Popular Post AudiS4 Posted April 20, 2011 Popular Post Report Share Posted April 20, 2011 Ok, many of you have heard the audio from the DC speech today. I've listened to it a few times and concluded a few things. Here are some thoughts: 1) People are NOT understanding "re-denomination" - Shabibi FULLY backed up what I was stating earlier today. Re-denominate DOES NOT MEAN LOP. It simply means the bank notes will be reprinted in different denominations... THATS IT. It's an action... an event... a reaction to some other action. They would re-denominate for 2 reasons: 1 - They LOP, therefore need smaller bills to function as a currency. The LOP is the action, the re-denomination is the reaction 2 - They RV (for a decent amount), therefore need smaller bills to function as a currency. The change in exchange rate is the action, the re-denomination is the reaction. So remember, an article does not scream LOP every time you see re-denominate. Getting back to Shabibi... he stated VERY CLEARLY that the removal of the 3 zeros was and has been over-exaggerated. If the overall intention of the CBI was to raise the value of the currency (exchange rate), they would simply have to re-denominate to make full effect of the exchange rate. Think about it this way... they RV for $.50... I forget what their smallest note is... but let's pretend it's 500 dinar. so their smallest note is worth about $250. How would you buy a can of pepsi? You'd be throwing 500 dinar notes ($250) around all the time. Because of this, they MUST re-denominate with smaller bills. Is this clear? Are we all on the same page again? 2) Removal of the zeros - this relates to re-denomination in the same sense. Why carry around highly valued 25k dinar notes? Do any of you regularly carry around $10,000 bills? Probably not. Same goes for Iraq. He also stated that the initial reason for ADDING the zeros was not because they wanted to, but because inflation made the smaller notes un-usable. Think of an American gas station... ever see the "give a penny, take a penny" bin at the cash register? Do you not agree that it's there because NEITHER party really give a sh*t about a penny or two? There's been talk of completely eliminating the penny all together. It's rendered virtually useless in modern day America. This same thing happened in Iraq, according to Shabibi. People STOPPED using the smaller notes and starting using the upper end notes... because of inflation. The CBI has printed even larger notes (notes from today) because they were actually useful vs a 1, 5, 10, 20, etc. I'm not totally convinced on this story and how THIS is how it all played out in Iraq the last 20 years. I believe it's a slight twist in truth, but the theory still holds ground. 3) Every time removal of the 3 zeros or "re-denomination" came up, he said it goes hand-in-hand with an updated exchange rate. Think about this people... they are NOT removing the three zeros and re-denominating for fun... they're doing it because they're adjusting the exchange rate! Could they LOP? Sure, if they really wanted to. But that makes about as much sense as cashing out your 401(k) in pennies. 4) He stated at the start that inflation is very much under control and they continue to watch this as their #1 priority in pricing (among development of the economy and security). 5) His "propaganda" mishap. I chuckled when I heard that. He should have just said "smoke". 6) He emphasized security at the end and how that will be needed to play a role in a stable nation/economy. To wrap things up, I think people are over-hyped about a LOP happening. I've said it before... a LOP does NOT help anyone. It's a means of easing societies' mind about counting and pricing. It does NOTHING for the exchange rate and creates no additional purchasing power. What improves a nations's economy is local production and manpower development not the number of zeros in the currency. This would be no different than if the central bank of the US decided "You know what...F* the Dollar... I cant keep the dollar and the cent straight... so we're moving to a cent based currency where everything gets 2 zeros tacked on in front of the decimal place". Purchasing power would not be adjusted in this case... we'd only be mentally mortified to see so many numbers on the price tag of a LCD monitor (think about it... 35,000¢ looks scary!) . If you told me inflation has now increased and the LCD costs 36,500¢, I'd be slightly worried that I'm now spending an additional 1,500¢ on the same product! If you told me the LCD is no longer $350 and is $365 due to inflation... I'd tell you to find something more productive to do. Is any of this clicking with you all? Just relax people, this ride is almost over. I got the impression that they've been just trying to stabilize the country in order to pull the trigger (both inflation and security). It's only a matter of time.. Shabibi himself said so! 35 Link to comment Share on other sites More sharing options...
JOLLY ROGER Posted April 20, 2011 Report Share Posted April 20, 2011 Thanks for your post AudiS4. Great explaination on something that alot of us are unclear about. Link to comment Share on other sites More sharing options...
