Very important RV question guys.

[iqdheadlines]

I'm not a believer in the LOP at all BUT this is a very important question.

Once either the RV or RI happens......................will the average Iraqi citizen or person living in Iraq that holds an average of 25K dinar be suddenly rich over night?

Let's say that there was an RV of $3.00, how would the average Iraqi citizen or person exchange their 25K dinar note for the new lower 100 denoms?

They would need 250 of the new lower 100 denoms to have 25,000 new dinars in total equaling $75,000 US dollars.

This example is for those that don't have bank accounts.

How would an RV work or benefit an Iraqi citizen or person living in Iraq, will they make millions too like us if there happen to be an RV of $3.00 for example?

[sandy040]

I may well be wrong, as i often am, but i always believed the idea behind the RV/RD/RI or whatever we are calling it this year, was to return the money to the people of Iraq that they lost when the Dinar was so severely devalued, so not all citizens will become rich overnight , just return to the situation they were once in.

[wavggg]

Hey IHL

I have read posts from members in Iraq or with family there that observe that the orinary Iriaqi is destitute poor and have little cash. They live day-today on their Iraq (oil-for-food) welfare card which gets "recharged" every month. If true, most Iraqis will not reap any benefit from savings of Dinar in the event of an RV. The benefit to them from an RV wll be in being able to purchase things like refrigerators, TV's, air conditioners and Burkas with embedded fans... (lol)...

They will become middle class peple in a country wtih less debt and more hard assets that the US, China and Russia combined.

Peace,

gg

[The Machine]

Hey IHL

I have read posts from members in Iraq or with family there that observe that the orinary Iriaqi is destitute poor and have little cash. They live day-today on their Iraq (oil-for-food) welfare card which gets "recharged" every month. If true, most Iraqis will not reap any benefit from savings of Dinar in the event of an RV. The benefit to them from an RV wll be in being able to purchase things like refrigerators, TV's, air conditioners and Burkas with embedded fans... (lol)...

They will become middle class peple in a country wtih less debt and more hard assets that the US, China and Russia combined.

Peace,

gg

this is true ..... the average iraqi is broke , i reckon homeless people in the US have a better standard of living than the average Iraqi. Its not likely that the average people have cash savings, this would have been spent along time ago on things like food !!

[rick25sandi]

The I raqis would benefit from the lower prices for goods in Iraq but would not receive the increase in the value. Probably the best example would be traveling to Canada. if the usd is 1.05 against the cnd, so as an american you cross the border and exchange your usd for canadian you would get 1.05 canadian but the canadian people don't benefit from that exchange

[speculatorsRIDE]

Iraqi's will become rich but not due to the exchange rate RV but because of Article 111 of the Iraqi Constitution.

Article 111:

Oil and gas are owned by all the people of Iraq in all the regions and governorates.

Once the GOI is completed (see Article 144) the Constitution takes effect and Iraqi's will receive a percentage of all oil and gas sales as Kuwaiti's now do.

Article 144:

This Constitution shall come into force after the approval of the people thereon in a

general referendum, its publication in the Official Gazette, and the seating of the

government that is formed pursuant to this Constitution.

http://www.uniraq.org/documents/iraqi_constitution.pdf

Edited June 27, 2011 by speculatorsRIDE

[iqdheadlines]

But what about the Iraqi citizen that does hold a 25K dinar note, wouldn't he have the right to exchange it for the new lower denoms at the new RV rate and make a profit by using his new lower denoms either in or outside of Iraq?

[speculatorsRIDE]

But what about the Iraqi citizen that does hold a 25K dinar note, wouldn't he have the right to exchange it for the new lower denoms at the new RV rate and make a profit by using his new lower denoms either in or outside of Iraq?

Upon the RV of the IQD then anyone anywhere would be able to cash it out. Every Iraqi with IQD will benefit by the RV with added value just as we will. They will receive added purchasing power.

[iqdheadlines]

Upon the RV of the IQD then anyone anywhere would be able to cash it out. Every Iraqi with IQD will benefit by the RV with added value just as we will. They will receive added purchasing power.

So an Iraqi citizen could travel to the USA and cash-in his 25K dinar note and receive $75,000 US dollars if it RV'd at $3.00:unsure:

[F-16Pilot]

But what about the Iraqi citizen that does hold a 25K dinar note, wouldn't he have the right to exchange it for the new lower denoms at the new RV rate and make a profit by using his new lower denoms either in or outside of Iraq?

Everything is relative, even in Iraq. There is no reason why an Iraqi citizen holding a 25K note shouldn't be able to increase his net worth three-fold if the dinar RV's for $3.00. He will still be in the same financial standing, relatively speaking, as he was before except now he is holding 75K. Being that most Iraqi citizens are broke, someone holding 25K is already in a higher eschelon, and post-RV he will remain in the higher eschelon. No, not all Iraqis will suddenly become millionaires over night, but the ones who currently have more dinar than your average joe, will. That's the way it should be...unless, of course, you are an advocate of socialism.

