My worth on this investment.

[keepmwlknfny]

A LOP does not exist. Trying to make sense of a LOP is really stupid. How can i explain a made up LOP when it doesn't exist? Further more how can you even relate a LOP to a currency investment? The word LOP was made up by Al Warka to promote electronic dinars.

http://breitlingcurrency.blogspot.com/2011/11/breitlings-morning-review-1192011.html

The dinar will RV then RD then they will dedollarize. This is what CBI and Shabibi has explained. LOP was not mentioned. No matter how you link what you see as a LOP, it is not correctly examined.

Oh and if you are remotely in any way trying to relate this Iraqi Dinar investment to any other country you will be lead astray in your research. Economic conditions are way different in Iraq than other countries that you say so called LOPPED there currency.

Hahaha ok so you all of a sudden wanna be correct in your terminology after using the term lop yourself for so long describing the same thing as what the CBI is saying is a RD? LOL.....your funny!!!

Ok so let's be technical then.....your right, it will never lop but it surely seems shabibi wants to RD to raise the value of the dinar, not RV then RD cause that would be pointless and doesn't make any sense.....if they can RV there is no need to RD, only to issue a few more bills into the market.....would be no need to replace the entire currency and make people exchange at a thousand to one ratio.....

[Scrumdiddles]

Hahaha ok so you all of a sudden wanna be correct in your terminology after using the term lop yourself for so long describing the same thing as what the CBI is saying is a RD? LOL.....your funny!!!

Ok so let's be technical then.....your right, it will never lop but it surely seems shabibi wants to RD to raise the value of the dinar, not RV then RD cause that would be pointless and doesn't make any sense.....if they can RV there is no need to RD, only to issue a few more bills into the market.....would be no need to replace the entire currency and make people exchange at a thousand to one ratio.....

Two words for you Keep. EVEN EXCHANGE.

Two words for you Keep. EVEN EXCHANGE.

Taking the zeros off the actual bill is a retraction of an economy. Iraqs economy is not failing like turkey, Keep. Why would Iraq retract there economy by taking off the zeros from there bills? Hyperinflation is not the answer.

[keepmwlknfny]

Two words for you Keep. EVEN EXCHANGE.

Taking the zeros off the actual bill is a retraction of an economy. Iraqs economy is not failing like turkey, Keep. Why would Iraq retract there economy by taking off the zeros from there bills? Hyperinflation is not the answer.

Well unfortunately they haven't been talking about an even exchange......

Taking zeros off an inflated currency is not a sign of retraction, its a sign of economic stability and improvement......

How is being able to get rid of the remaining effects of hyperinflation and being able to raise the value of the dinar a sign of a economy retracting??? Its actually quite the opposite.....

[notoriousb]

Two words for you Keep. EVEN EXCHANGE.

Taking the zeros off the actual bill is a retraction of an economy. Iraqs economy is not failing like turkey, Keep. Why would Iraq retract there economy by taking off the zeros from there bills? Hyperinflation is not the answer.

I agree Scrum. I keep thinking of the the 500, 1000, 10,000, and 100,000 U$D notes that still retain their worth even though theyre not still in circulation.

Iraq did say they were emulating our currency structure.

[Scrumdiddles]

Well unfortunately they haven't been talking about an even exchange......

Taking zeros off an inflated currency is not a sign of retraction, its a sign of economic stability and improvement......

How is being able to get rid of the remaining effects of hyperinflation and being able to raise the value of the dinar a sign of a economy retracting??? Its actually quite the opposite.....

If propaganda is what you want to listen to ok. Taking away something from a currency is never a sign of stability and improvement, rebuilding a currency is always a sign of strength. Why is it so inbeded in your mind that a lop is possible. Hyperinflation is just that hyperinflation, it exists however who ever said corrections like LOPPING a currency is required?

I agree Scrum. I keep thinking of the the 500, 1000, 10,000, and 100,000 U$D notes that still retain their worth even though theyre not still in circulation.

Iraq did say they were emulating our currency structure.

Exactly and yet we still have lopper continuing to try to spread there (wealth of knowledge). Every question leads to a vicious circle (dane cook), great stand up show.

[keepmwlknfny]

If propaganda is what you want to listen to ok. Taking away something from a currency is never a sign of stability and improvement, rebuilding a currency is always a sign of strength. Why is it so inbeded in your mind that a lop is possible. Hyperinflation is just that hyperinflation, it exists however who ever said corrections like LOPPING a currency is required?

Exactly and yet we still have lopper continuing to try to spread there (wealth of knowledge). Every question leads to a vicious circle (dane cook), great stand up show.

The only reason I can't block it out from not happening is because everything we see verifies them being in that situation....

There is no evidence that it cannot and will not happen.....RD doesn't take any VALUE away.....this would be common knowledge if people would take the time to really learn and understand it.....

No one said that lopping is required....oh wait are you using that made up term again as if it exists now? LOL. Anyways no its not required, but iraq has not shown or is taking other steps to rectify the problem and the CBI is only talking about dealing with it in one way as well.....

Just trying to help clear up a lot of the misconceptions since people would rather trust what some stranger says because it sounds good rather then verify any info for themselves

[Scrumdiddles]

The only reason I can't block it out from not happening is because everything we see verifies them being in that situation....