TPSprayduster Posted April 20, 2011 Report Share Posted April 20, 2011 I am giving this explanation 4 thumbs up Note i am borrowing 2 thumbs ok. 1 Link to comment Share on other sites More sharing options...
cashin Posted April 20, 2011 Report Share Posted April 20, 2011 i think they will lopp removing the 3 zeros and then rv to a rate they want. this will give the buying power they want and also will mean they dont have to pay out much on the dinar abroad. We will get 3 to 4 times our outlay no more. sorry guys 4 6 Link to comment Share on other sites More sharing options...
AudiS4 Posted April 20, 2011 Author Report Share Posted April 20, 2011 Cashin, why would they do that? in theory, that's no different than changing the exchange rate to 360ish dinar:$1... which they could do without re-denominating. Yes it's an increase, but IMO still doesnt get them the purchasing power they need. Link to comment Share on other sites More sharing options...
MrRich Posted April 20, 2011 Report Share Posted April 20, 2011 I think his reference to propoganda means nothing to us. He was referring to educating the Iraqi people about the changes to their currency IMO. Kind of like a public service announcement campaign. 11 Link to comment Share on other sites More sharing options...
Camelspiderman Posted April 20, 2011 Report Share Posted April 20, 2011 OK, Audis4 ,that does make for a very logical scenerio ,but I am actually boots on the ground over here and I interact with alot Iraqis on a daily basis , they are very well aware of the LOP dropping the 000s . Also , there are no new lower denoms in circulation .But whatever does happen ,believe me that I should be the first to know because I probably wont see any locals come work . LOL 2 2 Link to comment Share on other sites More sharing options...
easyrider Posted April 20, 2011 Report Share Posted April 20, 2011 (edited) Edited April 20, 2011 by easyrider Link to comment Share on other sites More sharing options...
Dinarsaurus Posted April 20, 2011 Report Share Posted April 20, 2011 i think they will lopp removing the 3 zeros and then rv to a rate they want. this will give the buying power they want and also will mean they dont have to pay out much on the dinar abroad. We will get 3 to 4 times our outlay no more. sorry guys However you dress it up with magical theories this is also the way I see this thing going.If they RV'ed to $3 after the lop this would then give the Iraqis 3 times their current buying power.I think this would be sufficient to appease them.Unless you're holding millions of dinar you'll be lucky to have enough to pay for a decent holiday from this investment.Obviously I hope I'm wrong but all logic seems to point this event occurring. 2 1 Link to comment Share on other sites More sharing options...
aliciadogz Posted April 20, 2011 Report Share Posted April 20, 2011 This was the best way to explaine the LOP, I have found so far.Thanks!GGGGGOOOOOORRRRVVVVV!!!!!!! Link to comment Share on other sites More sharing options...
frankc Posted April 20, 2011 Report Share Posted April 20, 2011 If they remove the 3 zeros and RV at $1 we won't even get our investment back. Why would they L O P? It does not increase their purchasing power. Even removing the zeros and RV'ing at $3 still doesn not get Iraqi's back to Sadam levels. In Sadam days when the dinar rate was about $3, 25k dinar was $75k dollars. Now if you take away the zeros and RV at $3 a 25k note would only be worth $75. Let's see, $75,000 vs $75. I hardly think this is going to make the Iraqi's happy at all. 5 4 Link to comment Share on other sites More sharing options...
Bedouin Posted April 20, 2011 Report Share Posted April 20, 2011 Thanks for the post. Best explanation i've heard on the subject to date Link to comment Share on other sites More sharing options...
Camelspiderman Posted April 20, 2011 Report Share Posted April 20, 2011 If they remove the 3 zeros and RV at $1 we won't even get our investment back. Why would they L O P? It does not increase their purchasing power. Even removing the zeros and RV'ing at $3 still doesn not get Iraqi's back to Sadam levels. In Sadam days when the dinar rate was about $3, 25k dinar was $75k dollars. Now if you take away the zeros and RV at $3 a 25k note would only be worth $75. Let's see, $75,000 vs $75. I hardly think this is going to make the Iraqi's happy at all. 1 1 Link to comment Share on other sites More sharing options...
nevermore Posted April 20, 2011 Report Share Posted April 20, 2011 (edited) i think they will lopp removing the 3 zeros and then rv to a rate they want. this will give the buying power they want and also will mean they dont have to pay out much on the dinar abroad. We will get 3 to 4 times our outlay no more. sorry guys DING DING DING we have a winner this exactly what he put out. If you are getting something other than this you need to listen to it again. It explains a L O P right to a T sorry but facts are facts. An this came from the man himself. there is no wigle room for anything else. I would love to be wrong. I would like to go back home and not work here in Iraq any more. TRUST ME Edited April 20, 2011 by nevermore 1 2 Link to comment Share on other sites More sharing options...
