Perish the thought of a LOP

[Darin]

So....how does that quantify your statement and I quote "more informed and follow the situation" ?

While I dont refute the rest of your statement having the "more informed and follow the situation" immediately discredits anything that follows in my opinion.

Its akin to starting a post 'Since im smarter than all of you listen to this'.

Simple.. Your taking that quote out of context. I was referring to myself, but including all IQD currency speculative investors.

We follow the IQD closely, and would understand a lot of detailed information about it.

However, Company ABC looking to setup shop over there in the M.E. may not follow the IQD closely and just be considering their own potential profits they could make. And prior to deciding whether or not to setup shop in the M.E., they may do their due diligence and start studying the situation. At first glance, they may see that the exchange rate is close to a DOLLAR (if they were to LOP) so they feel comfortable that the exchange rate is stable and conducting business should be easy. But after doing their research & due diligence, they find that the exchange rate is due to a recent denomination... Which ultimately means, what "real" difference would it make to a foreign investors if he saw that they did a LOP or if the currency was at one time valued much much lower.

I can't see how it may attract more investors.. it is like saying hey if we put a few balloons on this car, we may have a better chance to sell it. The car doesn't change, but the eye-catching of the balloons may help you notice the car.

Catch my drift?

[keepmwlknfny]

Please Mr KEEP explain to all of us what a LOP is? The definition seems to ellude me. Can you explain how a LOSS OF PROFIT will happen in an underinflated economy?

You and a few seem to believe this word fits into this economic situation and I just want to be educated on it. First off the word is a term which in my belief doesnt fit this economic model.

So, in advance I thank you for the definition and explaination.

Peace to all of you and I look forward to my education from KEEP.

Also, if you are old enough, maybe we can grab a beer when this is all over and luagh about this.

Why do you keep calling it a loss of profit when nothing is lost?? Lopping the zeros/redenominating (same thing in this context) Removing or lopping the zeros and redenominating....its a neutral change....where is the loss?? Purchasing power is increased because what used to cost 5k dinar, now only costs 5 dinar (in the scenerio they have been repeating over and over) So where is the loss?? And no I cant go get drinks with you Im only 12....sorry.....

[Darin]

Why do you keep calling it a loss of profit when nothing is lost?? Lopping the zeros/redenominating (same thing in this context) Removing or lopping the zeros and redenominating....its a neutral change....where is the loss?? Purchasing power is increased because what used to cost 5k dinar, now only costs 5 dinar (in the scenerio they have been repeating over and over) So where is the loss?? And no I cant go get drinks with you Im only 12....sorry.....

Purchasing power won't increase, in your statement the goods they purchase will also reflect the pricing of a LOP

So what costs 100,000 IQD will than cost 100 IQD

The new demons would pay for the item as if it was 100 IQD

The old denoms would pay for the item as if it was 100,000 IQD

Now the Iraqis have to carry two separate IQD denominations & possibly USD as well.

Than what if they were to buy a 100,000 item, they may have to mix/match their currencies

For example: 2 25,000 IQD notes & 2 25 IQD notes. (The 25,000 note is pre-lop & the 25 note is post-lop)

This could cause CONFUSION!

People may simply argue that just view the denoms as the 3 zeros didn't exist.

Well, what about a 500, or a 50..

Psychologically, wealth will feel lost to some.

Could this whole process turn out this way? Of course.. But I don't think they'll benefit like they think they will.. And I am sure people much much smarter than I am feel a better opportunity exists

[keepmwlknfny]

I think we would have to view this as apples to oranges when comparing the two countries.

Asian countries do a lot of exporting.... They tend to hold an undervalued currency (See China)...

M.E. countries do a lot of importing... They tend to hold a higher value currency (See other M.E. countries using dinar)...

The economy is growing & stabilizing... To some people, they may feel the need to jump into the honey pot before it gets warm...

If the IMF has a goal to reduce poverty and improve the economy.. How would a LOP help that? The wealth of every individual stays the same & I don't believe it would help improve the economy.

It would maybe make transactions simpler through a banking standard, however, for the individuals, they still have to carry the same # of bills to make purchases.. (Which in this case, it could cause confusion between having to manage two sets of denoms.... and others may feel a loss of wealth, which won't necessarily be true, but the #s in a bank account would show differently).

Purchasing power would remain the same.... And they worry about dollarization. Which is two currencies used within a country. Lots of the citizens prefer the use of the dollar over the IQD because of the purchasing power & stability. Well, look at this way.. A stable $1 vs. a questionable stability of $0.85... Which will be more of the preferred use? It likely won't solve that problem either. Now, include the costs of introducing the new currency, exchanging it, and educating people about it... Than consider the speculators who hold it with expectations of large gains who decide to cash-out and no longer wish to remain on the ride. Now the cash reserves start getting affected. It would appear to them that they have a stronger currency, and maybe to the public view, but in reality.. It is no more or less stable than it was prior. Turkey I believe did their LOP due to accounting and processing of transaction issues. Hard to do math on a calculator when you have to consider soo many zeros!

By no means, am I saying a LOP/RD is impossible.. I just weigh the pros/cons on both, and favor the alternative will be more beneficial for everyone.

I dont really think that being an exporter or importer has a whole lot to do with it.....what Im getting at is that foriegn investors are going to be looking for a stable economy, rather then one with the highest valued currency......would you drop hundreds of millions of dollars in a country where you will have to worry about your buildings and employees being blown up on any given day and losing everything?? Or would you rather be in a more stable area? Where you know the govt and country can run themselves without being overtaken by insurgents and where the terrorist threat is lessened?? Regardless of how high or low the currency is, if your an american investor are you going to get paid all in dinar, pay all your employees in dinar (physical bills) when there is no practical use for it here in the states? Wouldnt you rather have your own countries currency?? Same with lets say a group of french investors.....why would they want to get paid in dinar?? Heck, they might even take the USD just because of how widely used it is....but the notion that a lop will scare away people from investing is a little far fetched to me.....in most cases its even a sign of improvement and stabillity....since alot of times its used to combat the effects of hyperinflation that have plaqued a country when things settle and they get inflation and such under control......

Purchasing power won't increase, in your statement the goods they purchase will also reflect the pricing of a LOP

So what costs 100,000 IQD will than cost 100 IQD

The new demons would pay for the item as if it was 100 IQD

The old denoms would pay for the item as if it was 100,000 IQD

Now the Iraqis have to carry two separate IQD denominations & possibly USD as well.

