xyzzy Posted October 4, 2011 Report Share Posted October 4, 2011 If the IQD were to RV to $1, this does not effect to cost of imported goods in their home country, so they will become 1000x less costly to import to Iraq. If prices and wages stay the same (in dinars) in Iraq, only the importers gain anything from this deal so clearly the price of imported goods will fall proportionately. Likewise the cost of Iraq's goods must fall or they will never be able to export anything, and wages must also come down. So only the holders of cash (physical or electronic) are the winners, and they are big winners. Holders of stuff (including debt) gain nothing. Suppose you are doing well in Iraq and own five houses or apartments that your rent out. Its a cash flow intensive business and it just happens that you are completely tapped out the day prior to collecting monthly rent from your five tenants. But it RVs on that day. Your apartments are not worth any more then they were the day before, as their price in dinars comes down by 1000x, but your tenants having not yet paid their monthly rent now have 10000 months worth or 83 yeas worth of rent in their pocket. You gain nothing, they are all rich. Two guys with low paying jobs live payday to payday. One gets his weekly pay just before the RV and now has 18 years worth of pay, the other gets paid right after the RV and has no advantage at all. The price of ISX shares will come down like anything else but stock markets are prone to overshoot so that could be pretty chaotic. Iraqi's with even modest savings will be rich and want to buy and this demand will drive prices back up and out of reach of those that did not happen to have savings at that moment. That will drive wages up and Iraqi goods will become uncompetitive in some degree undoing the gain of the RV for Iraqis. For those that think an RV to $1 is possible, how will society not tear itself apart here (in addition to all the other problems pointed out of course). 9 Link to comment Share on other sites More sharing options...
Atheist Posted October 4, 2011 Report Share Posted October 4, 2011 If the IQD were to RV to $1, this does not effect to cost of imported goods in their home country, so they will become 1000x less costly to import to Iraq. If prices and wages stay the same (in dinars) in Iraq, only the importers gain anything from this deal so clearly the price of imported goods will fall proportionately. Likewise the cost of Iraq's goods must fall or they will never be able to export anything, and wages must also come down. So only the holders of cash (physical or electronic) are the winners, and they are big winners. Holders of stuff (including debt) gain nothing. Suppose you are doing well in Iraq and own five houses or apartments that your rent out. Its a cash flow intensive business and it just happens that you are completely tapped out the day prior to collecting monthly rent from your five tenants. But it RVs on that day. Your apartments are not worth any more then they were the day before, as their price in dinars comes down by 1000x, but your tenants having not yet paid their monthly rent now have 10000 months worth or 83 yeas worth of rent in their pocket. You gain nothing, they are all rich. Two guys with low paying jobs live payday to payday. One gets his weekly pay just before the RV and now has 18 years worth of pay, the other gets paid right after the RV and has no advantage at all. The price of ISX shares will come down like anything else but stock markets are prone to overshoot so that could be pretty chaotic. Iraqi's with even modest savings will be rich and want to buy and this demand will drive prices back up and out of reach of those that did not happen to have savings at that moment. That will drive wages up and Iraqi goods will become uncompetitive in some degree undoing the gain of the RV for Iraqis. For those that think an RV to $1 is possible, how will society not tear itself apart here (in addition to all the other problems pointed out of course). Hmm Shabs or you...I am going with Shabs can figure it out. 5 Link to comment Share on other sites More sharing options...
zul Posted October 4, 2011 Report Share Posted October 4, 2011 What if most of the prices and salaries are quoted in USD? Most Iraqis are using USD in their daily transactions, much much more than their own IQD. Link to comment Share on other sites More sharing options...
