Updated thoughts from Enoch8...sat oct.1

[design interrupted]

Thanks Highlander! Your wealth of knowledge and research is greatly appreciated. Please stop by more often.

[xyzzy]

I take no offense to healthy discussion at all.

Super!

And thank you for backing up what I stated about France. The math you presented about France is the same that I presented. For every 1000 Francs they had they received 10 new Francs. 1000 divided by 100 = 10 That is 100 of the old notes for every one of the new notes. And yes they removed 3 zeroes. You see the 1000 series notes were taken out of use in France and never have been used again.

Right, maybe I misinterpreted things when you said

France carried 1,000, 5,000, and 10,000 notes. They in fact removed 3 zeroes from their currency. However here is the wrinkle. when they allowed the citizens to exchange their notes they were able to get 1 of the new notes with only 100 of the old notes. Which essentially was 100 to 1 for the people not 1000 to 1 and a removal of 3 zeroes would lead us to believe.

But there was no "wrinkle" there was no "allowed", it was just a straight forward 100:1 RD for all holders of the old currency, in France or outside.

As far as my saying it is true simply because I say it is true is a little extreme. A more diplomatic way to state that would be to ask me if I could help you all with the documents and research I have to back up these statements. My response would be.. Sure! I would be happy to help those seeking knowledge in understanding how this works!

Ok, how could Iraq sustain a money supply that is valued at 300 times their GDP? Can you point to any country in the last 100 years that managed this feat? Why would any other country or company accept this claimed value for the dinar with no underlying change to Iraq's economy or money supply? Edited October 3, 2011 by xyzzy

[zigmeister]

So lets consider the political aspects to this. If they can indeed do this, Maliki could find himself sitting in a very good situation.

[tim5400]

when this hits the fan there will NOT be 30 trillion dinars"" in circulation"".... shabibi will pull them in in a speedy manner,,,his ass depends on it

[goldengoose]

Exaclty! The GOI is elected by the people and represent the people. And The CBI is not elected officials. One last thing I forgot to mention. Shabibi is not the final decision maker for the CBI. There is a board that sits above him in the organizational chart of the CBI that he answers to. I wonder who sits on that board? All I can say is I would love to see the name on the signature line for Shabibis paycheck. I can assure you it isn't being signed by the government of Iraq!

'Highlander',

Good evening!

Thank you for your intelligent perspective and ability to break down specific research you bring forth!

I may be going out on a very weak and shaky limb here, but I agree and think there may be an American 'signature' associated with Shabbs' paycheck and the "Board of CBI Governors.........!!!!

Thank you,

GG

[zantac]

What we all need to know is the CBI is a little more powerful than most think, greater laws & regulations were handed to the CBI by none other than are good friends the IMF

Take a good look at the CBI web site, this is a very bold statement.

I have highlighted the key factors to show the original post has absolutely know creditable information or logic

The primary objectives of the Central Bank of Iraq (CBI) is to ensure domestic price stability and foster a stable competitive market based financial system. The CBI shall also promote sustainable growth, employment and prosperity in Iraq. The functions of the CBI in addition to achieving its primary objectives are:

Implement the monetary policy and the exchange rate policy of Iraq

Hold gold and manage the state reserves of gold.

Issue and manage the Iraqi currency.

Establish, oversee, promote a sound and efficient payment system.

Issue licenses or permits in addition to regulating and supervising the banking sector as specified by the Banking Law.

Carry out any ancillary tasks or transactions within the framework of Iraqi law.

link

http://www.cbi.iq/index.php?pid=TheCbi

[Highlander]

Ok, how could Iraq sustain a money supply that is valued at 300 times their GDP? Can you point to any country in the last 100 years that managed this feat? Why would any other country or company accept this claimed value for the dinar with no underlying change to Iraq's economy or money supply?

the only example that I can give you is the United States. You see in 1948 our congress passed a piece of legislation calles "the economic recovery act of 1948" which became known as the marshall plan later on. In the act the United States alloted 12 billion dollars for the reconstruction of Europe. By doing this we created an artificial demand for the dollar. See the countries of Europe were crushed during the war. They had no infrastructure, no power, no production, no exporting and no currencies with any value to speak of.