[The Machine]

So an Iraqi citizen could travel to the USA and cash-in his 25K dinar note and receive $75,000 US dollars if it RV'd at $3.00:unsure:

well if it came out at $3.00 he could save himself the price of the plane ticket and just exchange it in an Iraqi bank for $75,000 USD

[speculatorsRIDE]

well if it came out at $3.00 he could save himself the price of the plane ticket and just exchange it in an Iraqi bank for $75,000 USD

However, there wouldn't be any reason for him to change it to US Dollars. They will keep it in IQD and enjoy the added purchasing power.

[The Machine]

However, there wouldn't be any reason for him to change it to US Dollars. They will keep it in IQD and enjoy the added purchasing power.

Yes you are right so unless he was planning on leaving the country anyway it's kinda an invalid question. there would be no reason for any Iraqi to exchange there money into another currency, unless they were speculating on it lol

Edited June 27, 2011 by The Machine

[iqdheadlines]

Wow........I now totally understand now how the an Iraqi citizen would benefit from an RV of their currency if they personally held dinar of their own......and that is, they will receive added purchasing power or will make a profit if they lived outside of Iraq no matter what country it they may live in outside of Iraq due to the Iraqi Dinar being a global tradable and exchangeable currency at the time the Rv happened.......do I understand you guys right?

I must say really that I want to thank all of you guys that contributed to this post and answering my questions...........I had been confused so much about this for such a long time but I just never had the time to make and post this thread..............Go RV !!!!!!!

[keepmwlknfny]

I'm not a believer in the LOP at all BUT this is a very important question.

Once either the RV or RI happens......................will the average Iraqi citizen or person living in Iraq that holds an average of 25K dinar be suddenly rich over night?

Let's say that there was an RV of $3.00, how would the average Iraqi citizen or person exchange their 25K dinar note for the new lower 100 denoms?

They would need 250 of the new lower 100 denoms to have 25,000 new dinars in total equaling $75,000 US dollars.

This example is for those that don't have bank accounts.

How would an RV work or benefit an Iraqi citizen or person living in Iraq, will they make millions too like us if there happen to be an RV of $3.00 for example?

A RV doesnt just suddenly put more money in their hand.....the only people that benefit from a jump in the exchange rate would be us....their 25k note will still be just that in country......

[The Machine]

Wow........I now totally understand now how the an Iraqi citizen would benefit from an RV of their currency if they personally held dinar of their own......and that is, they will receive added purchasing power or will make a profit if they lived outside of Iraq no matter what country it they may live in outside of Iraq due to the Iraqi Dinar being a global tradable and exchangeable currency at the time the Rv happened.......do I understand you guys right?

I must say really that I want to thank all of you guys that contributed to this post and answering my questions...........I had been confused so much about this for such a long time but I just never had the time to make and post this thread..............Go RV !!!!!!!

Yes but they would also have added purchasing power in there own country too .... say for example a loaf of bread costs 25,000 dinar then th RV comes along and the currency revalues a couple of thousand times the Iraqi still has 25,000 dinar but the loaf of bread might only be a fraction of 1 dinar in price now.

thats the simplist way of explaining it I can think of.

Edited June 27, 2011 by The Machine

[speculatorsRIDE]

A RV doesnt just suddenly put more money in their hand.....the only people that benefit from a jump in the exchange rate would be us....their 25k note will still be just that in country......

That is true Keep. Their 25k note will still be a 25k note. In the OP's post he supposed the rv would be to $3.00 If that were the case, then the purchasing power of that 25k note would increase dramatically. I would call a 3000% increase in purchasing power dramatic, wouldn't you?

They would benefit from a RV to $3.00 as would we.

Edited June 27, 2011 by speculatorsRIDE

[iqdheadlines]

Yes but they would also have added purchasing power in there own country too .... say for example a loaf of bread costs 25,000 dinar then th RV comes along and the currency revalues a couple of thousand times the Iraqi still has 25,000 dinar but the loaf of bread might only be a fraction of 1 dinar in price now.

thats the simplist way of explaining it I can think of.

Yes......you explain it very well......wow thanks for that!

Just two last questions though.

(1). Will the Iraqi citizen who does hold a 25K dinar note have the right to exchange it for the new lower 100 denoms once the RI/RV/RD happens? (He will need 250 x 100 new lower denoms)

(2). How will all the businesses and shops in Iraq suddenly update all their new prices for the purchasing of goods and services by normal Iraqi citizens? (I'm sure not every business or shop and so fourth runs on the latest technology that we have these days).

