Very important RV question guys.

[Freedom4]

Hi

Tell me if I am right or not?

When Iraqi people exchange the old Sadam notes when the current 000 notes were released in 2003.

they must have had the same value of money they were holding! right!

Now why would they lose there asset or lose 90% of what they were owning to a lop?

That would mean that the ones that were millionaire before, would now become middle class people

and those that were middle class then, well! now poor? Will iraqi people accept this! I don't think so, they

suffered a lot these last 20 years!

Just a thought!

Edited June 27, 2011 by Freedom4

[FXStockpiling]

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?

If the IQD was an Internationally traded currency and was worth more than now it would benefit anyone holding it. Think of it like someone buying gold at $27.00 an ounce it is now worth $1575.00 an ounce anywhere in the World... Anyone recall the stories of people in Iraq being sent money from family outside of Iraq so that it may be exchanged for IQD and saved? Yes even the people of Iraq are interested in the future value of the Iraqi Dinar. How about all the bank robberies that have taken place as of late in Iraq, people being killed in their homes and vast amounts IQD stolen? Yes once again I think the people of Iraq are looking at something more than a lop...

[LA2009]

they have to get it to them some how.....

Prime Minister & Minister of Trade inspect repair of the ration card items

27/6/2011 1:46 PM

Prime Minister Nuri al-Maliki held, at his office today, a meeting with the Minister of Trade and Secretary General of the Council of Ministers and staff responsible for the ration card.

He called to the study of offers made by many companies specialized in the provision of materials, ration card, to ensure that all components of the citizen on the card without delay and the attributes of the best.

Maliki called to study of offerings from some of the companies that expressed willingness to supply Iraq with vocabulary ration card within the specified dates and the mechanism to ensure accurate distribution of the individual quota to him through the distribution of funds closed, according to the number of family members.

http://www.nmc.gov.iq/ArticleShow.aspx?ID=1260

[iqdheadlines]

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.

Umm.....I think you forgot one thing which doesn't make sense, and that is........there is no such 25 dinar note at all nowhere to be found in Iraq not even with the new lower denoms that are supposed to come out that were printed in 2003 along with the dinar we hold now.

There is a 25K note but there is no such thing as a 25 dinar note.............since the new lower denoms are 1, 5, 10, 20, 50 and 100.

[merry1]

Umm.....I think you forgot one thing which doesn't make sense, and that is........there is no such 25 dinar note at all nowhere to be found in Iraq not even with the new lower denoms that are supposed to come out that were printed in 2003 along with the dinar we hold now.

There is a 25K note but there is no such thing as a 25 dinar note.............since the new lower denoms are 1, 5, 10, 20, 50 and 100.

Well of couse,, not yet, I am going on the articles that say there is going to be issued a new currency and if they redenominate they will need a new currency. I've very sorry if this doesn't fit into your dream of weath but IF it goes down this way, this is the way they will handle it. If you have not read the articles they also say the Kurdish language will be on the notes and Arabic. This leads me to believe that they will issue new notes not necessarily the notes printed in 2003.

Edited June 27, 2011 by merry1

[AoK]

Threads like this is where DV shines, IMO! Very educational. Great post and responses!

[BBear]

basicaly the Iraqi that goes to the store to buy bread, curry, rice, milk, and some chicken to make dinner and has a few 25k notes to do it with, and it RV's on the way to the store,.. when she go there she could buy the whole store and a new truck to bring dinner home with.

[jmw]

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.

That is a perfect answer...but it doesn't work...give me your thoughts on this...

You say...

1. All prices will change the instant it rv's

2. All loans will change the instant it rv's

3. All salaries will change the instant it rv's

Correct?

Now what if it only revalues 20%?...do all of those still change based on a small change in the exchange rate?...and if not then...when...what would be the threshold?...100%...1000000%?

And what if they change everything and the value falls again on the open market...do they change them all again?

Since currency exchange is fluid...you can't adjust everything in the market place with every move...would love to hear your thoughts...or anyone elses.

[speculatorsRIDE]

Let me preface this by saying that this is my opinion. Don't take anything posted here as gospel. We are speculating here.

First I believe that what we are seeing is several different events explained at the same time in these articles. It is hard to know where one event stops and the next begins. This is leading to mass confusion. Below is how I see these events unfolding.

We should see a revalue first on the current bills we all have. There will NOT be any re-denomination with this RV. NO LOP! They will at the same time release the lower denoms that were printed back in 2003 when they printed our 000 notes. The CBI will be raising these 000 notes, meaning as they funnel back into the CBI from Iraqi citizens they will be removed from circulation and soiled or destroyed. The IQD we cash in here in the states through the banks and dealers will end up in the Federal Reserve. These IQD will be added to our foreign reserves and will strengthen our dollar. We will be given 2 years to cash in.