Than what if they were to buy a 100,000 item, they may have to mix/match their currencies

For example: 2 25,000 IQD notes & 2 25 IQD notes. (The 25,000 note is pre-lop & the 25 note is post-lop)

This could cause CONFUSION!

People may simply argue that just view the denoms as the 3 zeros didn't exist.

Well, what about a 500, or a 50..

Psychologically, wealth will feel lost to some.

Could this whole process turn out this way? Of course.. But I don't think they'll benefit like they think they will.. And I am sure people much much smarter than I am feel a better opportunity exists

And the level of confusion you are thinking about is another reason why they have been studying the process for over 5 years now....another reason why economists and such believe its not a good time to do anything right now and they complain about how confusing it could be for the people.....but from what I hear they have been educating the citizens for awhile on this subject and they are understanding what would or could happen.....but if they do redenominate/lop prices in the market place will be adjusted accordingly....so your mix/match currency statement wouldnt really apply....like what happened in germany, they had two different prices labeled on goods in the market....one price for the old bills, and another price for the new......both bills having the same purchasing power....

[speculatorsRIDE]

I want my 20 minutes back.

[Darin]

Keep -

My main point was just because they LOP does not show that they are stable. It proves no effect that the economy is improving.

Now, if the value of the IQD was increasing..... Than we could say, yes, I see that the value is increasing therefore the economy must be growing stronger.

We watch Gold & Silver, and we think.... Okay these values are going up, so they must be a great thing to invest in...

Now imagine if gold did something crazy where instead of going by ounce or something they went by bars. Basically making it so you have to pay more per unit.

The fluctuations would be represented differently.

Like if Crude was sold on the market by the gallon and than went to the barrel. It tightens up the volatility of it.. Therefore in my mind, you would think that the CBI would maybe struggle to make as much profit.

I know it may not make sense to you, but it seems to make sense to me..

Basically what I am stating is that they're limiting their fluctuations in value where they could potentially profit.

[keepmwlknfny]

Keep -

My main point was just because they LOP does not show that they are stable. It proves no effect that the economy is improving.

Now, if the value of the IQD was increasing..... Than we could say, yes, I see that the value is increasing therefore the economy must be growing stronger.

We watch Gold & Silver, and we think.... Okay these values are going up, so they must be a great thing to invest in...

Now imagine if gold did something crazy where instead of going by ounce or something they went by bars. Basically making it so you have to pay more per unit.

The fluctuations would be represented differently.

Like if Crude was sold on the market by the gallon and than went to the barrel. It tightens up the volatility of it.. Therefore in my mind, you would think that the CBI would maybe struggle to make as much profit.

I know it may not make sense to you, but it seems to make sense to me..

Basically what I am stating is that they're limiting their fluctuations in value where they could potentially profit.

It might not prove that their economy is at its strongest point, but to be able to cut the money supply and increasing the purchasing power for the citizens that has to show something!!! being able to take care of the monetary inflation means something.....its better then going in the opposite direction....

[Darin]

It might not prove that their economy is at its strongest point, but to be able to cut the money supply and increasing the purchasing power for the citizens that has to show something!!! being able to take care of the monetary inflation means something.....its better then going in the opposite direction....

I don't understand where you believe they'll have a higher purchasing power.

The items they purchase will be equally affected.

There is no bringing back the wealth.

Poverty will still exist - as it will not really change.

We just see #s change - all related to the IQD change equally....

Imagine if the USD loped by 10%

Our 100 bill now buy what a $10 bill buys

But something simple like gas would be under a $1 (for example $0.36 or $0.37)

If our paycheck was bi-weekly & $1,000.. Our new paycheck would be $100

See where I am going w/ this??

[dinarck]

Well to start off, I don't view myself as qualified or informed enough to give a some-what accurate answer. But I can offer my viewpoint which is basically just an opinion.

To start off.. Lets say they decide to go the route of re-valuing. I am sure they have to wait for the correct market conditions (Which I don't necessarily know which factors to watch for)

And study the situation to a point to find the correct introductive rate.

To begin, what do you think the minimum amount you would truly cash-in based upon a RV?

For example.. We know that everyone would likely cash out at $3...... I have no doubt that many would sit back and wait for a better rate from $3 as it could easily drop from that value.

We also can predict that many may not jump to cashing out at a penny. A penny is basically the equivilant of 10 times your investment. Great return in my opinion.

But, than they have to determine how many people would buy-in at a penny if the rates went live at a penny. We would view it as a penny stock & it would be easy to have 1,000 shares at $10... Throwing 100s at the investment would come with ease.

A dime would reduce that, and I believe that many would cash out at a dime, but some will still hold (Unless they have a limited window upon cash-in)

Now.. If I were to just give a rough estimate to what introductive rate they choose? I would say a Quarter. (Personal opinion, because some will say higher, some will say lower, some will say LOP)

I think at the rate of a quarter, they'll be similar to the Saudis... They'll have room to grow, and the value could rise..

It will be enough of a rate increase to get many to cash out & many to buy-in.

If for every IQD exchanged-in, they had a buyer willing to purchase at that rate.. The cash reserves don't take a hit & the CBI profits from the spread. They coudl easily take a % of the profit and deposit into their reserves and let their reserves grow.

Some people who buy in late, may lose $ if they are impatient, some may make money with patience.

For ex:

If the sell rate was a $1.00 & the buy rate was $0.98.. For every IQD transaction they would make 2 pennies. So, if they exchange $5,000 in value... They may make $100... At this point it becomes more volatile, more people gamble, and therefore some get rich some get burned. CBI always wins in the end.

But the main point of it all.. Is that they have to find a rate that still ensures they have people willing to buy & people to sell. If both can be met properly, the CBI doesn't take a hit. The more transactions back & forth the more $ they make. Other things they would be able to do is as they draw in big notes, they can remove them from circulation all together as well. Thus reducing the entire money supply in circulation. All while manaing the exchange rate. And over time the value will likely go up.. But, like many state, they'll come out low and gradually increase in value.

Everyone looks at the total # in circulation and figure the new RV value represents the entire circulation. They only have to in reality cash out those that hold it for investment purposes. The individual speculative investor. We're actually only a small role in the big picture. I would guesstimate we account for maybe a total of 1 trillion IQD. (Maybe, as I am considering the entire global speculators)

Could be higher, could be lower... But as we continue to do transactions, the cbi profits.

So with 1 trillion in the hands of speculative investors and lets say 100 % of them cash out.. They would only need to pony up roughly $250 Billion total... Their cash reserves sit at 50 billion, but, upon a RV I am sure people will continue to buy sell at the new rate which will likely balance the reserves and if anything possibly increase it.

