Anyone else find it suspicious....

[mmmcgee1]

interesting.

[mmmcgee1]

I am hoping for more.

[bellypod]

It will when they drop the 3 zeros. People got to understand they are dropping 3 zeros from the currency in cir right now. They are not dropping it from the new that will come out. So a 25000 with 3 zeros dropped will have the same buying power as a NEW 25 note...........it really is simple as that as the article says it is a Re-denomination of the currency.

you are right

[bellypod]

I was born in France in 1955. Why is this relevant? A few years later, France had a similar event with their currency. In the early 60s, France had bills with two extra zeros. They made a similar statement that the money would be changed and two zeros eliminated. Overnight, 100 francs were worth 1 franc in the new currency. It took a few weeks to get all the old bills out of circulation and eventually, the new money was all that was left until the euro replaced it. So my take of the dinar is that a similar procedure will occur. The people will be able to exchange their old notes with new ones, the new ones having three zeros less than the old. Could this be followed by an acceptance into the IMF? Probably so as the new dinar would then be close to the dollar in value. However, as a consequence, our dream of quick riches would be shattered. If that was to happen, the new dinar stands a good chance of eventually climbing in value but not at the expected 1000 to 1 all of us were hoping for. I can see the new dinar being worth 2 or 3 USD at some point which would make us whole with a potential 200% + return. This would most likely take time after the acceptance of the currency into the IMF.

that makes logical sense

[bellypod]

I am sooooo tired of this conversation. If I offend you I am sorry. For those of you who think this is a LOP, you need to do research and use common sense. A LOP IS USED DURING INFLATION, PERIOD. Iraq has one of the lowest inflation rates in the world.

FOR YOU MIKE1422= READ the article again. IN 1990 the value of the dinar in circulation was 25 billion dinar, and today it is 25 trillion, it says NOTHING about changing the value of the currency. I really wish people would LEARN TO READ. Next, if it was a lop, how could both denominations coexist, and be "legal tender" according to the article? If it were a lop everyone would have to go the banks IMMEDIATELY to exchange their dinar for the lower denoms, but here it clearyl states that the larger notes will be phased out by the years end.

Next, read the Phoenix post on DD, he says the USA did a "lop" before too, they got rid of 10000, 5000, 1000, 500 dollar bills, yet it DID NOT DECREASE in value.

Finally, go to http://translate.google.com/translate?hl=en&u=http://www.darabeen.com/index.asp%3Ffname%3D/2010/02/02-05/2010-2-5-22-54-42.htm%26dismode%3Dx%26ts%3D05/02/2010%252010:58:21%2520%25E3&prev=/language_tools&rurl=translate.google.com&twu=1 in it the advisor to the Finance Minister says and I quote "the timing of the launch of this strategy is not appropriate, noting that the country's economy must be in a position of STRENGTH before the application of such changes." For all of you who are too dumb to understand what this statement is, it says that they cannot and will not begin the process of "removing the three zeros" until the IQD has an RV. And then they will begin to exchange the large notes for smaller notes in country, and for all of us investors we will get paid. If you still think it is too good to be true. Go to ebay, sell your dinar and get out of here because I am tired of answering questions for all of the idiots out there. There are good questions out there, but this lop stuff is just ridiculous. I didnt even get into the idea of all of the debt that has been forgiven and how that would come in to play in a lop. Lets just say countries would be ****** OFF.

So if we follow your conclusion that Iraq is doing the same as the US did, then are you expecting to exchange 25,000 old dinar for 1000 new 25 dinar notes? When the US collected the higher denomination bills they for an example exchanged a $1000 bill for 10-$100 bills right?

currently a 25,000 dinar note equals about $21.43 after this deal it will be a 25 dinar note =$21.43

[Dinar Dan]

Ooops!

I mis-calculated the value for the future 25 dinar note.

25 dinar valued at $21.25 is $.85 per dinar.

From $.00085 to $.85

Now isn't that a coincedence!

The worldwide currency system is based on the value of a single unit of a country's currency.

A single Iraqi dinar is worth $.00085 ~ this is the standard, the rule of measure used to determine the value of ALL denominations of their currency.

Iraq cannot have two differant denominations with the same value circulating at the same time.

They can either Lop and re-issue currency OR raise the value of the existing currency.

Pricing is based on the value of a single dinar.

If Iraq says 25 dinar are NOW worth the same as 25,000 how does the country function in business?

The two notes CANNOT coexist in the marketplace with the same value.

25,000 dinar notes in circulation are currently worth $21.25

Add 25 dinar notes worth the same and you get two differant valuations for a single dinar.