There is no evidence that it cannot and will not happen.....RD doesn't take any VALUE away.....this would be common knowledge if people would take the time to really learn and understand it.....

No one said that lopping is required....oh wait are you using that made up term again as if it exists now? LOL. Anyways no its not required, but iraq has not shown or is taking other steps to rectify the problem and the CBI is only talking about dealing with it in one way as well.....

Just trying to help clear up a lot of the misconceptions since people would rather trust what some stranger says because it sounds good rather then verify any info for themselves

It is not about sounding good, it is about speculation of a currency that is bound to RV. RV RD then dedollarization. That is what they are saying.

[keepmwlknfny]

It is not about sounding good, it is about speculation of a currency that is bound to RV. RV RD then dedollarization. That is what they are saying.

I'm beginning to think that is actually the case.....cause the CBI is saying nothing of the sort.....the dinar is bound to raise in value but you should understand that they have two ways of raising the value of the currency......straight up RV, OR Rd followed by a RV.......

The CBI has only been talking about one way.....and not what we want....

If iraq can RV, there is no need to RD.....it really is that simple.....the idea that iraq will RV first then RD is pretty comical and senseless.....unless your speaking of a very small RV to like 1000 to 1 from 1170 just to make the RD easier and make it dead even value with the USD

[Scrumdiddles]

I'm beginning to think that is actually the case.....cause the CBI is saying nothing of the sort.....the dinar is bound to raise in value but you should understand that they have two ways of raising the value of the currency......straight up RV, OR Rd followed by a RV.......

The CBI has only been talking about one way.....and not what we want....

If iraq can RV, there is no need to RD.....it really is that simple.....the idea that iraq will RV first then RD is pretty comical and senseless.....unless your speaking of a very small RV to like 1000 to 1 from 1170 just to make the RD easier and make it dead even value with the USD

See you keep thinking that a RD is taking away value from old currency, and that is the only way. Let me break down the word Redenomination.

RE- once more; afresh; anew, in return; mutually

denomination- the face value of a banknote, a coin, or a postage stamp.

So in this breakdown, where does it say that the RD has take zeros off the currency? Fresh banknote, anew banknote, banknote mutually. Why is a RD considered a negative thing, oh yea because lopsters consider a lop and RD the same thing.

[20MillionDinar]

Well unfortunately they haven't been talking about an even exchange......

Taking zeros off an inflated currency is not a sign of retraction, its a sign of economic stability and improvement......

How is being able to get rid of the remaining effects of hyperinflation and being able to raise the value of the dinar a sign of a economy retracting??? Its actually quite the opposite.....

The only real problem with them Re-denominating at this time is the fact that they have kept inflating their money supply during the past 8 years! What makes us think they are going to stop once they Re-denominate? They need to implement monetary tools NOW, get things under control, and THEN RV/RD or RD/RV.

I personally don't see an RD being very successful at this time, do you? What are they going to do after they re-denominate differently that they couldn't have done in the past or now?

[Scrumdiddles]

Well unfortunately they haven't been talking about an even exchange......

Taking zeros off an inflated currency is not a sign of retraction, its a sign of economic stability and improvement......

How is being able to get rid of the remaining effects of hyperinflation and being able to raise the value of the dinar a sign of a economy retracting??? Its actually quite the opposite.....

Oh so Shabibi never said 1 to 1 exchange?

[keepmwlknfny]

See you keep thinking that a RD is taking away value from old currency, and that is the only way. Let me break down the word Redenomination.

RE- once more; afresh; anew, in return; mutually

denomination- the face value of a banknote, a coin, or a postage stamp.

So in this breakdown, where does it say that the RD has take zeros off the currency? Fresh banknote, anew banknote, banknote mutually. Why is a RD considered a negative thing, oh yea because lopsters consider a lop and RD the same thing.

Nope......your not paying attention.....no VALUE is lost....point blank.....

An RD is considered negative because they don't make anyone money and they are revenue neutral events.....

Any sort of definition of a redenomination is NOT what we want.....its either a fixed ratio exchange, depending on how many units they are cutting it down by, or changing to a completely different currency.....neither of which will make us money....

Oh so Shabibi never said 1 to 1 exchange?

Nope.....he has never said you will trade your 25k note for 25k in smalller denoms.....

The only real problem with them Re-denominating at this time is the fact that they have kept inflating their money supply during the past 8 years! What makes us think they are going to stop once they Re-denominate? They need to implement monetary tools NOW, get things under control, and THEN RV/RD or RD/RV.

I personally don't see an RD being very successful at this time, do you? What are they going to do after they re-denominate differently that they couldn't have done in the past or now?

Well if you look at iraqs stability the past 3/4 years, id say that it could be successful, I mean shabibi has been able to control the inflation which is one of the most important parts of it so If things stayed the way they are it could be done successfully.....they would continue to do the same thing they have done this whole time.....probly no different.....they could RD and keep expanding the money supply little by little and be fine for decades to come.....as the country grows I would assume you also will see the money supply grow as well....

[Scrumdiddles]

Nope......your not paying attention.....no VALUE is lost....point blank.....

