For new 'Dinarians', to help clarify common questions...

[Fi3ry_Ph03n1x]

What is redenomination?

It is the gradual removal of current bank notes, replaced with new bank notes. In the case of Iraq, we anticipate that all notes are going to be turned in for 1,000x less face value. In a redenomination, there is no such thing as only redenominating specific bills and keeping other bills in circulation. It doesn't work for this reason. When a bill is redenominated, a new bill takes its place. In Iraq, a new 25 bank note will replace an old 25,000 bank note. The numbers on the notes will be different (called the nominal value), but the intrinsic value of both notes will be equal. In other words, they'll have different numbers but be able to buy the same stuff.

How can two different bills buy the same stuff?

At the time of a redenomination, the exchange rate increases to compensate for the decrease in nominal value. In other words:

25,000 IQD x an exchange rate of .0008 USD = $20 USD

The new 25 IQD note has to have an exchange rate of .8 USD for the new note to have the same value:

25 IQD x an exchange rate of .8 USD = $20 USD

Notice that the exchange rate is different to keep the value of both bills at $20. The exchange rate can't be raised to .8 for only the 25,000 notes. The exchange rate affects all notes. This is why a redenomination has to happen to all bills, because the exchange rate will go up for all bills.

Some people have said that they aren't redenominating in that way, though. They are only removing certain bills from circulation. What about this?

The trouble with this is that Iraq has way too much currency in circulation right now. By all measures, this one country has trillions more than the Euro which curently has 12 trillion (and the Euro is the currency of 16 countries!). Iraq cannot have this much currency and still have an exchange rate on par with others in the international community.

When the 25,000 IQD bills get turned in, though, doesn't that reduce the money supply?

In a word, no. If you take a $100 USD note to the bank and have it deposited in your bank account, that bill may disappear from your wallet or purse, but it doesn't cease to exist as part of the United States' money supply. It may be electronic, and this bill may even be destroyed from being circulated too long. The final outcome for that piece of paper doesn't matter. The value of that money remains in your bank account until you spend it or withdraw it. Even then, the value isn't lost from the economy. It just transfers to someone else.

This is true anywhere, to include Iraq. When Iraqis deposit this money in their bank accounts, the central bank may be able to recall the paper and stop circulating it, but it doesn't reduce the supply of money because the value of that money stays in their accounts no matter what happens to the actual paper.

Well, in that scenario, everyone is rich! That sounds like a good thing, right?

If it worked, it would be a good thing. But countries cannot just print money and automatically make themselves richer. The money doesn't automatically have value just because it gets printed. There are a lot of factors that determine whether or not currency has value, and where that value comes from. It comes down to collateral in one form or another. If you walk into a bank and ask for a $100,000 loan, they are going to want some collateral to hold until the loan is paid off. You can't say, "I'm going to start pumping a lot of oil in 5-10 years, and I'll use that for collateral today." Sorry sir, to get a loan today, you have to have collateral that is worth somewhere in the ballpark of what you want to borrow today.

This is an oversimplistic example of why Iraq cannot circulate 25-45 trillion IQD. The country and its infrastructure are in shambles, they have an occupying force keeping the peace, and will probably have UN peacekeeping forces for a very long time as the country slowly rebuilds itself. As the gross domestic product (GDP) improves, the country's measurable intrinsic value will increase, and this will support the currency (definitely not 25-45 trillion IQD, but a more reasonable level in the billions is very plausible). There is simply no way that the IQD which is many multiples higher than the largest currency in the international community can be supported after an RV from a ragged, war-torn, fledgling country.

Regardless of what anyone tries to tell you, please don't let them borrow bits and pieces of economic principles and mix them together in a big batch of IQD soup to sell a bowl to you. If you have IQD, hold on to it. Anything is possible, and I don't think you will lose money on it. If you don't have any, you might want to buy some. I don't see it losing value against the USD, so it would be good to hold some. I recommend Al Warka Bank as you get the best exchange rate, the best interest rate, and no one from that bank pumping them on speculation sites (except me, apparently, and I am most certainly not affiliated with them other than having my own personal bank account there.)