Then at a later date (probably 2 years) after they have their new currency printed as outlined by their Constitution, they will release the new currency to the citizens of Iraq. At this point is when they are talking about the 2 currencies coexisting and not before. By then we will have turned in all of our bills and be out of the picture. Now when they release this new currency is when they will re-denominate (lop) the 3 000's from their currency as the new bills will be printed in only lower denoms.

The CBI is purposely sending out conflicting information and describing scenario's from different events in an effort to keep us guessing. However, everything they are saying in these articles is true.

I hope this helps everyone to understand what is being talked about in these articles and why they are releasing them as they are.

That is a perfect answer...but it doesn't work...give me your thoughts on this...

You say...

1. All prices will change the instant it rv's

2. All loans will change the instant it rv's

3. All salaries will change the instant it rv's

Correct?

Now what if it only revalues 20%?...do all of those still change based on a small change in the exchange rate?...and if not then...when...what would be the threshold?...100%...1000000%?

And what if they change everything and the value falls again on the open market...do they change them all again?

Since currency exchange is fluid...you can't adjust everything in the market place with every move...would love to hear your thoughts...or anyone elses.

I don't see it revaluing at 20%. The CBI and the Iraqi Government has made it very clear both in articles and to their own people that they intend to revalue to prewar value. You will not see a RV for less then $3+ range. No one has ever said that they will be on a free float system. I believe it will be a managed float until such time as they introduce their new currency.

I would love to ride the currency up on a free float but I don't believe we will have that option.

Edited June 27, 2011 by speculatorsRIDE

[keepmwlknfny]

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.

But you also have to remember that until they are getting shiploads of imported goods, prices might not change like we are thinking they will......once imported goods are being distributed in the marketplace, thats when you will see the biggest jumps in purchasing power.....

[TPSprayduster]

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

You cannot take Dinars out of the country if you are a US Citizen, but can carry only 25,000 USD out of the country at one time. That is what is says when you go through immigration.

[randalln]

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.

Brilliant

[speculatorsRIDE]

But you also have to remember that until they are getting shiploads of imported goods, prices might not change like we are thinking they will......once imported goods are being distributed in the marketplace, thats when you will see the biggest jumps in purchasing power.....

Luckily I don't own a store there. But, I am willing to bet that once the RV is announced store owners will have to change their prices immediately. Trying to get someone to pay 500 dinar for a soda if 500 dinar are worth $1610.00 would be a bit difficult.

[DinarDana]

Thanks EVERYONE on this topic for this great thread. I applaud everyone for contributing. I also learned a great deal. Simple math for the artist. And may I add although there were differences and corrections, they were handled well. No one got their feelings hurt.

[LaGrange]

That is a perfect answer...but it doesn't work...give me your thoughts on this...

You say...

1. All prices will change the instant it rv's

2. All loans will change the instant it rv's

3. All salaries will change the instant it rv's

Correct?

Now what if it only revalues 20%?...do all of those still change based on a small change in the exchange rate?...and if not then...when...what would be the threshold?...100%...1000000%?

And what if they change everything and the value falls again on the open market...do they change them all again?

Since currency exchange is fluid...you can't adjust everything in the market place with every move...would love to hear your thoughts...or anyone elses.

The dollar fluctuates a LOT and salaries/property values aren't adjusted with every tick so why would Iraq be any different once the rate is floating?

Edited June 27, 2011 by LaGrange

[speculatorsRIDE]

The dollar fluctuates a LOT and salaries/property values aren't adjusted with every tick so why would Iraq be any different once the rate is floating?

If they are revaluing to a penny or ten cents then I would agree. However, if they are revaluing to prewar rates then everything would have to be adjusted. If not, I am moving to Iraq and will be working soon after the RV. Where else in the world can you make that kind of money an hour?

[LaGrange]

If they are revaluing to a penny or ten cents then I would agree. However, if they are revaluing to prewar rates then everything would have to be adjusted. If not, I am moving to Iraq and will be working soon after the RV. Where else in the world can you make that kind of money an hour?

Yes, they would have to make the initial adjustment but market fluctuations can be handled differently. For example the Swiss National Bank will intervene in the market when their currency gets to strong or too weak according to their monetary policy. It is unnanounced and traders often get blasted in the market place. The Japanese are also notorious for this practice.

[fastarnie]

No, Shabs has said the exchage rate will not effect the people of Iraq. People of Iraq don't have extra cash on hand. Prices of goods will change accordingly as well.

[Rhorse]

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:

Why would an Iraqi want USD at that point, when the Dinar would be worth more?.... That's too much geo-centric thinking about the value of the dollar.

If I was an Iraqi, I'd keep my Dinars at that point.

