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Okay. I read it. Still nothing changes the fact that, well... nothing changes! It won't make anything easier for Iraqis, investors, banks, no one!

So what if they take off the three zeros and make less amount of money worth the same as the larger amount used to be. It doesn't make their currency actually worth more, just reduces the ratio of how much is needed for any one action, such as a purchase or exchange. What we as investors are looking for is something to change the inherent value in the currency, which can only be done by the Central bank changing the perceived exchange rate between currencies around the world, and like I said in a previous post, will likely just be pegged still to the USD which is falling, so in order for them to justify a stable rate and base it on the USD, they HAVE to increase the perceived value of their currency, even if they redenominate. That's the only way any amount of purchasing power will increase for Iraqis and we as investors will make money. That is what we want to see happen. We could care less about the actual numbers on the face value of the currency. We care about its perceived, or inherent value. Which is still going to be worth nothing compared to the USD after they RD. IMO, no RD, just slow increase of value in IQD over a short to medium time period, less than 2 to 3 years, preferably. I can see them jumping from 1170:1 to 500:1 and then to 250:1 and then 100:1, and then eventually up to the same amount as their neighboring middle eastern countries, somewhere in the ~3usd: 1iqd. It must happen for them to reflect the true value of their countries assets, including oil, natural gas, and others.

I agree as investors we look for a change in the value of the currency. We will in fact see that change. What they are telling us in the articles unfortunately isnt how we want the value to change. They are telling us that a redenomination is needed for the value of the IQD to rise. As a matter of fact at the moment of redenomination the exchange rate is raised to par with the USD so that no value is lost. That in its self is a RV. Problem is we didnt make money because zeros were removed from the currency. Sux but that is how it works. Question is if they will bring the exchange rate on par with or above the USD right away or over time.

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The best way to view a straight-up re-denomination is to understand that the numerical value on all notes changes, while the exchange rate & value of the note remain the same. Psychologically, upon a re-denomination, a newly re-denominated currency would have to be introduced and released into circulation. Now the citizens have 3 different types of currencies to use such as: IQD, newly re-denominated IQD, and USD. From my understanding, they already view the notes as if the 3 zeros were not present. But, this won't solve the dollarization problem. The dollar holds more value and is more stable. Citizens may become weary of using the newly re-denominated IQD as well, considering they had just went through the whole exchange process 8 years prior. Now, how do you get people to remain faithful to the currency if you keep introducing a complete replacement?

Imagine if 8 years ago, we all had to start using a new currency (Lets call it the green-back). The exchange was done in a time-frame leaving all previous dollars worthless. If you missed your window, you lost out on wealth. So many of us acquire the green-back and some are cautious about the currency itself. Many of us decide to rely on the more stable Euro due to its higher value & stability. As we finally start getting comfortable using the green-back, the US decides they're going to introduce another currency to replace the existing one (Lets call this the Amero). This was purely done to remove 000s that existed on the Green-back. A 1,000 green-back note & 1 amero note equal in value, however, both are valued under the Euro. With the feeling of uncertaintity of the new Amero, you go back to relying on the stability of the Euro. You feel that the Amero will take time to adjust into the market and people may not be so accepting. Dollarization still exists, some people feel as if they lost wealth (In reality the didn't), others complain about the exchange process, and many people are uncertain to put their faith into the amero.

How could we make the Amero more tempting? Well if 1 amero is worth more than 1 euro, I think that is a great start.

But it may not be that easy, instead, it appears that the governments may make it hard to use the Euro by putting higher restrictions of trade. So your beloved Euro is being basically hated upon & now your being forced to use something else.

What if, the Amero never existed but instead the green-back started having lower denominations and the value was increasing? Faith would be restored into the green-back in a much similar fashion of the faith that was once installed into the USD. As native holders see the rise, they feel proud to know the green-back has a future. The use of the Euro drops (which removes the idea of dollarizaton being present).

But this is only an opinion. There may be no right answer. But discussing it gives us the ability to see it from different perspectives.