Dalite Posted October 4, 2011 Report Share Posted October 4, 2011 What if most of the prices and salaries are quoted in USD? Most Iraqis are using USD in their daily transactions, much much more than their own IQD. It would force everything to go to USD. Think about it. For years, a 25,000 Dinar note would buy a case of 24 Cokes. After a $1.00 RV, it could be exchanged for $25,000, and ever Iraqi knows what that would buy. There would be mobs descending on the banks to exchange every dinar they can acquire, by any means imaginable, before the Dinar again becomes worthless. They know it won't happen to them if they hold dollars. It would take years of near 100% dependence on the dollar, and the dinar somehow remaining stable, before the confidence to use the dinar started shifting that tide. People would be killed, riots of people trying to get to the banks and get dollars before the banks ran out. Those that weren't able to cash in before the banks ran dry would be at odds with those more fortunate. Folks would kill their neighbors for dinars that they may be able to get $.50 to the dinar on the black market, An increase of 500 times is still 500 times more valuable than it had been for years, and they know what the dollar has always bought. If things weren't bad enough already, this could fill that void... Hopefully, we would have our troops out before they rioted and destroyed the airfields to keep the noveau riche from vacating the country. Our troops would have to be transported to another (hopefully friendly) country to be extracted. Yeah, it would be a great idea; almost as fun as putting 100 bumblebees in a jar, and shaking h e l l out of it every time they settled down. It would be the quickest way to get all the Dinar out of circulation. 1 1 Link to comment Share on other sites More sharing options...
Francie26 Posted October 4, 2011 Report Share Posted October 4, 2011 It would force everything to go to USD. Think about it. For years, a 25,000 Dinar note would buy a case of 24 Cokes. After a $1.00 RV, it could be exchanged for $25,000, and ever Iraqi knows what that would buy. There would be mobs descending on the banks to exchange every dinar they can acquire, by any means imaginable, before the Dinar again becomes worthless. They know it won't happen to them if they hold dollars. It would take years of near 100% dependence on the dollar, and the dinar somehow remaining stable, before the confidence to use the dinar started shifting that tide. People would be killed, riots of people trying to get to the banks and get dollars before the banks ran out. Those that weren't able to cash in before the banks ran dry would be at odds with those more fortunate. Folks would kill their neighbors for dinars that they may be able to get $.50 to the dinar on the black market, An increase of 500 times is still 500 times more valuable than it had been for years, and they know what the dollar has always bought. If things weren't bad enough already, this could fill that void... Hopefully, we would have our troops out before they rioted and destroyed the airfields to keep the noveau riche from vacating the country. Our troops would have to be transported to another (hopefully friendly) country to be extracted. Yeah, it would be a great idea; almost as fun as putting 100 bumblebees in a jar, and shaking h e l l out of it every time they settled down. It would be the quickest way to get all the Dinar out of circulation. What did Kuwait do in these circumstances? I don't recall reading that they were using the dollar before their own RV, but still, in an RV situation, there are surely some similarities that could provide guidelines. What are those? 1 1 Link to comment Share on other sites More sharing options...
Dalite Posted October 4, 2011 Report Share Posted October 4, 2011 What did Kuwait do in these circumstances? I don't recall reading that they were using the dollar before their own RV, but still, in an RV situation, there are surely some similarities that could provide guidelines. What are those? Kuwait never revalued; they reinstated. The currency that was stolen when Iraq invaded was rendered basically valueless, and a new currency was printed at the previous rate. Kuwait had a functional banking system and a civilized society. Those two attributes allowed Kuwait to "buffer" the economy during the relatively short time between devaluing to thwart Saddam, printing a new currency, and reinstating the value . Anyone that told you Kuwait revalued their currency, and that Iraq had any similarities, and would do the same, is or was lying to you to get you to purchase mre dinar. 1 Link to comment Share on other sites More sharing options...
