Iraq Said To Be Planning Currency Overhaul, Redenomination

[Luigi1]

I been saying all along, a LOP then a RV. You will not become $Millionaires overnight. After LOP, RV to around USD 3.3 ID to the USD. Be happy to make a 3 times profit for now.

Hold the phone...the ID will float agaist the Dollar as the nation's ecomomy improves eventually settling near $1 USD to 3 ID or 30 times your return is a few years. This puts the ID in line with other Gulf nations currencies. Continue to hold & buy more ID after LOP & RV. Get rich slowly.

Edited July 27, 2011 by Luigi1

[RickOhio]

I put zero creadence into anything with Saleh's name in it. Just ask Doc31.

[redrock]

Saleh said there were currently some 29 trillion dinars in circulation in Iraq, represented by some 6 trillion banknotes of various denominations, most of them quite small. He said this also caused complications for the Central Bank and government, as well as commercial accounting departments.

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Many of these notes are held in Iraq for reserves and for intra-bank transactions. Many are held by China, the U.K., and the U.S. and are also reserves or are used as tradable currencies for oil or other products. The Iraqis will not have to have enough cash to "buy" every dinar note in circulation! They won't need to buy their own. The other countries will be holding theirs for trade and bank transactions. Most of what they are going to need to cover is investors and citizens who will cash in. It is unlikely that any of the dinar we hold will go directly to Iraq. It will go to our banks and then to the Fed to hold as reserve or for trade for oil. Once you actually "cash in" mostly it will move to electronic transactions. Still believing that for the good of Iraq a straight-up RV is the best solution!

[keepmwlknfny]

Many of these notes are held in Iraq for reserves and for intra-bank transactions. Many are held by China, the U.K., and the U.S. and are also reserves or are used as tradable currencies for oil or other products. The Iraqis will not have to have enough cash to "buy" every dinar note in circulation! They won't need to buy their own. The other countries will be holding theirs for trade and bank transactions. Most of what they are going to need to cover is investors and citizens who will cash in. It is unlikely that any of the dinar we hold will go directly to Iraq. It will go to our banks and then to the Fed to hold as reserve or for trade for oil. Once you actually "cash in" mostly it will move to electronic transactions. Still believing that for the good of Iraq a straight-up RV is the best solution!

And I would love to believe that will be the case but even just the idea of trading dinar for oil goes against everything in the opec nations agreements and what the US has been trying to enforce by everyone sticking to the USD for purchasing oil....and that's partly why there is still some value and belief in the USD as a currency.....

Part of the motive forthe war against iraq was because saddam wasent accepting USD for oil and its what Iran is doing now which is another reason we have our eyes on them too

[Alex38]

The way I see it is this: They can't be a part of the international community without ADDING VALUE TO THEIR CURRENCY. It really is THAT SIMPLE We shall see.... crazy days!!!

[Dalite]

Dalite...but if they avoid the IMF then they cannot join the WTO - correct?

I honestly don't know.

I was just reading an older article replayed by easy rider, and it pointed out involvement with IMF still ongoing, so I expect that IMF guidelines will still be in place for some time.

Easy posted yesterday some info on the IMF and a link to Their website that showed the various types of "floats" and the IMF restrictions, based on the float type.

IIRC, on a managed, or controlled float, there is a limit on time between RVs, as well as the percentage of increase of each RV.

that is what makes me suspect that a slight rise in the rate to 1000:1 would spare a valuable RV.

If there is any truth to that speculation, it would allow for a much higher rate with the first RV after RD.

Shabibi could just do a $.14 RV to reach parity, but I personally feel that would be a waste of a period and percentage.

Remember, just my opinion.

All we can do is try to determine what we feel would be the most likely outcome, based of the info available.

I been saying all along, a LOP then a RV. You will not become $Millionaires overnight. After LOP, RV to around USD 3.3 ID to the USD. Be happy to make a 3 times profit for now.

Hold the phone...the ID will float agaist the Dollar as the nation's ecomomy improves eventually settling near $1 USD to 3 ID or 30 times your return is a few years. This puts the ID in line with other Gulf nations currencies. Continue to hold & buy more ID after LOP & RV. Get rich slowly.

The most important thing to consider, as you have brought out here, would be to make the exchange during a RD.

Holding the new currency gives you the time to let it grow.

Try to find an outlet with the lowest spread, throw in with others for larger exchange, with the goal of a smaller spread.

Try to find a bank that is an international partner with Iraq, and see if you can deposit with them in your country, and withdraw the new currency after RD ( not to try to avoid the dropping of the zeros, but to avoid exchange spread).

The goal is to find the most profitable way to make lemonade, if RD is the choice the CBI takes...

Get the new currency, bail, or hold.

[2fast4u2c]

Dalite...I would take .14.

[Dalite]

Dalite...I would take .14.

But, keep in mind, that is after and conjunction with a RD, so back to square one.

I an not anti- RV. Nothing is impossible.