Darin I have to say that during the past few weeks I have enjoyed reading your posts more than anybody else's on this site. Logic, common sense, and positivity are key factors. Also, you know how to carry on a conversation/debate and still remain polite with the other party.

I am not looking to fly high in the clouds in a millionaires dream, or believe anything that somebody says just because I want to hear it. Keep up the good work my friend.

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I agree as investors we look for a change in the value of the currency. We will in fact see that change. What they are telling us in the articles unfortunately isnt how we want the value to change. They are telling us that a redenomination is needed for the value of the IQD to rise. As a matter of fact at the moment of redenomination the exchange rate is raised to par with the USD so that no value is lost. That in its self is a RV. Problem is we didnt make money because zeros were removed from the currency. Sux but that is how it works. Question is if they will bring the exchange rate on par with or above the USD right away or over time.

Thank you Dinarck...Iraq did not push this currency upon us as an investment or try to sell it to us at all for that matter.So we wannabe currency traders do not come into play in their decisions.If they think that an RD is the best start for credibility in their currency,then that's just what they will do.We all hope that this is not the path that they will take,but it is definitely an option that they are and have been exploring.I am not saying that this is the only option that they may take,but it is something that they are looking into as being a solution.If they do RD,I still see us making money in the long run...just not as much as most of us bought into.I must add that the news about the funds being released is huge and I will have to wait and see if this does in fact come to fruition before I continue to see an RD as being their most logical option.

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Okay. I read it. Still nothing changes the fact that, well... nothing changes! It won't make anything easier for Iraqis, investors, banks, no one!

So what if they take off the three zeros and make less amount of money worth the same as the larger amount used to be. It doesn't make their currency actually worth more, just reduces the ratio of how much is needed for any one action, such as a purchase or exchange. What we as investors are looking for is something to change the inherent value in the currency, which can only be done by the Central bank changing the perceived exchange rate between currencies around the world, and like I said in a previous post, will likely just be pegged still to the USD which is falling, so in order for them to justify a stable rate and base it on the USD, they HAVE to increase the perceived value of their currency, even if they redenominate. That's the only way any amount of purchasing power will increase for Iraqis and we as investors will make money. That is what we want to see happen. We could care less about the actual numbers on the face value of the currency. We care about its perceived, or inherent value. Which is still going to be worth nothing compared to the USD after they RD. IMO, no RD, just slow increase of value in IQD over a short to medium time period, less than 2 to 3 years, preferably. I can see them jumping from 1170:1 to 500:1 and then to 250:1 and then 100:1, and then eventually up to the same amount as their neighboring middle eastern countries, somewhere in the ~3usd: 1iqd. It must happen for them to reflect the true value of their countries assets, including oil, natural gas, and others.

In all due respect you may have bought into the uncomparable rate of the KWD with the IQD...All ME rates are not in line with that.Once Iraq has fully established itself economically,it may be able to rival that rate to an extent. Here is a link to nothing other than ME currency rates...

http://www.forexpros.com/currencies/middle-east

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In all due respect you may have bought into the uncomparable rate of the KWD with the IQD...All ME rates are not in line with that.Once Iraq has fully established itself economically,it may be able to rival that rate to an extent. Here is a link to nothing other than ME currency rates...

http://www.forexpros.com/currencies/middle-east

Okay, so I'm looking at it, and...

The middle eastern currencies are one of the following:

1.) Purposely over-inflated and worth practically nothing compared to the USD or Euro because of the type of economy or low population and not a specific need to redenominate and revalue

2.) In the range of 1/3 a USD to slightly over 3 USD to 1 of that currency (most are ~0.3 to 1usd or ~3 to 1 usd, only one of them was 1.6 or so...)

3.) Somewhere out in left field for a rate, like one was 250:1 and another 45:1 or something. To me that says just lost in its own economic miseries and policies and not concerned much with the goings on of the world balance for currency conversion.