Captjohn Posted October 4, 2011 Report Share Posted October 4, 2011 So, you're saying that if Iraq RV's at, say, 1 to 1, their "society will tear itself apart". However, if they don't RV, most would agree that their society will tear itself apart through eventual civil unrest. So, in the end, you're suggesting that no matter what they do, they're screwed. Nice point-of-view. Very hopeful analysis. Glad I'm not an Iraqi in your world view. 1 1 Link to comment Share on other sites More sharing options...
umbertino Posted October 4, 2011 Report Share Posted October 4, 2011 (edited) Kuwait was always a rich Country.. A lot richer in its per capita income than any other Country in the area, including S.Arabia.....Because, but not only, it has a small ppopulation to begin with...I think other Countries coming close to Kuwait as per per capita income are Dubai and Abu Dhabi( not exactly in that area) Edited October 4, 2011 by umbertino Link to comment Share on other sites More sharing options...
Dalite Posted October 4, 2011 Report Share Posted October 4, 2011 So, you're saying that if Iraq RV's at, say, 1 to 1, their "society will tear itself apart". However, if they don't RV, most would agree that their society will tear itself apart through eventual civil unrest. So, in the end, you're suggesting that no matter what they do, they're screwed. Nice point-of-view. Very hopeful analysis. Glad I'm not an Iraqi in your world view. Actually, with increases in oil production, the addition of revenue from industry, agriculture and tourism, the currency will be forced to make small increases in value to offset the corresponding rise of inflation. That is a self-regulating condition. At this stage of the game, those concerns are currently in play. If the Euro was a stable and gold backed currency, and the UST decided to make a USD equal 1000 euro, and the euro was used along with the dollar, what would you do. Would you continue to use dollars that had just magically been deemed 1000 times more valuable out of thin air, or would you convert them to euro before they sobered up over at treasury? Would you take a few weeks to think about it, or would you throw in the towel and decide to be 1000 times richer at start of business the next morning. Do you think you would just ease into the bank and be the only customer? Could you get a parking place closer to a mile from the bank? Would any one go to work that day? The next day? Ever again? Would you decide to walk anywhere with a hundred dollar bill that was now worth a hundred thousand euro? What is the price of a human life when everyone has 1000 times more buying power than the had yesterday? How do you make your employees come back to work without increasing their salaries more than 1000 times? What would your inventory cost to replace? What would you have to sell your product for after wages and materials went up 1000 times? How long before inflation takes away 999 times the increase to equalize the dollar to the euro again? How many people were killed, maimed, or bankrupted during that short period of economic stability? These are just a few of the things that would come into question in the mind of anyone taking the time to think this through. Maybe there are solutions that were never before revealed to economists that would prevent any change to society from a 1000 times increase in value; overnight. I don' know about you, but if the dollar increased in value 1000 times overnight, instead of going to the bank, I would go shopping for supplies, implements, water, ammo, and everything needed to keep from having to go into any area of dense population until the entire thing burned itself out. In the meantime, I would concentrate on protecting what was mine, and concentrate on coming out the other side alive and well. The "hopeful" will, unfortunately, make fertilizer for future generations to farm with while rebuilding civilization... Not having a clue, they will be the first to fall. If they do begin to live long enough to start understanding the process, their better prepared neighbors may be kind enough to arm them with a butter knife to defend themselves until they acquire what is necessary to survive. They will be widely known as the " butter knife brigade" I don't know about you, but that outcome is not on my list to send to Santa this year. And I doubt I am on your Christmas Card list either... 1 Link to comment Share on other sites More sharing options...
Darin Posted October 4, 2011 Report Share Posted October 4, 2011 Kuwait never revalued; they reinstated. The currency that was stolen when Iraq invaded was rendered basically valueless, and a new currency was printed at the previous rate. Kuwait had a functional banking system and a civilized society. Those two attributes allowed Kuwait to "buffer" the economy during the relatively short time between devaluing to thwart Saddam, printing a new currency, and reinstating the value . Anyone that told you Kuwait revalued their currency, and that Iraq had any similarities, and would do the same, is or was lying to you to get you to purchase mre dinar. The general concept still remains w/ their scenario as well. Domestic currency worth X amount Next day, domestic currency worth X times 100 times more... R/V or R/I the value jumped from one day to the next while the public had no warning. Those that held KWD lucked out... Those that didn't missed out.... Same scenarios play into effect Those paying in KWD cash (at their street value) - lost Those getting paid in KWD cash (at their street value) prior to the R/I - come out ahead. People say that comparing Iraq to Kuwait is Apple to Oranges But, in my opinion, at least if a straigh up R/V @ $1 were to occur.. The situations are more similar than just apples to oranges. Differences do still exist, such as: Population Time period duration But other factors still remain similar Sudden & drastic increase in value of domestic currency Dollarization within the economy 4 Link to comment Share on other sites More sharing options...