An RD is considered negative because they don't make anyone money and they are revenue neutral events.....

Any sort of definition of a redenomination is NOT what we want.....its either a fixed ratio exchange, depending on how many units they are cutting it down by, or changing to a completely different currency.....neither of which will make us money....

Value is lost Keep, 25,000 down to 25 is value lost on a RV. Your not paying attention, we are talking about on a 1 dinar to 1 usd exchange. RD does not mean always that the old currency is stripped of the 000 on it. RD is the issuing of new currency at a different value not always replacing the actual numbers on a old bill with new currency example (25000 old to 25 new). The new currency can reflect lower denoms without taking 000 off the old currency. Now Iraq has 25k 10k 5k 1k 500 250 and 50. After RD they hypothetically will have according to Shabibi (the 100 dollar system) 100 50 20 10 5 1 and coins. So how does a LOP play into that scenario? Makes no sense to LOP a currency to nothing and issues a new currency worth nothing without a RV first, Right?

[keepmwlknfny]

Value is lost Keep, 25,000 down to 25 is value lost on a RV. Your not paying attention, we are talking about on a 1 dinar to 1 usd exchange. RD does not mean always that the old currency is stripped of the 000 on it. RD is the issuing of new currency at a different value not always replacing the actual numbers on a old bill with new currency example (25000 old to 25 new). The new currency can reflect lower denoms without taking 000 off the old currency. Now Iraq has 25k 10k 5k 1k 500 250 and 50. After RD they hypothetically will have according to Shabibi (the 100 dollar system) 100 50 20 10 5 1 and coins. So how does a LOP play into that scenario? Makes no sense to LOP a currency to nothing and issues a new currency worth nothing without a RV first, Right?

If your talking about losing on the amount of money you would make from 25k dinar with a 1 to 1 RV vs from a 25 dinar with a 1 to 1 RV then duh LOL of course your gonna make more with the 25k.....hahaha the point is that in the process of a RD in itself with nothing else involved but the exchange of old currency for new, there is no loss in value....all based off of what the CBI is saying.....

You are correct that a RD doesnt always mean 3 zeros are taken off....it can be any amount, but when has a country performed a "redenomination" or said they were redenominating and exchanged the bills 1 for 1?? LOL No one, cause thats not a redenomination.....unless your exchanging one currency for something completely different at a 1 to 1 rate.....like when all those countries in Europe switched over to using the euro.....they were all exchanged differently and there could have been some exchanged evenly but whatever......lets get back on track here.....the redenomination in the way that the CBI is speaking about is NOT what we want......they are talking about exchanging at a 1000 to 1 ratio......

If Iraq is just adding a few more bills like your saying, thats not a redenomination.....not a textbook redenomination.....

your right, it doesnt make any sense for a country to LOP and not make any changes to the value in the currency, thats why the new currency thats being exchanged for carries a higher value....

[pudge]

If your talking about losing on the amount of money you would make from 25k dinar with a 1 to 1 RV vs from a 25 dinar with a 1 to 1 RV then duh LOL of course your gonna make more with the 25k.....hahaha the point is that in the process of a RD in itself with nothing else involved but the exchange of old currency for new, there is no loss in value....all based off of what the CBI is saying.....

You are correct that a RD doesnt always mean 3 zeros are taken off....it can be any amount, but when has a country performed a "redenomination" or said they were redenominating and exchanged the bills 1 for 1?? LOL No one, cause thats not a redenomination.....unless your exchanging one currency for something completely different at a 1 to 1 rate.....like when all those countries in Europe switched over to using the euro.....they were all exchanged differently and there could have been some exchanged evenly but whatever......lets get back on track here.....the redenomination in the way that the CBI is speaking about is NOT what we want......they are talking about exchanging at a 1000 to 1 ratio......

If Iraq is just adding a few more bills like your saying, thats not a redenomination.....not a textbook redenomination.....

your right, it doesnt make any sense for a country to LOP and not make any changes to the value in the currency, thats why the new currency thats being exchanged for carries a higher value....

It's no use Keep, I mean you've explained it six ways to Sunday as I have. They'll never get it cause it doesn't mesh with the hypothesis or fairy tale of a thousand times return on an RV event.

Edited November 10, 2011 by pudge

[20MillionDinar]

Well if you look at iraqs stability the past 3/4 years, id say that it could be successful, I mean shabibi has been able to control the inflation which is one of the most important parts of it so If things stayed the way they are it could be done successfully.....they would continue to do the same thing they have done this whole time.....probly no different.....they could RD and keep expanding the money supply little by little and be fine for decades to come.....as the country grows I would assume you also will see the money supply grow as well....

As we know the Iraqi Dinar is now held at a "program" exchange rate as specified by the International Monetary Fund of 1170 dinars per US dollar at the Central Bank of Iraq. However, there is not yet a set international exchange rate and so international banks do not yet exchange Iraqi dinar. The exchange rate available on the streets of Iraq is around 1200 dinars per US dollar.