Nowhere in there does it seem like the Iraqi dinar should be anything other than similar to its middle eastern neighbors. It certainly isn't going to be similar to New Zealand, or Canada, or Yugoslavia... If anything, Iraq would strive to emulate its neighbors for cohesion and integration purposes (they want to be in the WTO and have an internationally recognized currency to boost economic growth and profit from their vast resources, correct?).

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Okay, so I'm looking at it, and...

The middle eastern currencies are one of the following:

1.) Purposely over-inflated and worth practically nothing compared to the USD or Euro because of the type of economy or low population and not a specific need to redenominate and revalue

2.) In the range of 1/3 a USD to slightly over 3 USD to 1 of that currency (most are ~0.3 to 1usd or ~3 to 1 usd, only one of them was 1.6 or so...)

3.) Somewhere out in left field for a rate, like one was 250:1 and another 45:1 or something. To me that says just lost in its own economic miseries and policies and not concerned much with the goings on of the world balance for currency conversion.

Nowhere in there does it seem like the Iraqi dinar should be anything other than similar to its middle eastern neighbors. It certainly isn't going to be similar to New Zealand, or Canada, or Yugoslavia... If anything, Iraq would strive to emulate its neighbors for cohesion and integration purposes (they want to be in the WTO and have an internationally recognized currency to boost economic growth and profit from their vast resources, correct?).

You are talking about years of economic growth to be able to rival that of many of their neighbors.As far as WTO,they have been in observer status since '03 or '04,and isn't Vietnam in the WTO?

Edited by skepticaldinar
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Okay, so I'm looking at it, and...

The middle eastern currencies are one of the following:

1.) Purposely over-inflated and worth practically nothing compared to the USD or Euro because of the type of economy or low population and not a specific need to redenominate and revalue

2.) In the range of 1/3 a USD to slightly over 3 USD to 1 of that currency (most are ~0.3 to 1usd or ~3 to 1 usd, only one of them was 1.6 or so...)

3.) Somewhere out in left field for a rate, like one was 250:1 and another 45:1 or something. To me that says just lost in its own economic miseries and policies and not concerned much with the goings on of the world balance for currency conversion.

Nowhere in there does it seem like the Iraqi dinar should be anything other than similar to its middle eastern neighbors. It certainly isn't going to be similar to New Zealand, or Canada, or Yugoslavia... If anything, Iraq would strive to emulate its neighbors for cohesion and integration purposes (they want to be in the WTO and have an internationally recognized currency to boost economic growth and profit from their vast resources, correct?).

As far as population look at Iran's 73 million and Saudi Arabia's 29 million in comparison to Iraq's 32 million. I know that GNP,GDP,Per capita GDP,as well as FX reserves have to come into play.So Iraq definitely has it's work cut out for an RV.

Edited by skepticaldinar
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Okay, so I'm looking at it, and...

The middle eastern currencies are one of the following:

1.) Purposely over-inflated and worth practically nothing compared to the USD or Euro because of the type of economy or low population and not a specific need to redenominate and revalue

2.) In the range of 1/3 a USD to slightly over 3 USD to 1 of that currency (most are ~0.3 to 1usd or ~3 to 1 usd, only one of them was 1.6 or so...)

3.) Somewhere out in left field for a rate, like one was 250:1 and another 45:1 or something. To me that says just lost in its own economic miseries and policies and not concerned much with the goings on of the world balance for currency conversion.

Nowhere in there does it seem like the Iraqi dinar should be anything other than similar to its middle eastern neighbors. It certainly isn't going to be similar to New Zealand, or Canada, or Yugoslavia... If anything, Iraq would strive to emulate its neighbors for cohesion and integration purposes (they want to be in the WTO and have an internationally recognized currency to boost economic growth and profit from their vast resources, correct?).

Im sure they want to get back to the 3.00 range but how could they do it overnight? That would put their money supply around 75 trillion USD. You seem like a smart person. Do you really believe that will happen? They can get back to the 3.00 range overnight with a redenomination like they are telling us they want to do. Dont know if they will go straight there but maybe over time or maybe overnight, who knows.

