Redenomination As DEFINED by INVESTOPEDIA

[dinarded]

What Does Redenomination Mean?

1. The process whereby a country's currency is recalibrated due to significant inflation and currency devaluation. Certain currencies have been redenominated a number of times over the last century for various reasons.

2. The process of changing the currency value on a financial security.

Investopedia explains Redenomination

1. For example, the Bulgarian lev was redenominated due to inflation arising at the end of the Second World War. After the redenomination, one "new" lev was equal to 100 "old" levs. The lev was redenominated three times in the twentieth century.

2. A recent example of redenomination arose when the euro was introduced and the denomination on many European securities had to be changed to the euro.

http://www.investopedia.com/terms/r/redenomination.asp

Oh man this is driving me CRAZY!!!

INVESTOPEDIA DEFINES THIS AS A LOP!

[THOR]

Are you guys crazy and cant see what they are doing its not rocket science.

Its very simple they dont want people walking around with 25K Dinar notes because the shops wont be able to give them CHANGE !!!

Take your 25k dinar notes in to the bank and change them for 1000 25 dinar notes

They are changing the size of the notes not the value of them 1 IQD will = 1 IQD

You cannot just take money from the people buy lopping off 3 zeros

If you take in a 25k dinar note and ask for 1000 25 dinar notes in exchange dont you still have 25k worth of dinar exept the notes DONT HAVE 3 X 000 on them right ?????

You have just taken 000 off the notes but you still have the equivilent value in Dinar you just have more notes in your wallet !!!

JMO

[dinarded]

Are you guys crazy and cant see what they are doing its not rocket science.

Its very simple they dont want people walking around with 25K Dinar notes because the shops wont be able to give them CHANGE !!!

Take your 25k dinar notes in to the bank and change them for 1000 25 dinar notes

They are changing the size of the notes not the value of them 1 IQD will = 1 IQD

You cannot just take money from the people buy lopping off 3 zeros

If you take in a 25k dinar note and ask for 1000 25 dinar notes in exchange dont you still have 25k worth of dinar exept the notes DONT HAVE 3 X 000 on them right ?????

You have just taken 000 off the notes but you still have the equivilent value in Dinar you just have more notes in your wallet !!!

JMO

Might agree with you except for this one "new" lev was equal to 100 "old" levs <<<<---- From the definition above

[roxbutterfly]

Are you guys crazy and cant see what they are doing its not rocket science.

Its very simple they dont want people walking around with 25K Dinar notes because the shops wont be able to give them CHANGE !!!

Take your 25k dinar notes in to the bank and change them for 1000 25 dinar notes

They are changing the size of the notes not the value of them 1 IQD will = 1 IQD

You cannot just take money from the people buy lopping off 3 zeros

If you take in a 25k dinar note and ask for 1000 25 dinar notes in exchange dont you still have 25k worth of dinar exept the notes DONT HAVE 3 X 000 on them right ?????

You have just taken 000 off the notes but you still have the equivilent value in Dinar you just have more notes in your wallet !!!

JMO

the news source said the reason for doing this was so people could carry less money with them...is carrying one thousand 25 dinar notes less than carrying 1 25k dinar note? NO...therefore a lop does make more sense...HOWEVER...now each dinar would be worth more...sooooo...just gotta wait and see...

[Bamabuyer]

Redenomination As DEFINED by INVESTOPEDIA

What Does Redenomination Mean?

1. The process whereby a country's currency is recalibrated due to significant inflation and currency devaluation. Certain currencies have been redenominated a number of times over the last century for various reasons.

2. The process of changing the currency value on a financial security.

Investopedia explains Redenomination

1. For example, the Bulgarian lev was redenominated due to inflation arising at the end of the Second World War. After the redenomination, one "new" lev was equal to 100 "old" levs. The lev was redenominated three times in the twentieth century.

Now, my OPINION:

The "lop" occurs when a country's economy is in turmoil...runaway inflation and devaluation. A good example of this recently was North Korea. They devalued at a rate of 100 to 1. This was due to inflation and the "black market" was controlling the value of the currency more than the government or marketplace was.

Iraq has had NO inflation to speak of, the currency has been stable at 1170 to 1 for over a year and there is NO reason to devalue the currency by a rate of 1000 to 1. A "lop" as some describe would claim that Iraq economy is 10 times worse than North Korea's was when they "lopped". This is not the case.

