Sonny1 drive by :) 8/1/11 am

[Sirius]

That would be 10 trillion or more for fun cashed in at the Federal Reserve for US dollars. That would be 10 trillion or more added to our foreign reserves to strengthen our dollar. Nothing says that money ever has to be cashed out at the CBI.

Good explanation, some are still stuck saying "how can they pay 50 trillion?" like we hold every Dinar of Iraq. Also they need to learn who actually owns the CBI and that would help them understand much more of how things will work.

[cooked]

So you're saying 300 billion USD is going to cover an RV of a dollar, which will result in them having an M2 of 59 TRILLION USD?

Or you're saying that they're going to "electronically convert" dollars to dinar and then back the dinar with more dinar?

Both are equally ludicrous. You got owned in the debate.

You're too focused on m1 m2, they as someone said earlier, just numbers thrown out to fabricate data for numbers crunchers. Iraq can easily "cover" a 1:1 rv. And where is this 50 trillion dinar number coming from now?

[cooked]

The m1 m2 numbers are just like the 25, 50, 70 and whatever triooion dinar in circ. None of these numbers are verifiable. So people just make up numbers to support thier position. From what I've read I think a 1:1 rv is not only realistic but would be the best move for the Iraqi people, and the best way to dedollarize. The Iraqi people want the currency that has the most value, if they rv at less than 1:1 the people will just keep using the US dollar.

[Darin]

What are you talking about? Have you done any research on the original currency exchange? Do you not understand that they picked a rate and cash equivalents for both the Saddam Dinar and the Swiss Dinar based on the market conditions at the time? 1IQD for 1Saddam and 150 Iqd for 1 Swiss. Then they went through a civil war after wards and then had periods of more crazy inflation with unemployment levels reaching 50%? Part of it was the past from Saddam printing money at will and killing the value and part from the fallout after Saddam. Read the links I posted.

They printed the existing currency so that they could get rid of the 2 defunct currencies (Saddam and Swiss Dinar) that were competing with one another. Not to mention that the Saddam Dinar was full of counterfeits from the black market and the Swiss Dinar hadn't been reprinted in decades and they were mostly ripped, torn, and in shambles because those folks wanted nothing to do with the Saddam Dinar. Then you had US Dollars in the equation. They wanted a uniform single currency for Iraq. The 3 zeros were indicative of the market conditions and the rate that the CBI and IMF and US deemed appropriate value for currency in circulation at that time. They thought they might have to bring in different denominations in time (ie...100k notes) depending on the market needs. It is right there in the links I provided you.

You are merging 2 things I said into one. No wonder you have everyone so confused. Re-denomination was a separate point from the original currency exchange. Quit being so argumentative and try learning something. We are on the same side dude.

Here are 2 decent links on the history of Dinar for anyone that wants to learn the truth and not made up stuff. Do your own research folks. Be your own guru!

http://en.wikipedia....iki/Iraqi_dinar

http://www.edinarfin...net/history.php

Darin... because they were smack dab in the middle of hyperinflation. Changing the 3 zeroes would do absolutely nothing DURING hyperinflation because the wound is still leaking blood and not healed. It would cost a ton of money for something that amounted to a band-aid. The problem would have continued again and they would be having to do a re-denomination all over again!

Read more:

Apparently something got taken out of context. Look at the second quote.

My argument

Instead of stabilizing at 1170, why not stabilize at 1.17

Instead of printing notes w/ 000s, why not omit them?

And... if we were at where we are today, the #s would be appealing, right? Hence no reason to re-denominate

Which is why I found the statement funny.. - The people have began to treat the bills as if the 000s didn't exist. Imagine if that was a reality (omission of the 000s) We wouldn't be having a re-denomination argument here. They would simply look to raise the value more (if anything).

But, I'll give you a reason I believe they printed the 000s.

They wanted to match the current value of the old regime notes at a 1:1 trade.

The idea was to get rid of the old dictator from the notes. And for the people to have a new currency to value and become proud of.

That in itself was a psychological band-aid so to speak.