So we shipped off the US Dollar to Europe. Conveniently the US had stopped printing the 3 zeroed notes in 1945. So we ship off a whole lot of notes with 3 zeroes on them to Europe meanwhile at home we see a rise in the 100 series notes being used. Why? Because the value of the US dollar had gone up and the notes with 3 zeroes on them were no longer needed. But Europe could use them because they needed large amounts of money to rebuild so the 3 zeroes were not a problem for them.

The 3 zeroes were not addressed again until 1969 when nixon declared them no longer for use. He supposedly did this to fight the war on drugs and make it harder to move large amounts of US money. So you see we never did a redenomination. The value of our currency was driven by demand and the effect of this was the removal of the zeroes from circulation without a redenomination.

Look up the treaty between Germany and the United States in 1948 for exactly how this US money was secured by Germany. It is interesting reading and very mind blowing.

Back to the subject at hand. We didn't lower our currency in circulation to raise the value of the dollar in fact we increased our currency in circulation. The value was driven by demand.

You can find these documents by doing a simple goodle search starting with the economic recovery act of 1948 and following the trail!

What we all need to know is the CBI is a little more powerful than most think, greater laws & regulations were handed to the CBI by none other than are good friends the IMF

Take a good look at the CBI web site, this is a very bold statement.

I have highlighted the key factors to show the original post has absolutely know creditable information or logic

The primary objectives of the Central Bank of Iraq (CBI) is to ensure domestic price stability and foster a stable competitive market based financial system. The CBI shall also promote sustainable growth, employment and prosperity in Iraq. The functions of the CBI in addition to achieving its primary objectives are:

Implement the monetary policy and the exchange rate policy of Iraq

Hold gold and manage the state reserves of gold.

Issue and manage the Iraqi currency.

Establish, oversee, promote a sound and efficient payment system.

Issue licenses or permits in addition to regulating and supervising the banking sector as specified by the Banking Law.

Carry out any ancillary tasks or transactions within the framework of Iraqi law.

link

http://www.cbi.iq/index.php?pid=TheCbi

the only point that I made earlier is that the CBI law was done in 2004 and the constitution was done in Oct of 2005 and it simply states no law may exist in iraq that contradicts the constitution. I didn't say that it made the CBI law null and void all together. I simply stated that the power to issue currency was taken back by the GOI. I also posted the specific articles from the constitution that address this issue. Again you can find your own copy of the Iraqi constitution by google searching the iraqi constitution. The second link that comes up is straight from the UN website.

I am not trying to scare anyone here. I just differ in opinion from others. I simply believe that the history of the bankers in our world does not bode well for us. But I do believe Iraq has this one chance, while they are trying to issue a new currency, to have a say in their future. Once this process is done Iraq will be in the same shoes as all the rest of the governments around the world and they will be at the mercy of the central bank policies.

[xyzzy]

Ok, how could Iraq sustain a money supply that is valued at 300 times their GDP? Can you point to any country in the last 100 years that managed this feat? Why would any other country or company accept this claimed value for the dinar with no underlying change to Iraq's economy or money supply?

the only example that I can give you is the United States. You see in 1948 our congress passed a piece of legislation calles "the economic recovery act of 1948" which became known as the marshall plan later on. In the act the United States alloted 12 billion dollars for the reconstruction of Europe.

Yes I'm sure most everyone knows of the Marshall plan. It was for 13B not 12, and that was on top of the 12B in aid we had already given Europe between the end of the war and the beginning of the plan.

By doing this we created an artificial demand for the dollar. See the countries of Europe were crushed during the war. They had no infrastructure, no power, no production, no exporting and no currencies with any value to speak of.