Typically, a government wanting to maintain a fixed exchange rate does so by either buying or selling its own currency on the open market. This is one reason governments maintain reserves of foreign currencies. If the exchange rate drifts too far below the desired rate, the government buys its own currency in the market using its reserves. This places greater demand on the market and pushes up the price of the currency. If the exchange rate drifts too far above the desired rate, the government sells its own currency, thus increasing its foreign reserves.

The main criticism of a fixed exchange rate is that flexible exchange rates serve to automatically adjust the balance of trade. When a trade deficit occurs, there will be increased demand for the foreign (rather than domestic) currency which will push up the price of the foreign currency in terms of the domestic currency. That in turn makes the price of foreign goods less attractive to the domestic market and thus pushes down the trade deficit. Under fixed exchange rates, this automatic rebalancing does not occur.

Governments also have to invest many resources in getting the foreign reserves to pile up in order to defend the pegged exchange rate. Moreover a government, when having a fixed rather than dynamic exchange rate, cannot use monetary or fiscal policies with a free hand. For instance, by using reflationary tools to set the economy rolling (by decreasing taxes and injecting more money in the market), the government risks running into a trade deficit. This might occur as the purchasing power of a common household increases along with inflation, thus making imports relatively cheaper.

Additionally, the stubbornness of a government in defending a fixed exchange rate when in a trade deficit will force it to use deflationary measures (increased taxation and reduced availability of money) which can lead to unemployment. Finally, other countries with a fixed exchange rate can also retaliate in response to a certain country using the currency of theirs in defending their exchange rate.

The belief that the fixed exchange rate regime brings with it stability is only partly true, since speculative attacks tend to target currencies with fixed exchange rate regimes, and in fact, the stability of the economic system is maintained mainly through capital control A fixed exchange rate regime should be viewed as a tool in capital control. A speculative attack in the foreign exchange market is the massive selling of a country's currency assets by both domestic and foreign investors. Countries that utilize a fixed exchange rate are more susceptible to a speculative attack than countries utilizing a floating exchange rate.This is because of the large amount of reserves necessary to hold the fixed exchange rate in place at that fixed level. Nevertheless, if a government chooses to maintain a fixed exchange rate during a speculative attack, they risk the chance of severe economic depression or financial collapse.

A speculative attack has much in common with cornering the market as it involves building up a large directional position in the hope of exiting at a better price. As such, it runs the same risk: a speculative attack relies entirely on the market reacting to the attack by continuing the move that has been engineered, in order for profits to be made by the attackers. In a market that is not susceptible, the reaction of the market may, instead, be to take advantage of the change in price by taking opposing positions and reversing the engineered move. This may be assisted by aggressive intervention by a central bank, either directly through very large currency transactions or through raising interest rates, or by activity by another central bank with an interest in preserving the current exchange rate. As in cornering the market, this leaves the attackers vulnerable.

The above tells us that Iraq has extremely large reserves due to the fact that they need to keep their exchange rate stable as it is pegged to the US dollar They do this through their currency auctions. Now, if the IMF (which seems to be the ones who are responsible for keeping them on the fixed exchange rate) allowed the Iraqi Dinar to float then what could happen is the CBI could purchase Iraqi Dinars at their currency auctions and "destroy them" or withdraw them from circulation. This in turn places greater demand on the market and pushes up the price of the currency. Also, if they were not on the fixed exchange rate then they wouldn't have the need for so much extra currency as they wouldn't have to "prop up" or "suppress" their currency on a day to day basis like they have to do now.

Another problem being stuck on this fixed exchange rate is that an automatic balancing of trade does not occur. When a trade deficit occurs, there will be increased demand for the foreign (rather than domestic) currency which will push up the price of the foreign currency in terms of the domestic currency. That in turn makes the price of foreign goods less attractive to the domestic market and thus pushes down the trade deficit. This is what has been happening in Iraq for quite some time. The demand for and excessive use of the US dollar in Iraq is actually making the IQD worth less because of the lack of demand. This also makes foreign goods (imports) less attractive pushing down the trade deficit. A "flexible exchange rate" serves to automatically adjust the balance of trade.

Now, on top of all of this they also need to worry about "speculative attacks" which could be cause by speculators and foreign investors. Yes, this is very possible, especially with a country worth so little bit. $60 Billion USD, this market is easy to corner if you think about it. A couple of major corporations, foreign financial institutions, and major investors could EASILY corner this market should they choose to do so! However, this may be assisted by aggressive intervention by a central bank, either directly through very large currency transactions or through raising interest rates, or by activity by another central bank with an interest in preserving the current exchange rate. As in cornering the market, this leaves the attackers vulnerable.

I personally believe that somebody (USA) has an interest in preserving the current exchange rate. This would leave any potential attackers vulnerable. I don't care who says US is not holding massive amounts of Dinar, I say they are for this exact reason. This market would be easy to corner UNLESS Iraq is being assisted by the US through very large currency transactions. If you think this is impossible then think again! Just because you can't find proof that the US is holding tons of dinars, think about this. It is almost common sense!

Overview:

1) There is excessive amounts of Dinar which is needed at this time to maintain the fixed exchange rate system. This is a major reason for the over inflated money supply.

