We were told 25 trillion to 15 Billion is good???

[easyrider]

In the first place I never said the world, I was refering to Americans. I still believe IMO that the average american holding Iraqi dinars are holding less than 1 million. There are maybe 500 thousand holding a million, and maybe that many holding 2 to 4 million, and less than a couple of hundred thousand holding about 5 to 10 at most. The majority are holding less than a million. I don't doubt the US government holds a few trillion, but that is also speculation, just like what you are stating is speculation. You do not know how many Americans are invested in Iraqi dinar, and neither do I, so admit you could be wrong also.

Are you the former XYZZY or Dinarck? You seem to fit that profile well.

He is someone else using another name its so onbvious to find out look at his join date as i respect all other opinons i cant help but notice the cycle that one user comes on here and then gets banned or uses another screen name i can almost bet its a former lopper at hand just saying is it dinarick or xxyyz i dont know but we know the routine for someone to emerge this late in the game its a second screename.

Also what the heck happened to dalite hmmm???

Edited November 25, 2011 by easyrider

[easyrider]

Nope you guys are dead wrong, maybe the mods have a way of checking? I would appreciate being checked out and clearing this up, not that it matters a lot to me.

there is no way of checking you could be on another computer or something that doesnt have the same IP adress theres ways to change Ip adresses frankly we cannot find out but like you said its doesnt really matter its just a little suspicious to all of the veterans that have been around for a while and seen a lot come and go many get banned and try to come back on different screen names happens all the time or some have multiple accounts its just kinda odd you would emerge and join so late in the dinar andposting fequently is all we are saying i woulldnt take it to heart

Edited November 25, 2011 by easyrider

[Mick373]

I still don't understand what it is you mean about how it is going to affect the Iraqis? No I don't believe the RV could be more than a cent or so without a RD first but it has nothing to do with how we spend the money here affecting the Iraqis. As I have pointed out repeatedly it is because there is simply not enough money available in the world for this to happen, Iraq can not RV into the Trillions of Dollars, it's just not possible! At 25 Trillion Dinar how can they simply adjust the exchange rate to RV (at even 1 to 1) so they would have a worth of 25 Trillion Dollars? Do you have any idea what 25 Trillions Dollars is in relation to the world economy? Do you honestly believe Iraq is going to go from a third world economy to hold most of the world's wealth just by declaring it to be so? Think about it, there is not enough money in the world for this to happen, it's impossible! And no electronic banking does not make the numbers work either, electronic money facilitates transactions to make them easier and faster but it in no way allows a country to have more money than it would otherwise.

No I am no one you knew before, I am just someone who is trying to look at this thing from a rational point of view.

I want to appoligize to you and do not mean to labor on this point, but what I am trying to get across, is that dinar paper money is just paper money, if you exchange it for other paper money, it does not make any difference how many trillion of dinars there are in the world. Paper is Paper. If you want to add to that paper what about purchases on Credit. what I am saying, if the US gives me $5.00 for a dinar or one cent for a dinar, it is paper for paper. If I then take the paper dollars and exchange them for China Yen, if is still paper for paper. The question is how the IMF, CBI and BIS decide what to value in relation to all world currency and value of Iraq. Dollars are used in the US to buy goods and services. Yen is used in China, Dinar is used in Iraq. It does not cost the govenment to print more are less money. We however, cannot print money or reduce money supplies that is why it is so hard to undersand why this works.

so lets say, Iraq has 25 trillion dinars out, US gives us $5 for each one we turn in. That means if all those 25 trillion dinars were in the US they would be worth 125 trillion. But they are not all in the us. Also, the only place I could spend the 125 trillion would be in the USA for goods and services. If I was to buy something in another country, I would have to exchange the $ for that countrys currency. But finally the dinars will end up over time in Iraq for its goods and services, Oil. IMHO

[easyrider]