Europe was indeed hit very hard but was by no means at 0 production. If it was at 0, a mere 25B would not have been remotely enough for all of Europe. At no time did the aid exceed 5% of GNP of the recipient nations (The Marshall Plan: Myths and Realities George Mason University)

This also did not involve a money supply that was 100s of times GDP which is the example I asked for (and I agree can not be offered as it doesn't exist). We did not revalue their currency we gave them our currency. The US GDP at the time was 258B, so the total of both aid blocks was still only 10% of our annual GDP, so really not that big of a deal. A demand for dollars would be where the rest of the world wants to buy dollars with their currency, but that is not what happened, we just gave them the dollars (well for the most part, about 1+B was actually loans). Further they had to match their expenditures from the aid with their own funds so, they were not at 0 GDP or 0 production or 0 currency value.

So we shipped off the US Dollar to Europe. Conveniently the US had stopped printing the 3 zeroed notes in 1945. So we ship off a whole lot of notes with 3 zeroes on them to Europe meanwhile at home we see a rise in the 100 series notes being used. Why? Because the value of the US dollar had gone up and the notes with 3 zeroes on them were no longer needed. But Europe could use them because they needed large amounts of money to rebuild so the 3 zeroes were not a problem for them.

I see no references that we shipped giant boxes of cash in the form of 1,000 and 5,000 notes (there were very few 10,000 notes ever printed). If you have a reference support this I'll be happy to look at it, but it also doesn't really matter. What difference does it make what denominations we used?

The 3 zeroes were not addressed again until 1969 when nixon declared them no longer for use. He supposedly did this to fight the war on drugs and make it harder to move large amounts of US money. So you see we never did a redenomination. The value of our currency was driven by demand and the effect of this was the removal of the zeroes from circulation without a redenomination.

This whole "3 zero" theme for the US is irrelevant. What does it have to do with what you propose will happen in Iraq?

Look up the treaty between Germany and the United States in 1948 for exactly how this US money was secured by Germany. It is interesting reading and very mind blowing.

Back to the subject at hand. We didn't lower our currency in circulation to raise the value of the dollar in fact we increased our currency in circulation. The value was driven by demand.

And neither was the value of the dollar increased over night, but over many years from our rising economy, not some government proclamation of its worth. So to compare the lack of use of large notes in the US to what is expected in Iraq is nuts! They are not remotely the same. We never had that many huge notes to begin with, and the value slowly rose based on the economy (and not by nearly a factor of 1000). In iraq huge notes are common and you are claiming their value will rise by 1000 fold by proclamation.

[vaquero]

Consider this question: "Who pays for the RV?"

Then this: "How will CBI cover $30 Trillion to cover 30 Trillion IQD at even $1.00?"

It is apparent to me, that it is the GOI, who holds the ability to authorize, the 'Bills of Exchange', that will monetize the People's Wealth...... meaning the Asset Wealth of the Nation of Iraq, that belongs to the People of Iraq, not the Central Bank.

Central Bank does not have the authority to monetize non liquid assets, because they are not the elected Representatives of the People. GOI is.

Factoid: CBI does not have the ability to monetize $30 Trillion worth of what is under the ground in Iraq, to cover the approximately 30 Trillion IQD at even $1.00, without the GOI authorizing such 'Bills of Exchange', to cover the costs.

Think of it like this..... who is going to pay you $1 Million US for your 1 Million Dinars? That does not come from thin air. Even the US is not going to just print that into existence, without holding an asset of equal or greater value.

In this case, my guess would be, that all of what we cash in for USD in the US, for example, would be covered by such 'Bills of Exchange', that are backed by the GOI, which are not 'In Circulation' currency, hence relieving the 'Liability' from the CBI.

CBI CANNOT act alone on this. Without the Elected Representation of what belongs to the People, the Central Bank does not have that power. The Government bears that obligation and responsibility, NOT CBI. CBI has the power to implement policy, at the pleasure of the GOI, and the People of Iraq.

Independent Agency operates and exists, only by the will of the People's Representation.

That is GOI and only GOI. Bankers are not elected, so have no authority but what is granted by the Government.

Iraq can cover the RV..... but not CBI. The bank's job is to handle the transactions and implement functional plans. Only GOI can approve the plan. In fact, it was GOI, namely the Economics Commision of 2007, who are a GOI Committee of Parliament, who charged the CBI, to draft the proposal to begin with.