[speculatorsRIDE]

Yes......you explain it very well......wow thanks for that!

Just two last questions though.

(1). Will the Iraqi citizen who does hold a 25K dinar note have the right to exchange it for the new lower 100 denoms once the RI/RV/RD happens? (He will need 250 x 100 new lower denoms)

(2). How will all the businesses and shops in Iraq suddenly update all their new prices for the purchasing of goods and services by normal Iraqi citizens? (I'm sure not every business or shop and so fourth runs on the latest technology that we have these days).

Answers

(1). Yes they would just exchange for the new lower denoms just as they did with the old Sadam notes when the current 000 notes were released in 2003.

(2). By hand one item at a time.

[zul]

So an Iraqi citizen could travel to the USA and cash-in his 25K dinar note and receive $75,000 US dollars if it RV'd at $3.00:unsure:

I'm not sure if they can carry that much IQD out of Iraq

[jmw]

It's the right question...however, most still look at it through our eyes and thereby make inaccurate assumptions....you have to look at it much more in depth...from imports to distributors...wages and salaries...loans and lines of credit....but the biggest thing to remember is that a revalue is ONLY an exchange rate...It does not make them wealthy it only gives them purchasing power for IMPORTED items....local goods and service should not be affected....

Lets say a store owner sells coke...it is imported so the price will change with a revalue....but he also sells camel feed...it is grown locally so the price won't change....here is why...lets say both items cost 1000 dinar and the dinar revalues to 1 to 1...

the store owner pays 1/2 this price from his wholesaler...so he pays 500 dinar for each one.

The wholesaler has a 2 month stock of both items.

After the RV...both items will continue to be sold for 1000 dinars...it won't be until the wholesaler has exhausted his 2 month supply of product and is able to import more coke in that the price of coke will change...So after 2 months the owner now pays 500 dinar for 500 cokes and now can sell sell them for his 100% mark up at 1 dinar each...if he lowers the price before he is able to buy them at a lower price then he will actually lose money on the sale.

The camel feed...being a local product does not change in price...since it isn't imported it isn't affected by a revalue.

Now...here is the issue that makes a RV a big challenge...the store own has a loan on the store and currently pays 10 million dinar per month (equal to 10k US) on the loan...after the revalue he still has to pay the same amount...they would not change his loan since it is an exchange rate only...so now he owes the equivalent of $10 million US dollars each month.

An increase in value of that amount is almost impossible to accomplish.

[speculatorsRIDE]

It's the right question...however, most still look at it through our eyes and thereby make inaccurate assumptions....you have to look at it much more in depth...from imports to distributors...wages and salaries...loans and lines of credit....but the biggest thing to remember is that a revalue is ONLY an exchange rate...It does not make them wealthy it only gives them purchasing power for IMPORTED items....local goods and service should not be affected....

Lets say a store owner sells coke...it is imported so the price will change with a revalue....but he also sells camel feed...it is grown locally so the price won't change....here is why...lets say both items cost 1000 dinar and the dinar revalues to 1 to 1...

the store owner pays 1/2 this price from his wholesaler...so he pays 500 dinar for each one.

The wholesaler has a 2 month stock of both items.

After the RV...both items will continue to be sold for 1000 dinars...it won't be until the wholesaler has exhausted his 2 month supply of product and is able to import more coke in that the price of coke will change...So after 2 months the owner now pays 500 dinar for 500 cokes and now can sell sell them for his 100% mark up at 1 dinar each...if he lowers the price before he is able to buy them at a lower price then he will actually lose money on the sale.

The camel feed...being a local product does not change in price...since it isn't imported it isn't affected by a revalue.

Now...here is the issue that makes a RV a big challenge...the store own has a loan on the store and currently pays 10 million dinar per month (equal to 10k US) on the loan...after the revalue he still has to pay the same amount...they would not change his loan since it is an exchange rate only...so now he owes the equivalent of $10 million US dollars each month.

An increase in value of that amount is almost impossible to accomplish.

Let me correct several inaccuracies in your post.

You said: So after 2 months the owner now pays 500 dinar for 500 cokes and now can sell sell them for his 100% mark up at 1 dinar each

This should say: So after 2 months the owner now pays 250 dinar for 500 cokes and now can sell them for his 100% mark up at 1 dinar each

You said: The camel feed...being a local product does not change in price...since it isn't imported it isn't affected by a revalue.

Not true. The farmer won't be able to charge 1,000 dinar = $1,000 for the same amount of camel food that cost 500 dinar pre-rv. Assuming the store was selling at the 100% markup pre-rv. The farmer will now only charge $.50 and the store owner will sell for 1 dinar. They love their camels but they aren't going to pay $1,000 every time they feed them.