WILLB Posted October 4, 2011 Report Share Posted October 4, 2011 (edited) I wonder this, How many 25,000 Dinar bank notes does the average Iraqi citizen hold within Iraq...If they hold very little which I suspect is the case, this would all be a moot point, wouldn't it? Will Edited October 4, 2011 by WILLB 1 Link to comment Share on other sites More sharing options...
Aqua Dude Posted October 4, 2011 Report Share Posted October 4, 2011 If the IQD were to RV to $1, this does not effect to cost of imported goods in their home country, so they will become 1000x less costly to import to Iraq. If prices and wages stay the same (in dinars) in Iraq, only the importers gain anything from this deal so clearly the price of imported goods will fall proportionately. Likewise the cost of Iraq's goods must fall or they will never be able to export anything, and wages must also come down. So only the holders of cash (physical or electronic) are the winners, and they are big winners. Holders of stuff (including debt) gain nothing. Suppose you are doing well in Iraq and own five houses or apartments that your rent out. Its a cash flow intensive business and it just happens that you are completely tapped out the day prior to collecting monthly rent from your five tenants. But it RVs on that day. Your apartments are not worth any more then they were the day before, as their price in dinars comes down by 1000x, but your tenants having not yet paid their monthly rent now have 10000 months worth or 83 yeas worth of rent in their pocket. You gain nothing, they are all rich. Two guys with low paying jobs live payday to payday. One gets his weekly pay just before the RV and now has 18 years worth of pay, the other gets paid right after the RV and has no advantage at all. The price of ISX shares will come down like anything else but stock markets are prone to overshoot so that could be pretty chaotic. Iraqi's with even modest savings will be rich and want to buy and this demand will drive prices back up and out of reach of those that did not happen to have savings at that moment. That will drive wages up and Iraqi goods will become uncompetitive in some degree undoing the gain of the RV for Iraqis. For those that think an RV to $1 is possible, how will society not tear itself apart here (in addition to all the other problems pointed out of course). wow i want a degree from where you graduated in economics 2 2 Link to comment Share on other sites More sharing options...
WILLB Posted October 4, 2011 Report Share Posted October 4, 2011 I think his degree is in pessimisticology 5 Link to comment Share on other sites More sharing options...
donnydoright Posted October 4, 2011 Report Share Posted October 4, 2011 I wonder this, How many 25,000 Dinar bank notes does the average Iraqi citizen hold within Iraq...If they hold very little which I suspect is the case, this would all be a moot point, wouldn't it? Will the Iraqi people aren't as rich as the Average American, But i still think with the 25,000 dinar worth around $21.37 that you can compare "How many $20 bills the Average American has in their wallet" to "How many 25,000 notes the Average Iraqi has in their wallet" I'm in no way average, i tend not to carry my own wallet, and more of my everyday costs come off of one of several corporate accounts...so i'm not sure how many $20's most people carry, i'd think atleast five to get through the day Link to comment Share on other sites More sharing options...