I agree with those that say the introduction of the lower denominations is right on track with the "plan" for the IQD. The people of Iraq will be able to carry smaller bills (less currency) on their person for daily living. This can only be fully accomplished with an associated RV that has increased the value of their currency.

Also, just put yourselves in the shoes of an Iraqi citizen for a moment. These people traded the old dinar for the new dinar at an even 1 to 1 rate. Some were very wealthy. Now all of a sudden their government is supposed to devalue the currency they have held all of these years and basically turn 10 million of their dinar into 10 thousand. I don't think so.

Not only is there no indication in the economy for a need for this, it would destroy what many Iraqis have been holding onto for many years.

I agree that since the announcement of the lower denominations being introduced into the market has been made, the RV must be very near. A "lop" happens quickly.....North Korea had only 7 days. This co-existence of the lower and higher denominations for almost a year would also indicate this is NOT a "lop". As the larger notes are taken in more lower denominations will be introduced to the marketplace. Eventually the larger bills will be off the market and in the hands of the Central Banks. I imagine that some may not be destoyed but will be used as a means of transferring funds between central banks.

All of this is just my humble OPINION.

Bamabuyer

[Dex70]

Bamabuyer....I completely agree with you. IMO....a LOP means Devaluation and control of inflation.

[tlar]

So according to the article they are going to knock 3 0's off the bigger notes only leaving the smaller notes as they stand. If I understand your argument the the 50 and 250 and 500 will go up in value because they don't have 3 0's and the 50 will now be worth 2x' what the 25,000 note was worth. If this is true then the currency that the Iraqi's have mostly been saving which would be the three o notes will essentially go down in value while the almost no value notes will go way up. If this is true then we should have seen a run on their banks today as any Iraqi with any brains would be exchanging the large notes for the smaller notes. It did not happen. There was no run. I guess I will be the only one who gets rich on dinarvets because all my dinars are 50's and 500's. Woo HOO. Come on people use your heads. Bad translation, poor chice of words or intentional mis-information.

[jackdavis1364]

As I have stated before, it is my personal opinion that there was an unfortunate use of the word REDENOMINATION. What the article describes is not consistant with the definition of redenomination. This is not going to be a redenomination, it should be called a RECONSTITUTION of the currency. What they describe doing is the same as the US did when they ended the use of the larger US denominations. That has been explained over and over in these posts. People took their 1,000 US denonination to the bank and got 10 $100.00 bills. Yep, they lopped off the zeros but you still have $1,000.00.

That still leaves us with 1170 IQD to the USD. Having that rate staying in existence would mean that an Iraqi would have to have a huge wad of cash to buy a loaf of bread. That defeats the whole purpose. Now, if they revalue the dinar, suddenly that 1170 goes away and you need only one small bill to purchase that loaf of bread.

Without elaboration, just consider all of the oil contracts and for that matter all of the other contracts that have been entered into. Are they going to reopen all of those contracts and renegotiate them? No, they were written with the figures of the rv that was set months ago and just have not been released to the general public. IMO. This is no redenomination. This is a RECONSTITUTION.

[THOR]

the news source said the reason for doing this was so people could carry less money with them...is carrying one thousand 25 dinar notes less than carrying 1 25k dinar note? NO...therefore a lop does make more sense...HOWEVER...now each dinar would be worth more...sooooo...just gotta wait and see...

The locals IE IRAQIS will be issued with debit cards for those that hold large ammounts for those of us offshore the cash is IRRELEVANT we will converting into whatever currency to whatever country we live in into our bank accounts and we dont need the new notes so end of discussion right ??

Wake up your reading to many demons into this remember 1 IQD = M1 IQD no matter what they do

Live long and prosper

THOR

[tlar]

Continued - If a country is going to redenomiate a currency, it will redenominate all notes not just the 3 O notes. If you add the word note to the above article you will see that it now makes sense. "The CBI has determined to remove 3 zero NOTES". You cannot redenominate part of a currency or your population will get screwed and there will be utter choas. Think of it another way. If the US government put out and article today saying they were going to redenominate all 2 zero notes and the hundred now is worth $1. What would that due to our banks who have most of these notes. How about the private banks in Iraq. In reality the mechanics of this internally in Iraq would be horendous. A 500 note now more valuable the a $25,000 note. The article that has spurned this lively debate is not well writtenh and does not fully explain what they intend to do as does most news articles that come out of Iraq due to the imperfection of the arabic translators. So just hang tight. The CBI has just atmitted to you that the small denominations are there and that they are on the cusp of a major monetary policy chage. After all is this not what we have been waiting and hoping for?