You said: the store own has a loan on the store and currently pays 10 million dinar per month (equal to 10k US) on the loan...after the revalue he still has to pay the same amount...they would not change his loan since it is an exchange rate only...so now he owes the equivalent of $10 million US dollars each month.

Not true. The loan payment would have to be revalued as the currency was revalued. To assume that the store owner would pay $10 million per month would put them and every other business out of business. Since the rate is now 1170 IQD/$1 and we are going to revalue to 1 IQD/$1 then the loan payment 10 million would be divided by 1170 and the new payment per month for the mortgage would be 8547 IQD per month.

Edited June 27, 2011 by speculatorsRIDE

[The Machine]

Let me correct several inaccuracies in your post.

You said: So after 2 months the owner now pays 500 dinar for 500 cokes and now can sell sell them for his 100% mark up at 1 dinar each

This should say: So after 2 months the owner now pays 250 dinar for 500 cokes and now can sell them for his 100% mark up at 1 dinar each

You said: The camel feed...being a local product does not change in price...since it isn't imported it isn't affected by a revalue.

Not true. The farmer won't be able to charge 1,000 dinar = $1,000 for the same amount of camel food that cost 500 dinar pre-rv. Assuming the store was selling at the 100% markup pre-rv. The farmer will now only charge $.50 and the store owner will sell for 1 dinar. They love their camels but they aren't going to pay $1,000 every time they feed them.

You said: the store own has a loan on the store and currently pays 10 million dinar per month (equal to 10k US) on the loan...after the revalue he still has to pay the same amount...they would not change his loan since it is an exchange rate only...so now he owes the equivalent of $10 million US dollars each month.

Not true. The loan payment would have to be revalued as the currency was revalued. To assume that the store owner would pay $10 million per month would put them and every other business out of business. Since the rate is now 1170 IQD/$1 and we are going to revalue to 1 IQD/$1 then the loan payment 10 million would be divided by 1170 and the new payment per month for the mortgage would be 8547 IQD per month.

Correct on all accounts

[Choppermike]

Let me correct several inaccuracies in your post.

You said: So after 2 months the owner now pays 500 dinar for 500 cokes and now can sell sell them for his 100% mark up at 1 dinar each

This should say: So after 2 months the owner now pays 250 dinar for 500 cokes and now can sell them for his 100% mark up at 1 dinar each

You said: The camel feed...being a local product does not change in price...since it isn't imported it isn't affected by a revalue.

Not true. The farmer won't be able to charge 1,000 dinar = $1,000 for the same amount of camel food that cost 500 dinar pre-rv. Assuming the store was selling at the 100% markup pre-rv. The farmer will now only charge $.50 and the store owner will sell for 1 dinar. They love their camels but they aren't going to pay $1,000 every time they feed them.

You said: the store own has a loan on the store and currently pays 10 million dinar per month (equal to 10k US) on the loan...after the revalue he still has to pay the same amount...they would not change his loan since it is an exchange rate only...so now he owes the equivalent of $10 million US dollars each month.

Not true. The loan payment would have to be revalued as the currency was revalued. To assume that the store owner would pay $10 million per month would put them and every other business out of business. Since the rate is now 1170 IQD/$1 and we are going to revalue to 1 IQD/$1 then the loan payment 10 million would be divided by 1170 and the new payment per month for the mortgage would be 8547 IQD per month.

Spot on RIDE. Bravo.

[merry1]

Shabibi has said over and over again that the new denominations will have no effect on the value of the currency. How can this happen? Well both currencies for a period of time will coexist. Both the new denominations and the old.

Now the explanation. The two currencies, the old and the new will coexisit, meanwhile, the bank will be collecting the large notes to be destroyed. Suppose a person goes into a store with a 25,000 note and a smaller 25 note. How will the shopkeeper figure this? For explanation purposes lets use .00086 as the rate. CBI redenominates, thus taking 3 zeros off the notes for the new denominations and taking 3 zero's off the rate making .00086 to .86. So we are back at the shop and you have a new 25 note and an old 25000 note. the shop keeper takes your new 25 note and multiplies 25x.86 and comes up with $21.50 and then he takes your old 25000 note and multiplies 25000x .00086 and gets $21.50. So both bills are worth exactly the same thing. The shop keeper will then take his daily deposit to the bank and the bank will then have the 25,000 note, hence putting it out of circulation. Over time all the large notes will eventually disappear. Bear in mind that the shopkeep really won't have to do the figuring of these notes because he'll know that both notes are worth the same amount. Both notes for a peroid of time will coexist and the prices or value of the money will remain the same. JMHO, but it's usually the way it works.

So nobody, not us or the Iraqi's will get rich. Right away at least. Of course there is still the possibility of Dinar going on Forex and raising in value over time.

Edited June 27, 2011 by merry1