2) If the Iraqi Dinar is allowed to float then that would allow them to withdraw and destroy trillions of dinar immediately. This in turn creates greater demand for the IQD currency and drives up value. Also, being an internationally recognized currency using a flexible exchange rate puts the currency on the FOREX market giving the currency more liquidity and trade volume is increased substantially! A flexible exchange rate also helps to automatically balance trade.

3) Speculative Attacks: Why hasn't the Iraqi market been cornered? Why hasn't any major corporations, financial institutions, or even governments tried to corner this market? Or have they....? It is very possible that the same entity (USA) who could cause the biggest speculative attack on Iraq be the ones who are preventing this from happening through very large currency transactions as there is a major interest in preserving the current exchange rate. Something to think about folks...

[keepmwlknfny]

It's no use Keep, I mean you've explained it six ways to Sunday as I have.

No kidding lol.....if only some would take the time to learn as much about the "dark side" as they do about the RV and why it should raise in value, they would have a much clearer picture of whats going on....

[Rossenbos]

The only thing that comes to mind is Shabs plan....they started it like 3 or 4 years ago? I cant remember exactly, but they had to put this plan together over the years to make sure everything is in order to handle such a change, no different then a RV because clearly after the RD there would be some sort of RV on the currency....so you could ask the same question about why havent they RVd already? Seems they just arent ready....well I mean now it seems they are if this plan to delete the zeros really is in front of parliament waiting to be voted on....

I figure our best hope is that it gets dragged on further....the longer time goes, I feel the less likely it is to happen....

Dont forget Maliki and his crew are totally against this plan.....Maliki is on our side....not Shabs....

There has been a ton of opposition to this plan through the govt and its in their hands now.....

Two reasons why Iraq hasn't RV-ed yet:

1. They wanted to milk the international community and get debt-forgiveness. And they did get quite a lot of that.

2. They needed to take IDQ out of circulation, which they have done on a massive scale with their currency auctions.

This has been strategised from 2003 onwards (most likely earlier even) and it's all mapped out. Great geopolitical minds ( Brezinsky and co) have been plotting this. Obama is an extra in this production, not a main character, as is the Iraqi GOI.

[keepmwlknfny]

As we know the Iraqi Dinar is now held at a "program" exchange rate as specified by the International Monetary Fund of 1170 dinars per US dollar at the Central Bank of Iraq. However, there is not yet a set international exchange rate and so international banks do not yet exchange Iraqi dinar. The exchange rate available on the streets of Iraq is around 1200 dinars per US dollar.

Typically, a government wanting to maintain a fixed exchange rate does so by either buying or selling its own currency on the open market. This is one reason governments maintain reserves of foreign currencies. If the exchange rate drifts too far below the desired rate, the government buys its own currency in the market using its reserves. This places greater demand on the market and pushes up the price of the currency. If the exchange rate drifts too far above the desired rate, the government sells its own currency, thus increasing its foreign reserves.

The main criticism of a fixed exchange rate is that flexible exchange rates serve to automatically adjust the balance of trade. When a trade deficit occurs, there will be increased demand for the foreign (rather than domestic) currency which will push up the price of the foreign currency in terms of the domestic currency. That in turn makes the price of foreign goods less attractive to the domestic market and thus pushes down the trade deficit. Under fixed exchange rates, this automatic rebalancing does not occur.

Governments also have to invest many resources in getting the foreign reserves to pile up in order to defend the pegged exchange rate. Moreover a government, when having a fixed rather than dynamic exchange rate, cannot use monetary or fiscal policies with a free hand. For instance, by using reflationary tools to set the economy rolling (by decreasing taxes and injecting more money in the market), the government risks running into a trade deficit. This might occur as the purchasing power of a common household increases along with inflation, thus making imports relatively cheaper.

Additionally, the stubbornness of a government in defending a fixed exchange rate when in a trade deficit will force it to use deflationary measures (increased taxation and reduced availability of money) which can lead to unemployment. Finally, other countries with a fixed exchange rate can also retaliate in response to a certain country using the currency of theirs in defending their exchange rate.

The belief that the fixed exchange rate regime brings with it stability is only partly true, since speculative attacks tend to target currencies with fixed exchange rate regimes, and in fact, the stability of the economic system is maintained mainly through capital control A fixed exchange rate regime should be viewed as a tool in capital control. A speculative attack in the foreign exchange market is the massive selling of a country's currency assets by both domestic and foreign investors. Countries that utilize a fixed exchange rate are more susceptible to a speculative attack than countries utilizing a floating exchange rate.This is because of the large amount of reserves necessary to hold the fixed exchange rate in place at that fixed level. Nevertheless, if a government chooses to maintain a fixed exchange rate during a speculative attack, they risk the chance of severe economic depression or financial collapse.

A speculative attack has much in common with cornering the market as it involves building up a large directional position in the hope of exiting at a better price. As such, it runs the same risk: a speculative attack relies entirely on the market reacting to the attack by continuing the move that has been engineered, in order for profits to be made by the attackers. In a market that is not susceptible, the reaction of the market may, instead, be to take advantage of the change in price by taking opposing positions and reversing the engineered move. This may be assisted by aggressive intervention by a central bank, either directly through very large currency transactions or through raising interest rates, or by activity by another central bank with an interest in preserving the current exchange rate. As in cornering the market, this leaves the attackers vulnerable.