Actually I am not as new as you might think since I got into the Dinar game three years ago and I was a visitor here for months before joining. If it seems I have been posting a lot it's because I am laid up from an accident but regardless I do take this thing very seriously, more so than you might imagine, but unlike some I want to look at both sides of it because like it or not there is a possible downside. I have not told anyone to sell out nor have I told anyone not to buy but surely you have to know how lopsided (no pun intended) the discussions have been on this thing and the subjects I address are subjects I fear not something I want to see happening. Hiding from a downside that we all know is possible is not a good idea and a rational discussion could help us to make critical decisions if this does not go as well as we would like for it to and bashing people willing to talk about it will not help if the worst does happen. Honestly don't you think it better to look at the possibilities and maybe be able to deal with them ahead of time rather than get blindsided? To borrow a line from a post from a few days ago, if there is a train wreck coming I don't want to be standing on the tracks with my eyes closed when it gets here, what's wrong with that?

of course its healthy to look at all sides im not saying to stop it was just somebody's comment that intrigued me to comment on all of the times people have been banned and made other ccounts after the Mods did indeed figure them out. I wont mention any names.

[MrDinarman]

I want to appoligize to you and do not mean to labor on this point, but what I am trying to get across, is that dinar paper money is just paper money, if you exchange it for other paper money, it does not make any difference how many trillion of dinars there are in the world. Paper is Paper. If you want to add to that paper what about purchases on Credit. what I am saying, if the US gives me $5.00 for a dinar or one cent for a dinar, it is paper for paper. If I then take the paper dollars and exchange them for China Yen, if is still paper for paper. The question is how the IMF, CBI and BIS decide what to value in relation to all world currency and value of Iraq. Dollars are used in the US to buy goods and services. Yen is used in China, Dinar is used in Iraq. It does not cost the govenment to print more are less money. We however, cannot print money or reduce money supplies that is why it is so hard to undersand why this works.

so lets say, Iraq has 25 trillion dinars out, US gives us $5 for each one we turn in. That means if all those 25 trillion dinars were in the US they would be worth 125 trillion. But they are not all in the us. Also, the only place I could spend the 125 trillion would be in the USA for goods and services. If I was to buy something in another country, I would have to exchange the $ for that countrys currency. But finally the dinars will end up over time in Iraq for its goods and services, Oil. IMHO

It's all about VALUE. I think that might clear it up. There is a limit....

[Mick373]

Honestly no offense meant but I still fail to see your point, if Iraq has 25 Trillion Dinar at $5 that's a worth of 125 Trillion Dollars but there's not nearly that much money in the entire world so it does not matter where it is spent. The bottom line is that regardless of how this is figured Iraq simply can not have Trillions of Dollars of wealth and for anything big to happen in the way of a RV this figure must be brought down into the Billions, there's just no way around it.

I understand what you are saying, and it make perfect sense logically. But governments do not operate that way. It only matters, what the exchange rate is and what other countries are willing to give their respectfic currency in exchange for it. Further, as I understand the dinar is pegged to gold, that puts the value higher than a few cents. Money supply is just one of the factors in determination of the exchange rate. Remember, what goes up can come down, and what has come down can go up, the Iraqi dinar under Saddam was worth $3.21 it is now worthless what happen to that currency. Iraq replaced it with the new dinar, pegged lower at 1170 per $1.00. Regarding the 125 trillion, that is my understanding why they are raising the zeros from the currency, issuing new demonations and revaluing. This should strenghten the in coutry dinar. Out of country, is based on Forex what the value is set for each country is willing to exchange their currency for the iraqi dinar. I am just a laymen when it comes to this and like you trying to make sense of this. But regarding rate, I have heard opinions from a few cents, to $15.00. But my understanding is the exchange rate is based on the GNP, Gold or other assets tied to that currency. Also, becasue logically based on the example if a country reducing the value of its currency and the money supply increases as a result, could never revalue. Becasue the lower the value the more currency could be purcahsed by investors. So if the dinar comes out at 10 cents, then investors buy more dinar at that value, if it comes out higher less dinar is acquired. I have no idea as to what the rate will be, I do not know when it will happen I hope soon.

