Thread: Iraq/Dinar News. 09/05 to 01/14/07

Unfortunately, I still see zero lopping as distinct possibility, and nothing I've seen or heard has convinced me otherwise.

We recently had a post referring to the removal of 3 zeros, before a reval, but everyone assumed it would be from the exchange rate rather than from the notes.

I was a little confused because why would they go from .00068 to .68 and then further revalue to 1:1?

The recent trip to Romania by a high ranking Iraqi bank official had the bells ringing for me, as Romania are in the middle of a revalue by lopping 4 zeros. The have created the new Lieu which is currently in circulation alongside the original Lieu. An old 500,000 having the same value as a new 50 etc.

Everyone talks about a reprint being inconceivable, but when you think about it a reval will require the immediate circulation of coins and smaller denomination notes anyway.

Now, it is possible for them to remove 3 zeros and revalue to 1:1 at the same time, and to have two currencies in circulation simultaneously, as we are seeing in Romania now, and have previously seen in Turkey.

For example, a 25,000 would carry the same value as 25, a 10,000 would be worth the same as a newly introduced 10, and a 5000 the same as a newly introduced 5. Obviously, the larger denominations would be withdrawn in time.

An Iraqi currently on say 25,000 per week has roughly 17 Dollars to their name, whereas if the above happens he or she will have 25 Dollars. That's a 47% increase... not bad for starters.

Now, before you all send me to the gallows, I want and need this to work for us as much as the next person. But I now put this to the floor to be properly addressed instead of just dismissed.

I look forward to someone being able to allay our fears once and forever, but somehow I fear that nobody will be able to.

Constructive comments only please..........

Regards
Neil

Originally Posted by Offshore-Wealth.com

Loops,

This is the same language we have seen reported in all mediums, but MSNBC chose to use a new phrase, "knocking off". Now we have all been through this before, lopping is a specific term relevent to changing value of actual currency. The terms lifting, and/or knocking off zeros are not the same and are midleading to say the least, but this is the problem when you have writers who are clueless about translations. LOL

BAGHDAD - Iraq is considering redenominating the dinar, printing new banknotes to remove inflation-generated zeros from its currency, the finance minister said on Thursday.
Senior government and central bank officials have told Reuters the proposal has been under consideration for some time to make one new dinar equal to 1,000 current dinars, a move that would bring the currency closer to parity with the U.S. dollar.
Story continues below ↓

No matter how butchered the title of this article is, they finish up with a statement which says it all, to bring currency closer to parity with the U.S. dollar. They are obviously going to introduce smaller denominations, this we already read several places, in fact, they are already to be released. And yes, ultimately we will not see so many zeros on bills in circulation, as in less zeros, as in, 25,000, 10,000, and 5,000. notes being phased out, not replaced, just phased out. As you can see, the zeros will be gone, and this has nothing to do with value of notes.

When you reread the above highlighted paragraph referencing new dinar equal to 1,000. current dinars, this clearly indicates a new note at under a US dollar, or equal to chump change as we would call it in U.S. (g) Or better stated, about .67 as in current 1,000 dinar value.

Good luck to all, Mike
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Asked about such a suggestion in an interview on Arabiya television, Finance Minister Bayan Jabor said: "This is the ministry's suggestion to the central bank. We think in the long term it will be for the benefit of Iraq."
Jabor said surveys indicated popular support for the move. The oil-rich nation's currency was once worth more than $3, he recalled, before the ruinous wars and international sanctions during the rule of Saddam Hussein.
There are currently about 1,450 dinars to the dollar, a rate that has been relatively stable since shortly after the U.S. invasion in 2003. At that time new banknotes were issued by the U.S. occupiers to remove Saddam's image.
Other nations that have been through rampant inflation have followed a similar course, notably Russia in the 1990s. Until the 1980s, many prices in Iraq commonly also used the fils. One dinar equals 1,000 fils. The smallest denomination note today is 250 dinars.