But by all means, please don't buy more hard currency. The most confusing information available may be intentionally confusing you to do one thing: Get you to buy more. Just be smart and remember that you don't know the source of some of the comments being made or their true intentions or possible hidden agendas.

FP

[gator 12]

thanks from one of the newdes

[Fi3ry_Ph03n1x]

thanks from one of the newdes

You're quite welcome, Gator. I'm sure you gathered from the subtext of my message that I don't think everyone here acts in your best interest. Information is power, right?

FP

[imjustme0502]

Thank you for the detailed information. Makes a lot of sense the way you wrote it. I appreciate you.

[kia2002]

So im confused a little bit...are you saying that it's not possible for an RV or is it?

[kkjk]

FP, your posts often irk me! Including this one! You ALWAYS have a negative tone! If you do not believe in this investment, then sell and leave. I read your back and forth with Enorsste, while he backs up his veiws with links, you on the other hand like to tell us your negative veiws, and really never back up your writing with proof. You did not continue your back and forth with E, because it seems to me you cannot prove your point as he does. You have no proof of your stance. Now you start your thread with an invitation to "NEWBIES" and then talk as if you know exactly what is going to happen. That is unfair to them as well as this site.

You may be right, but you may also be wrong and in that scenario You are the one not looking out for anyones best interest. Is it necessary to always have a neg tone and then try to infect the "Newbies" with that state of mind.

Just prove one of your points with an article that states your stance, otherwise you are spouting speculation just as others here on this site do.

The articles that we have seen are vague, and are open to interpretation. Enorsste takes the positive angle, you take the negative angle, as if we need to hear more negativity. Save it for the mirror, because all in all none of us know really what this means until it is done!

PS- Newbies, you will encounter both opinions, you choose who to believe. I choose Enorsste, because the other opinion has me just as broke as I was when I started, and if that is true, then I have a lifetime to be negative, for now I remain positive!

Go RV!!

[skelly]

Fi3ry_Ph03n1x

Very good post. I hope you are wrong but chance it will happen as you described

[Fi3ry_Ph03n1x]

FP, your posts often irk me! Including this one! You ALWAYS have a negative tone! If you do not believe in this investment, then sell and leave. I read your back and forth with Enorsste, while he backs up his veiws with links, you on the other hand like to tell us your negative veiws, and really never back up your writing with proof. You did not continue your back and forth with E, because it seems to me you cannot prove your point as he does. You have no proof of your stance. Now you start your thread with an invitation to "NEWBIES" and then talk as if you know exactly what is going to happen. That is unfair to them as well as this site.

You may be right, but you may also be wrong and in that scenario You are the one not looking out for anyones best interest. Is it necessary to always have a neg tone and then try to infect the "Newbies" with that state of mind.

Just prove one of your points with an article that states your stance, otherwise you are spouting speculation just as others here on this site do.

The articles that we have seen are vague, and are open to interpretation. Enorsste takes the positive angle, you take the negative angle, as if we need to hear more negativity. Save it for the mirror, because all in all none of us know really what this means until it is done!

PS- Newbies, you will encounter both opinions, you choose who to believe. I choose Enorsste, because the other opinion has me just as broke as I was when I started, and if that is true, then I have a lifetime to be negative, for now I remain positive!

Go RV!!

kkjk: Your point is taken, and thanks for your criticism. First of all, I'm sorry if my posts irk you. I don't have any intention of making you or anyone mad. Disagreement about ideas is one thing, but I don't take criticism personally, or get offended if another member has a different view than I have. I do my best not to personalize; try not to take it so personal. It's about the information, not about the people. Now, to the points you've made:

(1) Enorsste is well-respected... very much a stand up guy. I've said so personally. He and I like each other just fine. In the last post I wrote to him, I told him in no uncertain terms that I get that he is very busy with all the hard work he does, and that I dont' expect his undivided attention. After all, there are a lot of people here, and I'm interested in talking about ideas, not having a 'back-and-forth' with anyone as you call it. I'll share ideas with anyone in the hopes that we can all know and understand our world better.