xyzzy Posted October 4, 2011 Author Report Share Posted October 4, 2011 (edited) So, you're saying that if Iraq RV's at, say, 1 to 1, their "society will tear itself apart". However, if they don't RV, most would agree that their society will tear itself apart through eventual civil unrest. So, in the end, you're suggesting that no matter what they do, they're screwed. Nice point-of-view. Very hopeful analysis. Glad I'm not an Iraqi in your world view. Please don't assign me your view. I am not saying if the do not RV the society will tear itself apart. I think that is mostly a prophecy by those wishing for an RV. Stable growth is what people what in my estimation and an RD with a small RV perhaps will support that. As the economy grows and conditions improve everyone will be more content and there will be less unrest. There are no magic bullets. I wonder this, How many 25,000 Dinar bank notes does the average Iraqi citizen hold within Iraq...If they hold very little which I suspect is the case, this would all be a moot point, wouldn't it? Will I don't know, but I'm not sure the average is the issue so much as the deviation. i.e. those who have cash (in the pocket, under the mattress, or in the bank) are big winners but anyone who has stuff (houses, gold, cars, land, stock, etc) instead is a big loser. An RV or an RD will effect all currency. I think the CBI spreadsheet shows 24T in m0 (cash flowing in the economy) and 8T in banks and all those dinars (banks and cash) would be impacted. wow i want a degree from where you graduated in economics If you disagree with my points I encourage you to contribute to the discussion. Edited October 4, 2011 by xyzzy 1 1 Link to comment Share on other sites More sharing options...
randalln Posted October 4, 2011 Report Share Posted October 4, 2011 (edited) the Iraqi people aren't as rich as the Average American, But i still think with the 25,000 dinar worth around $21.37 that you can compare "How many $20 bills the Average American has in their wallet" to "How many 25,000 notes the Average Iraqi has in their wallet" I'm in no way average, i tend not to carry my own wallet, and more of my everyday costs come off of one of several corporate accounts...so i'm not sure how many $20's most people carry, i'd think atleast five to get through the day Wrong.............Iraqi's dont even use the 25000 they are taking them out of the system 10000 also Lots of 5000 still ..................there goods are priced accordingly I cant give you a link because you would have to jack in to my eyes.......................... Please don't assign me your view. I am not saying if the do not RV the society will tear itself apart. I think that is mostly a prophecy by those wishing for an RV. Stable growth is what people what in my estimation and an RD with a small RV perhaps will support that. As the economy grows and conditions improve everyone will be more content and there will be less unrest. There are no magic bullets. I don't know, but I'm not sure the average is the issue so much as the deviation. i.e. those who have cash (in the pocket, under the mattress, or in the bank) are big winners but anyone who has stuff (houses, gold, cars, land, stock, etc) instead is a big loser. An RV or an RD will effect all currency. I think the CBI spreadsheet shows 24T in m0 (cash flowing in the economy) and 8T in banks and all those dinars (banks and cash) would be impacted. If you disagree with my points I encourage you to contribute to the discussion. 24 trillion is M2-M3 8 trillion hahahah try 4 trillion M1 and all Those #'s are 2 years old Edited October 4, 2011 by randalln 1 1 Link to comment Share on other sites More sharing options...
xyzzy Posted October 4, 2011 Author Report Share Posted October 4, 2011 I think his degree is in pessimisticology So you have saved up your money for years to buy a house. You execute the transaction, then find that had you waited one day your savings would be multiplied by 1000. But, now since you have a house not cash you get no advantage at all while the person who sold you the house has 1000 times your money. Can you honestly say that you would be fine with that and not be upset or try to void the transaction or anything? Link to comment Share on other sites More sharing options...
caz1104 Posted October 4, 2011 Report Share Posted October 4, 2011 the Iraqi people aren't as rich as the Average American, But i still think with the 25,000 dinar worth around $21.37 that you can compare "How many $20 bills the Average American has in their wallet" to "How many 25,000 notes the Average Iraqi has in their wallet" I'm in no way average, i tend not to carry my own wallet, and more of my everyday costs come off of one of several corporate accounts...so i'm not sure how many $20's most people carry, i'd think atleast five to get through the day Based on my understanding of the poor economic, living conditions,& lack of employment I would be surprized if the average Iraqi citizen would have more than one 25k note on they're person. Link to comment Share on other sites More sharing options...