Foreign Govts likely sit on IQD - but they may hold it as cash reserves for themselves, something to hedge against, consider it an asset, and or use it to purchase crude. Many possibilities there. But, in reality, I doubt they cash-in just like speculators... Because they hold a pretty large sum of the market on what is outside of the country.

CBI has more of that information on hand, and I am sure it is confidential. Everyone has their own opinion and this is just a potential way I see it going down.

I agree that a RV is possible at a very low rate to start and I really wish that is what they would do. Thing is they are telling us otherwise. Unless they are lying to the world, including their own people then this is the route they seem to want to take. I admitt that it could be all smoke but it just seems too extensive at this point. I mean article after article and then Shabbs himself saying the zeros are coming off.

Maybe the parliment will vote it down and all of a sudden they come out the next week and say O we decided to RV to .04 instead. That I could see. That is what I hope happens. But lets not all forget that a redenomination will solve the trillions problem outright and all these arguments that it would cause chaos are nonsense. It has happened numerous times around the world.

Look, it is true that we don't know what Iraq will do but what we do know is what they are telling us they are going to do. And why would they be telling us they are going to LOP when they are really gonna RV? Why wouldn't they just come out and RV? I mean I seriously doubt everyone is running out and selling their dinars. I bet Ali is still selling like crazy with all the hype that we are so close. It just doesn't make sense. What does make sense for Iraq is to redenominate their currency. I am not advicating a LOP I am only saying that it seems like the right thing for them to do whether we like it or not. True there are other ways it could be done that would make us all wealthy but I doubt that is what Iraq is worried about. We are small fish. The whales and sharks will get their fill once the currency is stable. The zeros need to go and it looks like it's gonna happen. Again I hope not but hope never made me any money. We are all gonna make profit here people. There will be no loss. Even if a LOP occurs they would have to bring the exchange rate above the USD either right off the bat or down the line.

We wait we see. A redenomination is in fact a possibility and seems likely. Sad but true. Maybe not who knows. I know there are many who feel the US holds trillions and won't let it happen and this is the world bail out and all this and everyone is entitled to there beliefs and I am not trying to destroy anyones dreams I am just trying to call it the way I see it.

Keep -

My main point was just because they LOP does not show that they are stable. It proves no effect that the economy is improving.

Now, if the value of the IQD was increasing..... Than we could say, yes, I see that the value is increasing therefore the economy must be growing stronger.

We watch Gold & Silver, and we think.... Okay these values are going up, so they must be a great thing to invest in...

Now imagine if gold did something crazy where instead of going by ounce or something they went by bars. Basically making it so you have to pay more per unit.

The fluctuations would be represented differently.

Like if Crude was sold on the market by the gallon and than went to the barrel. It tightens up the volatility of it.. Therefore in my mind, you would think that the CBI would maybe struggle to make as much profit.

I know it may not make sense to you, but it seems to make sense to me..

Basically what I am stating is that they're limiting their fluctuations in value where they could potentially profit.

A 3.22 rate is a 3.22 rate no matter how they get there. Either way LOP or RV their currency is now worth 3 times the USD. Investors could care less.

Edited April 29, 2011 by dinarck

[Darin]

Dinarck,

Anything can happen. I think the best way to put it is.. I don't believe they'll LOP until they do. I don't believe they'll RV until they do. I believe they'll stay the course until I see them do otherwise. I foresee a change needs to be made, but how they go about it is the question. Simply put, right? I believe many can relate to this scenario.

If they could manage a "small RV" - wouldn't that maybe benefit their own people? Make them feel like things are on the up & up? Make them feel more confident in the dinar? Give them additional "Real" purchasing power. What I mean by "real" purchasing power is an increase in wealth. A re-denomination basically does not affect any individuals wealth, as they would still make the same amount of $ (USD value-wise) job wise. They would still spend the same amount of $ (USD value-wise) on product. And well, you get the point. Poverty remains, high amount of unemployment remains, and continued civil unrest. Over time, this will increase for better things, but, the LOP/RD will not give any immediate fixes to the economy. It does not mean carrying less cash. You still basically carry the same amount of bills. It may make math more simple, but, how hard is it to take away 3 zeros while doing math anyways, right?

A public perspective from foreign investors? Well those that are watching may not feel the economy is more or less stable than it is now. LOP or no LOP

See, I think a lot of people advocate the LOP for 2 main reasons 1) Because the amount of articles circulating regarding the issue & 2) Because the amount in circulation

You have to remember two things when you think like that:

1) A majority or a high percentage of IQD remains within Iraq. Lets say 65% as a reasonable % number. Basically saying, at "best" they would only have to cash out 35% upon a RV at worst case-scenario. Now, as they draw the notes in, speculators will buy in at the new rate. As a buy rate & a sell rate are not exactly the same #, they'll make money upon the spread. Anyways, if what gets cashed in by speculators is equally met with new speculative investors that buy in at the new rate. Their cash reserves would be stable & could support it. If they allocate a % of the income/revenue made upon each transaction, they could deposit it into their reserves and it will grow.

Remember, the spread is involved with each 1 IQD. For example if they RV where they sell for $1.00 but buy for $0.98, they would be making $0.02 per every IQD. So if you $5,000 worth of IQD and immediately sell it back, you buy $5,000 worth, and as you sell it back you get $4,900. The CBI just made $100 off that transaction. Now who is to say that all foreign holders cash-in? Maybe a large $ is held by foreign governments that hold it for cash-reserves, assets to strengthen their own currency, use for petro-dollars, or any other reason(s). Make sense? See, in reality, the CBI could profit from a well planned RV if they introduce themselves at the Sweet-spot rate. If the holders who sell are equally met by those wishing to purchase, no problem. It won't cripple the CBI.

2) Regarding the articles.... If they had intentions to re-value, especially at the returns we potentially think this could hit... Would we ever see anything making those claims?? No.... They're going to misguide us, mis-lead us, confuse us, make us weary of spending $ and invest. Think about it.... Why would they make it illegal to try & sneak out IQD or even ship it? Because they want to be able to account for what is outside of the country & what is within their own country. They understand that some people would be successful in sneaking it out, but, that % may be very small as well. With the long-term of this speculative ride, they basically have to meet it with the same amount of confusion for a long period of time as well to confuse investors. However, what they may not be expecting or considering is how many of the IQD holders currently hold based upon speculation will likely not cash in until a change happens. The scare tactics are not going to help draw in IQD, but it may help prevent additional sales. Initially, they likely wished to sell a lot of the currency to build up their reserves, but I don't think they wish to build up their reserves anymore at the moment. Who know.. Its a speculative ride, and we can only educate ourselves and hope it becomes of value.