(2) Your second, and seemingly more important point, is that you don't think that my ideas are supported enough through 'links'. Well, first. Proving something doesn't always require a link. In the case of understanding how a redenomination works, it involves math. There is no link to understand math. There is school and I can't provide that for everyone, I'm sure you can understand. To some extent, there is also common sense. It should be unneccesary to prove that Iraq can't have 43 trillion dinar outstanding when the 16-member-nation Eurosystem only uses 12 trillion among all sixteen nations. It is self explanatory that one averaged-size middle eastern country wouldn' have almost 4x as much currency as 16 other strongly-positioned European countries. I can't provide a link for that. It is easy to see the relevance. There are some very linkable and quotable points that I've made. And you're right. I didn't put any links in. I don't want you or anyone else thinking that I just pulled this info from my butt, so I will track them down for you and post them here so that you know I did my due diligence and research to come to an informed opinion.

Iraq currently has 43 trillion IQD for money supply: As of November, 2009, Cell AM6 -- 43,812 Billion (or 43.812 trillion IQD in Iraq's money supply)

The ECB (Euro) currently has 12 trillion Euros for money supply: Their money supply is actually only 9,312.6 Euros, but the most favorable comparison to IQD is the Euro's value in USD. When converted, the 9.3 trillion Euros is 12.593 trillion in USD.

I didn't quote anything from this report, but it is lengthy essay by an Associate Professor at UNC on sixty different countries that have redeominated (lopped) their currency between 1960 and 2003: Dropping Zeros, Gaining Credibility? Currency Redenomination in Developing Nations.

This well-educated woman gives a lengthy analysis on redenomination and how it has historically been carried out in many circumstances for the last half-century. It is absolutely a must read link if you really want to understand what all of this means without just taking my word for it. If you'd rather assign your own personal definition to redenomination, this is not the link you are wanting.

Her credentials: I study and teach international relations, international political economy, and comparative political economy. My current research projects include the effects of international capital mobility on government policy choices, the role of private sector actors in global financial regulation, and the relationship between labor rights and foreign direct investment.

My calculations on old IQD vs. new IQD and their respective exchange rates: Start==> Run==> calc.exe (Sorry, no link. Manual activation required.)

Thanks again for the criticism. I hope this clears up my position better and gives me more credibility in your estimation. I know you probably won't agree with my opinions, but at least you can agree that I've done research and developed my own opinion from informed sources.

Last, and most importantly, I think your positive attitude is great, and I totally encourage it. I don't want people to be down, I just want honest, straight-forward truth so that people can make up their own minds with accurate info. I hope that the links and explanations I've provided for you help convince you that I've worked hard to give honest and accurate info even though it may not be the most uplifiting and positive. If not, what can I say? I tried my best.

FP

[Fi3ry_Ph03n1x]

So im confused a little bit...are you saying that it's not possible for an RV or is it?

I know it was quite a long post, kia. To summarize, I think that an RV is possible, and I still hold out hope that it could happen. My honest opinion, though, is that I think redenomination (LOP) is more likely to happen.

I sure hope I'm wrong, though, because I'll be the richest, wrongest firefighter that Arizona has ever seen!

FP

[scottiraq04]

Sorry FP, I have to jump in and help you with this basher...

kkjk - since you obviously like throwing unnecessary punches, I'm hoping you can take it as well as you give it...

FP, your posts often irk me! Including this one! You ALWAYS have a negative tone! If you do not believe in this investment, then sell and leave.

What part of this conclusionary statement was negative?