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LOL well at least you got the message....got home and couldnt find your original post but you have my reply now!! Yes I do stand strong about the currency in circulation because of who it comes from (not just Iraq themselves) and the requirement of Iraq to be transparent financially due to the sanctions that have been on them......which is soon to all change very shortly.....you are correct that in a cash out or exchange from our perspective, they wont be cashing out the entire 27 trillion....just whatever is outside the country which could be 3 trillion or so (just a guess) and it is true that the CBI dropped the percentage of whats required to be backed from 20 to 15% but even that would mean they need 7 or so trillion to back up their money supply unless Im punching in my numbers wrong lol which could be possible hahaha I freakin hate math......so in other words, Iraq is really short on whats needed to back up their currency......

Read more: http://dinarvets.com/forums/index.php?/topic/66069-how-many-dinar-were-in-circulation-prior-to-2003/#ixzz1M8LAGfL4

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LOL well at least you got the message....got home and couldnt find your original post but you have my reply now!! Yes I do stand strong about the currency in circulation because of who it comes from (not just Iraq themselves) and the requirement of Iraq to be transparent financially due to the sanctions that have been on them......which is soon to all change very shortly.....you are correct that in a cash out or exchange from our perspective, they wont be cashing out the entire 27 trillion....just whatever is outside the country which could be 3 trillion or so (just a guess) and it is true that the CBI dropped the percentage of whats required to be backed from 20 to 15% but even that would mean they need 7 or so trillion to back up their money supply unless Im punching in my numbers wrong lol which could be possible hahaha I freakin hate math......so in other words, Iraq is really short on whats needed to back up their currency......

Read more: http://dinarvets.com/forums/index.php?/topic/66069-how-many-dinar-were-in-circulation-prior-to-2003/#ixzz1M8LAGfL4

Keepem', I still like the way you approach all of this but... the 15% reserve requirement you cite is the required amount Iraqi banks are required to have on deposit in their reserve accounts at the CBI. It is not the requirement for the CBI's Official International Reserves.

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LOL well at least you got the message....got home and couldnt find your original post but you have my reply now!! Yes I do stand strong about the currency in circulation because of who it comes from (not just Iraq themselves) and the requirement of Iraq to be transparent financially due to the sanctions that have been on them......which is soon to all change very shortly.....you are correct that in a cash out or exchange from our perspective, they wont be cashing out the entire 27 trillion....just whatever is outside the country which could be 3 trillion or so (just a guess) and it is true that the CBI dropped the percentage of whats required to be backed from 20 to 15% but even that would mean they need 7 or so trillion to back up their money supply unless Im punching in my numbers wrong lol which could be possible hahaha I freakin hate math......so in other words, Iraq is really short on whats needed to back up their currency......

Read more: http://dinarvets.com/forums/index.php?/topic/66069-how-many-dinar-were-in-circulation-prior-to-2003/#ixzz1M8LAGfL4

M1 & M2 #s are backed 100% by foreign reserves. For every 1,170 IQD - a $1 dollar (or equivilant reserve currency) exists in the reserves to back it. The CBI is following the guidelines & policies of Article XIV to help stabilize inflation. Even at the going rate of exchange being stable, it is from my understanding that the foreign reserves are using that money to pay external debt for the GOI. Now, a better question to ask is, are the reserves being replenished or are they basically holindg "IOU-Notes" from the GOI? From what I have gathered, it is a little bit of both. They're being replenished, but they are still owed. Thus, this alone says that the reserves maintain the 1170 value, but all additional income/revenue goes to other debts.

Now, as they move to Article VIII, they can monetize all of their non-liquid assets and factor that into their reserves. This would bump up their value & likely change the exchange rate. How much value is behind the non-liquid assets? I would say we can only speculate as the actual #s could easily be confidential. I believe that a lot of funds, assets, and money exists that is not being accounted for (I.e., seized assets, DFI funds, etc.) that are currently being protected. As the protection of those funds, assets, and money is listed the CBI can account for that as well.

