have on hand or to borrow from somewhere to pull off what your putting down. Doesn't the CBI only have about $60 Billion in foreign reserves now. So how?

Oil? They have lots of oil right now and they can't even pay back Kuwait the $20 Billion they owe them. They can't provide their citizens with basic utilities with those oil proceeds now. They are using the DFI to duck and dodge the outstanding creditors. They are borrowing money from the IMF to fund the budget shortfalls. But oil is going to pay for the CBI in order to suddenly give you $1,000,000 cash for your $1000 worth of Dinar. Seriously bro you have not thought this through have you? Then again... I'm just stupid. Just remember... I said I do not want a lop. I want an entirely different scenario but I am not going to sit idly by while Pollyanna cheerleaders that don't know what they are talking about mislead others into making poor choices. Such as... Dinar purchases over mortgage or rent payments. This is a gamble, a bet, a hope, even an investment... but it is not a sure thing. Got it?

Sounds pretty SMART to me.

Do have to say that I hope fractional banking works. HAHA

[seus]

drox is spot on...

[tampa1000]

Thanks for the post!

[FishmanTx]

Hey Drox,

I need a little clarification here cuz I'm feeling a little stupid too. I've obviously missed something cuz I can't see the logic in debt increase with an increase in the dinar's value (str8 rv). Are we speaking of internal or external debt? Internal, yes, it makes sense. External, I can't see it. On external debt, the debt is relative to the currency of the country owed, is it not? For example: $1 billion is owed to the US. At the current rate, equals 1,170,000,000,000 (1.7 trillion IQD). A straight rv @ 1:1 would change that from 1.7 trillion IQD to 1 billion IQD necessary to pay off the 1 billion USD owed. An increase in value would make it easier to pay foreign debt using less dinar to do so. Their 27 trillion IQD are now equivalent of 27 trillion USD. Correct so far or is my logic flawed? I'm missing something here, of course I'm no economist.

Thanx

Fish

Sorry thats supposed to be 1.17 trillion IQD.....sorry

Edited April 21, 2011 by FishmanTx

[dinarck]

Hey Drox,

I need a little clarification here cuz I'm feeling a little stupid too. I've obviously missed something cuz I can't see the logic in debt increase with an increase in the dinar's value (str8 rv). Are we speaking of internal or external debt? Internal, yes, it makes sense. External, I can't see it. On external debt, the debt is relative to the currency of the country owed, is it not? For example: $1 billion is owed to the US. At the current rate, equals 1,170,000,000,000 (1.7 trillion IQD). A straight rv @ 1:1 would change that from 1.7 trillion IQD to 1 billion IQD necessary to pay off the 1 billion USD owed. An increase in value would make it easier to pay foreign debt using less dinar to do so. Their 27 trillion IQD are now equivalent of 27 trillion USD. Correct so far or is my logic flawed? I'm missing something here, of course I'm no economist.

Thanx

Fish

Sorry thats supposed to be 1.17 trillion IQD.....sorry

I believe he speaks of the dinar in circulation.

[FishmanTx]

I believe he speaks of the dinar in circulation.

Oh we are speaking of individual debt not govt debt? If so, that makes more sense.

[jaminjimmy90]

Thanks for the questions/opinion. Everyone calling me stupid must mean I am stupid. Thank you for showing me that. Before I accept that label let me comment first.

I made no remarks insinuating that removing zeros will be from "just" the higher denominations at all. Not sure where you got that nonsense. 3 zero removal will be from all Dinar denominations as well as from the exchange rate. It is all relative. That is why a LOP would be very expensive to perform. They would have to replace most or all of the currency. The cost must outweigh the benefits. What are the benefits of a lop? Ease of use for cash transactions, confidence and pride in the rate and M2 number for Iraq, and some may argue international credibility although plenty of nations have fractional numbers for an exchange rate. One more reason might be that the Iraq constitution states that the Kurdish language must be on the currency. As you probably know the Kurds mostly used Swiss Dinar when they saw that Saddam was running the Saddam Dinar into the ground by printing currency to pay for everything. That was a big agreement that help to unite the country if you think about it.

So you say that Iraq is going to make 1 Dinar equal 1 Dollar and that "removing the zeros means RV" . Why??? Why would they make everyone holding Dinar rich while you make your country severely indebted to do so at astronomical numbers? Before we argue the point of HOW (fractionalizing and spreading the burden) or IF they become indebted, lets stick to why Iraq would do it. Is it for the same reasons I stated above? Confidence and credibility? Why would Iraq do that? To make many of their citizens rich while making the majority of their citizens with no savings DIRT POOR? Whereby creating an unheard of social class chasm within their already security challenged borders???

You see, the CBI is ultimately responsible for paying that RV. If you go to Vegas you give them money for chips right?. They take your cash. You win more chips you cash out at the casino. You might take those chips to another casino and they will let you play with another's chips. Why? Because that casino wants your bet. They know they can go at a later time to the other casino and cash the chips in for the cash. Kind of like how an interbank exchange works like Forex. Minus a skim off the top. That time frame created a delay in the cash out for Iraq but one that is limited. Iraq will still eventually have to cash out. Lets say the CBI and Iraqi banks have 25% of the M2 in reserves. Then lets say 25% stays out in the world spread across numerous countries reserves, banks, exchanges, and in investor hands... Iraq still has the 50% cash in to contend with inevitably. My percentage might not be exact but I bet they are close. So how on Earth will Iraq pay for that at such an astronomical increased bump to the exchange rate? 50% of 27 Trillion is $13.5 Trillion dollars to cash out everyone. That is a lot of cash to have on hand or to borrow from somewhere to pull off what your putting down. Doesn't the CBI only have about $60 Billion in foreign reserves now. So how?

Oil? They have lots of oil right now and they can't even pay back Kuwait the $20 Billion they owe them. They can't provide their citizens with basic utilities with those oil proceeds now. They are using the DFI to duck and dodge the outstanding creditors. They are borrowing money from the IMF to fund the budget shortfalls. But oil is going to pay for the CBI in order to suddenly give you $1,000,000 cash for your $1000 worth of Dinar. Seriously bro you have not thought this through have you? Then again... I'm just stupid. Just remember... I said I do not want a lop. I want an entirely different scenario but I am not going to sit idly by while Pollyanna cheerleaders that don't know what they are talking about mislead others into making poor choices. Such as... Dinar purchases over mortgage or rent payments. This is a gamble, a bet, a hope, even an investment... but it is not a sure thing. Got it?

wait a minute ive heard the us will buy our dinar they want it for the purchase of petro dollars anyone else heard this ?