Lets compare that to a LOP/Re-denomination

They have to pay for a whole new set of bills - and the costs incurred there

They limit themselves on the ride up in value where the CBI can make $.

If they were to LOP - they would stay even upon value and buying/selling would not really happen. They could than RV after the LOP to 3.22 for example, but, they close that gap of the ride up in value where they could make a large amount of profit. Who would really buy in at $3.22 if they think the value has topped out? But I am sure they have done numerous studies, extensive research, and weighed their options. So they may have found their own plan to take action upon but we just get to sit back and wait to see when & how they implement it.

[dinarck]

Dinarck,

Anything can happen. I think the best way to put it is.. I don't believe they'll LOP until they do. I don't believe they'll RV until they do. I believe they'll stay the course until I see them do otherwise. I foresee a change needs to be made, but how they go about it is the question. Simply put, right? I believe many can relate to this scenario.

If they could manage a "small RV" - wouldn't that maybe benefit their own people? Make them feel like things are on the up & up? Make them feel more confident in the dinar? Give them additional "Real" purchasing power. What I mean by "real" purchasing power is an increase in wealth. A re-denomination basically does not affect any individuals wealth, as they would still make the same amount of $ (USD value-wise) job wise. They would still spend the same amount of $ (USD value-wise) on product. And well, you get the point. Poverty remains, high amount of unemployment remains, and continued civil unrest. Over time, this will increase for better things, but, the LOP/RD will not give any immediate fixes to the economy. It does not mean carrying less cash. You still basically carry the same amount of bills. It may make math more simple, but, how hard is it to take away 3 zeros while doing math anyways, right?

A public perspective from foreign investors? Well those that are watching may not feel the economy is more or less stable than it is now. LOP or no LOP

See, I think a lot of people advocate the LOP for 2 main reasons 1) Because the amount of articles circulating regarding the issue & 2) Because the amount in circulation

You have to remember two things when you think like that:

1) A majority or a high percentage of IQD remains within Iraq. Lets say 65% as a reasonable % number. Basically saying, at "best" they would only have to cash out 35% upon a RV at worst case-scenario. Now, as they draw the notes in, speculators will buy in at the new rate. As a buy rate & a sell rate are not exactly the same #, they'll make money upon the spread. Anyways, if what gets cashed in by speculators is equally met with new speculative investors that buy in at the new rate. Their cash reserves would be stable & could support it. If they allocate a % of the income/revenue made upon each transaction, they could deposit it into their reserves and it will grow.

Remember, the spread is involved with each 1 IQD. For example if they RV where they sell for $1.00 but buy for $0.98, they would be making $0.02 per every IQD. So if you $5,000 worth of IQD and immediately sell it back, you buy $5,000 worth, and as you sell it back you get $4,900. The CBI just made $100 off that transaction. Now who is to say that all foreign holders cash-in? Maybe a large $ is held by foreign governments that hold it for cash-reserves, assets to strengthen their own currency, use for petro-dollars, or any other reason(s). Make sense? See, in reality, the CBI could profit from a well planned RV if they introduce themselves at the Sweet-spot rate. If the holders who sell are equally met by those wishing to purchase, no problem. It won't cripple the CBI.

2) Regarding the articles.... If they had intentions to re-value, especially at the returns we potentially think this could hit... Would we ever see anything making those claims?? No.... They're going to misguide us, mis-lead us, confuse us, make us weary of spending $ and invest. Think about it.... Why would they make it illegal to try & sneak out IQD or even ship it? Because they want to be able to account for what is outside of the country & what is within their own country. They understand that some people would be successful in sneaking it out, but, that % may be very small as well. With the long-term of this speculative ride, they basically have to meet it with the same amount of confusion for a long period of time as well to confuse investors. However, what they may not be expecting or considering is how many of the IQD holders currently hold based upon speculation will likely not cash in until a change happens. The scare tactics are not going to help draw in IQD, but it may help prevent additional sales. Initially, they likely wished to sell a lot of the currency to build up their reserves, but I don't think they wish to build up their reserves anymore at the moment. Who know.. Its a speculative ride, and we can only educate ourselves and hope it becomes of value.

Lets compare that to a LOP/Re-denomination

They have to pay for a whole new set of bills - and the costs incurred there

They limit themselves on the ride up in value where the CBI can make $.

If they were to LOP - they would stay even upon value and buying/selling would not really happen. They could than RV after the LOP to 3.22 for example, but, they close that gap of the ride up in value where they could make a large amount of profit. Who would really buy in at $3.22 if they think the value has topped out? But I am sure they have done numerous studies, extensive research, and weighed their options. So they may have found their own plan to take action upon but we just get to sit back and wait to see when & how they implement it.

Make sense. Hope that pans out.

[dinarck]

Hey Darin,

I have to admitt, you have sparked my curiosity. One question I have is, why would new speculators buy in at the new rate when Iraq has already threatened to LOP the first time around? OK 2 questions. How would Iraq raise it's exchange rate the second time around? I mean sooner or later the price will get to a point where no one is buying in and Iraq will have to pay out of pocket. Am I missing something here? To tell you the thruth when I thought about your senerio it actually makes sense and gave me new hope that they could pull this off. I just think they are going about it the wrong way if in fact this is the plan. I would think threatening to LOP now would ruin their chances of ever having anyone buy their currency again.

[imgesing]

Why do you keep calling it a loss of profit when nothing is lost?? Lopping the zeros/redenominating (same thing in this context) Removing or lopping the zeros and redenominating....its a neutral change....where is the loss?? Purchasing power is increased because what used to cost 5k dinar, now only costs 5 dinar (in the scenerio they have been repeating over and over) So where is the loss?? And no I cant go get drinks with you Im only 12....sorry.....

No it isnt the same. EXACTLY MY POINT a LOP is a LOSS OF PROFIT L O P stands for LOSS OF PROFIT. Look this up. So it isnt the same thing and it is HIGHLY MISUSED here. I get the context of what everyone is saying but might want to just say Re-Denomination or something else but using the term LOP seems to me to make the person using the term ignorant. Just saying...

PEACE and WOW SMART FOR YOUR AGE... lol Be well...