"If you have IQD, hold on to it. Anything is possible, and I don't think you will lose money on it. If you don't have any, you might want to buy some. I don't see it losing value against the USD, so it would be good to hold some."

I read your back and forth with Enorsste, while he backs up his veiws with links, you on the other hand like to tell us your negative veiws, and really never back up your writing with proof.

Since you are so well versed on this particular thread, maybe you should devote the same amount of time to researching where FP, Kent, myself and many others have already done this...numerous times. Here is a phrase for you: LEAD, FOLLOW OR GET OUT OF THE WAY. Notice which one I highlighted for your current position. Enorsste and FP are leaders, so if you don't know as much as they do then my advice would be to "get out of the way"; or go find your leader to do the arguing for you.

You did not continue your back and forth with E, because it seems to me you cannot prove your point as he does.

"Seems to me"? it seems to me as if you are assuming...or was that an assumption on my part? Why don't you be man, or woman, enough to just ask FP, in a nice way, why he did what he did? As for "cannot prove your point"...see my second statement above.

You have no proof of your stance.

wow, stating this a third time...as if that was going to help prove your point. I consider this a wasted typing effort and will again direct you to my second statement above.

Now you start your thread with an invitation to "NEWBIES" and then talk as if you know exactly what is going to happen. That is unfair to them as well as this site.

Why can't he talk this way? Enorsste does...or can we not apply the same "free speech" rights to FP? just incase you were wondering, that was a rhetorical question. By the way, the only thing unfair to "Newbies" is not getting both points of view; of which you obviously don't want them to get...or am I wrong? FP's intentions were good; clearly shown by outlining some basic facts in his first 4 paragraphs. If you ask, I'm sure FP can help you out with some proof...but that's not what you are after...is it?

You may be right,

Whoooo...all the negative bashing you gave and then you say this. Are you starting to see other possibilities, or are you just flipping your stories around like SFMedic?

but you may also be wrong and in that scenario You are the one not looking out for anyones best interest.

Let's fight fire with fire here...I can apply this exact same statement to Enorsste (although I don't)...but again, that's not the kind of logic you're looking for is it?

Is it necessary to always have a neg tone and then try to infect the "Newbies" with that state of mind.

Again with the "negative tone" thing...you really need to learn to comprehend what you read (sorry, that was bashing)...but one good question deserves another: is it necessary to always follow even though you don't know where you're being lead?

Just prove one of your points with an article that states your stance, otherwise you are spouting speculation just as others here on this site do.

Again, pointing you to my second statement above. I'm starting to think you are a "newbie" yourself, or is it a blind practice of selective thread reading that you do? If you haven't read FP's or Kent's threads in the past then "blindness" is the only word that comes to mind. "Cool-aide" comes to mind as well...but I'm hoping I don't have to apply that to you just yet.

The articles that we have seen are vague, and are open to interpretation. Enorsste takes the positive angle, you take the negative angle, as if we need to hear more negativity.

So, the articles are "vague" and "open to interpretation"...but you only want everyone to read Enorsste's "positive angle"...yep I had you pegged correctly...a "FOLLOWER". Personally I like the LOP'ers that understand that an RV is still a possibility; and if you read their posts you will see that they are more naturaly level-headed than most.....hhhmmmmm, does that make me agnostic? since there are two forms of agnosticism I'll let you do the research and figure out which one I am...since you are so good at it.

Save it for the mirror,

Bashing...don't like it, take it somewhere else!

because all in all none of us know really what this means until it is done!

Although I disagree with this statement, I'm going to have to ask: do you really believe this? Because if you do, then I'm all confused as to where you stand. You only want the "positive" but yet "no one really knows". You have a right to this opinion, but attempting to force feed "newbies" of this by bashing a person that is trying to bring a different opinion to the table is just plain wrong...and if you don't see that then there's no help for you.

PS- Newbies, you will encounter both opinions, you choose who to believe. I choose Enorsste, because the other opinion has me just as broke as I was when I started, and if that is true, then I have a lifetime to be negative, for now I remain positive!