It started with Parliamentary Committee.... and that is who will approve it.

Be careful who you speak badly about. You never know who your best advocates are.

Just sayin'.

CBI has consistently spoken of redenomination and I am sure if it was left up to them, that is all it would be. The GOI and the Economists of the GOI, are the ones who are protecting you from the lop. They are the ones that are saying, redenomination will not solve anything. That means they are basically saying...... a LOP wont change anything. GOI is your best advocate here. Get a clue.

Great observations, Duck.

This is what I meant, last year when I said, "This is going to get really bumpy at or near the end of this ride."

Hold the faith.... Hold the line..... Stand Strong.

what i will do is sell all my dinars and put all my money I get from selling my dinars into my Warka and Isx. When it RVs I'l dont have to pay tax and leave it there Until I'm good and ready to spend it or for my legacy. Thank you oh I will even get more dinars with in Warka acc. again Thank you for it will be what will be.

[countryroads]

All this fussing about who has what authority, who's in charge of what and who makes what decisions should have been settled a long time ago. No more commitment than they have right now toward a unified Iraq means it will be 2 to 3 more years before they stop talking and start action on the RV. We taught them now we reap our rewards.

[Markinsa]

One important fact that is constantly overlooked is that the CBI law was put into place by the CPA in 2004. There was a document that came along in Oct of 2005 called the Iraqi Consitution that may of had a few things to say about the CBI law and the authority of the CBI.

Please see below. These are articles from the actual Iraqi constitution.

Second: No law that contradicts this Constitution shall be enacted. Any text in any

regional constitutions or any other legal text that contradicts this Constitution

shall be considered void.

This article of the constitution directly states that no legal text that opposes the constitution will be honored. Now this becomes important when you read the next piece of information.

Article 110:

The federal government shall have exclusive authorities in the following matters:

First: Formulating foreign policy and diplomatic representation; negotiating,

signing, and ratifying international treaties and agreements; negotiating, signing,

and ratifying debt policies and formulating foreign sovereign economic and trade

policy.

Second: Formulating and executing national security policy, including

establishing and managing armed forces to secure the protection and guarantee

the security of Iraq’s borders and to defend Iraq.

Third: Formulating fiscal and customs policy; issuing currency; regulating

commercial policy across regional and governorate boundaries in Iraq; drawing

up the national budget of the State; formulating monetary policy; and establishing

and administering a central bank.

I think the constitution of Iraq clearly states whos authority it is to issue a new currency and that is the GOI's right.

Article 130:

Existing laws shall remain in force, unless annulled or amended in accordance with the provisions of this Constitution.

I'm not a lawyer, but I would say, because of Article 130, the CBI Law is still in force and therefore doesn't need permission from the Government of Iraq to Issue Currency or adjust the Exchange Rate.

-

[Zekiel]

Super!

Right, maybe I misinterpreted things when you said But there was no "wrinkle" there was no "allowed", it was just a straight forward 100:1 RD for all holders of the old currency, in France or outside.

Ok, how could Iraq sustain a money supply that is valued at 300 times their GDP? Can you point to any country in the last 100 years that managed this feat? Why would any other country or company accept this claimed value for the dinar with no underlying change to Iraq's economy or money supply?

I see you posed this question not once but twice.

"How could Iraq sustain a money supply that is valued at 300 times their GDP?"

Has anyone here suggested that Iraq or CBI would still have 30 Trillion IQD in circulation after an RD or RV ?

Seems to me, what Enoch posted, shows how over 99.9% of the currency in circulation can be 'Paid For', and 'Removed' from circulation..... by monetizing non liquid assets.

By doing this, it does indeed relate to forms of credit, as someone suggested earlier, but the beauty of that, would be, it is not like and interest bearing loan, by using 'Bills of Exchange', issued by the government.

Do you see, this is like creating accounts, somewhat like stocks and futures, that are no longer a liability of circulation currency?

Nobody here said there would be 30 Trillion IQD in circulation. The whole idea is to remove them.