BEEEEEEE-YYOOOOOO-TEE-FUL Mike~!

read this guys post,
Secret is easy look at the article. It talks about "rampant inflation" like Russia in the 1990s. Check the facts Iraq does not have rampant inflation. The article states the smallest denomination note is 250 dinars but I hear there are 50 dinar notes on the street and there are also 25 dinar coins that are also denominations. The IMF agreed to a SBA with Iaq in Dec 2005, if Iraq needed economic boosts why haven't they utilized one cent of the SBA? Don't forget the President can authorize the use of the ESF (Exchange Stabilization Fund) to shore up Iraqs exchange rate and also the IMF can utilize ESF (Exogenous Shocks Facility) funds to also help. Not to mention the DFI will most likely be turned back over to the GoI after July 17th and then theres the whole monetizing of the oil which Iraq can now use toawrd its exchange rate. The oil sales up until the DFI is released go into the DFI which is extensively monitored by the IAMB and is to be used exclusively for reconstruction not exchange rate shoring. Don't even get me started on the fact that Iraq has secured 80% debt reduction worldwide.

Bottom line.....Iraq has ABSOLUTELY no justification of a zero lop on their currency and as a member in good standing with the IMF they will not be allowed to lop ANY zeroes off their currency. If Iraq does chose to take this drastic and un-called for measure they will undoubtedly have chosen to move away form IMF membership which creates a economic collapse for Iraq. Without IMF membership the SBA would need to be repaid (easy enough, its unused), the Paris Club agreeement would be null and void as well as the WB support. Nuff Said.
My thoughts...so relax it is just an article."
not sure if i can doo this but i thought it important

Originally Posted by njd2004

Unfortunately, I still see zero lopping as distinct possibility, and nothing I've seen or heard has convinced me otherwise.

We recently had a post referring to the removal of 3 zeros, before a reval, but everyone assumed it would be from the exchange rate rather than from the notes.

I was a little confused because why would they go from .00068 to .68 and then further revalue to 1:1?

The recent trip to Romania by a high ranking Iraqi bank official had the bells ringing for me, as Romania are in the middle of a revalue by lopping 4 zeros. The have created the new Lieu which is currently in circulation alongside the original Lieu. An old 500,000 having the same value as a new 50 etc.

Everyone talks about a reprint being inconceivable, but when you think about it a reval will require the immediate circulation of coins and smaller denomination notes anyway.

Now, it is possible for them to remove 3 zeros and revalue to 1:1 at the same time, and to have two currencies in circulation simultaneously, as we are seeing in Romania now, and have previously seen in Turkey.

For example, a 25,000 would carry the same value as 25, a 10,000 would be worth the same as a newly introduced 10, and a 5000 the same as a newly introduced 5. Obviously, the larger denominations would be withdrawn in time.

An Iraqi currently on say 25,000 per week has roughly 17 Dollars to their name, whereas if the above happens he or she will have 25 Dollars. That's a 47% increase... not bad for starters.

Now, before you all send me to the gallows, I want and need this to work for us as much as the next person. But I now put this to the floor to be properly addressed instead of just dismissed.

I look forward to someone being able to allay our fears once and forever, but somehow I fear that nobody will be able to.

Constructive comments only please..........

Regards
Neil

We have no control or input into what actually happens with the dinar so my contention is to not sweat the load about it. We either make 1000 times our money or we make 47% profit...whats not to like about either scenario as far as "we" are concerned? On the other hand...there will be some mighty pissed Iraqi's when their wealth is further diminished by some zero lopping. LOL

Originally Posted by danny51

We have no control or input into what actually happens with the dinar so my contention is to not sweat the load about it. We either make 1000 times our money or we make 47% profit...whats not to like about either scenario as far as "we" are concerned? On the other hand...there will be some mighty pissed Iraqi's when their wealth is further diminished by some zero lopping. LOL

Nice post danny51.