[luckyone]

As much as I wouldn't like to I have to agree DD on this one. 4 tril in circulation does seem a bit low. If there were 1 mill people holding an average of 5 mill dinar that alone would be 5 tril and that isn't counting what any gov. might be holding. But I also think if they RD before they RV then they will end up in without enough money because 15 bill dinar at even $1 wouldnt be enough. I do think they will RV first but only to a small amount, like .10 at the most and have a time window to cash in before the high denominations are no longer valid. One of my sources of info come from a friend of mine in Kuwait that just came from Iraq. He told me about a week or so ago that some contractos were talking about an RV in the range of .01 to .10 at first, and having it pegged untill the new lower denominations are introduced. At that time anyone that still holds dinar will have a limited time to cash in before the higher denominations are no longer valid. I don't see a straight up RV in the amount of $3 or anything even close to it, but I also don't see a straight up RD either. I'm a part time physics/math teacher at a college and I have been talking to an economics teacher about this because he is invested in the dinar also, and he told me that when a country RD's the currency that it takes time and is highly unlikely to RV at the same time to make the new lower denomintations equal to the higher notes. This would make it very confusing for not only banks, but the people as well having two different currencies at two different values at the same time. He said what he thinks what might happen is one of two things; 1. They will RV first (probably at a low right to collect some of the notes) then RD soon after and then RV again. Or, 2. Issue new currency at the same time as the initial RV and peg the new denominations to the face value at the current rate untill the cash/trade in widow closes for the higher notes then either RV again or let it float. One thing he did say is that if they RD first that it is very unlikely that they will be able to support themselves without an imediate RV, and he said thats unlikely because you have to have time to trade in the old for the new.

[speculatorsRIDE]

I have read the entire thread and still I don't see speculators holding 4 trillion IQD. This figure is not plausible to me. It is almost like people have no idea how large a number 4 trillion is. 4,000,000,000,000 4,000,000 people would have to hold 1,000,000 IQD each. Perhaps it is time for a poll to see how much IQD people actually own.

[Mick373]

It does matter a great deal more than the exchange rate, think about it (if I understand what you are saying) if Iraq could RV to worth of 125 Trillion Dollars they would be in control of almost all the entire world's wealth, no country could possibly have that kind of wealth it's just impossible.

Brother, I just want you to know, I have really enjoyed our discussion; regarding the 125 trillion as being a "wealth: the currency is a liability for the country not an asset; However, it is redeemable in goods and services offered by Iraq, Oil, goats, precious metals, burkas etc. The highest valued currency in the world now is the Kuwait dinar at $3.61, based on articles etc. I have read. Iraq has more wealth than Kuwait in Oil reserves etc. Also, there is not 25 trillion dinar outside the country, Shabbi has been reducing the money supply, and at the same time keeping inflation around 7%.

[keepmwlknfny]

Also, there is not 25 trillion dinar outside the country, Shabbi has been reducing the money supply, and at the same time keeping inflation around 7%.

No, its probly not all outside the country...but the statistics show 25 trillion in circulation.....how do you know Shabibi is reducing the money supply? I mean I know we all want that, but there is no evidence supporting this idea....anywhere.....

[mrmcwhipit]

Man you guys are like the eveready bunny about the LOP ithink one of you has just about written a book just today haha, I give you an A for effort.

[Blu Collar Guru]

The notion that the Federal Reserve is going to trade IQD for oil is complete fiction. The US Government doesn't control the Federal Reserve. It never has. The Federal Reserve is a private entity. Understanding this and accepting it is key to this speculation. Years ago it was rumored that Iraq was going to revalue their currency, and could do so based on the fact that they were sitting on an ocean of oil. While this is true, they are, it does not factor into the value of the IQD. Currently, the IQD is backed by foreign currency reserves.

I am not sure what is so hard about grasping what the status of the Iraqi currency is. The CBI reports they have 30 trillion IQD printed and are responsible for 60 trillion IQD if you include electronic IQD (IQD in accounts on paper). No where do they state that they have 30 trillion IQD out on the streets in peoples hands. The CBI vault is stacked with paper notes and the local bank branches throughout the country aren't empty either. Then there is the physical IQD held in the Federal Reserve and all the central banks of the world. The CBI has said there are approx. 4 trillion IQD circulating in the economy. This figure seems correct to me as I have no reason to dispute their claim.