LOP isnt going to happen and neither should a currency trade... WAIT and SEE... I bet I am right. (wink)

[Sucma]

The largest argument to the LOZ discussion seems to be the amount if dinar in circulation. I would like to know a valid number in which a straight RV would be a no brainer. 10tril 5tril is there a way to calc this. Because assuming they have been collecting larger notes like they say they have back 5 years ago I would like to do my own math on whether I think they could have removed enough.

[RescueBreaths]

No it isnt the same. EXACTLY MY POINT a LOP is a LOSS OF PROFIT L O P stands for LOSS OF PROFIT. Look this up. So it isnt the same thing and it is HIGHLY MISUSED here. I get the context of what everyone is saying but might want to just say Re-Denomination or something else but using the term LOP seems to me to make the person using the term ignorant. Just saying...

PEACE and WOW SMART FOR YOUR AGE... lol Be well...

LOP isnt going to happen and neither should a currency trade... WAIT and SEE... I bet I am right. (wink)

I'm not sure why the LOP word is misused here, Not by you but the other sheep who play in the meadow. Unfortunatly from my time sitting on the sidelines I've noticed the ELOHPEE has been thrown around like aids, You never knew someone gave it to you until your mouth spews ignorant information not realizing the information is almost backwards to what you actually mean. A LOP is different then a RD, Therefore a LOP does not = 25k - 25. (This is NOT a LOP it's an RD). Between the "Educated", "Well informed", "Gurus", "Positive people", "Negative people", "Lost people", "Keep - Which is a whole Catagory by himself (No pun intended your just a funny guy)", And the "Sheep" who don't research themselves yet read only what the "Guru's" or what I refer to as the blind shephards say, and other sheeps opinion, they sure don't pay well enough attention (Or maybe they pay to much attention which is why they are confused). Before anyone jumps on the LOPtrain and rides it till the end of our investment, Please RESEARCH what a LOP is and a RD is. 2 Completely Different things. Google is a very powerful search engine, in fact I've heard recently they have more information than the CIA or any other agency can dream of having. It's not hard to do a little research instead of being spoon fed Lies, Negativity, and FALSE information, including false use of words. In conclusion a LOP is impossible, a RD is possible but not likely. I win. Thank you imgesing for popping my cherry on this site. :]

[dinarck]

Already know what you are gonna say Darin. Just snapped. The new speculators are buying new lower denoms there for not worried about a LOP. Took me a while but got it.

[Darin]

Hey Darin,

I have to admitt, you have sparked my curiosity. One question I have is, why would new speculators buy in at the new rate when Iraq has already threatened to LOP the first time around? OK 2 questions. How would Iraq raise it's exchange rate the second time around? I mean sooner or later the price will get to a point where no one is buying in and Iraq will have to pay out of pocket. Am I missing something here? To tell you the thruth when I thought about your senerio it actually makes sense and gave me new hope that they could pull this off. I just think they are going about it the wrong way if in fact this is the plan. I would think threatening to LOP now would ruin their chances of ever having anyone buy their currency again.

Interesting point...

Because with all the threatening articles and scare-tactics of using the re-denomination scenario.. Some people may feel that buying in is not necessarily a good idea at the moment. Its an exotic currency, so it is not easy to get. Especially with banks tightening up on exchanging it. Serious currency traders may be waiting for it to go international in hopes to take advantage of the rise in value.

So if the rates go live & people buy in upon speculation. It is easy to buy it up via forex & selling it via forex as clicking a button.

Some may buy in immediately and watch it drop and get scared and sell. Or it may go up in value and people ride it out. It's a market that will have volatility which means some people may lose, some may make money. But for the time being it is an exotic currency, so many serious currency traders may have no interest in touching it.

Now, when we look at the spread, the banks will make profits from that. They could take a portion of the spread and deposit it into the cash reserves.

So, lets say they RV and the rates go live. Well, they'll have some speculators buying in at that rate, which should also help supply those that cash-out the physical currency. As they draw in the physical currency, they may destroy/soil or set aside the big bills. This can also deplete the currency within circulation as well. So the CBI will likely always have those holding the currency via being traded online which also means they'll be able to basically pay out others.. Some will buy, some will sell, and those that buy the funds can be used to pay those that sell. And upon each transaction, the CBI profits.

Theoretically --- They could Re-value the currency, let the currency go live on the international market with the perfect introductory rate and in the end make a lot of money..... They'll make money on the ride up...

All while returning wealth to their people, and some wealth to those that bought in while the currency was exotic..

For the most part, its a theory and idea on how they may plan to go about doing things. I'm only speculating with logic & I may have some processes wrong or I am not accounting for key points. But I'm trying to break it down for some people to understand how it could work out.

If they did a re-denomination, they could easily Re-value roughly up to 7 times the value anyways.

My break-down.

24T (A figure that I took by assuming 27T in circulation with 3T recently pulled in by the CBI)

24T re-denominates into 24B.. The USD value becomes 20 billion (Assuming we take and multiply by $0.86)

Out of that 20 Billion, lets assume they would only have to cash out 35% of those that hold currency outside of Iraq. 35% could be individuals, banks, foreign governments, & also currency dealers.

So 35% of 20 Billion is... 7 billion roughly. Well, if the CBI holds 50 Billion USD, technically they could rv 7 times the value. so... $0.85x7 = giving us a rate of 5.95...

Now, that type of rate would likely scare away investors....Wouldn't you agree?

I would be pleased (for the most part) if they LOP and RV'd up to that rate.

But than again, why not just RV at minimum of basically a penny... Make it slightly more simple. But, how many speculators would even sell at a penny? How many speculators would cash in at $3?

From my observations and readings and personal opinion, i feel more in line with Adam's prediction of roughly $0.10-0.25

I know i would feel comfortable cashing out at a quarter.

I think many others will as well. But is that rate still too low for a live market? Who knows..

It really depends on how that 35 percent sits outside the market. Do the foreign governments have different plans for it? To keep it as cash reserves, maybe cash assets, maybe used for petro/crude, who knows. Those are the factors we may never know unless either told or post-rv.

The largest argument to the LOZ discussion seems to be the amount if dinar in circulation. I would like to know a valid number in which a straight RV would be a no brainer. 10tril 5tril is there a way to calc this. Because assuming they have been collecting larger notes like they say they have back 5 years ago I would like to do my own math on whether I think they could have removed enough.

Its hard to predict and or calculate.. So we can only make predictions based upon logic

Okay, so lets say 27T is currently in circulation, and if I recall CBI just recently drew in 3T

OKay, now we are at 24T...

We can assume a MAJORITY of the currency resides within Iraq. Either by the citizens, banks, or businesses.