Basically, we may see that $50 Billion jump up by a significant amount from a liquidity stand point while the value of non-liquid assets help support the value as well. This is where we may see the substantial increase in value.. (RV). We can only speculate when & by how much.

This idea alone sort of goes against re-denomination, but if the substantial impact of increase in value is high enough.. The 000s may not be needed within circulatoin. They would likely need to introduce lower de-nominations though.

I also theorize that the reasoning they are requesting so many companies to invest into them (such as rebuilding their infastructure) is that it may create a buyer market for their currency to help stack their reserves post-RV. Just a theory though

To read a little more about the EO expiratoins which would release the protection of these particular funds. Refer to the Encho8 post - it is a very good read

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Keepem', I still like the way you approach all of this but... the 15% reserve requirement you cite is the required amount Iraqi banks are required to have on deposit in their reserve accounts at the CBI. It is not the requirement for the CBI's Official International Reserves.

Ok so the 15% is only for the banks and not the reserves.....gotcha....so the reserves are still required to back up 100% of the total money supply then.....thanks for clearing that one up for me....was wonderin where I got the 15% from, thanks bro

M1 & M2 #s are backed 100% by foreign reserves. For every 1,170 IQD - a $1 dollar (or equivilant reserve currency) exists in the reserves to back it. The CBI is following the guidelines & policies of Article XIV to help stabilize inflation. Even at the going rate of exchange being stable, it is from my understanding that the foreign reserves are using that money to pay external debt for the GOI. Now, a better question to ask is, are the reserves being replenished or are they basically holindg "IOU-Notes" from the GOI? From what I have gathered, it is a little bit of both. They're being replenished, but they are still owed. Thus, this alone says that the reserves maintain the 1170 value, but all additional income/revenue goes to other debts.

Now, as they move to Article VIII, they can monetize all of their non-liquid assets and factor that into their reserves. This would bump up their value & likely change the exchange rate. How much value is behind the non-liquid assets? I would say we can only speculate as the actual #s could easily be confidential. I believe that a lot of funds, assets, and money exists that is not being accounted for (I.e., seized assets, DFI funds, etc.) that are currently being protected. As the protection of those funds, assets, and money is listed the CBI can account for that as well.

Basically, we may see that $50 Billion jump up by a significant amount from a liquidity stand point while the value of non-liquid assets help support the value as well. This is where we may see the substantial increase in value.. (RV). We can only speculate when & by how much.

This idea alone sort of goes against re-denomination, but if the substantial impact of increase in value is high enough.. The 000s may not be needed within circulatoin. They would likely need to introduce lower de-nominations though.

I also theorize that the reasoning they are requesting so many companies to invest into them (such as rebuilding their infastructure) is that it may create a buyer market for their currency to help stack their reserves post-RV. Just a theory though

To read a little more about the EO expiratoins which would release the protection of these particular funds. Refer to the Encho8 post - it is a very good read

I will have to check that out then.....scooter also told me to read that post....a lot of good info I hear!

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Ok so the 15% is only for the banks and not the reserves.....gotcha....so the reserves are still required to back up 100% of the total money supply then.....thanks for clearing that one up for me....was wonderin where I got the 15% from, thanks bro

I will have to check that out then.....scooter also told me to read that post....a lot of good info I hear!

I highly reccomend checking into that IMF article that I put into my "Dinar, Overrated?" Topic.

It touches base about monetizing the non-liquid assets and what article the CBI would have to comply with to follow those policies.

It will likely change your perspective on the thought process of how the GOI & CBI will re-denominate.

At least you will know going forward a change in value is in order in one way or another.

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Now, as they move to Article VIII, they can monetize all of their non-liquid assets and factor that into their reserves. This would bump up their value & likely change the exchange rate.

I ought to just change my Screen Name to "Yeah But..."