The CBI has also stated that they will become a reserve currency. Again no reason to doubt this. If they become a reserve currency, then we have no way of determining the value of the IQD. A lot will depend on which currencies are placed in their basket. Which currencies will be pegged to the IQD? I would assume it would be most of the oil producing countries in the ME. They have stated they want to return to prewar value for their people. This should give you a clue as to the rate they have in mind. As a reserve currency they become a faith based currency like the US Dollar. As long as people believe that when they take their IQD to the bank they will receive the rate. This is faith based.

WELL SAID !

[Anti This Anti That]

It does matter a great deal more than the exchange rate, think about it (if I understand what you are saying) if Iraq could RV to worth of 125 Trillion Dollars they would be in control of almost all the entire world's wealth, no country could possibly have that kind of wealth it's just impossible.

There are hundreds of trillions in the world, and it has been stated on many occasions that the Rothschilds have in excess of 500 trillion themselves.

[lotsofdinar]

I think a figure of $500 trillion is simply a meaningless figure. Where would you aquire that much fiat currency and what would you do with it? If that many dollars existed, USD would more inflated than ID.

Edited November 26, 2011 by lotsofdinar

[Mick373]

No, its probly not all outside the country...but the statistics show 25 trillion in circulation.....how do you know Shabibi is reducing the money supply? I mean I know we all want that, but there is no evidence supporting this idea....anywhere.....

Brother, this was posted on our site before, Regarding Dr. Shabbi etc.

Shabibi's address to the US Chamber of Commerce and the RV

While all this has been going on I have been watching from the side lines all the debate over the Shabibi videos. I watched Frank change his rate. I saw all the supposed gurus in the know scramble to come up with explanations as to why their rates are wrong, what the hold ups are, And how everything will unfold. I also watched a new generation of lopster monsters attack the forums. I have wanted to address these things but I have been lacking the time to do so. I will address them now.

As many of my readers know I am not a rate and date guy. I don’t put rates out there for one simple reason. I have no hard evidence. This does not mean I don’t have a belief about what I think the rate will be. I have shared my belief with close friends. I have shared the revalue process in an article called “The Truth About The Iraqi Dinar part 5.” My belief on this scenario has changed a little bit since this article was written. I am about to reveal my opinion on the rate. While I believe in a little different process my belief about the rate has not changed. Before I talk about the process that I believe will unfold soon we need to look at the videos containing Shabibis speech. For those who don’t know, Dr. Sinan Al-Shabibi is the head guy at the Central Bank of Iraq. (CBI) As the governor of CBI Shabibi has the sole power of setting the rate. This power was given to him by the Iraqi constitution. So now let us watch the videos and see his plans to raise the value of this currency.

watch?v=Q56aohs98iI&playnext=1&list=PL668F4FE1E0D58A02

watch?v=EY9oXjJRXzk&feature=related

watch?v=6jy0T9HVYFA&feature=related

watch?v=ZBtffE1AD1s&feature=related

Now let us address some points that Mr. Shabibi raised.

Video 1

In the first Video Dr. Shabibi gave an overview of Iraq’s condition before 2003. He went on to point out that Iraq had high inflation, A huge external debt, and a weak currency. Because of sanctions Iraq had low oil output and high unemployment. Iraq also had damage to it's infrastructure. He went on to say that policies to respond to sanctions were not adequate.

He also said that in 2003 it was important to obtain stability politically and in economics. Without this they could not move forward. Iraq needed to stabilize the exchange rate to lower inflation. The CBI concentrated on the stability of the exchange rate. (fixed rate) This set up stable parameters.