Go RV!!

You have a very eschewed opinion of "positive" and "negative"...but by all rights, it's your opinion and will be respected in the future. I for one like a lot of "Gray" in my life...it produces less disappointments and more room to maneuver and grow intellectually...but hey, that's just my opinion.

Now, enough of the counter bashing. By now I'm sure you just want to start typing away at me...but please understand, this wasn't to start a fight. This was for you to read and feel the same type of personal attack you handed to FP. Yes I know, two wrongs don't make a right, but some people have to be physically slapped to understand that a slap actually hurts. I would much prefer that we either go our own seperate ways, respectfully, or you at least narrow your attack to me. FP has been nothing but courteous and does not deserve the manner of disrespected you handed to him.

[NotReallyTex]

WOW FP after reading your response to Kkjk you have my respect for sure. I may not wish to hear what your saying, only cause I want things to go another way, but you are very respectful and I really appreciate that.

Thanks

[boonduck]

Good piece...

Question...Since the Iranian Rial ( According to XE.com..IRR/US Dollar 9826 ) seems to come closest (among Middle Eastern nation states ) to the current Iraqi Dinar/US Dollar valuation of approx. 1170, do you have any idea as to the total volume of Iranian Rials ..?

This Iranian/Iraqi Shiite axis concerns me greatly...and these concerns extend well beyond any potential RV of the Dinar...

The implications for the US are enormous...

[scottiraq04]

Good piece...

Question...Since the Iranian Rial ( According to XE.com..IRR/US Dollar 9826 ) seems to come closest (among Middle Eastern nation states ) to the current Iraqi Dinar/US Dollar valuation of approx. 1170, do you have any idea as to the total volume of Iranian Rials ..?

This Iranian/Iraqi Shiite axis concerns me greatly...and these concerns extend well beyond any potential RV of the Dinar...

The implications for the US are enormous...

Really good question Boonduck...and here is something else to confound the issue:

Iran approves plan to lop three zeros off Rial

http://www.presstv.ir/detail.aspx?id=106378&sectionid=351020102

[kkjk]

FP, I can appreciate where you are coming from and I am making no claims to know ANYTHING!!!

I am not mad just noticing a tone that always seems to come from your posts! I do value what all the posters add, including the negative posts. I have read many of your posts and really only find you on one side of the fence, holding out hope for the other side, which is a pretty safe place to be, I wish I could be there. I have noticed you have been forthright and understanding of all veiws, I assume you just are not comfortable with the wishful thinking from mine or Enorsste point of veiw! Which of course is your right to opinion, I just was uncomfortable with how you were stating very believeable points to the newbies, where we all know are opinions, although thoughtful and insightful, were opinions that read as fact! Enorsste does the same thing, but he does state that these are his thoughts on "How an RV would work"!

As Far As Scottiraq04, dude really, you do not have anything better to do that hijack posts to suppot your LOP story that you have been telling since Nov of 2009. If I remember right, you took this stance because someone told you it was being reported on Arab TV. Yeah that is a great source. (Sorry but you deserved that one!)This post was just to point out that FP bases his arguments in a negative light and this one read as this was a fact! (notice not one IMO)!

I as most are experiencing highs and lows, and most if not all of the members are aware of the negative possibilities and a member who is always arguing from that stance certainly is going to encounter some bashing and FP seems ready and willing to take on all comers! You however want to jump in and defend someone who in your opinion is telling it like it is! Well good for you do-gooder, FP really seems to want to be defended! *sarcasm*

I am not sure what the point of your post was, however there were no personal attacks on anyone (until your response), I was just responding, we can do that cant we, with thought and FP responded with thought! Cant say that much for your response! Maybe a little angry for some reason? Who knows?

I make no claim to be a researcher or a RV expert, but I can sense tone and negativity, and as far as you, the gauge is spiking!