Roadrunner Posted April 20, 2011 Report Share Posted April 20, 2011 Well said AudiS4. I agree 100%. I take this as good news and refuse to believe it means LOP. Roadrunner 3 Link to comment Share on other sites More sharing options...
Camelspiderman Posted April 20, 2011 Report Share Posted April 20, 2011 Frank , but here is the deal, the locals get paid between 500$ to 1500$ worth of dinar , just yesterday i had one of them open his wallet ,he must of had like 5 or 6 25k notes in there . So your trying to tell me a local that makes a average of 12000$ a year salary will suddenly have 450k or more depending on the exchange rate when they hit the R.V. button . Sort of Crazy ? Also all of the population of iraq and all other goverments and civilian investors across the world will cash in ? Not sure where all the money will be coming from to cover that kind of a tab ? But with the World Bank involved anything is possible i guess. This investement used to have legs back in 2004 when the speculation from the green zone was 10 cents to the dollar ,that was almost fisable . But this sudden R.V. rate of pre-Saddam days does not do us any favors . I am with russian huey on this one , not a good look for the instant millionaire . 1 3 Link to comment Share on other sites More sharing options...
labuti Posted April 20, 2011 Report Share Posted April 20, 2011 OK, Audis4 ,that does make for a very logical scenerio ,but I am actually boots on the ground over here and I interact with alot Iraqis on a daily basis , they are very well aware of the LOP dropping the 000s . Also , there are no new lower denoms in circulation .But whatever does happen ,believe me that I should be the first to know because I probably wont see any locals come work . LOL I have spoken with 2 private bank owners in Iraq. They have said that they have been recieving lots of the small bills lately! The small bills are the 500,250 and some 50's. Have you seen this happening where you are? Link to comment Share on other sites More sharing options...
Camelspiderman Posted April 20, 2011 Report Share Posted April 20, 2011 No . but I will dig deeper today , Kinda of difficult to get somebody to open their wallet for you ,but I Link to comment Share on other sites More sharing options...
DAME1 Posted April 20, 2011 Report Share Posted April 20, 2011 Morning Sunshines Why would they be using US currency after the RV in their everyday trade in Iraq? I thought the purpose was to make the Dinar stronger for them..... Link to comment Share on other sites More sharing options...
Ex-wingnut Posted April 20, 2011 Report Share Posted April 20, 2011 Here we go again. Shabibi himself speaks about the revaluation and the dropping of 3 zeros and there's still different interpretations of what he meant. All that tells me is that no one understood what he said even though he was speaking English. Sure his English was somewhat broken but I think he still spoke clearly enough for us to understand his words but not the context of them. Oh well! I guess I'll just wait for the Forex and CBI postings before I get too excited because it's obvious that we still don't have a clear answer as to what is going to happen. 2 Link to comment Share on other sites More sharing options...
Roadrunner Posted April 20, 2011 Report Share Posted April 20, 2011 (edited) Morning Sunshines Why would they be using US currency after the RV in their everyday trade in Iraq? I thought the purpose was to make the Dinar stronger for them..... Slum Dame. Thank you for asking. You hit the nail on the head. I keep hearing the question “How are they going to be able to buy back trillions of dollars worth of dinar”. The simple answer is; they aren’t. First off, we don’t know how much dinar the CBI already has and that is currency they won’t have to buy back. Second, the currency that is in the hands of the Iraqi citizens will not be exchanged for dollars. It is already the local currency and it would make no sense for them to exchange it. Third, no one knows for sure how much dinar is in the hands of foreign investors. Regardless or the amount, not all of it will be cashed in. Small time investors like us will cash in some or all of our holdings depending on the rate. Larger investors will probably be using it to invest in business opportunities in Iraq which will further boost the economy. I am not an economist like a few people on the site, and I don’t claim to have all of the answers. What I do have is a bit of common sense and it has served me well for many years. My best advice for anyone is, when you read the posts, just try to sort out what makes sense to you and what don’t and act accordingly. Roadrunner Edited April 20, 2011 by Roadrunner 3 Link to comment Share on other sites More sharing options...