I have tried to learn as much as the current info available allows what the options are, but still have my share of unanswered questions.

We all are hoping that the gains are very real and very large.

But, we also have to consider a plan B..

[gls1972]

I never understood how people can say the Iraqis have to carry "bags full of money" to buy expensive items such as cars! LOL This is complete Bull ****! Listen, a 25k IQD note is worth a little over $20 so you would need 5 IQD notes for every $100 USD bill.

I had 20 Million Dinars in my safe for a period of time and it really doesn't take up that much space. I could probably fit a couple hundred million dinar (couple hundred thousand usd) in a typical school backpack.

Bottom line is: 20 million dinars does not take up that much physical space. How many Iraqis on average are taking that amount of cash to go buy a $20,000 car in downtown Baghdad. I would say the numbers are slim at best...

You only need 5 25k IQD notes for every $100 USD bill! Not a big deal...

Oh and if anybody says well what about the "smaller" notes? Simple, they could easily take those notes to the bank to exchange them for 25k notes before making their purchase. Even if they had to do that, it is not that big of a deal and you do not need "bags full of money" for daily transactions.

Just a little tired of people using this excuse (ease of financial tranactions) as a reason for an RD/RV...

[MrFnHappy]

The way I see it is this: They can't be a part of the international community without ADDING VALUE TO THEIR CURRENCY. It really is THAT SIMPLE We shall see.... crazy days!!!

Why not? Look at Viet Nam, the dong is 20,585 to 1 USD. Their economy is robust, as is their stock market.

[rnldtippitt]

How many times are we going to have this same discussion? This change occurs in country only for ease of transactions. The larger denoms will still exist for larger transactions. They simply will not be in the hands of the average Iraqi. They will also exist as a contingency because their banking infrastructure and power supply is still inconsistent.

There's a difference between a lop, and a redenomination

[joedee2004]

folks just hold on we will be blessed just wait and see keep the faqith...

[dinarck]

How many times are we going to have this same discussion? This change occurs in country only for ease of transactions. The larger denoms will still exist for larger transactions. They simply will not be in the hands of the average Iraqi. They will also exist as a contingency because their banking infrastructure and power supply is still inconsistent.

There's a difference between a lop, and a redenomination

Is that what 1000 note becomes 1 note and like Turkey means? I know that sounds condescending but was just trying to make the point that we are being told different by the CBI.

[MrFnHappy]

Lop, RD, all the same. Lop being more of a "slang" term for RD. Call it what you wish, there is no loss in PP to the citizens. The event is "revenue neutral".

Numerous articles out of Iraq reference Turkey as an example when speaking of a lop/RD.

Turkey will lop six zeros from its currency at midnight

Louis Meixler Associated Press

ANKARA, Turkey – At midnight tonight, Turkey will cease to be the land of the millionaires and billionaires.

That is when the government drops six zeros from the national currency and Turkey loses the dubious distinction of being the country with the largest denomination in circulation, the 20,000,000 lira, worth only about $15.

The zeros are the result of decades of double-digit inflation that has taken the currency from 2.8 to the dollar throughout the 1950s to 1,350,000 per dollar today.

Introducing a new currency has been a Turkish goal for years, but the government only moved forward this year, the first time in three decades in which inflation fell into single digits.

For many Turks, the new money will end the confusion of dealing in a currency in which the smallest coin in general circulation is the 50,000 and a loaf of bread can cost you 350,000 lira while a small container of orange juice costs 1,900,000 lira.

As the new year begins, that loaf will cost 0.35 new Turkish lira (or 35 kurus – 1 lira will equal 100 kurus in new currency), and that orange juice will be 1.90 new Turkish lira.

Right now, bigger purchases can be measured in the billions and the Turkish gross national product is a mind-bending 424 quadrillion lira or 424,000,000,000,000,000.

Officials hope that the new money, called the new Turkish lira, will make it easier for international trade, which often involves trillions of old lira, and will boost confidence in the economy as Turkey pushes for EU membership.

“The Turkish lira has been like funny money … and now at least in cosmetic terms it will look like a real currency,” said Tevfik Aksoy, chief economist in Turkey for Deutsche Bank.

Behind the change has been stunning economic progress that helped push EU leaders in December to agree to open accession talks with the overwhelmingly Muslim country.

In 2001, Turkey was mired in its worst economic crisis in decades. The lira plunged, inflation hit 70 percent and 2 million people lost their jobs.

[rnldtippitt]

Anytime you read a directly translated article, they specifically says two things. one... In country, and two... Ease of transactions. We all seem time leap through these articles with selective readers looking for then we're f$ked, and miss the subtleties. Like alcoholics reading the steps the first hundred times.

[estephan]

Lets not forget that Offices have been set up in Iraq to sell USD for IQD , Feeding on the lack of faith in the Dinar for the common man, The propaganda I believe is being distributed , is Shaleh's JOB. To assist the drawing in of the Large denoms.