Now it appears they will be looking to re-denominate again. Re-denominate as in, adding new currency such as lower denominations..

I wasn't trying to be argumentative, just stirring the pot a little bit

[Darin]

They're directly from the CBI. No one is making them up to support their position, unless you're saying the CBI is making them up to support their position, which is something you have zero evidence of.

Okay, fine, I'll bite - lets say the M1/M2 figures are accurate. (I still think they could eaisly be inflated a little bit, but, some people think they're being completely 100% transparent)

Do you recall reading about the articles that made it appear a 50k or 100k note were to be released??

Everyone was freaking out thinking that they were going to be adding higher denominations when we were hoping to see a R/V and release of lower denominations.

Okay - lets say they did indeed print their 100k notes, but the sole intention of the notes were never to be released to the public.

The idea is that they become intergovernmental treasury notes.

So let's play a process out:

The IQD R/Vs at 1:1

Each country exchanges the incoming IQD for another currency. The foreign central banks hold a lot of IQD.

The CBI comes in, exchanges all those 000s with 100k notes to reduce the space and destroys the 000s.

The 100k notes act as bonds. Foreign governments collect interest on these notes. And in the near future could collect on them as well as Iraq grows & prospers.

See, the big-picture involves setting up their economy for the long-term (not a quick simple band-aid)

What evidence is there to suppor the theory?

** Speculation of a 100,000 note

** That IQD is spread all over the world (or so it seems)

** The growth-rate of Iraq

** The appearance that they wish to be less dependent on crude exports and become a free-market economy (such as Turkey)

and much more...

So, when a guy like Sonny says they will benefit from this... He is right -

** Additional purchasing power

** A growing economy

** A lot of foreign investors will likely pour in

** Job creations

** Infastructure rebuilding

[Darin]

So central banks of foreign governments are just going to effectively loan Iraq 10 trillion USD? 3% of 10 trillion (and I'd say 3% is pretty low considering the risk involved here) is 300 billion. That's 3 or 4 times Iraqs GDP. How on earth or they going to pay that? They could quadruple oil production TOMORROW and they still wouldn't be able to pay it.

Why does Iraq get to have an M2 that's almost a thousand times their GDP? And don't say because they've got oil, because that's ridiculous. Lots of countries have oil, they don't get to have an M2 like that.

The only way an RV of 1:1 can work is if the CBI is lying about the M1/M2 by a factor of 500 or more, and that simply isn't possible. If that were the case there wouldn't be trillions of dinar in the hands of currency speculators and it also wouldn't cost 50k to buy a loaf of bread.

Of course they'd benefit from it. The US would benefit from 1 USD = 1000 euro. Why don't we just do that? Answer that, and you'll have the answer for why Iraq can't do it either.

Your viewing this a little too negatively.

When we "add-up" all of the liabilities within the consumer market and government of the U.S.

Our #s are much higher than Iraqs #s

The governments holding the bonds would profit.... It's an investment vehicle

It is a long-term scenario for them...

How many loans does the U.S have out where we don't even touch the principle? Heck, we're barely affording the payments on the interest.

I think the CBI (which is owned by the fed) may use the same method.. Why would that be so hard to believe?

This allows the region to grow and prosper and become a free-market society and down the road they may start collecting those debts over time...

I'm not in a position to grab the necessary information to argue better, since the information I am displaying is off the top of my head.

[DiNaR DoCtOr]

Drox -

I am very familiar with the process of issuing the new currency, and the history you provided is correct. But, I think Darin has a good question. Why did they not remove the 000s during the new issue? You (and Keep) have correctly stated that it is done after a period of hyperinflation, like in Turkey, but Iraq was a little different. There were three options considered in 2003:

1st - Keep Saddam currency, which would not work because there were too many counterfeits and Saddam's ugly mug

2nd - Keep the economy flowing by using only USD, which would not work because then it would REALLY look like we were occupying

3rd - Issue new currency, which would not work because Iraqis had no faith

So they did a hybrid option, which was a mix of the 2nd and 3rd options. USD was used to pay government workers and keep economy going. New currency was issued to let them know we were taking over their economy.