Side note: Dr.shabibi seems to believe that a fixed exchange rate helped stabilize Iraq and controlled Inflation. He went on to say “Today we paved the groundwork for government to act. No more worry about exchange rate and inflation. This will attract investors”

Video 2

Dr. Shabbi said that the economic side, the political side, and the security side should all work hand in hand to provide stability. He briefly talked about currency wars and nations printing too much currency and increasing the money supply. He talked about having the reserves to counter that approach. He said, nobody is responsible for rate stability. They were using currency auctions to stabilize the exchange rate. He also said that the global increase in food prices will affect the exchange rate. He said that the government will help the private sector.

Video 3

This was the question and answer part of his presentation. It was also the most telling. The first question was: Will there be a revalue of the Iraqi Currency to foreign and domestic investors? How long before this happens to the Iraqi currency?

Dr. Shabbi said that it depends on controlling inflation and maintaining price stability. Other factors are trade, imports and exports. Inflation will be a deciding factor in adjusting the exchange rate. He said they are going to revisit the exchange rate.

Another question was: It has been said in the news media that Iraq will cut 3 zeros and it plans to redenominate it’s currency. Is there any truth to this? Shabibi responded by saying there is a lot of talk from people writing articles saying the value of the dinar will depreciate. This is not the case. This is just a way to ease counting. They have a plan and conditions are different now. Shabibi said “Removing the three zeros will go hand in hand with adjusting the exchange rate. We have been studying when and we will implement this soon.” He went on to say that they will need the help of the security forces. They need to become less busy with violence.

Video 4

This is the last part of the question and answer section. The question was: What affect did the drop in policy rate have on lending? (side note the policy rate is what we would call the interest rate here in America which is set by the Federal Reserve)

Dr. Shabbi said when inflation is high they raise the policy rate. The policy rates the banks use to lend are different then the CBI’s rate. What judges the banks rates are the markets. The policy rate set by the CBI is a guideline for banks to follow. Banks don’t always follow the CBI rate due to things like risk. Banks like to play it safe by putting money in the CBI and participating in currency auctions. Problems with uncertainty in loans and problems with the banks will be resolved soon.

My Analysis,

It is evident to me that any Revalue scenario will use a fixed rate of exchange not a floating rate. Shabibi credits a fixed rate with providing stability with inflation and stability in the economy. It is highly unlikely he will abandon this when Iraq needs stability the most. That is when they implement their plan to remove the zeros and raise the value of the dinar.

Dr.Shabibi has said that raising the exchange rate of the dinar goes hand in hand with controlling inflation and maintaining price stability. He also said that redenomination will go hand in hand with raising the exchange rate. Typically there are two ways inflation can be controlled.

First: raising interest rates. When interest rates are raised consumer spending drops. This decreases demand and increases supply. This works to bring down prices in all markets.

Second: Raising the exchange rate. When the exchange rate is raised against foreign currency imports become cheaper. This is something Iraq desperately needs to do to help rebuild infrastructure. Most of the materials needed for this will be imported. When Imports compete with goods manufactured in country it brings down prices. This should not affect Iraq’s chief export which is oil. This is because oil is bought and sold using US dollars. Raising the exchange rate is a great plan when the imports are too expensive. This is something China is even considering.

http://en.21cbh.com/...tion-Forex.html

Whenever you use the word redenomination the lopsters come out from hiding. They typically say see we told you so! Here comes the lop! Their main argument and point seems to stem from Iraq having some 24 trillion dinar in circulation in Iraq. They say there is no way Iraq can revalue their currency for even $1.00 because that would put the equivalent of 24 trillion in US dollars in circulation and that would destroy their economy. The problem is they are right. If there was a one-time revalue of a dollar that would put way to much currency in circulation.

Now let’s reverse that. If Iraq were to lop the way they claim one old 25,000 dinar note is equal to one new 25 dinar. that would only bring an amount equal to 24 billion in US dollar value. This would be the entire Iraqi dinar money supply. This would not work. Consider that Iraq’s budget for 2011 is equal to 82.6 billion US dollars. A lop of the currency would not even meet a third of the budget let alone provide extra currency for the people of Iraq to use. So obviously both scenarios are wrong!