xyzzy Posted October 4, 2011 Author Report Share Posted October 4, 2011 (edited) Wrong.............Iraqi's dont even use the 25000 they are taking them out of the system 10000 also Lots of 5000 still ..................there goods are priced accordingly I cant give you a link because you would have to jack in to my eyes.......................... OK, lets say your individual experience is representative of most of Iraq, so its the equivalent of using $5's instead of $10's and $20's for street level tansactions. I can't say I see the significance eve if its true. So you have five 5,000's instead of one 25,000 . 24 trillion is M2-M3 8 trillion hahahah try 4 trillion M1 and all Those #'s are 2 years old Iraq does not even track M3 in any docs I've seen, and if they did M2 minus M3 would be negative. 24T is the number on the M0 page of their doc for Dec 2010 as "money outside of banks". My figure for money in banks of 8T actually looks to be low, so I'll take that one back, the docs show it to be higher (M2 after all is 60T). Edited October 4, 2011 by xyzzy Link to comment Share on other sites More sharing options...
Hawaii 50 Posted October 4, 2011 Report Share Posted October 4, 2011 Serious I could only see on average a 25k note which means a majority of people would get around 25k USD. so what they can support that. And this whole 25k dinar to = $21 and some change come on that would cause more problems across the board. It's not going to happen it does not add up . Link to comment Share on other sites More sharing options...
Darin Posted October 4, 2011 Report Share Posted October 4, 2011 Figuratively speaking........ In the idea of a rate adjustment that pushes the exchange for 1 IQD to equal 1 USD: It would really come down to the idea that those holding IQD are the big-winners. Adjustments would be necessary within the work place, economy, and so forth. But... That would be on the "people" such as owners of a business. If they wish to continue paying you 25,000 IQD per hour ($21/hr).. That would be their own loss. The business owners would look to make adjustments, accordingly. Prices in the market would adjust just as well as labor costs. Suddenly, everyone citizen is happy that the GOI gave wealth to the people. I couldn't think of a better way to get their own citizens to be more patriotic than to give something back to the people that was lost for many years.. Citizens lost faith in banks when the Old Regime took over. Now faith can be restored and upon a R/V, citizens can rush to banks and deposit their money for protection. Local markets would have competition, as demand would outreach supply. This would create more competition within the market and other businesses would open up. Why go to Bob if Alan is selling goods at a better price? Fair-market competition would be created. As the government has given wealth to the people.. (Wealth restoration).... Foreign businesses would flock that region for potential revenue generation. We may see businesses such as Wal-Marts, MacDonald's, Best Buys, Sears, or similar businesses being created to supply products & services to the people. As those businesses were propped up in that region, they would need to hire local citizens for employment. This would reduce the unemployment figures. As wealth is distributed back to the people, they would be able to afford the housing that is currently being built. What is the figure, $50 billion? that they've allocated to their housing development? That is a pretty hefty project. Violence would drop as people would have opportunities such as jobs to go to instead of waking up each morning wondering how they're going to be fed. Men of families won't feel the need to strap a bomb to them to receive payment so their families could eat by going out and blowing themselves up. The locals would call out the shady citizens who may be part of any terroristic group as they would value life more than before. See, terrorists exploit poor & uneducated people to join their group... Increasing education to help the economy be full of knowledgeable working people. Schools, universities, etc. And if all this can be successful, it would prove to be a great model to all other non-democratic countries to consider following suit to help create a better global environment. I view the spread of democracy how the European nations used to try and spread Christianity back in the day. Or, they could re-denominate (LOP)... The banks could hold a large amount of leverage over the GOI & the people of that region... Watch a slow-growing economy take forever to get back to their feet. Have continued violence, security issues, and instability. Continue having serious dollarization issues to maintain a propped up economy and hope that particular process plays out positive... One leaves a lot of uncertainties and increases liabilities.. The other decreases liabilities and is more of a status-quo move, IMO. 2 Link to comment Share on other sites More sharing options...