Drox, I am sure that you already know this. My reasoning for Darin having a good point about removing the 000s then is based on the fact that their economy continued to function based on USD, which they want to eliminate. If for a period of time they were using USD in the economy and making strides in reducing inflation, it would seem that they could have just eliminated the 000s then. Its not like they had any faith in the IQD.

I am not saying anyone is totally correct; rather, I am considering Darin's comment interesting.

Maybe you can help me out. Did Turkey have a USD problem? i.e. did they have to eliminate the over use of USD? If not, I would concede to many on DV that Turkey and Iraq are truly different scenarios. I have heard the argument from RD side that Turkey had pre- and post-RD bills in circulation for up to 10 years. That would not suggest that Turkey was trying to eliminate the use of USD.

I always consider all options, and I hope you are not cussing at your monitor for my perspective here. I guess I could believe that, because of the choice made by the CBI when implementing the new currency, that Iraq had the opportunity in 2003 to RD, even with the inflation rate at the time due to the common use of USD.

*Disclaimer* - I am assuming that USD was used more than IQD in 2003. I am assuming that Turkey did not have a USD problem (if you could call it that). The IQD will RD if the M1/M2 figures are correct. Finally, I apologize for grammar or spelling. I should be working, so I am typing fast.

[HopefulTxn]

Apparently something got taken out of context. Look at the second quote.

My argument

Instead of stabilizing at 1170, why not stabilize at 1.17

Instead of printing notes w/ 000s, why not omit them?

And... if we were at where we are today, the #s would be appealing, right? Hence no reason to re-denominate

Which is why I found the statement funny.. - The people have began to treat the bills as if the 000s didn't exist. Imagine if that was a reality (omission of the 000s) We wouldn't be having a re-denomination argument here. They would simply look to raise the value more (if anything).

But, I'll give you a reason I believe they printed the 000s.

They wanted to match the current value of the old regime notes at a 1:1 trade.

The idea was to get rid of the old dictator from the notes. And for the people to have a new currency to value and become proud of.

That in itself was a psychological band-aid so to speak.

Now it appears they will be looking to re-denominate again. Re-denominate as in, adding new currency such as lower denominations..

I wasn't trying to be argumentative, just stirring the pot a little bit

You do realize that when they introduced the new dinar in 2003 that they already had 000 notes. Saddam notes were printed up to 10,000 dinar, and from what I have read you basically had two notes that were used, the 250 dinar note and the 10,000 dinar note. By the time Saddam was removed from power there was already trillions of dinar in circulation, it's not like they went from having billions in early 2003 to trillions in late 2003.

You have asked why they didn't redenominate in 2003 when they introduced the new currency. I would ask if you have seen The Future of Iraq Project document. Someone brought it up the other day, and I had completely forgotten that they talked about redenominating during that currency exchange. Simply put, they stated to raise the value closer to what it was in the 1970s they would have had to do an exchange of 6,000 IQD for 1 NID, considering that the value at that time was 2,000 IQD to $1. Link

[Darin]

You do realize that when they introduced the new dinar in 2003 that they already had 000 notes. Saddam notes were printed up to 10,000 dinar, and from what I have read you basically had two notes that were used, the 250 dinar note and the 10,000 dinar note. By the time Saddam was removed from power there was already trillions of dinar in circulation, it's not like they went from having billions in early 2003 to trillions in late 2003.

You have asked why they didn't redenominate in 2003 when they introduced the new currency. I would ask if you have seen The Future of Iraq Project document. Someone brought it up the other day, and I had completely forgotten that they talked about redenominating during that currency exchange. Simply put, they stated to raise the value closer to what it was in the 1970s they would have had to do an exchange of 6,000 IQD for 1 NID, considering that the value at that time was 2,000 IQD to $1. Link

When you have a foreign asset that back your money supply let's look at his this would break down.

If you printed just 'one' note - that note would equal the value of the entire foreign assets that back your money supply.