[Dalite]

No, Shabs has said the exchage rate will not effect the people of Iraq. People of Iraq don't have extra cash on hand. Prices of goods will change accordingly as well.

It should not affect the exchange, as another country's currency is not involved.

The Exchange Rate of 1170 Dinars per Dollar only references the value expressed in Dollars.

I think this seems to be the most confusing part of the press releases.

[jmw]

If they are revaluing to a penny or ten cents then I would agree. However, if they are revaluing to prewar rates then everything would have to be adjusted. If not, I am moving to Iraq and will be working soon after the RV. Where else in the world can you make that kind of money an hour?

So how big of a swing does it need to be before sparked and loans are recalculated...the problem with your argument is that it is subjective...my point about the 20% revalue is that you would have to pick an arbitrary number....say it revalues to $1 and everything is adjusted...but what if it triples after that and goes to $3...do you adjust it again?

You can't adjust peoples pay and loan documents based on an exchange rate.

[Sparky69]

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.

Except we would only have a one time payout.(if there is truth to the US govt holding trillions they will have an ongoing payout for years in the form of cheap oil)Their currency will not only become much more valuable in country but they will have 3x the purchasing power of the US on the open market as well.Probably much more in the years ahead as they develop not only the oil,but the gas,agriculture and other natural resources they have.IMO 3 bucks is a long shot to open with but hey,go hard or go home.

Cheers,

Sparky

Edited June 28, 2011 by Sparky69

[YaTaHe]

Brilliant

EXACTLY!, but prices will go up in return. How many quadrillians of Dinar do you think that it would take to pay these contractors to repair their infastructure? They have to revalue the Dinar.

[dinarck]

Great thread and a fascinating discussion. JMW and I have talked about this before and I have to say that I learned alot from that exchange.

First I have to disagree with the RV coming in at 3.00 which is impossible at this time but lets just say that it did RV at 1.00 tommorow. Unlikely as well at this time but just for the discussion. At that point I would agree that prices would have to change immediately in relation to the newly revalued currency. JMWs points are quite valid and there is really know way for us to know because a RV of that magintude has never occured in history. I just don't see how a shop owner could charge 500 dinar for a coke when that is the value of 500 USD post RV. Each item that very next day would have to change in relation to whatever value the dinar has RVed at. That would also have to include salaries, previous loans, and mortages. What I am saying isn't that is what would happen the day of the RV, what I am saying is that it would be impossible to RV without it happening that way. Maybe a RV of this magnitude is impossible. Maybe not.

Drox has made excellent points on other threads as well which need to be addressed. What about the Iraqi making 20 million dinar a year? Would he be making 20 million dinar a year worth 20 million USD a year post RV? If he had 20 million dinar in savings from working that job which is now worth 20 million USD then why not? How can they now tell that Iraqi O by the way you are only making 20 thousand dinar this year since the dinar Rved? If Iraq is going to be handing out trillions of dollars post RV then why stop there? Why not go ahead and pay the guy 20 mill the next year? Got plenty of oil right?

The fact is a straight up RV at these numbers brings up more questions then answers and I just don't see how it would work. It would make some super wealthy while the majority got the shaft and I seriously doubt that would be good for Iraq.

We talk alot about raising purchasing power and this seems to be a selling point for many why a RV must happen but I think we have seen that a RV overnight really wouldn't do this. Sure some Iraqis would be rich but again most would not. Now I am once again going to get bashed to death for what I am about to type but a RD makes more sense when it comes to increasing purchasing power. That seems like a oxy-moron to many but think about it. After RD the IQD could go as high as they want and slowy rise to double then triple then even quadrouple the purchasing power of the Iraqi people. Especially after prices would in fact be adjusted with a RD so now that coke cost .50 and that Iraqi in the future would have zero issues affording most things including higher priced items when his currency is worth 3 or 4 times the USD. I know this isn't a LOP thread and I apologize for mentioning it but I think it was a point that needed to be made.

[jmw]

Dinarck...that is a great explanation...way better than I could do....I think we would all agree that if it revalued to 1 IQD to $1 that prices would need to adjust...so anything that use to cost 1000 dinar now cost 1 dinar...and if you adjust prices you would have to adjust loans...if you owed 20million dinar for a car you would now owe 20,000 dinar...and if you adjusted loans you would have to adjust salaries and wages....if someone made 50 million dinar per year they would now make 50,000 dinar per year.

And here is the kicker....if you adjust all of those things to the same degree as the revalue...all Iraqi's would be right back to where they are today...their purchasing power would have been adjusted away...we would all get rich but unless they have money on the bank or cash on hand nothing would change for them...however if you look at dinarck's scenario...they can double or triple their purchasing power and come way out ahead...without having to pay us trillions or leverage their oil reserves.

I hate to say it but a sizable RV will never happen...it is not possible