Let’s revisit the main points Dr. Shabibi made in these videos

1. A fixed exchange rate brought stability to Inflation and the currency. Translation= during the RV process the rate will remain fixed to provide stability.

2. Currency Auctions are used to stabilize the exchange rate and the global increase in food prices will have a direct effect on the exchange rate. Translation= Currency auctions will continue to play a role in the RV. The exchange rate will increase to combat higher food prices because a higher exchange rate directly affects the cost of importing food.

3. In video 3 Dr. Shabibi said that a revalue would depend on controlling inflation and maintaining price stability. Translation= A revalue will lower imports and will be used to control inflation.

4. Shabibi said a redenomination and removing the zeros would just be a way to make counting easier. Translation= He downplayed a lot of what was written on the redenomination. His definition of Redenominating is one and the same with removing the currency with 3 zeros.

Side note: If a lop were to play out Iraq would need to replace all the currency in circulation. You simply cannot take an old 250 dinar note and now say that it is worth more than this old 10,000 dinar note. So in the event of a lop Iraq would need to replace all currency. Shabibi constantly makes reference to removing the zeros while implying that they are keeping the lower denominations in circulation.

5. Removing the Zeros will go hand in hand with adjusting the exchange rate. Translation= as we pull the notes with three zeros out of circulation we will raise the exchange rates.

6. We will be implementing this soon. Translation= no translation required

7. Problems with uncertainty in loans and problems with the banks will be resolved soon. Translation RV baby!!!!!

You may not agree with the way I have read between the lines, but before you object let me present my RV scenario with the rates. Notice I said rates and not rate.

Before I talk about the rates I want to make one thing clear. First and foremost this is strictly my opinion and this does not mean that what I am about to tell you will come to pass. I do not know anyone on the inside. I don’t have any connections or inside information. I have no secret information or intel. This is completely guess work on my part and it is not to be taken as fact because I really don’t know for sure.

I believe things will play out mainly like the scenario I wrote about in the article. The Truth About The Iraqi Dinar part 5. The main difference now is I believe the rate will be fixed. It will not float. This is how I believe events will happen.

There will not be one-time revalue event. Lopsters provide too much proof for this. The exchange rate will adjust and begin to move up in a controlled way. If it floats the CBI has no control. When it gets to a certain point maybe a penny to ten cents lower denominations will be put into circulation. When this happens the notes with 3 zeros will be removed from circulation.

The rate will continue to go up and more notes will be removed from circulation and the CBI will contract the currency supply. Now Iraq is making money off the float and off the spread. There is a controlled exchange rate in the currency markets and the auctions. For example, The dinar the CBI purchased for 1 penny is now being sold for 10 cents. At the same time they decrease the supply of the currency through the auctions and the markets. The exchange rate will continue to go up as Dr. Shabibi monitors Inflation and releases more lower denominations. All the while CBI is making money, financing the revalue, and reducing currency supply through the auctions and the currency markets.

As the rate increases Iraq continues to make money off a controlled float. For example, It may be that they raise the rate over time to 50 cents. This means all the currency they purchased below this amount can now be redistributed for a profit. This will also be a way for Iraq to contract the money supply because they will not need to issue as much to break even and they will not take a loss when doing so.

Finally this scenario plays out and the value of the dinar stabilizes somewhere around $1.20. I believe the rate will wind up somewhere between the dollar and the euro. Then once Iraq has a stable place in the World Trade Organization and infrastructure is rebuilt. It could go up from there. This could all take place over a period of a few months. Of course this scenario could play out a number of different ways. One thing is for sure. I don’t see a one-time revalue event. I never did. I see a gradual increase over a very short period of time. Mr. rich can verify that this was my guess at a target rate. I gave credence to the one-time revalue event for two reasons.

1.So many of my friends believed in a one-time revalue event and I thought people knew more than me concerning this investment. I thought they knew something I did not know.

2. I really don’t know how this will play out. Everything is speculation on my part. What do I know?

What has been the hold up?