** I wonder If I support the LOP you will defend me?

[scottiraq04]

FP, I can appreciate where you are coming from and I am making no claims to know ANYTHING!!!

I am not mad just noticing a tone that always seems to come from your posts! I do value what all the posters add, including the negative posts. I have read many of your posts and really only find you on one side of the fence, holding out hope for the other side, which is a pretty safe place to be, I wish I could be there. I have noticed you have been forthright and understanding of all veiws, I assume you just are not comfortable with the wishful thinking from mine or Enorsste point of veiw! Which of course is your right to opinion, I just was uncomfortable with how you were stating very believeable points to the newbies, where we all know are opinions, although thoughtful and insightful, were opinions that read as fact! Enorsste does the same thing, but he does state that these are his thoughts on "How an RV would work"!

As Far As Scottiraq04, dude really, you do not have anything better to do that hijack posts to suppot your LOP story that you have been telling since Nov of 2009. If I remember right, you took this stance because someone told you it was being reported on Arab TV. Yeah that is a great source. (Sorry but you deserved that one!)This post was just to point out that FP bases his arguments in a negative light and this one read as this was a fact! (notice not one IMO)!

I as most are experiencing highs and lows, and most if not all of the members are aware of the negative possibilities and a member who is always arguing from that stance certainly is going to encounter some bashing and FP seems ready and willing to take on all comers! You however want to jump in and defend someone who in your opinion is telling it like it is! Well good for you do-gooder, FP really seems to want to be defended! *sarcasm*

I am not sure what the point of your post was, however there were no personal attacks on anyone (until your response), I was just responding, we can do that cant we, with thought and FP responded with thought! Cant say that much for your response! Maybe a little angry for some reason? Who knows?

I make no claim to be a researcher or a RV expert, but I can sense tone and negativity, and as far as you, the gauge is spiking!

** I wonder If I support the LOP you will defend me?

ok, now that we got the bashing out of our systems...how about we shake hands and put a stop to this? I do apologize for the counter bashing...it's just that I am getting tierd of all the bashing that is going around on this site. What I am seeing is a lot of lack of respect for personal opinions. It doesn't matter if it's FP, Kent, Enorsste or Sonny1 that they are bashing. There are just as many ways to word a respectful opinion as there are a disrespectful one...it all comes down to a choice. My counter attack on you, believe it or not, was not personal; and even though you bashed back, I still don't take it personal. So how about we start anew?

As for this: " I wonder If I support the LOP you will defend me?"...if I see someone bashing you for no good reason, then it won't matter to me what your opinions are...respect is respect. You, FP, Kent, Enorsste, Sonny1...none of you need to be defended...but the right to be treated with some kind of respect belongs to all of us. Would you not agree?

"you do not have anything better to do that hijack posts to suppot your LOP story that you have been telling since Nov of 2009. If I remember right, you took this stance because someone told you it was being reported on Arab TV. Yeah that is a great source. "

Disregarding the "re-bash", your memory serves you only half correct. I have had a LOP stance since Oct. 2009...and it's all due to my own research and posted articles and sites from others that I followed up on. Towards the middle of Nov. 2009 (if memory serves me correctly) I had a really good Iraqi friend (interpreter), one that I trust with my life, call me and let me know that he had heard the Minister of Finance on an Iraqi news channel talking about LOPing the zeros from the IQD. I then immediately posted a thread asking for any research help that could be given in trying to find a transcription of this or an article that matched that timeframe...nothing could be found for the months of Oct. or Nov. Since this Iraqi friend works in Baghdad, lives in Najaf and I've known him for 6 years, then yes I consider him a really good source for what's happening to the common Iraqi. Dispite the fact that there was nothing to confirm his story, there are still articles from before and after this timeframe that are stating the same thing. So yes, I believe he saw what he saw...and I held nothing back in letting the forum members know...oh, and I did state it as a rumor at the time.