Valued at $21.25 ~ 25,000 dinar = $.00085 per dinar

Valued at $21.25 ~ 25 dinar = $.04 per dinar

DD/SHM

[Fi3ry_Ph03n1x]

Redenomination and revaluation will probably happen at the same time. It would go like this:

#1: 25,000 IQD currently = somewhere around $21.25. (Exchange rate of .0085)

#2: 25,000 redenominated (lopped) to 25. At the same time, exchange rate (RV) goes up to 1.49 USD per 1 IQD.

#3: Now you have 25 IQD x 1.49 = 37.25

#4: Profit made = 37.25-21.25 (or whatever you originally paid per IQD). In this case, it is $16 per redenominated IQD, or 1.6 cents per original IQD. This is a percentage gain of 175.29%. This is a very respectable increase per IQD.

If you are here because you want to dream of unfathomable riches, obviously you'll want to ignore this logic. If you are interested in a full grasp on what redenomination is and how it works, you'll want to read the research paper that I linked to in this post:

http://dinarvets.com/forums/showthread.php?9287-Anyone-else-find-it-suspicious&p=60886&highlight=#post60886

As I always say, plan for the worst, but hope for the best.

FP

[texman]

say it ain't so joe

[Kent]

"Dropping Zeros, Gaining Credibility? Currency Redenomination in Developing Nations", Asst. Professor Layna Mosley. http://www.unc.edu/~lmosley/APSA%202005.pdf

P.1, Par. 2:

"This [redenomination of the Turkish Lira] was meant to herald, along with a series of other measures, the emergence of Afghanistan from years of civil conflict, and its movement toward modern nationhood."

Interesting. It wasn't meant to herald the end of high inflation. Inflation being the result of the conflict, not the cause of the redenomination. Let's read on...

P.1, Par 3:

"Currency redenomination also can be a means by which governments attempt to reassert monetary sovereignty. If citizens lose confidence in the national currency, they may begin to use foreign currencies, particularly those with greater prestige."

P.1, Par. 4

"Economic policy is influenced not only by international capital markets (e.g. Mosley 2003), but also by foreign central banks."

So it isn't just high inflation that can influence a redenomination, but also international capital markets and foreign central banks? Did I read that right, Earnest?

P.1, Par. 5:

"Yet not every country with high levels of inflation, or with a low local currency/dollar exchange rate (so that thousands of local currency units are required for everyday transactions), chooses to redenominate its currency."

I see. So some countries have high inflation, and/or a low exchange rate against the dollor, but the do not necc. redenominate their currency.

I'm only through page one of this article, and I've already found several thought-provoking quotes. If you'd like to learn more about redenomination, I'll let you read the entire paper yourself so that you can offer an educated opinion on the matter.

From the same source, p.2 Par. 2

"Among developing and transition nations, currency redenomination was employed on 60 occasions during the 1960-2003 period.2 These redenominations varied in size, from removing one zero from the currency (14 instances) to removing six zeros (9 instances); the median redenomination was three zeros..."

You'll notice that your 25,000 IQD note ends with three zeros, as Prof. Moseley cites as the median redenomination.

I trust that these statements have been thought out sufficiently for your advanced understanding of redenomination.

Dropping the Gauntlet,

FP

Phoenix, FYI, I offered my thoughts on that study in this string: http://dinarvets.com/forums/showthread.php?7545-Debunking-the-myths-of-the-infamous-bunny-ear-(lop)&highlight=

In another post you mentioned the idea of a combination lop and RV at the same time. I like that concept, but also think it might be confusing for the Iraq public. I lean a little more toward separating the 2 events, but perhaps not.

[gigi]

thanks for your post

[gigi]

I don't think they will LOP

[little myrtle]

I believe their natural resources and lack of inflation lend to them "not lopping"

[gb2008]

I need to buy all the wheel barrows I can get my hands on and ship them to Iraq. if they bring out the smaller dinar before the rv then they will need them to go buy bread

don't they use debit cards there like we do here or is it all paper?

[popo24]

I believe their natural resources and lack of inflation lend to them "not lopping"

Take a few people that everyone listens to and have them all say the same thing. It then becomes fact to all who read it whether or not it was originally based on facts or not. Which, the whole 'lop when its high inflation' thing is not based on 100% fact. There are a lot more variables than just inflation. Kent has gone into deep explanation of this with facts behind it to prove the statements.

[john1025]

I find it very strange with all the reporters we have in Bagdad and around Iraq, that none of them have filed a report on this to any major network station.It obviously isn't a secret or we wouldn't know anything but,none have. None! If the dinar RV's for anything over a dime it will be HUGE NEWS! You can't make instant millionairs of ordinary folks and expect that it won't be noticed by anyone. IMO

[popo24]

Kent please make another thread concerning the historical facts of a lop. Hopefully we can shed some light on how it works. Too many people have been brainwashed, per se, by all the 'experts' that are talking about it.