With certainty the main hold up is security. I think Dr. Shabibi verified that in these 4 videos. I now believe another hold up has been the Iraqi court attempting to circumvent the constitution and hand over the power of the CBI to Maliki. In Shabibi’s last letter of intent to the IMF he addresses this and he says he will continue to fight this. He said “We remain firmly committed to maintaining the independence of the CBI, as well as to ensuring that all of Iraq’s oil exports are in accordance with international agreements and that all oil export revenues accrue to the central government.”

The report also said “The CBI will continue to be independent in the pursuit of its policy objectives. The CBI’s monetary and exchange rate policies will continue to be aimed at keeping inflation in the low single digits and safeguarding international reserves.” It is pretty obvious to me that this was a big concern for Shabibi and the CBI

Read more:

[leola]

It seems to me, that iraq has planed to sell as much iqd as possible to out siders,after all they are still selling to us...No one can deny this,therefore he is not contracting the currency,but, but expanding it,,,YOU FIGURE OUT WHAT THE PLAN REALLY IS !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[keepmwlknfny]

Whenever you use the word redenomination the lopsters come out from hiding. They typically say see we told you so! Here comes the lop! Their main argument and point seems to stem from Iraq having some 24 trillion dinar in circulation in Iraq. They say there is no way Iraq can revalue their currency for even $1.00 because that would put the equivalent of 24 trillion in US dollars in circulation and that would destroy their economy. The problem is they are right. If there was a one-time revalue of a dollar that would put way to much currency in circulation.

Now let’s reverse that. If Iraq were to lop the way they claim one old 25,000 dinar note is equal to one new 25 dinar. that would only bring an amount equal to 24 billion in US dollar value. This would be the entire Iraqi dinar money supply. This would not work. Consider that Iraq’s budget for 2011 is equal to 82.6 billion US dollars. A lop of the currency would not even meet a third of the budget let alone provide extra currency for the people of Iraq to use. So obviously both scenarios are wrong!

24 billion after a lop wouldnt be their total money supply....their total money supply would actually be about 60 billion...you have to consider the ENTIRE money supply which would be their M2....

And the money supply has nothing to do with the budget, the budget is based off and paid for by revenues from oil...thats how Iraq runs the country....from oil sales, not from the amount they have in circulation so that theory that they wouldnt have enough money to run the country if they lopped is flawed and incorrect....

You never really answered my question so I will ask it again....why is it that you say they have been removing currency from circulation when there is no evidence even close to pointing to that theory??

[iqdheadlines]

The problem is how Iraq can back the value of their currency having so much in circulation......the dinar is a pegged currency, which it must have something backing the value of it, and they do not have the reserves to back a 1 dollar RV at this time....

You seem to forget or maybe you just don't know that commodities (such as oil, gas and others) are a currency itself and can be used as payment for goods and services and so forth...........so that means that the proven natural resources of Iraq can back the entire amount of IQD currently in circulation in the event of a revaluation rather than currency backing currency when in the end does not always work and is the very reason why we are seeing the economic crisis in Europe and the U.S.

[iqdheadlines]

Why doesn't any other country on the planet do this (back their currency with oil in the ground)? Not Saudi. Not Venezuela. Not Kuwait. No one. There are reasons no other countries do it, and they're the same reasons why Iraq can't either.

Who knows?

Maybe Iraq will be the first and maybe that is the reason why no other country has done this and Iraq could very well be the first country that adopts this new direction in backing their currency.

[keepmwlknfny]

You seem to forget or maybe you just don't know that commodities (such as oil, gas and others) are a currency itself and can be used as payment for goods and services and so forth...........so that means that the proven natural resources of Iraq can back the entire amount of IQD currently in circulation in the event of a revaluation rather than currency backing currency when in the end does not always work and is the very reason why we are seeing the economic crisis in Europe and the U.S.

Iraqs resources cant even cover the value of the physical currency in circulation if it RVd at a dollar!!!

Shabibi surely isent going to let the dinar float on the market either.....they dont want to be so reliant on the oil revenues as there only source of income....what does that tell you?? The price of the dinar would be too volitile....it would not be very stable either....

