POSSIBLE SCENARIO

[Charlie339]

This is just an opinion. I have no links to prove that this is what Iraq is doing, nor do I even have any confidence that this is even likely. It just makes a lot of sense to me.

I think we can all agree that those in power in Iraq are focused on opportunities to benefit themselves – not us or anyone else. With that in mind, it makes sense to consider this whole currency issue from their point of view.

Four of their objectives have been made quite clear …

• Shabbi has repeatedly said that his goal is to keep their currency “stable” and to keep inflation under control.

• The CBI has recently made numerous public comments regarding their intent to “delete three zeroes” from their present currency. Supposedly, there is a draft law “almost ready” to submit to their Parliament to this effect.

• They have also announced their desire to deploy lower-denomination currency.

• And there have been comments from them saying they want to raise the value of their currency.

How can they achieve all 4 of these objectives without going broke in the process? Implement all 3 currency changes at the same time.

Here’s a hypothetical of how that could work for them ..

#1: Delete three zeroes from their present currency. This “devaluation” would make a 100,000 Dinar note equal in exchange value and buying power to a 100 Dinar note. Historical precedent tells us that this can be done: At the end of our Civil War, all Confederate currency became worthless. Iraq’s own currency was drastically devalued by the United Nations in 1990, and (more recently) Viet Nam voluntarily devalued their own currency.

#2: Distribute lower-denomination currency. Some of us believe that these have already been printed, and they are being held until the proper moment to issue them. As soon as step #1 is done, the lower-denomination notes would logically be much more practical to use (making change, etc.)

#3 Revalue. For this example, let’s say that Shabbi declares an RV where 1 IQD - $1.87 US.

• This would have the effect of giving the Iraqi citizen the exact same purchasing power he has today, i.e. today a 100,000 Dinar note is worth $187 US, and after steps 1 and 3 occur, both a 100,000 Dinar note and a 100 Dinar note would each be worth $187 US. Thus, stability is perfectly maintained.

• Those outside of Iraq (governments and investors like us) would see a small profit: A million Dinar would be worth $1,870 US, or roughly $600 more than we paid for it – a 33% profit for us (less exchange fees).

• On the international market, the government of Iraq would have 1,000 times more buying power than they do today at a .00187 rate, and their currency would be accepted for worldwide trade at a rate of $1.87. Thus, inflation in Iraq is driven down.

And all this could be done with very little or no cost to Iraq.

Again, this is just a speculative scenario not based on any “Intel.” I am not a guru, but I do believe this is sound logic from Iraq’s point of view, and it could happen this way.

[cabbage]

As a long time holder and reader of these forums, this makes the most sense of any scenario I have read. Not the return hoped for, but as it's said, a speculation..

[Froto]

... Iraq’s own currency was drastically devalued by the United Nations in 1990...

???

That never happened.

... i.e. today a 100,000 Dinar note is worth $187 US...

???

Since when? I thought it was worth $86.

You should base a hypothesis on facts.

[stenz68]

Great, another lopster! Its is your opinion, just get tried of the lop stories

[dip stick]

Not what I had hoped for, but 33% is still a good return in todays market

[tim5400]

It does NOTHING for the Economy...or Restoring the wealth that the Iraqis had PRIOR to the war....which is what they (THE UN)would like to do for Iraq....JMHO

[D-BUNK]

You DO have to consider that the Iraqis are gonna do what's best (cheapest) for them. We would.

[Buckeye Pilot]

A Snowball in Fukoshima Nuke Plant would survive longer than that theory, IT WILL NOT LOP For the 8,456,098,231,842.5 Time.

[delta22]

I for one have never seen a 100,000.dinar note. The largest I have are 25,000.