[THOR]

You yanks are unbelievable (in a nice way you guys ok dont ban me ) Your ears are not just for placeing sunglasses on they are primarily for listening and hearing now listen

1 IQD will = 1IQD no matter what piece of paper its written on they just want to take the Big notes out of circulation THATS ALL !!

its the same as taking a $10,000 usd note out of circulation because its to big to deal with and replace it with 1000 $10 bills

Hello thats all they are doing geez open your eyes guys

Thor

[jackdavis1364]

You yanks are unbelievable (in a nice way you guys ok dont ban me ) Your ears are not just for placeing sunglasses on they are primarily for listening and hearing now listen

1 IQD will = 1IQD no matter what piece of paper its written on they just want to take the Big notes out of circulation THATS ALL !!

its the same as taking a $10,000 usd note out of circulation because its to big to deal with and replace it with 1000 $10 bills

Hello thats all they are doing geez open your eyes guys

Thor

It is beyond belief to me that people can't understand this. Even after explaining it exactly as you have above over and over, just just can't grasp it. It is locked in their pea brains that they are about to be screwed and there is no changing their minds.

As soon as possible after this RVs, I'll be heading to your country and New Zealand. I have had a yearning for years to visit.

[THOR]

If you understand what im saying then you are most welcome to come downunder and have some fun with us any time because you have seen what im saying and it would be a pleasure to meet you and celebrate life in general you would be most welcome at my place in fact after RV ill pay Half heheheheheh

Thor

[Bamabuyer]

You yanks are unbelievable (in a nice way you guys ok dont ban me ) Your ears are not just for placeing sunglasses on they are primarily for listening and hearing now listen

1 IQD will = 1IQD no matter what piece of paper its written on they just want to take the Big notes out of circulation THATS ALL !!

its the same as taking a $10,000 usd note out of circulation because its to big to deal with and replace it with 1000 $10 bills

Hello thats all they are doing geez open your eyes guys

Thor

I agree with you Thor...and the only thing that will make this feasible is for and RV to occur also, so the people do not need to carry 30,000 1Dinar bills to buy a loaf of bread. Come on RV!!!!

[jody2010]

i am in agreement here... the main goal is take large bill currencies out of circulation... not devalue

[Capt1va]

can you say north korea?

[wusObie]

One of yesterday's articles stated the following:

The Iraqi Central Bank is working on a strategy to delete the zeroes of the Iraqi currency in and out of their face value while maintaining the values of cash and purchasing power.

This tells you that each note will keep it's independent value. 25,000 will still be 25,0000 even while a 50 note is circulating.

[JOHNJOHNNY]

it's size that matters

[elblondee]

Thank you Bamabuyer. This makes the best sense of all that I've read.

[SPTicker]

Didn't they also say that in 1990 they had 28 billions in circulation and now have 28 trillions? To me, that means they want to have 28 billions in circulation again and not 28 trillions. That unfortunately also means 1 new dinar = 1,000 old dinars.

[DmsC]

People are gonna read what they want and hear what they want. Just Like After Obama said we are pulling our combat troops out of Iraq everyone started yelling we are pulling out of Iraq completely. On another thread which I would have to go find again one person suggested the the removal of the three zeros would be from the .00086 the the dinar is currently valued at against the dollar. Personally I think that the re domination may have been a poor choice of words in the article but it makes sense that they are trying to get the larger bills out of circulation, being I'm no economist and a wishful thinker that is what I would like to think. However no one but the people in charge in Iraq know what is gonna happen.

[MillionaireMaybe]

I don't have a crystal ball, so I can't say for sure what will happen, but I believe they just want fewer dinars in circulation. So, if 1 dinar had more purchase power (if I could buy a loaf bread for 2 dinars instead of 2000 dinars) the mission would be accomplished. There would be fewer dinars in circulation with each dinar having greater purchase power (no one is harmed). If you took my 2000 dinars and told me they were worth 2 dinars; but didn't change the purchase power, I'd starve to death (no bread for me). Sounds like they are setting up for an increase in value of the dinar. Why else would it matter?

[tabajam]

Thanks for the info