Okay, lets just predict 65% is held within the country. That # may actually be low, but its hard to predict.. I think the # is reasonable, so lets go with it.

That means 35% resides outside of the country basically spread all over the world. Canada, China, European countries, neighboring Middle East countries, U.S. and so forth

Individuals hold some, banks hold some, currency dealers hold some, and likely foreign governments hold some.

Okay, so what is 35% of 24T? Basically 8.4T they would maybe need to cash-out.

But remember, as they cash-out, others may still be buying in now that a rate is live and easy as clicking to purchase vs. ordering thru like DT/DB etc.

Out of that 8.4T, I think a majority of it would be held Foreign Governments, Central Banks, other banks, and currency dealers. -- The individual speculators would be a small portion of that. Maybe collectively we hold anywhere from 1-2T

But this is just all guesses & estimates.

I believe the CBI would be better qualified & knowledgeable on where & who has what.

[dinarck]

I'm not sure why the LOP word is misused here, Not by you but the other sheep who play in the meadow. Unfortunatly from my time sitting on the sidelines I've noticed the ELOHPEE has been thrown around like aids, You never knew someone gave it to you until your mouth spews ignorant information not realizing the information is almost backwards to what you actually mean. A LOP is different then a RD, Therefore a LOP does not = 25k - 25. (This is NOT a LOP it's an RD). Between the "Educated", "Well informed", "Gurus", "Positive people", "Negative people", "Lost people", "Keep - Which is a whole Catagory by himself (No pun intended your just a funny guy)", And the "Sheep" who don't research themselves yet read only what the "Guru's" or what I refer to as the blind shephards say, and other sheeps opinion, they sure don't pay well enough attention (Or maybe they pay to much attention which is why they are confused). Before anyone jumps on the LOPtrain and rides it till the end of our investment, Please RESEARCH what a LOP is and a RD is. 2 Completely Different things. Google is a very powerful search engine, in fact I've heard recently they have more information than the CIA or any other agency can dream of having. It's not hard to do a little research instead of being spoon fed Lies, Negativity, and FALSE information, including false use of words. In conclusion a LOP is impossible, a RD is possible but not likely. I win. Thank you imgesing for popping my cherry on this site. :]

Think alot of us know the difference between the 2. I personally get sick of typing redenomination over and over so call it a LOP.

[Darin]

Think alot of us know the difference between the 2. I personally get sick of typing redenomination over and over so call it a LOP.

Its a term we use incorrectly. But, it gets the simple point across. Another way of thinking is.. Lopping off the 3 zeros.

Re-denomination, typing that out takes longer

But, overall, I think this topic has been sort of beaten to death. So, it's basically just sit back and wait to see what sort of move they make. They could be making their move very soon & make it very well known what they did/do.

[dinarck]

Interesting point...

Because with all the threatening articles and scare-tactics of using the re-denomination scenario.. Some people may feel that buying in is not necessarily a good idea at the moment. Its an exotic currency, so it is not easy to get. Especially with banks tightening up on exchanging it. Serious currency traders may be waiting for it to go international in hopes to take advantage of the rise in value.

So if the rates go live & people buy in upon speculation. It is easy to buy it up via forex & selling it via forex as clicking a button.

Some may buy in immediately and watch it drop and get scared and sell. Or it may go up in value and people ride it out. It's a market that will have volatility which means some people may lose, some may make money. But for the time being it is an exotic currency, so many serious currency traders may have no interest in touching it.

Now, when we look at the spread, the banks will make profits from that. They could take a portion of the spread and deposit it into the cash reserves.

So, lets say they RV and the rates go live. Well, they'll have some speculators buying in at that rate, which should also help supply those that cash-out the physical currency. As they draw in the physical currency, they may destroy/soil or set aside the big bills. This can also deplete the currency within circulation as well. So the CBI will likely always have those holding the currency via being traded online which also means they'll be able to basically pay out others.. Some will buy, some will sell, and those that buy the funds can be used to pay those that sell. And upon each transaction, the CBI profits.

Theoretically --- They could Re-value the currency, let the currency go live on the international market with the perfect introductory rate and in the end make a lot of money..... They'll make money on the ride up...

All while returning wealth to their people, and some wealth to those that bought in while the currency was exotic..

For the most part, its a theory and idea on how they may plan to go about doing things. I'm only speculating with logic & I may have some processes wrong or I am not accounting for key points. But I'm trying to break it down for some people to understand how it could work out.

If they did a re-denomination, they could easily Re-value roughly up to 7 times the value anyways.

My break-down.

24T (A figure that I took by assuming 27T in circulation with 3T recently pulled in by the CBI)

24T re-denominates into 24B.. The USD value becomes 20 billion (Assuming we take and multiply by $0.86)

Out of that 20 Billion, lets assume they would only have to cash out 35% of those that hold currency outside of Iraq. 35% could be individuals, banks, foreign governments, & also currency dealers.

So 35% of 20 Billion is... 7 billion roughly. Well, if the CBI holds 50 Billion USD, technically they could rv 7 times the value. so... $0.85x7 = giving us a rate of 5.95...

Now, that type of rate would likely scare away investors....Wouldn't you agree?

I would be pleased (for the most part) if they LOP and RV'd up to that rate.

But than again, why not just RV at minimum of basically a penny... Make it slightly more simple. But, how many speculators would even sell at a penny? How many speculators would cash in at $3?

From my observations and readings and personal opinion, i feel more in line with Adam's prediction of roughly $0.10-0.25

I know i would feel comfortable cashing out at a quarter.

I think many others will as well. But is that rate still too low for a live market? Who knows..

It really depends on how that 35 percent sits outside the market. Do the foreign governments have different plans for it? To keep it as cash reserves, maybe cash assets, maybe used for petro/crude, who knows. Those are the factors we may never know unless either told or post-rv.

Its hard to predict and or calculate.. So we can only make predictions based upon logic

Okay, so lets say 27T is currently in circulation, and if I recall CBI just recently drew in 3T

OKay, now we are at 24T...

We can assume a MAJORITY of the currency resides within Iraq. Either by the citizens, banks, or businesses.

Okay, lets just predict 65% is held within the country. That # may actually be low, but its hard to predict.. I think the # is reasonable, so lets go with it.

That means 35% resides outside of the country basically spread all over the world. Canada, China, European countries, neighboring Middle East countries, U.S. and so forth

Individuals hold some, banks hold some, currency dealers hold some, and likely foreign governments hold some.

Okay, so what is 35% of 24T? Basically 8.4T they would maybe need to cash-out.