Also, I may as well state my official stance on this as well...yes, I think that a Redenomination (LOP) is going to happen. Meaning I think that this is the most probable course...but, since I believe all things are possible, I think a small RV is possible; but in my opinion not very probable. My stance is very similar to FP and Kent. All of us want nothing more than to be shown that an RV is more probable than a LOP, but to date the "facts" presented have not shown us that. I have stated this in many of my replies and posts: If the LOPers are correct then I walk away with enough money to take my family on a really good vacation, and if the RVers are correct then I walk away a rich man...either way I win.

Again, I do apologize for the counter-bashing...

[digital11]

FP, stop trying to scare the newbies with your LOP theories. It's not going to happen. The redenom articles were put out to scare people away from the investment.

[Unitedrich]

FP, Thanks not only for enlightening us, but also for helping the newer guys like myself put it in a perspective that is somewhat different than what we often read and giving us a much more level headed scenario on our investment. Please keep up the good work and keep us posted!!!

[Soldier]

I have a question maybe somebody can shine some light on. IMO Iran and Iraq are no different. Based on the link that Scott just posted Iran is trying to do the same thing that Intel on Iraq is doing. Most everybody on this site agree that the intel coming from Iraq is to scare people away as digital said. Could Iran be setting themselves up for the same. Is there any intel on why Iran would do something different than Iraq.

Iraq and Iran are both very wealthy due to oil. Even though Iran is a dictatorship and under sanctions can't they RV their currency as well. If not, Why?

[Enorrste]

FP -

Very well stated for your case my friend! While I clearly do not agree with you I applaud you for being sound in your reasoning and not infammatory in any manner.

At the same time, however, I can also be pleased with kkjk who obviously agrees with my position. You certainly can't fault me for recognizing my fans, right?

Now to the matter at hand. I will deal only with one issue since if I can make this point the remainder of your argument falls.

You have stated that the money in circulation cannot be reduced by a bank. In this you are absolutely correct, since the notes turned into the bank become deposits for the people who exchanged them.

However, and I know you know that this is true, money supply is increased or decreased all the time in various countries. So the simple question to ask is this: who increases or decreases a money supply? That answer in the case of Iraq is the CBI.

The banks transfer their large denom notes to the CBI. What has the CBI stated that it will do with these notes? Here is there statement from 2/6/2010, which we have all seen on my Chronology post:

”Salih said by the end of 2010 the new banknotes will be fully introduced while the old banknotes will be gradually removed from circulation."

Now Salih is in the CBI and is making an official statement that the old banknotes will be gradually removed from circulation. Translation: the money supply of Iraq will be reduced by the elimination of these notes. This is exactly HOW reserve banks lower money supplies: they take the notes out of circulation. This is also why money supply is defined as "bills in circulation". When the "bills in circulation" are removed the money supply is reduced.

I have argued earlier that you made a great point about your LOP theory and that it can be used to prove that the money supply will be reduced from 25 trillion dinars to 25 billion dinars. However, I have also argued that the process is not a LOP since the RV occurs first and then the large noted are removed over the next 9 months, effectively reducing the money supply back to the reasonable and sustainable level which, by your own admission, could be at much as $2.60 per dinar.

I welcome your response on this.

Steve

[mattevan]

Trust me on this Dinar Peeps....Fi3ry_Ph03n1x is wrong and soon he will be rich and wrong....Go Dinars!!!!

[shrevarini]

look on mataf currency converter the rate for dinar is dropping off

[Fi3ry_Ph03n1x]

Good piece...

Question...Since the Iranian Rial ( According to XE.com..IRR/US Dollar 9826 ) seems to come closest (among Middle Eastern nation states ) to the current Iraqi Dinar/US Dollar valuation of approx. 1170, do you have any idea as to the total volume of Iranian Rials ..?

This Iranian/Iraqi Shiite axis concerns me greatly...and these concerns extend well beyond any potential RV of the Dinar...