The above tells us that Iraq has extremely large reserves due to the fact that they need to keep their exchange rate stable as it is pegged to the US dollar They do this through their currency auctions. Now, if the IMF (which seems to be the ones who are responsible for keeping them on the fixed exchange rate) allowed the Iraqi Dinar to float then what could happen is the CBI could purchase Iraqi Dinars at their currency auctions and "destroy them" or withdraw them from circulation. This in turn places greater demand on the market and pushes up the price of the currency. Also, if they were not on the fixed exchange rate then they wouldn't have the need for so much extra currency as they wouldn't have to "prop up" or "suppress" their currency on a day to day basis like they have to do now.

Another problem being stuck on this fixed exchange rate is that an automatic balancing of trade does not occur. When a trade deficit occurs, there will be increased demand for the foreign (rather than domestic) currency which will push up the price of the foreign currency in terms of the domestic currency. That in turn makes the price of foreign goods less attractive to the domestic market and thus pushes down the trade deficit. This is what has been happening in Iraq for quite some time. The demand for and excessive use of the US dollar in Iraq is actually making the IQD worth less because of the lack of demand. This also makes foreign goods (imports) less attractive pushing down the trade deficit. A "flexible exchange rate" serves to automatically adjust the balance of trade.

Now, on top of all of this they also need to worry about "speculative attacks" which could be cause by speculators and foreign investors. Yes, this is very possible, especially with a country worth so little bit. $60 Billion USD, this market is easy to corner if you think about it. A couple of major corporations, foreign financial institutions, and major investors could EASILY corner this market should they choose to do so! However, this may be assisted by aggressive intervention by a central bank, either directly through very large currency transactions or through raising interest rates, or by activity by another central bank with an interest in preserving the current exchange rate. As in cornering the market, this leaves the attackers vulnerable.

I personally believe that somebody (USA) has an interest in preserving the current exchange rate. This would leave any potential attackers vulnerable. I don't care who says US is not holding massive amounts of Dinar, I say they are for this exact reason. This market would be easy to corner UNLESS Iraq is being assisted by the US through very large currency transactions. If you think this is impossible then think again! Just because you can't find proof that the US is holding tons of dinars, think about this. It is almost common sense!

Overview:

1) There is excessive amounts of Dinar which is needed at this time to maintain the fixed exchange rate system. This is a major reason for the over inflated money supply.

2) If the Iraqi Dinar is allowed to float then that would allow them to withdraw and destroy trillions of dinar immediately. This in turn creates greater demand for the IQD currency and drives up value. Also, being an internationally recognized currency using a flexible exchange rate puts the currency on the FOREX market giving the currency more liquidity and trade volume is increased substantially! A flexible exchange rate also helps to automatically balance trade.

3) Speculative Attacks: Why hasn't the Iraqi market been cornered? Why hasn't any major corporations, financial institutions, or even governments tried to corner this market? Or have they....? It is very possible that the same entity (USA) who could cause the biggest speculative attack on Iraq be the ones who are preventing this from happening through very large currency transactions as there is a major interest in preserving the current exchange rate. Something to think about folks...

The only problem is that going to a floating rate instead of being pegged, will leave the dinar very volitile.....Iraq has mentioned many times that their economy is based too much off of oil production rather then having a balanced GDP....they want to not have to rely so much on oil and free floating the dinar would make it much less stable then what it is now. Shabs is about stability (unfortunately)....the way oil prices bounce up and down on a regular it could also do more harm then good if you think about it.....

I understand about the speculative attacks and it makes sense.....but the way I see it is that us speculators are actually preserving the exchange rate with our buying the dinar....you could easily say that speculators in the US alone probly hold 2-3 trillion dinar?? What about speculators across the globe?? We know there is activity of buying up dinar in more then just the US.....we speculators could be preventing any "speculative attack" on Iraq.....not only that but at this point you also have the auctions which serve the purpose to keep the value stable, selling dinar and USD when need be but other then that, with Iraq still being such a new nation, with a uncertain future, with all its instability as far as the govt and security go, what large entities have that much faith in an inflated currency to just buy it up off the shelves? There is no real value in buying something thats already inflated.....wouldnt be such a smart move for anyone to take at this point......

Two reasons why Iraq hasn't RV-ed yet:

1. They wanted to milk the international community and get debt-forgiveness. And they did get quite a lot of that.

2. They needed to take IDQ out of circulation, which they have done on a massive scale with their currency auctions.

This has been strategised from 2003 onwards (most likely earlier even) and it's all mapped out. Great geopolitical minds ( Brezinsky and co) have been plotting this. Obama is an extra in this production, not a main character, as is the Iraqi GOI.

Milking the international community? Having a higher exchange rate wouldnt keep them from getting the continued help and support from the US (mainly) and the IMF.....The main reason for needing all this help is simply for rebuilding/restructuring Iraq.....and since its all the oil revenues that are put aside for rebuilding the country (which is in USD) it wouldnt matter what the value of the dinar is, they would still need help.....