[Kent]

Kent please make another thread concerning the historical facts of a lop. Hopefully we can shed some light on how it works. Too many people have been brainwashed, per se, by all the 'experts' that are talking about it.

Popo, I really tried that with http://dinarvets.com/forums/showthread.php?7545-Debunking-the-myths-of-the-infamous-bunny-ear-(lop)&highlight= People read differently. We all sometimes see what we want to see when we read. We are all wearing colored glasses. Some are rose, some are brown. I am coming to the conclusion that few are swayed, even with facts and studies and statistics. Things that appear so clear to me are clueless to others (and the reverse). Even enorrset (as well researched as he seems to be- no disrespect intended) quoting from http://dinarvets.com/forums/showthread.php?9526-Investing-in-Dinars-11-Finally-Iraq-Makes-a-Committment&highlight=:

Look how his plain observations (I am highlighting in red) are different from the article he is reading from:

"There is an old saying in Biblical exegesis that applies clearly here as well: “If the plain sense makes sense, don’t look for any other sense.”

Let us now apply that standard to the article posted today.

Here are the points made in the article, summarized:

(1) a redonimation of the currency

(2) this being done to ease transactions and allow people to carry less money.

(3) there is a plan to elminate 3 zeros from the currency

(4) the currency with 3 zeros (current banknotes) will be phased out late this year.

(5) new banknotes will be introduced sometime before the end of the year

(6) the old (large denom) banknotes will be gradually removed from circulation

(7) they did not specify when the new notes would be issued.

(8) both large and small (or old and new) banknotes will remain legal tender during this process until all large denom notes are removed"

Go back and look at the article he is making his observations from. It did not make a distinction on which currency would be replaced. It didn't say the large denom notes would be removed. His item 4 is simply NOT what the article said, yet that is the prevailing view among investors - that a correct interpretation of the article is that they will RV and will withdraw the big bills because they won't need them. I think everyone is interpreting when they think they are observing. Last night there were over 500 people in chat when I dropped in. The atmosphere was electric for removal of article VII and an RV. That is so amazing in the shadow of the reports in February. Even Adam's last chat post said he thought we wouldn't LOSE money - sounded to me like a big downgrade from a 10 cent RV.

By the way, scottiraq had a great article detailing redenomination and quoting heavily from the above UNC article. Check it out at http://www.gamji.com/article6000/NEWS7367.htm

[hale11hale]

The article say's

Finance Ministry has prepared a plan to increase the value of the dinar against the dollar and then delete the three zeroes from the dinar's value

[keylime]

The article say's

Finance Ministry has prepared a plan to increase the value of the dinar against the dollar and then delete the three zeroes from the dinar's value

Apparently from their new news release, they are not planning to delete the three zeros, but are planning to "increase" the value.

[Lollie]

Bigd1619, well said !!!!!!!!!!!!!!!!!!!!!

[jolynn]

Finance Minstery today says they are not dropping the zeros....who knows until it happens!!!

[Jac]

Bravo! Sanity returns. Thank you.

[Dryden01]

Venezuela is a banana republic and Chaves is driving their currency into the ground. Iraq is a different situation and has much brighter prospects for prosperity

[Kent]

Venezuela is a banana republic and Chaves is driving their currency into the ground. Iraq is a different situation and has much brighter prospects for prosperity

Dryden, understand that the Venezuela brochure is not offered as evidence that Iraq will lop. It is offered as a very clear example of how a lop is done and that a lop is value neutral and shows a clear example of how 2 currencies are maintained in a transition period. It is intended to be informative not predective. With a lot of the false statements about a lop I found it helpful.

[scottiraq04]

It isn't worthless is they LOP and RV at the same time. #1: Start with 5,000,000 IQD, #2: LOP it to 5,000 IQD, #3: RV that 5,000 at 1.49 USD, and #4: you have $7,450 USD. That is still a huge profit margin compared to other financial outlets, but obviously we want an RV to happen prior to a LOP. Either way, we all win. LOP first and RV, we win small, RV first and LOP second, we win big.

Perfect logic and an outstanding outlook on things...In fact, I'll help you out with a few facts:

http://www.gamji.com/article6000/NEWS7367.htm

Quote:

"In the ongoing debate about the redenomination of the Nigerian currency, some commentators have been using the terms redenomination and revaluation interchangeably, i.e. to mean the same thing. Technically, this is wrong. Currency redenomination is different from both currency revaluation and currency appreciation. In strict terms, redenomination does not increase the