I am no expert but as it has been mentioned before surely all these countries that have forgiven debt especially the U.S. would be absolutely gutted as we say in the U.K. if lopping were to happen, surely they have some kind of influence over this, they will be losing out bigtime.How this also influence the future of investers, would this make a difference.

If lopping were to happen, what would this mean if we wanted to cash in, it just does not seem logical to have invested in printing all this currency to find it worthless, when this was carried out were there not discussions with the CBI and all the various other entities as to what might happen in the future re revaluation, The revaluation in Kuwait is of a similar situation and even Germany after the second war, I would have thought Rumania is different. Surely it would not be logical to lop they have to give something back to their people.

Mike
I know you where involved in the Kuwaiti dinar experience
-did they have large denominations like 25k
-did they have to lop zero or knock off zeros like the article is suggesting
-if they had large notes, did the notes phase out after reval as your previous post is suggesting or are they still some in circulation
-what really different between the iraqi situation and the kuwaiti situation back then
-What do you think about the above (disturbing) post by NJD which I fear my be very possibly correct
Thanks for all that is contributing to this forum
(adster, OSW, treaties, neno, raditz and all the animators)
spirit

Originally Posted by cigarman

read this guys post,
Secret is easy look at the article. It talks about "rampant inflation" like Russia in the 1990s. Check the facts Iraq does not have rampant inflation. The article states the smallest denomination note is 250 dinars but I hear there are 50 dinar notes on the street and there are also 25 dinar coins that are also denominations. The IMF agreed to a SBA with Iaq in Dec 2005, if Iraq needed economic boosts why haven't they utilized one cent of the SBA? Don't forget the President can authorize the use of the ESF (Exchange Stabilization Fund) to shore up Iraqs exchange rate and also the IMF can utilize ESF (Exogenous Shocks Facility) funds to also help. Not to mention the DFI will most likely be turned back over to the GoI after July 17th and then theres the whole monetizing of the oil which Iraq can now use toawrd its exchange rate. The oil sales up until the DFI is released go into the DFI which is extensively monitored by the IAMB and is to be used exclusively for reconstruction not exchange rate shoring. Don't even get me started on the fact that Iraq has secured 80% debt reduction worldwide.

Bottom line.....Iraq has ABSOLUTELY no justification of a zero lop on their currency and as a member in good standing with the IMF they will not be allowed to lop ANY zeroes off their currency. If Iraq does chose to take this drastic and un-called for measure they will undoubtedly have chosen to move away form IMF membership which creates a economic collapse for Iraq. Without IMF membership the SBA would need to be repaid (easy enough, its unused), the Paris Club agreeement would be null and void as well as the WB support. Nuff Said.
My thoughts...so relax it is just an article."
not sure if i can doo this but i thought it important

Whenever a post appears that seems to contradict the "no lopping" thought.. it is a uneasy feeling... and then we get bits and pieces of why it's not anything to fear... and I gradually put it to rest... again..
Thank you Cigarman for putting it all together.. you are well informed and the logic you use calms the fear .. I will print it out and re-read it every time I get butterflys in my stomach...This is not easy on any of us ..I just wish it would hurry and peg!!! Thanks to everyone and their imput.. we are all here for the same reason... we all have hopes and dreams...
Libby

Iraqi Dinar : Proposal to make Iraqi dinar equal to U.S. dollar reviewed

Thursday, July 6th 2006
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The Ministry of Finance and the Central Bank of Iraq are studying a proposal to raise the value of Iraqi dinar and make it equal to the U.S. dollar.

The Minister said that the new government will have a "qualitative" budget for 2007.

The Minister also talked about the ministry's determination to draft the new pension law as soon as possible, and to create investment opportunities which will create job opportunities for the unemployed.http://www.portaliraq.com/news/Propo...__1112069.html

Boy, you guys are something else. I just got home and had to read an hour before I was caught up. I just love it! It looks like we are getting real close. I think I feel like dancin!