They SHOULD be taking dinar out of circulation but there is nothing at all that suggests that they really are removing currency from circulation....only that the numbers are still rising....so still like I was saying, you could answer the question for why they havent RD or RVd yet with the same answer....they simply arent ready to undergo or handle such an event....things do need to be in place, and they have been dragging their arses!

[caughtinthecrossfire]

The only real problem with them Re-denominating at this time is the fact that they have kept inflating their money supply during the past 8 years! What makes us think they are going to stop once they Re-denominate? They need to implement monetary tools NOW, get things under control, and THEN RV/RD or RD/RV.

I personally don't see an RD being very successful at this time, do you? What are they going to do after they re-denominate differently that they couldn't have done in the past or now?

This I completely agree with. I watched from Jan-June and the rate of inflation versus what all the lop talk gave as reasons a lop would take place. I've seen lop and rd so interchanged it's making my head spin when it only makes sense to do ONE or the OTHER...when they are both. Sigh...I swear it's like ping pong.

Back to my personal view concerning inflation.

Was it or was it not considered QUITE stabble much earlier this year. Yes or No. My opinion, yes, especially compared to previous years it definately looked balanced and well below the 10% before spring rise. If they REALLY...ACTUALLY had planned to RD all along...new currency could have/should have easily been implimented/exchanged. They already had plenty of people/banks in place and again...even if you are of the opinion they did not...then Shabs is obviously not very prepared for the perfect RD scenerio. Yes, yes, yes...they have all those fancy new machines with a costly price tag...but..

The infighting aside with those who do not agree with CBI's proposal...if the plan was in jepardy before inflation was finally stable...and Shabs REALLY did plan an RD...there would have been/should have been a much better explanation given to both gov officials and the Iraqi citizens who are currently standing against this supposed RD plan.

I'm firm on my thoughts about this. Proven wrong this one may be...but the force is strong....yes....

[20MillionDinar]

The only problem is that going to a floating rate instead of being pegged, will leave the dinar very volitile.....Iraq has mentioned many times that their economy is based too much off of oil production rather then having a balanced GDP....they want to not have to rely so much on oil and free floating the dinar would make it much less stable then what it is now. Shabs is about stability (unfortunately)....the way oil prices bounce up and down on a regular it could also do more harm then good if you think about it.....

I understand about the speculative attacks and it makes sense.....but the way I see it is that us speculators are actually preserving the exchange rate with our buying the dinar....you could easily say that speculators in the US alone probly hold 2-3 trillion dinar?? What about speculators across the globe?? We know there is activity of buying up dinar in more then just the US.....we speculators could be preventing any "speculative attack" on Iraq.....not only that but at this point you also have the auctions which serve the purpose to keep the value stable, selling dinar and USD when need be but other then that, with Iraq still being such a new nation, with a uncertain future, with all its instability as far as the govt and security go, what large entities have that much faith in an inflated currency to just buy it up off the shelves? There is no real value in buying something thats already inflated.....wouldnt be such a smart move for anyone to take at this point......

So you are saying that the floating rate will leave the dinar volatile? Bu then you say the U.S. speculators are preserving the exchange rate? Which one is it?

I would think this would be opposite. A floating rate would let supply and demand determine the true value, being internationally traded on the FOREX market would bring in a HUGE number of traders and investors, it would provide liquidity, and would also allow the CBI to withdraw tons of Dinar out of circulation as there wouldn't be such a high demand due to the fact that they wouldn't need to "prop up" and "supress" their value through the currency auctions on a day to day basis.

After all of what I just stated above happened, I think there would be a lot more value added to their currency. Unless of course they are "propping up" their currency at this time and it technically should be worth LESS than what it is now...do you think it should be worth less than what it is now?

I wouldn't consider Iraq to be "unstable" considering the fact that we have occupied it for 10 years. The fact that we are now withdrawing shows stability in itself. If that can't be recognized on a global scale then I don't know what is going to...

Major Investors, traders, financial institutions are not stupid. They have ways of analyzing a countries currency to determine its true value.

This I completely agree with. I watched from Jan-June and the rate of inflation versus what all the lop talk gave as reasons a lop would take place. I've seen lop and rd so interchanged it's making my head spin when it only makes sense to do ONE or the OTHER...when they are both. Sigh...I swear it's like ping pong.

Back to my personal view concerning inflation.

Was it or was it not considered QUITE stabble much earlier this year. Yes or No. My opinion, yes, especially compared to previous years it definately looked balanced and well below the 10%. If they REALLY...ACTUALLY had planned to RD all along...new currency could have/should have easily been implimented/exchanged. They already had plenty of people/banks in place and again...even if you are of the opinion they did not...then Shabs is obviously not very prepared for the perfect RD scenerio. Yes, yes, yes...they have all those fancy new machines with a costly price tag...but..

The infighting aside with those who do not agree with CBI's proposal...if the plan was in jepardy before inflation was finally stable...and Shabs REALLY did plan an RD...there would have been/should have been a much better explanation given to both gov officials and the Iraqi citizens who are currently standing against this supposed RD plan.

I'm firm on my thoughts about this. Proven wrong this one may be...but the force is strong....yes....

A straight up Re-denomination wouldn't take much time to prepare for at all. Period. It is a simple exchange of currency, they've done it before (during a time of war and massive chaos) and they can do it again. Obviously there is much more going on behind the scenes!