Basically what France did, shows, it is possible to remove a 1000 franc for 10 franc, but increase the value basically 10 times. That is in effect a 10 x Revaluation/Redenomination hybrid.

Nice work Highlander. Thank you.

[Highlander]

Yes I'm sure most everyone knows of the Marshall plan. It was for 13B not 12, and that was on top of the 12B in aid we had already given Europe between the end of the war and the beginning of the plan.

Europe was indeed hit very hard but was by no means at 0 production. If it was at 0, a mere 25B would not have been remotely enough for all of Europe. At no time did the aid exceed 5% of GNP of the recipient nations (The Marshall Plan: Myths and Realities George Mason University)

This also did not involve a money supply that was 100s of times GDP which is the example I asked for (and I agree can not be offered as it doesn't exist). We did not revalue their currency we gave them our currency. The US GDP at the time was 258B, so the total of both aid blocks was still only 10% of our annual GDP, so really not that big of a deal. A demand for dollars would be where the rest of the world wants to buy dollars with their currency, but that is not what happened, we just gave them the dollars (well for the most part, about 1+B was actually loans). Further they had to match their expenditures from the aid with their own funds so, they were not at 0 GDP or 0 production or 0 currency value.

I see no references that we shipped giant boxes of cash in the form of 1,000 and 5,000 notes (there were very few 10,000 notes ever printed). If you have a reference support this I'll be happy to look at it, but it also doesn't really matter. What difference does it make what denominations we used?

This whole "3 zero" theme for the US is irrelevant. What does it have to do with what you propose will happen in Iraq?

And neither was the value of the dollar increased over night, but over many years from our rising economy, not some government proclamation of its worth. So to compare the lack of use of large notes in the US to what is expected in Iraq is nuts! They are not remotely the same. We never had that many huge notes to begin with, and the value slowly rose based on the economy (and not by nearly a factor of 1000). In iraq huge notes are common and you are claiming their value will rise by 1000 fold by proclamation.

I will leave you with this link for the night since you have shown you like wikipedia as a source.

http://en.wikipedia.org/wiki/Fiat_money

Fiat money is money that has value only because of government regulation or law. The term derives from the Latin fiat, meaning "let it be done", as such money is established by government decree. Where fiat money is used as currency, the term fiat currency is used.

Fiat money originated in 11th century China,[1] and its use became widespread during the Yuan and Ming dynasties.[2] The Nixon Shock of 1971 ended the direct convertibility of the United States dollar to gold. Since then all reserve currencies have been fiat currencies, including the dollar and the euro.[3]

CharacteristicsThe term fiat money has been defined variously as:

any money declared by a government to be legal tender.[4]

state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.[5]

money without intrinsic value.[6][7]

While specie-backed representative money entails the legal requirement that the bank of issue redeem it in fixed weights of specie, fiat money's value is unrelated to the value of any physical quantity. Even a coin containing valuable metal may be considered fiat currency if its face value is higher than its market value as metal.

A feature of all fiat money is its acceptability to the government for payment of taxes and charges.

Fiat money is not essential for large countries, nor is it always used. An economy may function on banknotes issued by commercial banks, which are not legal tender, and hence not fiat money. This was the situation in the United States during periods prior to 1862, before the first United States Notes were created and declared by the government to be legal tender.

My last thoughts: Iraq is in a position that they can actually support the 30 trillion with assests and not just be a fiat currency. they can do it with oil, natural gas, minerals, gold and silver and we haven't even begun to touch what will happen to them when they have a free market economy to run along side all its natural wealth.

Can they do it because I say so? No, they can do it because the IMF allows for a fiat system of money to exist! And that is the magic of the banking world as it was so fondly referred to earlier in this thread. Money is debt not wealth and Iraq can determine how much debt they are willing to take on for their future.

[Zekiel]

XYZZY,

You sound like an intelligent person. So the very points you are making, makes me want to ask a question of you.

Which one of the 53 countries Shabibi mentioned, (Actually there were close to 90 of them since early 1900s, but who is counting?), again.... which of these countries who did a redenomination, is a good and reasonable comparison of Iraq?