If you print two notes of equal face value, each note equals 50% of that.

If you print four notes of equal fave value, each notes holds 25% of that.

I hope you see the pattern here:

My point:

They could of contracted the money supply by omitting the 000s from the introduction of the N-IQD

Their money supply is contracted, and "VALUE" remains the same.

I.e., 25 IQD = $0.86 instead of printing 25,000 and having the value be $0.00086

I was curious why they didn't consider it than?

But, I think it was based on the idea they needed swift actions and didn't have time to do an education campaign.

Or, it could be for reasons deeper.

[Darin]

GT5Junkie,

I'm not trying to argue any particular scenario. I mostly find it "laughable" that some people believe the only possible result is to R/D in terms of a LOP.

There are numerous ways in contracting the money supply. A re-denomination is the easiest to understand and plug the figures in. That may not necessarily be the best case scenario to pursue.

This can work in a long-term scenario... Slowly raising the value as the money supply is contracted

This can work in quick adjustments to the exchange. Multiple Tier R/Vs

They could sell bonds, as I was attempting to argue as a feasible solution

They could R/V with a lower rate that they could currently support and grow from there

and that are a few option(s) that come to mind.

Okay - lets say they decide that their best solution is to LOP

(i.e., 25,000 becomes 25)

They could maintain the same value that we see a 25,000 note now, basically running two exchange rates.

Each note has the same purchasing power.

Than, put forth a window to draw in the 000s.

Than deem them worthless.. Which most of us expect.

When we look at the Turkey scenario, they did not adjust the rate until the old notes were not longer valid.

Upon a R/D (lop) we very well could see that very same scenario for ourselves.

What does that mean?

Our 000s will never net us any gains. -

What are our solutions?

Exchange them away and walk away and think "It was worth a shot..."

Exchange them for new lower denominations and start the ride all over again.

Exchange them for USD, create a warka acct., put that USD in the warka account, and have it converted to IQD. (This scenario you could play the ISX or collect interest)

But here are the problems I foresee in "that" scenario:

1 - This could create a run on the banks, where 1,000s of people cash out their IQD and decide to walk away. This coudl be disruptive to the CBI and their foreign net reserves.

2 - This could prevent certain foreign companies investing..... Foreign investors would create jobs

I.e.,

Let's say I am the CEO of either MacDonald's or Wal-Mart:

I'm considering putting up restaurants or stores within their region because I believe that the particular region would benefit and I would profit.

I weigh the risks/rewards

At this moment, I would find the risks out weigh the rewards... High unstability, little security, and many poor people.

What if they had an increase in purchasing power (where the value increases)

The people would have money to spend.... They may look to buy goods/services

Now the rewards may outweigh the risks and it is worth taking action.

FYI - these type of places do not pop up over night.

[HopefulTxn]

When you have a foreign asset that back your money supply let's look at his this would break down.

If you printed just 'one' note - that note would equal the value of the entire foreign assets that back your money supply.

If you print two notes of equal face value, each note equals 50% of that.

If you print four notes of equal fave value, each notes holds 25% of that.

I hope you see the pattern here:

My point:

They could of contracted the money supply by omitting the 000s from the introduction of the N-IQD

Their money supply is contracted, and "VALUE" remains the same.

I.e., 25 IQD = $0.86 instead of printing 25,000 and having the value be $0.00086

I was curious why they didn't consider it than?

But, I think it was based on the idea they needed swift actions and didn't have time to do an education campaign.

Or, it could be for reasons deeper.

I think you missed the entire point of my last post. Since the 'plan' that was developed even before Saddam was removed from power stated that in order to increase the value of the dinar they would have to redenominate the currency, it seems to have been a foregone conclusion of what their endgame was going to be. No, they don't use the word, but when they state a currency exchange of 6,000 IQD to 1 NID that is exactly what it is. Which at that time would have put the NID value at around $3.