Gooserider67 Posted April 20, 2011 Report Share Posted April 20, 2011 (edited) What improves a nations's economy is local production and manpower development AudiS4 I believe that you are spot on with your description of this subject and i feel that all of the hype in the way that everyone was afraid of that their investment would be worthless was all for not... If Iraq did lop their currency and make all of the larger denomination's worthless it would discredit Iraq as a nation and put the nation back into a 3rd world status rather that a prospering new nation because of the heavy investment of the nations supporting Iraq. Thanks for the post Audi... And would someone send this quote to Obama and have him take an economics course, I can justify my tax dollar to pay for his class.. Edited April 20, 2011 by Gooserider67 6 3 Link to comment Share on other sites More sharing options...
Roadrunner Posted April 20, 2011 Report Share Posted April 20, 2011 Gooserider67, I don't know why you got a negative for your comment, I gave you a plus just to even it out. In case you haven't noticed, any time you mention "our illustrious leader" your are going to get that. Roadrunner Link to comment Share on other sites More sharing options...
AudiS4 Posted April 20, 2011 Author Report Share Posted April 20, 2011 All you lopsters... PLEASE EXPLAIN why they would lop! You keep saying "sorry, that's what's going to happen, no way around it"... but you have YET to give a reason why. Why would they do that? That ultimately allows them to RV at 3 or 4x what they're worth today and that's it... no more increase in value unless the USD continues to fall. Why wouldn't they just RV for a small amount (360:$1)? It would be cheaper and would allow them continued room to grow. Just because we don't believe they will LOP doesn't mean we think we'll be instant millionaires from this investment. Maybe I'm missing something, but a LOP make ZERO economical sense. Like I posted yesterday: Wealth was lost 20 years ago. Didnt matter if you have 1000 dinar ($3200) or 1,000,000 dinar ($3,200,000)... it became near worthless. Let's pretend it went directly to 1170:$1... your poor man now has about $0.86 and your rich man now has $854.70. Does it really matter which person you are? You might be able to pay for one months rent/mortgage if you were the wealthy man... but then you're flat broke. If you were the poor man, you're still poor. So with this example, it's clear that "wealth" was taken away. $3,200,000 will get you far in life, but $854.70 will not. VALUE disappeared! But now that they're in the mist of revaluing their currency once again to HAVE value, everyone is a naysayer. That same man with 1000 dinar (assuming he spent NONE of it over the years and converted it to the new currencies as they came out for a 1:1)... now will have 1 dinar, which will be worth the same as 1000 old dinar... which will be worth the same as $0.86 USD. That same man with 1,000,000 dinar (assuming he spent NONE of it over the years and converted it to the new currencies as they came out for a 1:1)... now will have 1,000 dinar, which will be worth the same as 1,000,000 old dinar... which will be worth the same as $854.70 USD. Do you see where I'm going here? At what point will the "wealth" be given back (the same "wealth" that was once there, but was taken away)? Obviously the full RI won't happen... but I dont see how $.10 is now out of the question. I need my coffee 1 Link to comment Share on other sites More sharing options...
rsskelton Posted April 20, 2011 Report Share Posted April 20, 2011 There has been more than enough lop talk on here in the past week to last a lifetime. It is quite aparrant that we are not all gonna be on the same page till something actually happens. I happen to be in the "no lop" camp. So what? who cares what I think, and does it even matter? No, I don't get a vote and neither do you. Face it, nobody knows for sure ( well maybe Shabs and a few others but he's already said he's not telling) and tempers are beginning to flair, so can we pleassssse talk about something else? There is other news out there and I think all the hide has been beaten off this dead horse. Lets just agree to disagree and wait and see what happens. Then one group of us can look at the other and say, "See, I told ya so". Also if we must talk lop, from here on out could we please place it in the LOP section? Just my thoughts. RSS 1 Link to comment Share on other sites More sharing options...
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