[abby01]

This has been a great thread to read! Thank you very much for sharing all your hard work and knowledge! I am glad somebody understands something in the dinar world!

That is for Highlander, Enoch and the DV members who add intelligent discussion to the topic.

Edited October 4, 2011 by abby01

[unirod]

Ive read a Redenomination has to go through parliament and get approved so therefore the CBI does not have a say till its passed the CBI is not running the country the GOI is.

Easy,

Does the Federal Reserve let Congress tell it what to do in regards to monitary policy? They lent out $16 trillion of our dollars at 0% interest WITHOUT congressional, or the peoples permission. So give me a friggin break here. I understood the CBI was an independant entity just like the Fed

[keepmwlknfny]

Ive read a Redenomination has to go through parliament and get approved so therefore the CBI does not have a say till its passed the CBI is not running the country the GOI is.

Its the issuing of a new currency that has to be approved by the govt....

The CBI can do what they want with the exchange rate without the govts approval.....

[Markinsa]

Anybody know a good Iraqi Lawyer that can translate this for us?

-

[xyzzy]

XYZZY,

You sound like an intelligent person. So the very points you are making, makes me want to ask a question of you.

Which one of the 53 countries Shabibi mentioned, (Actually there were close to 90 of them since early 1900s, but who is counting?), again.... which of these countries who did a redenomination, is a good and reasonable comparison of Iraq?

I don't know that any are that good of a match for the whole scenario from Saddam's hyperinflation through war and fledgling democracy yet highly factionalized and sectarian factions at that, the whole thing beyond chaotic. But I don't know that it matters. I think we can still place limits on what can or can not happen based on the present state of things, with lessons from the combined histories of other countries and the basic mechanisms of economics. I see no reason to think that Iraq is going to shoot off in a direction with its economy and relation to the rest of the world that is radically different from all other countries that have been in similar (but not exactly the same) situation.

[zul]

TQ Highlander....great information

[xyzzy]

I see you posed this question not once but twice.

"How could Iraq sustain a money supply that is valued at 300 times their GDP?"

Has anyone here suggested that Iraq or CBI would still have 30 Trillion IQD in circulation after an RD or RV ?

After an RD of course there would be 1000x less if its a 1000:1 RD. But if that is done it limits the RV to maybe 2x or 3x. I agree that is certainly possible, but I don't think that is what you are talking about. And by RD I mean the standard economic definition, a new currency with a fixed exchange rate to the old.

Seems to me, what Enoch posted, shows how over 99.9% of the currency in circulation can be 'Paid For', and 'Removed' from circulation..... by monetizing non liquid assets.

By doing this, it does indeed relate to forms of credit, as someone suggested earlier, but the beauty of that, would be, it is not like and interest bearing loan, by using 'Bills of Exchange', issued by the government.

Do you see, this is like creating accounts, somewhat like stocks and futures, that are no longer a liability of circulation currency?

No, I don't see it at all. So, how about laying it out, just Iraq does this, the people do that, exchanges are made for this etc. Tell me how it will go. I really do not think it can remotely work, but lets run it through and see.

Nobody here said there would be 30 Trillion IQD in circulation. The whole idea is to remove them.

Basically what France did, shows, it is possible to remove a 1000 franc for 10 franc, but increase the value basically 10 times. That is in effect a 10 x Revaluation/Redenomination hybrid.

Nice work Highlander. Thank you.

Well Highlander just said in another post that Iraq can in fact support 30T dollars worth of a money supply, so yes actually people do say that. Also for an RD to be value neutral in the aggregate (i.e. for all the money held by anyone or thing or prices or wages etc) it has to increases the value of an individujal note by the same ratio of the decrease of the number of notes. So France does a 100:1 RD, that ends up with a 1000 franc note being replaced by a 10 franc note (the number goes down by 100), and the new francs are worth 100 times as much (not just 10x).

[xyzzy]

So first you're just going to ignore everything I said and move on. Ok, up to you. But lets be clear you did not answer any of my points.