Simply because they decided to not do it then does not mean it was not still a planned action to take in the future. They were still suffering from high levels of inflation, most recently in 2007. They have been stating their plan is to redenominate since 2008. Unfortunately, that lines up with what we have learned about redenominations through research, is that they are most likely to be successful, only having to be done a single time. Had they redenominated in 2003 as you suggest, it is quite possible they would have had to issue new (higher) currency to compensate and then have to redenominate a second time, which would cost them even more.

[goldengoose]

I agree, very well thought out and seemingly feasable.

'cooked',

What's cookin'..........(Sorry, could not resist!!!)

Glad we agree.......let's hope with all of the good news recently, we will see this venture come to fruition very soon!

GG

[HopefulTxn]

When we look at the Turkey scenario, they did not adjust the rate until the old notes were not longer valid.

Upon a R/D (lop) we very well could see that very same scenario for ourselves.

Are you actually stating that people were to exchange ~1.35 million lira for 1 new lira but they didn't have a difference in value (1 old lira vs. 1 new lira)? If that is the case I would suggest you take another look at how they performed the action, which started with a currency law passed Jan 31, 2004, with implementation beginning Jan 1, 2005.

Edited August 2, 2011 by HopefulTxn

[frankc]

I'm not sonny1, but could you explain why you think Iraq will have to cash out all 50 trillion IQD? Any electronic funds would be held by citizens of Iraq and those would not be cashed out for US Dollars. Neither would any IQD held by citizens. As far as any IQD held by foreigners as investments, those wouldn't be cashed out by the CBI either. They would be cashed out by the foreigners Federal Reserve or Central Bank. Any IQD held by Federal Reserve's or Central Banks of foreign countries wouldn't be cashed out through the CBI either. They will be added to the foreign countries reserve currencies and used to strengthen there own currency. I would think that the amount of IQD cashed out to the CBI would be minimal and any that are would be done electronically.

What do you think would happen if the US Federal Reserve suddenly had every dollar held by foreign countries turned back in for their own currency? The US Federal Reserve couldn't do it and there wouldn't be any reason for the foreign countries to request that we do.

I have heard the argument that Iraq will use Sharia Law and not fractional banking. I would say that this might be the case if the CBI were owned by Iraqi's, but since it isn't, it will be using fractional banking as every other Central Bank and Federal Reserve does.

As for the M1 and M2 numbers that everyone seems to take as gospel. Good luck with that. Those numbers are nothing more then numbers on a page. To think that the CBI would have actual numbers up for the world to see only makes those that believe they are accurate appear gullible. The US Federal Reserve doesn't even post QE3 numbers any longer. CBI's posted numbers are no more accurate then ours. The numbers posted are those supplied by the CBI and they are released for a reason. They are to satisfy the IMF and UN to ensure they are still eligible for their free handouts. For example, it is like fudging the amount of take home pay to qualify for that new car. It is the way the banking system operates. Make it appear that you qualify on paper and you drive the new car home. That simple.

Fact of the matter is that no one knows what the rate will be and when it will happen. The only thing we know for sure is that when it happens we will cash out and move on.

Have a good night. oh btw Go RV.

You're comment that Iraq's M1 and M2 are only numbers on a page is interesting. If you don't want to believe anything published is real and you want to make up your own scenario to suit yourself and make your point then be my guest. I don't know why you mention QE3? The US has not even done a QE3 stimulus yet.

I don't know why there is this perception that if money is wired to someones account that digital money is just free. If any bank wires money they have to have it actually showing on their balance sheet first. It doesn't just miraculously appear. It has to come from somwhere.

That would be 10 trillion or more for fun cashed in at the Federal Reserve for US dollars. That would be 10 trillion or more added to our foreign reserves to strengthen our dollar. Nothing says that money ever has to be cashed out at the CBI.

In order for our Federal Reserve to accept that $10Trillion Dinar into their foreign reserves and pay out $10Trillion USD they would actually have to have the dollars in their account in order to pay all of us. Fractional banking applies to banks receiving money from the Fed they wish to loan out. For every dollar they recieve they will loan out 9 to 10 times that amount. Please tell me how that applies to our cashing in our Dinar?