It would bump up the reserves value, but it doesn't mean it will bump up the exchange rate. You just went from "they can't RV with today's reserve" to saying they will give us a part of the future reserves. Look at this and see if it makes more sense for Iraq.

Now, as they move to Article VIII, they can monetize all of their non-liquid assets and factor that into their reserves. This would allow them to raise the amount of dinar in circulation and use it in their own economy.

Believe me, if I can find a way that makes sense to double or triple our money (or become millionaires :P ) I'll spread it all over these boards, So far, for every scenario that says how money will end up in my pocket, I'll show you how Iraq can keep it for themselves instead.

At least you will know going forward a change in value is in order in one way or another.

Agreed, either the exchange rate goes up as circulation remains the same, or the exchange rate stays the same and the amount in circulation goes up. Both are a rise in total value, but only one of them is better for Iraq.

Edited by Froto
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Froto, what techniques can the central bank use to remove money from the M2? Can they really just take in cash and burn it so to speak?

Also so many people focus on the cash that cbi has to back and they don't include the M2 in their discussion. Whatever they have in their reserves to give the currency its value, has to be for everything M1 M2 whatever.... Right?

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Froto,

Okay, they'll stay at 1170 forever..... They have no desire to increase their exchange rate. They wish to maintain poverty amongst their people. Have no desire to create a middle class. And so on and so on and so on.

/end sarcasm

Your basically saying, they don't want to IMPROVE the value of the dinar what-so-ever.

They've increased it in the past, so why would they not continue to do so when available?

The 1170 is a project rate. It's not a true rate.

You make it sound like there is absolutely no way to make money by investing in dinar.W

Well, that is not necessarily the case, you could easily create a warka-account, and let your currency sit there and collect interest.. At least the value is going up one way or another in that regard...

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I ought to just change my Screen Name to "Yeah But..."

It would bump up the reserves value, but it doesn't mean it will bump up the exchange rate. You just went from "they can't RV with today's reserve" to saying they will give us a part of the future reserves. Look at this and see if it makes more sense for Iraq.

Now, as they move to Article VIII, they can monetize all of their non-liquid assets and factor that into their reserves. This would allow them to raise the amount of dinar in circulation and use it in their own economy.

Believe me, if I can find a way that makes sense to double or triple our money (or become millionaires :P ) I'll spread it all over these boards, So far, for every scenario that says how money will end up in my pocket, I'll show you how Iraq can keep it for themselves instead.

Agreed, either the exchange rate goes up as circulation remains the same, or the exchange rate stays the same and the amount in circulation goes up. Both are a rise in total value, but only one of them is better for Iraq.

So you don't believe they would use some of the wealth to strengthen their reserves at least enough to make a dent in the exchange rate?

It's possible...didn't Maliki try putting the central bank under his own control and they were wanting to use money in the central banks reserves? Maybe by nature some of these politicians would rather sack Iraq and take all that they can rather then develop it into a strong country that most of us on these boards believe it can become.

Didn't they report they estimated a total of 493 billion in lost oil revenue since 03?

We have to show them the way...

http://www.treasury.gov/connect/blog/Pages/Engaging-New-Iraqi-Leadership-on-Economic-Policies-for-a-Sovereign-Stable-and-Self-Reliant-Iraq.aspx

I have faith

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Exactly how proven or reliable is the info out there on the DFI funds and other frozen assets, and whether these hold any weight in the argument that Iraq has vast reserves of wealth they can buffer their foreign currency reserves with in an effort to fund a higher RV, potentially even without a redenom/lop?

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Froto, what techniques can the central bank use to remove money from the M2? Can they really just take in cash and burn it so to speak?

Also so many people focus on the cash that cbi has to back and they don't include the M2 in their discussion. Whatever they have in their reserves to give the currency its value, has to be for everything M1 M2 whatever.... Right?

They can't. You're looking at a country facing massive rebuilding and other monetary expenses. To think that they are taking in IQD to lower the money supply is foolish. Yes, M2 more closely represents the money supply, and it is closer to 50 Trillion IQD. It is backed up nearly 100% by the foreign reserves. Eve if they could, any amount of IQD taken out of circulation would have to be paid for proportionately with the foreign reserves, and the percentage would remain exactly the same.