TimS Posted October 4, 2011 Report Share Posted October 4, 2011 you have not done your homework...and I'm not doing it for you. suffice to say....you are wrong 1 1 Link to comment Share on other sites More sharing options...
colt32 Posted October 4, 2011 Report Share Posted October 4, 2011 If the IQD were to RV to $1, this does not effect to cost of imported goods in their home country, so they will become 1000x less costly to import to Iraq. If prices and wages stay the same (in dinars) in Iraq, only the importers gain anything from this deal so clearly the price of imported goods will fall proportionately. Likewise the cost of Iraq's goods must fall or they will never be able to export anything, and wages must also come down. So only the holders of cash (physical or electronic) are the winners, and they are big winners. Holders of stuff (including debt) gain nothing. Suppose you are doing well in Iraq and own five houses or apartments that your rent out. Its a cash flow intensive business and it just happens that you are completely tapped out the day prior to collecting monthly rent from your five tenants. But it RVs on that day. Your apartments are not worth any more then they were the day before, as their price in dinars comes down by 1000x, but your tenants having not yet paid their monthly rent now have 10000 months worth or 83 yeas worth of rent in their pocket. You gain nothing, they are all rich. Two guys with low paying jobs live payday to payday. One gets his weekly pay just before the RV and now has 18 years worth of pay, the other gets paid right after the RV and has no advantage at all. The price of ISX shares will come down like anything else but stock markets are prone to overshoot so that could be pretty chaotic. Iraqi's with even modest savings will be rich and want to buy and this demand will drive prices back up and out of reach of those that did not happen to have savings at that moment. That will drive wages up and Iraqi goods will become uncompetitive in some degree undoing the gain of the RV for Iraqis. For those that think an RV to $1 is possible, how will society not tear itself apart here (in addition to all the other problems pointed out of course). Just a thought. But, didn't the Iraqi money basically devalue overnight making anyone with millions or thousands or hundreds a lot less wealthy? Why isn't the opposite of that possible. Just a thought. 2 Link to comment Share on other sites More sharing options...
xyzzy Posted October 4, 2011 Author Report Share Posted October 4, 2011 Just a thought. But, didn't the Iraqi money basically devalue overnight making anyone with millions or thousands or hundreds a lot less wealthy? Why isn't the opposite of that possible. Just a thought. No, it devalued over at least 5 years while Saddam printed massive amounts of dinars. During periods of hyperinflation the only way to keep your wealth (however big or small) is to run to the store and by tradable stuff as soon as you get cash and not keep cash. But if a giant RV happens you will want just the opposite, cash instead of stuff. Figuratively speaking........ In the idea of a rate adjustment that pushes the exchange for 1 IQD to equal 1 USD: It would really come down to the idea that those holding IQD are the big-winners. Adjustments would be necessary within the work place, economy, and so forth. But... That would be on the "people" such as owners of a business. If they wish to continue paying you 25,000 IQD per hour ($21/hr).. That would be their own loss. The business owners would look to make adjustments, accordingly. Prices in the market would adjust just as well as labor costs. Suddenly, everyone citizen is happy that the GOI gave wealth to the people. But this is exactly the issue. The GOI did not give wealth to the people, they did not distribute wealth, they made the CASH you have be multiplied by 1000 fold. Again take any of the examples I offered. You buy a house the day before the RV and you get nothing while they guy that sold you the house gets 1000 fold the price. Had you waited one day you could buy a house 10 times as nice and still have 90% of your savings left. Can you really say that would make you happy? Link to comment Share on other sites More sharing options...
jas428 Posted October 4, 2011 Report Share Posted October 4, 2011 If the value of the dinar goes up, so does EVERYTHING. All price tags in stores will change as everything gets a new value. This includes the price of houses and cars and other big ticket items. If you had a home valued at one price, then its value increases to match the equivalent in the new currency. Everything changes. They're not going to let a coke remain at a cost of 25000 dinars if it rv's, nor would they let the value of a home stay the same. Link to comment Share on other sites More sharing options...
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