[caughtinthecrossfire]

Major Investors, traders, financial institutions are not stupid. They have ways of analyzing a countries currency to determine its true value.

A straight up Re-denomination wouldn't take much time to prepare for at all. Period. It is a simple exchange of currency, they've done it before (during a time of war and massive chaos) and they can do it again. Obviously there is much more going on behind the scenes!

TOO true...and ABSOLUTELY true. So, my thoughts again...when WAS the PERFECT time for an RD? Come and gone in my opinion. Which leaves me to believe in an (2 Letters...does not include a D)

....+1...to whomever guesses it first......

[20MillionDinar]

TOO true...and ABSOLUTELY true. So, my thoughts again...when WAS the PERFECT time for an RD? Come and gone in my opinion. Which leaves me to believe in an (2 Letters...does not include a D)

....+1...to whomever guesses it first......

I'm going to have to change my answer: Inflation in Iraq has dropped, averaging just 1.6 percent between 2007 and 2009.

However, this is due to the fact that they have manipulated their currency value through the fixed exchange rate and their currency auctions...

Edited November 10, 2011 by 20MillionDinar

[keepmwlknfny]

So you are saying that the floating rate will leave the dinar volatile? Bu then you say the U.S. speculators are preserving the exchange rate? Which one is it?

I would think this would be opposite. A floating rate would let supply and demand determine the true value, being internationally traded on the FOREX market would bring in a HUGE number of traders and investors, it would provide liquidity, and would also allow the CBI to withdraw tons of Dinar out of circulation as there wouldn't be such a high demand due to the fact that they wouldn't need to "prop up" and "supress" their value through the currency auctions on a day to day basis.

After all of what I just stated above happened, I think there would be a lot more value added to their currency. Unless of course they are "propping up" their currency at this time and it technically should be worth LESS than what it is now...do you think it should be worth less than what it is now?

I wouldn't consider Iraq to be "unstable" considering the fact that we have occupied it for 10 years. The fact that we are now withdrawing shows stability in itself. If that can't be recognized on a global scale then I don't know what is going to...

Major Investors, traders, financial institutions are not stupid. They have ways of analyzing a countries currency to determine its true value.

I was saying that as of right now, with the program rate, and the info that you brought forward saying that you think the US could be holding massive amounts of dinar to almost block a speculative attack, that it could just simply the speculators across the globe helping to keep the dinar stable....the more speculators worldwide, the higher demand through the banks which in return leads to more dinar being sold for USD and Iraq also makes money off each transaction that goes abroad out of country.....they make a good deal of money off of us lol....outside of us speculators there is really no demand for the dinar at all given its poor state....

But, going to a market driven value based only on oil would make the value unstable simply because if demand for oil goes down, or prices plummet, then so does the value of their currency....if this new Iraq was more established in the world again and the currency had been internationally traded and accepted for quite some time then i could see them possibly going to a free market float but not this early in the game....there is no confidence in the dinar right now and that will take some time to build....

I dont think it should be worth less then what it is right now....they have sufficiently shown that they are backing the current value 100% or should I say 110% based of the foreign currency reserves....its a bit undervalued for what they hold....and of course thats all based off of the numbers we see being true.....

The only reason I cant say that Iraq is truly stable is simply because the US has been there holding their hand this whole time, stepping in to help keep things in order but who knows whats to happen when we leave....there really is too much uncertainty hanging over Iraq and the troops leaving will be the best thing to do, but its gonna be their biggest test ever....but the way i see it, is that Iraq has been able to hold themselves together mostly because of us being there....not really Iraq handling business on their own...

[20MillionDinar]

I was saying that as of right now, with the program rate, and the info that you brought forward saying that you think the US could be holding massive amounts of dinar to almost block a speculative attack, that it could just simply the speculators across the globe helping to keep the dinar stable....the more speculators worldwide, the higher demand through the banks which in return leads to more dinar being sold for USD and Iraq also makes money off each transaction that goes abroad out of country.....they make a good deal of money off of us lol....outside of us speculators there is really no demand for the dinar at all given its poor state....

But, going to a market driven value based only on oil would make the value unstable simply because if demand for oil goes down, or prices plummet, then so does the value of their currency....if this new Iraq was more established in the world again and the currency had been internationally traded and accepted for quite some time then i could see them possibly going to a free market float but not this early in the game....there is no confidence in the dinar right now and that will take some time to build....

I dont think it should be worth less then what it is right now....they have sufficiently shown that they are backing the current value 100% or should I say 110% based of the foreign currency reserves....its a bit undervalued for what they hold....and of course thats all based off of the numbers we see being true.....

The only reason I cant say that Iraq is truly stable is simply because the US has been there holding their hand this whole time, stepping in to help keep things in order but who knows whats to happen when we leave....there really is too much uncertainty hanging over Iraq and the troops leaving will be the best thing to do, but its gonna be their biggest test ever....but the way i see it, is that Iraq has been able to hold themselves together mostly because of us being there....not really Iraq handling business on their own...

I see what you are saying and I understand completely. Thanks for your input Keep! You're one of our most valued members here at DV and are an asset to us all.