Your basically saying, they don't want to IMPROVE the value of the dinar what-so-ever.

They've increased it in the past, so why would they not continue to do so when available?

The 1170 is a project rate. It's not a true rate.

You make it sound like there is absolutely no way to make money by investing in dinar.W

Well, that is not necessarily the case, you could easily create a warka-account, and let your currency sit there and collect interest.. At least the value is going up one way or another in that regard...

Don't get stuck on the exchange rate. It's just a number. You have to think about it as total value, which is the size of the money supply times the value of each IQD. A simple redenomination can give them any exchange rate they want, and it does not change total value. They could do a 1000:1 RD, and they would have 1000 times less new IQD in circulation, and the exchange rate would be close to 1 to 1. And their foreign reserves would still be close to 100%.

So you don't believe they would use some of the wealth to strengthen their reserves at least enough to make a dent in the exchange rate?

I believe they do plan on using some of their future wealth to strengthen the reserves. Where I differ is that as the reserves grow, the can increase the size of the money supply instead, keeping the new found wealth in their own economy while maintaining a healthy reserve. Any rise in the exchange rate increases their OBLIGATION for all IQD, including the ones outside of its borders.

Edited by Froto
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They can't. You're looking at a country facing massive rebuilding and other monetary expenses. To think that they are taking in IQD to lower the money supply is foolish. Yes, M2 more closely represents the money supply, and it is closer to 50 Trillion IQD. It is backed up nearly 100% by the foreign reserves. Eve if they could, any amount of IQD taken out of circulation would have to be paid for proportionately with the foreign reserves, and the percentage would remain exactly the same.

Don't get stuck on the exchange rate. It's just a number. You have to think about it as total value, which is the size of the money supply times the value of each IQD. A simple redenomination can give them any exchange rate they want, and it does not change total value. They could do a 1000:1 RD, and they would have 1000 times less new IQD in circulation, and the exchange rate would be close to 1 to 1. And their foreign reserves would still be close to 100%.

I believe they do plan on using some of their future wealth to strengthen the reserves. Where I differ is that as the reserves grow, the can increase the size of the money supply instead, keeping the new found wealth in their own economy while maintaining a healthy reserve. Any rise in the exchange rate increases their OBLIGATION for all IQD, including the ones outside of its borders.

The only way or reason they would wish to increase their money supply would be after a re-denomination.

50-some trillion is a rather large figure to begin with.

Your right, the exchange rate is just a value... But, you would have to think that upping the exchange rate would have its benefits. (importing goods, recognition of wealth/ecnomic succes).

So, as foreign reserves "increase"

Several scenarios may play out:

1) Re-denomination while adding into their money supply (The ability to print more currency)

2) At the current rate, add more money (But why? Isn't 50 Trillion enough?)

3) Increase the exchange rate to balance the money supply with the reserves

I see your logic and this is one reason why the R/D will always be a possibility.

Now, I'll give a few opinions why I think they won't just add more money to their circulation

1) They've been going around looking to get investors to invest into their country. If the value of the IQD will not fluctuate in value, that is 1 less tempting option.

For example, as foreign businesses open up shop such as hotels or burgers joints, they will receive IQD in payment. They'll have to convert that to their native countries currency. The exchange rate will be a factor. Could be more tempting thinking that the value is going to rise as they exchange it out.

People who wish to be proud... They're going to want their curency to represent that their proud people full of wealth.

If they were to ever enter the international market, they are not going to want to do it at their curent rate. Wouldn't you agree?

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The only way or reason they would wish to increase their money supply would be after a re-denomination.

50-some trillion is a rather large figure to begin with.

Your right, the exchange rate is just a value... But, you would have to think that upping the exchange rate would have its benefits. (importing goods, recognition of wealth/ecnomic succes).