Any amount the US cashes in this exchange will have to come from somewhere, such as our Treasury. Electronic or not it has to exist on a balance sheet somewhere. The money they pay us doesn't come out of thin air. It's going to be real in my account and it would have had to be real in their account first.

And yes, GO RV!

PS. I'm still waiting to hear from sonny1 the details from his professor associates he keeps bringing up.

Edited August 2, 2011 by frankc

[speculatorsRIDE]

In order for our Federal Reserve to accept that $10Trillion Dinar into their foreign reserves and pay out $10Trillion USD they would actually have to have the dollars in their account in order to pay all of us. Fractional banking applies to banks receiving money from the Fed they wish to loan out. For every dollar they recieve they will loan out 9 to 10 times that amount. Please tell me how that applies to our cashing in our Dinar?

Any amount the US cashes in this exchange will have to come from somewhere, such as our Treasury. Electronic or not it has to exist on a balance sheet somewhere. The money they pay us doesn't come out of thin air. It's going to be real in my account and it would have had to be real in their account first.

And yes, GO RV!

PS. I'm still waiting to hear from sonny1 the details from his professor associates he keeps bringing up.

The 10 trillion dinar added to our foreign reserve currency becomes assets and backs the 10 trillion US Dollars that will be added to our bank accounts electronically. Once the 10 trillion dinar are cashed out and are added to the foreign reserve currencies they will be added to the balance sheet. it doesn't come out of thin air. The 10 trillion dinar worth 10 trillion dollars are real. You hold some in your hands now I assume. I know I hold mine they are real.

Fractional banking applies because that 10 trillion dollars that gets added to our bank accounts doesn't just sit there. The bank takes that money and loans it out charging interest to the borrower. That's how fractional banking works. I am really surprised I needed to explain that.

Now could you go back to my original post and answer the questions I posed to you? Answering a question with a question doesn't really answer the original question.

[Darin]

Are you actually stating that people were to exchange ~1.35 million lira for 1 new lira but they didn't have a difference in value (1 old lira vs. 1 new lira)? If that is the case I would suggest you take another look at how they performed the action, which started with a currency law passed Jan 31, 2004, with implementation beginning Jan 1, 2005.

Apparently some people have no better time than to look deeply into what is said in context and take it out of context..........

I'm stating this:

When Turkey did their LOP

They accepted the two sets of currencies for a limited duration.

When the old notes became no longer valid, it was than that they increased the value of the dinar.

So if the same thing were to happen in Iraq..... Which for all you lopsters continuously are so quick to point out that they look to Turkey for their solutions..... Than that means you better sell your 000s now while the street value is higher and prepare to buy lower denominations or create a warka account... And to top it off, be prepared to anywhere from 90 days to over a year to wait for the small increase in value.

[HopefulTxn]

Apparently some people have no better time than to look deeply into what is said in context and take it out of context..........

I'm stating this:

When Turkey did their LOP

They accepted the two sets of currencies for a limited duration.

When the old notes became no longer valid, it was than that they increased the value of the dinar.

So if the same thing were to happen in Iraq..... Which for all you lopsters continuously are so quick to point out that they look to Turkey for their solutions..... Than that means you better sell your 000s now while the street value is higher and prepare to buy lower denominations or create a warka account... And to top it off, be prepared to anywhere from 90 days to over a year to wait for the small increase in value.

Yeah, and if a frog had wings he wouldn't bump his arse every time he jumped either.

Ok, you don't like talking about the Turkey situation... I get it... It is rather difficult to refute all the statements regarding them basically being used as the model.

So let's go back to the statement from the US State Department document that was written in 2002 (before Saddam was even removed) that stated they would have to do a 6,000 IQD to 1 NID exchange to get the value back to levels seen previously against the US dollar. If they were talking about redenominating then, but simply didn't - what has change so much that they can now RV when they have a monetary system about 15 times larger now in terms of quantity of dinar?

It is the decision of each individual whether to buy dinar or even sell their dinar. As with anything people speculate or invest their money into all sides should be represented as well as supported for people to get a better understanding of what they are placing their hard earned money into. If they decide the risk is acceptable to them, fine - if not, guess what that is fine too.