I will leave you with this link for the night since you have shown you like wikipedia as a source.

http://en.wikipedia.org/wiki/Fiat_money

Fiat money is money that has value only because of government regulation or law. The term derives from the Latin fiat, meaning "let it be done", as such money is established by government decree. Where fiat money is used as currency, the term fiat currency is used.

Fiat money originated in 11th century China,[1] and its use became widespread during the Yuan and Ming dynasties.[2] The Nixon Shock of 1971 ended the direct convertibility of the United States dollar to gold. Since then all reserve currencies have been fiat currencies, including the dollar and the euro.[3]

CharacteristicsThe term fiat money has been defined variously as:

any money declared by a government to be legal tender.[4]

state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.[5]

money without intrinsic value.[6][7]

While specie-backed representative money entails the legal requirement that the bank of issue redeem it in fixed weights of specie, fiat money's value is unrelated to the value of any physical quantity. Even a coin containing valuable metal may be considered fiat currency if its face value is higher than its market value as metal.

Yes I am aware of flat money. If you live in isolation then definition I made bold can work, but that is not the case for countries that want to import, export, and exchange currency. Then the sum total of stuff that it represents (not gold, but the basket of stuff you can buy with it) must be consistent with its exchange rate to other currencies and their economies and be supported by the country. i.e. why are we not happy with how China pegs its currency? If it doesn't matter and is just arbitrary why are we so upset with them?

My last thoughts: Iraq is in a position that they can actually support the 30 trillion with assests and not just be a fiat currency. they can do it with oil, natural gas, minerals, gold and silver and we haven't even begun to touch what will happen to them when they have a free market economy to run along side all its natural wealth.

No. All these things will allow them to support a growing economy going forward but they do not offer support for a currency today, which wouldn't be a flat currency even if such things could back a currency.

Can they do it because I say so? No, they can do it because the IMF allows for a fiat system of money to exist! And that is the magic of the banking world as it was so fondly referred to earlier in this thread. Money is debt not wealth and Iraq can determine how much debt they are willing to take on for their future.

No actually they can't. They can only take on as much as the rest of the world thinks they can pay, i.e. the size of their economy. Edited October 4, 2011 by xyzzy

[imgesing]

Ive read a Redenomination has to go through parliament and get approved so therefore the CBI does not have a say till its passed the CBI is not running the country the GOI is.

LOL And who is REALLY running the GOI?

Now this is a bigger question, right? DO you think the USA has nothing or no involvement? It is another great question.

Are you one of those who believes the numbers too? Do you believe we are getting true information?

You do know what happened with China the day before an RV, right? Let's hope that MOST of the news now is a diversion to what hoefully will be something very benefical to us all.

PEACE

[Rossenbos]

Consider this question: "Who pays for the RV?"

Then this: "How will CBI cover $30 Trillion to cover 30 Trillion IQD at even $1.00?"

Think of it like this..... who is going to pay you $1 Million US for your 1 Million Dinars? That does not come from thin air. Even the US is not going to just print that into existence, without holding an asset of equal or greater value.

I'm going to comment on the above and take the risk that the whole forum will laugh me to the exit and tar and feather me :-).

But....

if I hold 1 mio dinars, and the RV comes in at 1$ then the US banks would happily exchange them into US$ for me. They will get the equivalent in value, which will move to their reserves and can be used as further backing for their fractional banking methods, right?

It does come from thin air. Money is not backed by anything but the economical activity of us humans. Not gold. Not silver.

The US doesn't need to print anything. It's all lazy digits in a computer.

So, the US is now holding onto my dinars. If the rate goes further up ( as Adam Montana believes... he thinks we'll have a floated RV, with 10cents first and further increases which will in effect pay for the increase in value), the US bank holding my dinars will increase value.

Am I wrong?

[Markinsa]

Sounds logical. Its just like a good painting. The painter dies and the value increases because the painter is dead. Its a perceived value thing. Free Market Economy, and the price of most things are what people are willing to pay for it. If the World thinks one Dinar is worth $1 US, then that's what it should be valued at.

-