But remember, as they cash-out, others may still be buying in now that a rate is live and easy as clicking to purchase vs. ordering thru like DT/DB etc.

Out of that 8.4T, I think a majority of it would be held Foreign Governments, Central Banks, other banks, and currency dealers. -- The individual speculators would be a small portion of that. Maybe collectively we hold anywhere from 1-2T

But this is just all guesses & estimates.

I believe the CBI would be better qualified & knowledgeable on where & who has what.

Took me a while but finally snapped that new specualtors wouldn't be buying 000 like us. LOL I made a post probably while you were typing yours. I gotta say, you come with logic. Hope this is the way it plays out. I know I would take .25 to the bank. Maybe hold a good portion and see what happens. Anyway, thanks for bringing some hope.

[keepmwlknfny]

No it isnt the same. EXACTLY MY POINT a LOP is a LOSS OF PROFIT L O P stands for LOSS OF PROFIT. Look this up. So it isnt the same thing and it is HIGHLY MISUSED here. I get the context of what everyone is saying but might want to just say Re-Denomination or something else but using the term LOP seems to me to make the person using the term ignorant. Just saying...

PEACE and WOW SMART FOR YOUR AGE... lol Be well...

LOP isnt going to happen and neither should a currency trade... WAIT and SEE... I bet I am right. (wink)

I use that term simply because for the most part people understand what you say when you say LOP cause they relate that to chopping off the zeros...getting rid of the larger bills in exchange for newer ones....or redenominating......and in that context that most people use, its practically the same thing.....just makes for easier conversation and as someone else mentioned its easier to say and people will still understand..... Either way, chopping off the zeros and redenominating like the articles we have seen coming out the past 5 or so years, are meaning the same thing as well......your 25k note now has the same purchasing power as a new 25 note.....

I don't understand where you believe they'll have a higher purchasing power.

The items they purchase will be equally affected.

There is no bringing back the wealth.

Poverty will still exist - as it will not really change.

We just see #s change - all related to the IQD change equally....

Imagine if the USD loped by 10%

Our 100 bill now buy what a $10 bill buys

But something simple like gas would be under a $1 (for example $0.36 or $0.37)

If our paycheck was bi-weekly & $1,000.. Our new paycheck would be $100

See where I am going w/ this??

We dont see it, but Im looking at the mirage effect of it, its not really, but just kind of a perception that they will have more purchasing power....yea the wealth wont be restored right away, that would probly take some time anyways once Iraq gets full control of their oil profits, starts pumping more oil, and then distributing that money to the citizens....thats how I see the wealth being restored.....yea they could come out low and accomplish getting back some of the wealth they once had....thats very possible.....and your right that they wouldnt have to cash out the entire 24 or so trillion outside the banks either, but there is still trillions outside the country that they would be responsible for and im not sure the reserves are high enough to even handle that at this point in time.....so all we can do is sit and wait and hope for the best!! And in the meantime, throw ideas back and forth at eachother and try to decifer every move they make.....

[Sucma]

Interesting point...

Because with all the threatening articles and scare-tactics of using the re-denomination scenario.. Some people may feel that buying in is not necessarily a good idea at the moment. Its an exotic currency, so it is not easy to get. Especially with banks tightening up on exchanging it. Serious currency traders may be waiting for it to go international in hopes to take advantage of the rise in value.

So if the rates go live & people buy in upon speculation. It is easy to buy it up via forex & selling it via forex as clicking a button.

Some may buy in immediately and watch it drop and get scared and sell. Or it may go up in value and people ride it out. It's a market that will have volatility which means some people may lose, some may make money. But for the time being it is an exotic currency, so many serious currency traders may have no interest in touching it.

Now, when we look at the spread, the banks will make profits from that. They could take a portion of the spread and deposit it into the cash reserves.

So, lets say they RV and the rates go live. Well, they'll have some speculators buying in at that rate, which should also help supply those that cash-out the physical currency. As they draw in the physical currency, they may destroy/soil or set aside the big bills. This can also deplete the currency within circulation as well. So the CBI will likely always have those holding the currency via being traded online which also means they'll be able to basically pay out others.. Some will buy, some will sell, and those that bu

y the funds can be used to pay those that sell. And upon each transaction, the CBI profits.

Theoretically --- They could Re-value the currency, let the currency go live on the international market with the perfect introductory rate and in the end make a lot of money..... They'll make money on the ride up...

All while returning wealth to their people, and some wealth to those that bought in while the currency was exotic..

For the most part, its a theory and idea on how they may plan to go about doing things. I'm only speculating with logic & I may have some processes wrong or I am not accounting for key points. But I'm trying to break it down for some people to understand how it could work out.

If they did a re-denomination, they could easily Re-value roughly up to 7 times the value anyways.

My break-down.

24T (A figure that I took by assuming 27T in circulation with 3T recently pulled in by the CBI)

24T re-denominates into 24B.. The USD value becomes 20 billion (Assuming we take and multiply by $0.86)

Out of that 20 Billion, lets assume they would only have to cash out 35% of those that hold currency outside of Iraq. 35% could be individuals, banks, foreign governments, & also currency dealers.

So 35% of 20 Billion is... 7 billion roughly. Well, if the CBI holds 50 Billion USD, technically they could rv 7 times the value. so... $0.85x7 = giving us a rate of 5.95...

Now, that type of rate would likely scare away investors....Wouldn't you agree?

I would be pleased (for the most part) if they LOP and RV'd up to that rate.

But than again, why not just RV at minimum of basically a penny... Make it slightly more simple. But, how many speculators would even sell at a penny? How many speculators would cash in at $3?

From my observations and readings and personal opinion, i feel more in line with Adam's prediction of roughly $0.10-0.25

I know i would feel comfortable cashing out at a quarter.

I think many others will as well. But is that rate still too low for a live market? Who knows..

It really depends on how that 35 percent sits outside the market. Do the foreign governments have different plans for it? To keep it as cash reserves, maybe cash assets, maybe used for petro/crude, who knows. Those are the factors we may never know unless either told or post-rv.

Its hard to predict and or calculate.. So we can only make predictions based upon logic

Okay, so lets say 27T is currently in circulation, and if I recall CBI just recently drew in 3T

OKay, now we are at 24T...

We can assume a MAJORITY of the currency resides within Iraq. Either by the citizens, banks, or businesses.

Okay, lets just predict 65% is held within the country. That # may actually be low, but its hard to predict.. I think the # is reasonable, so lets go with it.