[bamjack75]

Yeah, and if a frog had wings he wouldn't bump his arse every time he jumped either.

Ok, you don't like talking about the Turkey situation... I get it... It is rather difficult to refute all the statements regarding them basically being used as the model.

So let's go back to the statement from the US State Department document that was written in 2002 (before Saddam was even removed) that stated they would have to do a 6,000 IQD to 1 NID exchange to get the value back to levels seen previously against the US dollar. If they were talking about redenominating then, but simply didn't - what has change so much that they can now RV when they have a monetary system about 15 times larger now in terms of quantity of dinar?

It is the decision of each individual whether to buy dinar or even sell their dinar. As with anything people speculate or invest their money into all sides should be represented as well as supported for people to get a better understanding of what they are placing their hard earned money into. If they decide the risk is acceptable to them, fine - if not, guess what that is fine too.

IMO, that State Department document simply was laying out a possible scenario using the illustration of (1USD =6000 old saddam dollars= 1 NID). But, Iraq/US GOV didn't do that; it was a 1:1 EXCHANGE for the old Saddam dollars and this was done between Oct 03 to Jan 04. If you had the swiss dinar it was 150:1. The important part, of that reading, to me, was the purchasing power and the need to return to the exchange value of the 1970's.

[bamjack75]

Now, as far as the monetary system, as it existed before and after the introduction of the NID; If there was the 1:1 exchange and the masses exchanged 27 billion old dinars for 27 billion new dinars, what happened to the other 26,723,000,000,000 IQD? I simply don't believe or buy into the fact, that the majority of all these notes are in circulation.

[THINK.....]

Nice info sonny1, and it sounds like you have the right contacts. Keeping my fingers crossed. Let's do this thing.

[HopefulTxn]

IMO, that State Department document simply was laying out a possible scenario using the illustration of (1USD =6000 old saddam dollars= 1 NID). But, Iraq/US GOV didn't do that; it was a 1:1 EXCHANGE for the old Saddam dollars and this was done between Oct 03 to Jan 04. If you had the swiss dinar it was 150:1. The important part, of that reading, to me, was the purchasing power and the need to return to the exchange value of the 1970's.

I am not sure which part you were reading, but the part that I was reading was stating that since the value of the dinar was 2,000 to $1, that in order to get the value to levels seen in the 1970s it would require a currency exchange of 6,000 dinar to 1 NID - which would have put it at $3 per dinar.

Now, as far as the monetary system, as it existed before and after the introduction of the NID; If there was the 1:1 exchange and the masses exchanged 27 billion old dinars for 27 billion new dinars, what happened to the other 26,723,000,000,000 IQD? I simply don't believe or buy into the fact, that the majority of all these notes are in circulation.

There is plenty of documentation that states that Saddam went on a printing spree of the dinar, and the CBI Annual Bulletin for 2003 (available on CBI website) states that the currency level in June 2003 was about 3.3 trillion dinar.

The growth from that level to the current level appears to have two causes. First, was that the inflationary problems were still problematic until 2007. The other is that considering the CBI has been increasing the foreign currency reserves, without any appreciation to the currency value, and that they are still basically remaining 100% asset supported points to the CBI issuing additional currency to keep the rate stable as opposed to raising the value.

[Darin]

I am not sure which part you were reading, but the part that I was reading was stating that since the value of the dinar was 2,000 to $1, that in order to get the value to levels seen in the 1970s it would require a currency exchange of 6,000 dinar to 1 NID - which would have put it at $3 per dinar.

There is plenty of documentation that states that Saddam went on a printing spree of the dinar, and the CBI Annual Bulletin for 2003 (available on CBI website) states that the currency level in June 2003 was about 3.3 trillion dinar.

The growth from that level to the current level appears to have two causes. First, was that the inflationary problems were still problematic until 2007. The other is that considering the CBI has been increasing the foreign currency reserves, without any appreciation to the currency value, and that they are still basically remaining 100% asset supported points to the CBI issuing additional currency to keep the rate stable as opposed to raising the value.