So, as foreign reserves "increase"

Several scenarios may play out:

1) Re-denomination while adding into their money supply (The ability to print more currency)

2) At the current rate, add more money (But why? Isn't 50 Trillion enough?)

3) Increase the exchange rate to balance the money supply with the reserves

I see your logic and this is one reason why the R/D will always be a possibility.

Now, I'll give a few opinions why I think they won't just add more money to their circulation

1) They've been going around looking to get investors to invest into their country. If the value of the IQD will not fluctuate in value, that is 1 less tempting option.

For example, as foreign businesses open up shop such as hotels or burgers joints, they will receive IQD in payment. They'll have to convert that to their native countries currency. The exchange rate will be a factor. Could be more tempting thinking that the value is going to rise as they exchange it out.

People who wish to be proud... They're going to want their curency to represent that their proud people full of wealth.

If they were to ever enter the international market, they are not going to want to do it at their curent rate. Wouldn't you agree?

We could do this all week. You keep talking about cosmetic numbers, and they all can be changed with no loss in total value or change in the reserves through an RD, so don't dwell on that. Follow the money trail that people say will end up in your pocket. There is usually a way for Iraq to keep it for themselves.

A quick homework assignment: Iraq does an RD next week @ 4000:1. now they have a 12+ Billion NewIQD M2, and the new value of each is $3.44, which gives you a new exchange rate of 0.29 NewIQD per dollar. None of the underlying economics have changed. Total value is exactly the same. The reserve percentage is exactly the same. Their buying power is exactly the same. So now, please explain to me as you did before why they would use a future rise in the Foreign reserve to increase the value of the NewIQD up from $3.44, instead of injecting more NewIQD directly into their own economy.

Bottom line. The total value of the money supply has to be backed up with the reserve. As the reserves grow, and/or they lower the reserve requirement, they have two options. Increase the value of each dinar, or increase the money supply. One of those is a drain on the reserves, big or small, and the other gets injected directly into Iraq's economy.

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We could do this all week. You keep talking about cosmetic numbers, and they all can be changed with no loss in total value or change in the reserves through an RD, so don't dwell on that. Follow the money trail that people say will end up in your pocket. There is usually a way for Iraq to keep it for themselves.

A quick homework assignment: Iraq does an RD next week @ 4000:1. now they have a 12+ Billion NewIQD M2, and the new value of each is $3.44, which gives you a new exchange rate of 0.29 NewIQD per dollar. None of the underlying economics have changed. Total value is exactly the same. The reserve percentage is exactly the same. Their buying power is exactly the same. So now, please explain to me as you did before why they would use a future rise in the Foreign reserve to increase the value of the NewIQD up from $3.44, instead of injecting more NewIQD directly into their own economy.

Bottom line. The total value of the money supply has to be backed up with the reserve. As the reserves grow, and/or they lower the reserve requirement, they have two options. Increase the value of each dinar, or increase the money supply. One of those is a drain on the reserves, big or small, and the other gets injected directly into Iraq's economy.

You seem to take every view and exploit the negative side.... Could it be done? Yes..

So, if the foreign reserves were to substantially grow.......... With their current currency, why would they print more money? 50-some trillion is still a rather large figure.

How would it increase substantially in a short period of time? Monetizing non-liquid assets, release of protected funds, access to seized funds, replenishment from the GOI for the CBI paying external debt.

Will they immediately counter that with the printing of more currency? No.. They could increase their M2 figures substantially.

So, yes, they could increase their money supply. But history also has shown that they prefer to increase the value. The 3.22 rate we have heard about was never recognized internationally. So, with that being recent in history, I would believe they would wish to increase the value that way.

Articles also speak of lifting and or increasing the value.

They may go the route that you speak of.... But we can look at the history of the NIQD, and it has increased as well.

This may be a short-term profit or a long-term profit, but in 20 years, I am sure they still won't hold the same 1170 rate.

But if you believe so strongly in your views, let me ask you, do you even own IQD?

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