So why can't the LOP happen?

[popo24]

My question is if they drop three 0's off the 25k note how would that effect the local Iraqi people? The government of Iraq really doesn't care about us here in the U.S.A. but do need the people of Iraq to have confidence in them as leaders. If the decrease the value of the dinar to a point that it is worth so little compared to what they had yesterday then how would they react? If they have been paid or saved up the dinar and all of a sudden it loses so much value then what confidence would they have? I believe that they will make sure that they keep the people of Iraq as happy as possible in order to maintain power and by taking away a huge value in thier currency would not achieve this. I have no proof or documumented evidence but common sense tells me that the government will not allow the people to lose out on the money they have invested in the new government. Now, if the people of Iraq only hold a small portion of dinars and the international community is the major holder of the dinars in circulation then I could see them doing a LOP in order to maintain thier levels of investment in country. So the biggest question I have is what percentage of the dinars out there are held by Iraqi's and what percentage is held by others?

I mean this in no offense to your intelligence, but the general consensus of this is way off. If Iraq lops 3 zeroes off the currency, then that's also lopping 3 zeroes off the amount of dinar they have in circulation total, and their exchange rate. Let me give you an example.

IQD exchanges at $.00086 with 20,000,000,000,000 (20 trillion) dinar in circulation. Iraq lops 3 zeroes off their currency, in essence moving the decimal to the left 3 times on all of their notes which include, but not limited to, the 250 which would become .25. This decreases the amount of dinar in circulation down to 20,000,000,000 (20 billion), and changes the exchange rate to $.86. Their 25000 dinar note which was worth about $25 is now a 25 dinar note that is worth $25. This really doesn't change their value at all or give them more purchasing power, all it does is change the face of the currency. Then, when they are at .86, they can reval up to a rate similar to other gulf countries, let's say $3.44. That is a 400% increase, and now their 25 dinar note is worth $100, or, their previous 25000 note grows from $25 to $100. This helps the Iraqi people, but is only one way to do so. We are, of course, all hoping for an extreme valuation.

[Huskycrash]

Popo24,

I understand what your saying and agree but what about the people of Iraq? How would taking away the amount that they have been saving by decreasing thier value by so much. I am trying to use common sense and it tells me that the government would not been looked upon very favorably by the people if they have a large amount of the dinars saved up and all of a sudden it is worth less then it was when they got it by such a large amount. How much confidence would you have in our government if you have been saving up our currency for the last six years and then you wake up tomorrow and the President says that due to some issue your money is not worth only 33% of what it was yesterday? You would be pretty upset and not likely to vote for those in power when the elections rolled around. The leaders in Iraq need to make sure they stay in power and by doing a LOP before a RV makes little sense when they can just do a RV at .01 per dollar and accomplish the same thing while maintaining the true face value of the 25k note.

[rriver1010]

I do agree. What a shame that you have to post 10 times to get into the chat room.....geez!!!

[armondtoth]

Um your are wrong with your assumption that the 500 or 1000 dollar bill is still worth anything. It is not it is only worth what a collector will pay for it. You cannot walk into a bank and exchange a 1000 dollar bill for 1000 dollars in twenties. When you take currency out of circulation it becomes a collectors item. Take the 10,000 dollar gold certificate you cannot walk into a bank and cash that.

[popo24]

Popo24,

I understand what your saying and agree but what about the people of Iraq? How would taking away the amount that they have been saving by decreasing thier value by so much. I am trying to use common sense and it tells me that the government would not been looked upon very favorably by the people if they have a large amount of the dinars saved up and all of a sudden it is worth less then it was when they got it by such a large amount. How much confidence would you have in our government if you have been saving up our currency for the last six years and then you wake up tomorrow and the President says that due to some issue your money is not worth only 33% of what it was yesterday? You would be pretty upset and not likely to vote for those in power when the elections rolled around. The leaders in Iraq need to make sure they stay in power and by doing a LOP before a RV makes little sense when they can just do a RV at .01 per dollar and accomplish the same thing while maintaining the true face value of the 25k note.

I don't think you are comprehending this. If there is a simultaneous lop/rv as I have shown in my last post then the people of iraq are gaining money, 4 times the money to be specific.

[human1]

Just a quick question. I just went to Wikianswers.com and typed in ( How much Oil does Iraq have?) Answer: From Center for Global Energy Studies and Petrolog & Associates is around 300 billion barrels multiply that by what oil closed at yesterday, right around 72.00usd per barrel I came up with 21.6 trillion dollars. My question is have they already included this figure along with the Gold and Natural gas into the equasion, or do the only value what natural resources have been processed?