If its possible to use oil/gas/other resources as a way to back the value of your currency, then how come no one else does it?? All these oil producing nations should have 4-5 dollar rates huh?? LOL nope....cause its not done....its never been done....

[Mick373]

24 billion after a lop wouldnt be their total money supply....their total money supply would actually be about 60 billion...you have to consider the ENTIRE money supply which would be their M2....

And the money supply has nothing to do with the budget, the budget is based off and paid for by revenues from oil...thats how Iraq runs the country....from oil sales, not from the amount they have in circulation so that theory that they wouldnt have enough money to run the country if they lopped is flawed and incorrect....

You never really answered my question so I will ask it again....why is it that you say they have been removing currency from circulation when there is no evidence even close to pointing to that theory??

Boy!! I am tired, "I reckon i'll cross over the river and rest in the shade of the trees" (quote, last word of Stonewall Jackson);

[dtard]

Thanks for the ideas! many well thought out. Really wanted to know the answer

[bigdaddydn]

One thing I think we can all agree on is that Iraq can't RV at even $1 let alone $2 or $3 with 25 trillion dinar in circulation. Speculators alone hold trillions of dinar. Add that to the trillions being held by the Iraqi people and the CBI and you can see the problem here. Iraq needs their money supply to get to less than 1 trillion to even think about a $1 RV.

The fact is Iraq hasn't significantly reduced their money supply at all, but they need to in order to simplify cash transactions and in order to get their people to quit using the USD. Thus the news articles to that effect. Now they are saying that they will reduce the money supply down to 15 billion dinar. How do you suppose they will accomplish that? The only way that I can see is for them to redenominate as numerous other countries have done after they recovered from periods of hyperinflation as Iraq has. In other words, issue all new currency and render the former currency invalid. Speculators would then have to turn in their IQD for a new currency during the allotted time frame.

If you take 25 trillion and multiply it by the current value of $.00086 you get the current money supply which is roughly $21.5 billion USD. Then you take the proposed money supply figure of 15 billion and divide that into the $21.5 billion and you get roughly $1.43, provided no further RVs in the equation. So it appears to me that the only way to accomplish their stated intention of removing three zeros from their currency, de-dollarizing, easing cash transactions, and arriving at a new money supply of 15 billion dinar is for them to issue all new currency at a new rate of $1.43 which would mean that dinar speculators would make a profit of 200-300% prior to subtracting the exchange fees. Better than a kick in the backside but hardly the overnight millionaire status that many have been promoting.

Soooo .....if you paid $1100 for a million dinar and they RD/RV at $1.43 that means that you would exchange it for $1430 less whatever exchange fees are charged, which would leave you with a profit of 25% or less.Why wouldn't they do this???

Paper money lasts about 18 mounthes to 2 years! Do you think that IRAQ put ALL the paper out at one time and if you think they did do you think that it is all out there??

[joseroque]

Dtard's math is very suspect!! If you have a million dinar and it RV's at $1.43 you wind up with quite a bit more than $1,400.00!! The dinars we trade in go to the UST not the Federal Reserve, which is a private entity. The UST then exchanges the dinars for oil, gas and minerals which are the assests Iraq has to buy back the dinar. It's all so simple so I don't know why everybody tries to complicate things.

[dinarck]

Dtard's math is very suspect!! If you have a million dinar and it RV's at $1.43 you wind up with quite a bit more than $1,400.00!! The dinars we trade in go to the UST not the Federal Reserve, which is a private entity. The UST then exchanges the dinars for oil, gas and minerals which are the assests Iraq has to buy back the dinar. It's all so simple so I don't know why everybody tries to complicate things.

Since when has the US Treasury ever bought a drop of oil? Anyway oil is bought with USD not Dinar. This nonsense is nothing more than made up fantasy to keep the sheep in the flock. Please provide some sort of fact or proof to support this theory. By the way, why would Iraq give away billions of barrels of oil for years to come for no reason?