That means 35% resides outside of the country basically spread all over the world. Canada, China, European countries, neighboring Middle East countries, U.S. and so forth

Individuals hold some, banks hold some, currency dealers hold some, and likely foreign governments hold some.

Okay, so what is 35% of 24T? Basically 8.4T they would maybe need to cash-out.

But remember, as they cash-out, others may still be buying in now that a rate is live and easy as clicking to purchase vs. ordering thru like DT/DB etc.

Out of that 8.4T, I think a majority of it would be held Foreign Governments, Central Banks, other banks, and currency dealers. -- The individual speculators would be a small portion of that. Maybe collectively we hold anywhere from 1-2T

But this is just all guesses & estimates.

I believe the CBI would be better qualified & knowledgeable on where & who has what.

Okay. I get all that but the question was not how much they have but how much they should to straight RV. So out of thin air if we could make the total amount of dinar they have a amout such as 20T total and that number would allow a straight RV what would that number be? I want to know since the 24T number is to high for many to believe it is going to RV and rather they are sold on the LOZ what number would be better.

[HopefulTxn]

I am not even seeing Iraq being able to do a 10 cent RV. The reason is the math... Even if you took all the physical dinar out of the equation, you would still be left with about 22 trillion dinar in their monetary system. At 10 cents, that would give them a monetary system value of $2.2 trillion USD. Kuwait has a monetary system ~$98 billion, Saudi Arabia at ~$315 billion. Iraq would miraculously have a monetary system 22 times that of Kuwait, and about 7 times that of Saudi Arabia. This would also give them a monetary system almost 19 times their 2010 GDP. Kuwait produces about as much oil as Iraq, and Saudi Arabia produces a few times more, but Iraq is supposed to carry a much higher value to their monetary system?

If you add the 27 trillion physical dinar, those numbers are obviously even higher. I would love for a straight RV at $0.10 - $0.25 or more, but given the numbers it just makes no sense. Unfortunately the only thing that really makes sense, and is also in-line with the statements that have been made by the MoF and the CBI is redenomination. I really do wish this wasn't the case, but the numbers just don't come close to being realistic otherwise, IMO.

Edited April 29, 2011 by HopefulTxn

[Darin]

I am not even seeing Iraq being able to do a 10 cent RV. The reason is the math... Even if you took all the physical dinar out of the equation, you would still be left with about 22 trillion dinar in their monetary system. At 10 cents, that would give them a monetary system value of $2.2 trillion USD. Kuwait has a monetary system ~$98 billion, Saudi Arabia at ~$315 billion. Iraq would miraculously have a monetary system 22 times that of Kuwait, and about 7 times that of Saudi Arabia. This would also give them a monetary system almost 19 times their 2010 GDP. Kuwait produces about as much oil as Iraq, and Saudi Arabia produces a few times more, but Iraq is supposed to carry a much higher value to their monetary system?

If you add the 27 trillion physical dinar, those numbers are obviously even higher. I would love for a straight RV at $0.10 - $0.25 or more, but given the numbers it just makes no sense. Unfortunately the only thing that really makes sense, and is also in-line with the statements that have been made by the MoF and the CBI is redenomination. I really do wish this wasn't the case, but the numbers just don't come close to being realistic otherwise, IMO.

Interesting perspective. But a removal of 3 zeros would turn 27T into 27B (But I read a report/article that the CBI had recently recalled 3T, so lets use 24 for this).

24 Billion X's $0.85 = 20+ billion in USD value. Hmmm not a whole lot, interesting enough though.. That $20 billion could pay off the debts to Kuwait.

Now, we have to remember, the majority resides within the country. Electronic or Hard currency. Why? Because its exotic & the rate is a program rate.

Okay, so maybe at bet they have to cash out 35% of physical dinars held by foreign holders

20B x 0.35 = 7B paid to foreign holders (All governments, banks, currency dealers, and or speculative individual holders)

The Cash-reserves currently sit at 52 Billion.

52 B /divided by/ 7B = 7.43

They could LOP/RD than raise the value 7.43 times without entirely depleting their cash reserves.

Keep in mind, they would also have other speculators buy-in at the new lopped price at some point...

Keep in mind that Foreign Govts. may hold the currency as cash reserves, assets, and so forth (Maybe a back-room deal where they use IQD for crude)

This realistically only puts them in a sustainable place to be in a $0.01-0.04, but there are many other factors we are not accounting for such as assets, and the money made by the CBI during exchanges and much much more.

Problem is, if you RV at $0.01-0.04 and go live. Speculators will eat you alive.

But you will reduce the entire money supply of circulation upon RV as you draw in notes.

We won't know what happens until it happens, so until than, we are left to sit back & speculate.

[HopefulTxn]

Interesting perspective. But a removal of 3 zeros would turn 27T into 27B (But I read a report/article that the CBI had recently recalled 3T, so lets use 24 for this).

24 Billion X's $0.85 = 20+ billion in USD value. Hmmm not a whole lot, interesting enough though.. That $20 billion could pay off the debts to Kuwait.

Now, we have to remember, the majority resides within the country. Electronic or Hard currency. Why? Because its exotic & the rate is a program rate.

Okay, so maybe at bet they have to cash out 35% of physical dinars held by foreign holders

20B x 0.35 = 7B paid to foreign holders (All governments, banks, currency dealers, and or speculative individual holders)

The Cash-reserves currently sit at 52 Billion.

52 B /divided by/ 7B = 7.43

They could LOP/RD than raise the value 7.43 times without entirely depleting their cash reserves.

Keep in mind, they would also have other speculators buy-in at the new lopped price at some point...

Keep in mind that Foreign Govts. may hold the currency as cash reserves, assets, and so forth (Maybe a back-room deal where they use IQD for crude)

This realistically only puts them in a sustainable place to be in a $0.01-0.04, but there are many other factors we are not accounting for such as assets, and the money made by the CBI during exchanges and much much more.

Problem is, if you RV at $0.01-0.04 and go live. Speculators will eat you alive.

But you will reduce the entire money supply of circulation upon RV as you draw in notes.

We won't know what happens until it happens, so until than, we are left to sit back & speculate.

You are doing the math based solely on the physical dinar, and not including the rest of the monetary system that has to be accounted for, which is almost half of their overall monetary numbers.

The statements about being 'bought up' lose a little credibility, IMO, when one could look at a country like Japan, which has a currency value of less than 2 cents per yen. In this scenario it would be much cheaper to go after Kuwait, which has about the same oil output (although not the reserve levels), a far more sound infrastructure and would cost them much, much less money.

Edited April 29, 2011 by HopefulTxn