So - if the currency level in 2003 was roughly 3.3T...

And we know that the currency level in 2004 started with roughly 6T...

Why would the CBI allow the Monetary base to grow to above 50 Trillion?

Wouldn't you consider that irresponsible?

Why not adjust the rate against the amount in circulation to prevent printing additional notes.

So, lets say we argue that it was speculation upon the currency that expanded to 50+ Trillion from the original 6T

Are you willing to argue that over $50 billion USD has funneled towards them upon speculation alone? That's a lot of $ to relate to speculation.

You would think.... Considering supply & demand, the rates would rise in that scenario.

If a stock has so many shares - as demand rises, so does value.

We do know that life expectancy of a note in circulation in that region does not last very long.

I think the average life cycle is 1.5 years

So, it is obvious that there is a need to print notes nearly every year to replace worn out currency.

So, overall, the irony that I find here is that S.H. was foolish and went on a printing spree, when it appears if the #s are correct that CBI went on a printing spree in a ten-fold + rate.

[HopefulTxn]

So - if the currency level in 2003 was roughly 3.3T...

And we know that the currency level in 2004 started with roughly 6T...

Why would the CBI allow the Monetary base to grow to above 50 Trillion?

Wouldn't you consider that irresponsible?

Why not adjust the rate against the amount in circulation to prevent printing additional notes.

So, lets say we argue that it was speculation upon the currency that expanded to 50+ Trillion from the original 6T

Are you willing to argue that over $50 billion USD has funneled towards them upon speculation alone? That's a lot of $ to relate to speculation.

You would think.... Considering supply & demand, the rates would rise in that scenario.

If a stock has so many shares - as demand rises, so does value.

We do know that life expectancy of a note in circulation in that region does not last very long.

I think the average life cycle is 1.5 years

So, it is obvious that there is a need to print notes nearly every year to replace worn out currency.

So, overall, the irony that I find here is that S.H. was foolish and went on a printing spree, when it appears if the #s are correct that CBI went on a printing spree in a ten-fold + rate.

The difference between when Saddam went on a printing spree was because he had spent the foreign reserves on his war with Iran, so he was introducing more currency without increasing the assets backing it which devalued it - so yes that was far more irresponsible than what it seems the CBI is doing now, which seems to simply be balancing the amount of dinar in relation to their assets backing it. If you notice, as their net assets are increasing, the balance between liabilities and assets is remaining fairly constant, so that means that they are issuing more currency to compensate for the gains in asset value rather than increasing the value, which makes sense when considering they would have to spread that value gain over trillions of dinar, which would make it very negligible upticks in value. It also makes complete sense if redenomination was their intention from the beginning - as the only thing that would possibly change is the ratio between old currency and new currency during an exchange.

[Darin]

The difference between when Saddam went on a printing spree was because he had spent the foreign reserves on his war with Iran, so he was introducing more currency without increasing the assets backing it which devalued it - so yes that was far more irresponsible than what it seems the CBI is doing now, which seems to simply be balancing the amount of dinar in relation to their assets backing it. If you notice, as their net assets are increasing, the balance between liabilities and assets is remaining fairly constant, so that means that they are issuing more currency to compensate for the gains in asset value rather than increasing the value, which makes sense when considering they would have to spread that value gain over trillions of dinar, which would make it very negligible upticks in value. It also makes complete sense if redenomination was their intention from the beginning - as the only thing that would possibly change is the ratio between old currency and new currency during an exchange.

Speculation could of driven up the value. Everyone would of eventually folded at some point in time based upon the value. But they choose to not go that route, as they just printed more money instead of increased the value. I find that interesting....

[HopefulTxn]

Speculation could of driven up the value. Everyone would of eventually folded at some point in time based upon the value. But they choose to not go that route, as they just printed more money instead of increased the value. I find that interesting....

How exactly would speculation drive up the value of the dinar considering it is a fixed rate currency and not a market driven valued currency?