The implications for the US are enormous...

Boonduck: According to Iranian's central bank publications, on page 173, table 72. (Note, this is actually page 49 of the document because this is part three of a series which is why the page number in the doc doesn't match the page number in the .pdf.) In billions of Rial:

Money: 182,652.7

Quasi Money: 234,871.3

Liquidity (which I interpret as their equivalent M2): 417,524.0

This 417 trillion rial is the equivalent of 41.59 billion USD. I used coinmill.com for my conversion. Also, they use a non-standard date system, so these figures are from the year 1385, which -- as best I can figure it -- is 2007's report.

Iran is definitely a thorn in the side of many in the international community and -- IMO -- very much outside of the influencial sphere of the IMF which is why their currency is so depressed and has no hope of being comparatively valued anywhere near the IMF's international standards. Politically speaking, they are positioned to cause huge problems for Iraq as well. I share your concern. The upcoming elections will be interesting.

FP

[Fi3ry_Ph03n1x]

FP, stop trying to scare the newbies with your LOP theories. It's not going to happen. The redenom articles were put out to scare people away from the investment.

Whether the 'redenom articles' were misinformation to scare people or not, you'll notice that I didn't base any of my opinions on these article, but rather direct links to central bank websites, verifyable research by respectable professors in the field of international monetary policies and practices, and a dash of common sense.

For what it's worth, I don't put a great deal of stock in the articles either. Although they might be reported correctly by the news outlet, misinformation can be leaked, translation of the information can be vague and ambiguous as KKJK stated, and we all know how quickly things change on the dinar roller coaster, right? I'll listen and give account for the stories, but I appreciate your position on the articles and don't put a lot of weight in them either.

As for scaring people, Scott interpreted my intentions correctly. I don't want people scared or feeling negative, but I do hope that everyone has both sides of the story so that they can make up their own mind. That's not unreasonable, right?

FP

[Fi3ry_Ph03n1x]

FP, Thanks not only for enlightening us, but also for helping the newer guys like myself put it in a perspective that is somewhat different than what we often read and giving us a much more level headed scenario on our investment. Please keep up the good work and keep us posted!!!

YW, Rich. I hope that those who hold a more positive view can see that this all I hope to accomplish. I have nothing to gain from 'convincing newbies' of negative viewpoints. I've noticed that new people often have unanswered questions. I fully encourage new people to listen to all viewpoints and make up their own mind.

FP

[Fi3ry_Ph03n1x]

I think you hit the crux of the matter with your main point. Here's a little snippet from your post:

<<>>

However... money supply is increased or decreased all the time in various countries. So the simple question to ask is this: who increases or decreases a money supply? That answer in the case of Iraq is the CBI.

<<>>

I most certainly do agree with you, Steve. Central banks contract and exand their money supply all the time through inflation/interest rates and other monetary instruments. In the past, you have said that you have a background and education in economics. As you are the comparative expert in the field, I won't presume to know the finer points about how this is done, and I for one would like to know more.

How exactly does a central bank use their monetary instruments to increase and decrease money supply?

Historically, how quickly can a money supply be expanded or reduced, while still maintaining a stable economy?

For a follow up question, are there any examples of countries that have reduced their money supply by trillions of units in the course two to nine months? Historical evidence would help us better see how this could actually occur in Iraq without causing economic and financial turmoil.

I understand your position, but -- and this no doubt will surprise your socks off -- I am skeptical that that much money can be removed from circulation through the traditional means by which central banks normally do this. I think that this interim time between an RV and the completion of this large note reclamation weeks or months later would be chaotic, unsupported economically, and generally unsustainable. Once again, though, you know about economics, and I am interested in knowing more on the questions I asked. As always, you always have a way of stimulating thoughts and ideas, rather than bashing (which, by the way, I very much discourage in either direction in this thread or as a general practice). Your points of view are always welcome and appreciated, sir.

Thanks for your response Steve,

FP