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

O.K. am I the only one that imagines what other members may look like. Come over to the "General Chat" section and get in the "Bit of fun" thread. I have posted many over there, one may be you, go check.

Originally Posted by benzboy

I went out and test drove a New 07 Aston Martin,AM V8 Vantage today! was pretty disappointed though, Great car if your 20 years old and have no lower back issues, $120.000.00 car and I felt like I was being tossed around in the back of a pick-up truck with no shocks, got out of it and back into my 2 seater Benz and I felt like I had just left a tank and gotten into a RR LOL!!! but true. Can't wait for the reval ,can't be soon enough.
benzboy

Laughed out loud Benz, that's FUNNY. I've just been hoping that something wonderful would happen while I was still spry enough to enjoy it! Gotcha on that lower back business. Yoga helps.
I'm starting to get that hiccuppy "this is really happening!" feeling, and that's the most youthifying thing possible. eeehaaa!

Dont want to pour cold water on this but this is my understanding of the dinar - USD scenario. Note this is my understanding not a verified fact.

You are currently holding a 25,000 dinar note which currently has an exchange rate of 1400 dinars to 1 USD.

Iraq will lop the the zero's which means the actual value of a 25,000 dinar note will now be 25 dinars and the exchange rate will be 1.4 dinars to 1 USD because the face value of the dinar note has been reduced 1000 times (1400 to 1 divided by 1000 = 1.4 to 1).

This means that the exchange of the current 25,000 dinar note (new actual value 25 dinars) to USD will be 17.4 USD and not 17,400 USD as people are speculating.

Can anybody verify that this is correct or come up with a plausable scenario to show that the exchange will in fact be 35,000 USD.

yes, read the 25,000 dinar. It states in english to be worth 25 thousand dinars. If they loped they would have to be reprinted, AIN"T GONNA HAPPEN!!!! Enough said.

cigarman,

That is a fact at the moment, but lopping the zeroes means the removal of 1000 at the end.

There is also another case to consider in the scenario. If when the peg comes the current face value of the notes went to 1.4 to 1 USD and those notes were exchanged for USD there would be billions of dinars being sold which would create the same scenario as Asian currencies in 1997 and the dinar value would crash the same way as the Asian currencies did and fuel astonomic inflation and overseas debt.

This in itself would be the total reverse of what the goal is.

one more addition to my ignore list.

clueless,

Why on the ignore list?

These are reasonable questions for anyone to ask when trying to get their head round how this is going to work.

If you can give me plausable scenario's and facts to the contrary I will jump in with both feet.

Originally Posted by bjft

clueless,

Why on the ignore list?

These are reasonable questions for anyone to ask when trying to get their head round how this is going to work.

If you can give me plausable scenario's and facts to the contrary I will jump in with both feet.

This has been for the last 50 to 70 pages bjft. You might look like a newbie to most here. They are just tired of the nay-sayers and tired of going backwards. Most do not know you here. You will have to read back to understand this group. They study and seek hard here. They almost know for sure. They are called the "Dinar Gang" I am with them too. As I am with you on 10by5.

Originally Posted by bjft

Dont want to pour cold water on this but this is my understanding of the dinar - USD scenario. Note this is my understanding not a verified fact.

You are currently holding a 25,000 dinar note which currently has an exchange rate of 1400 dinars to 1 USD.

Iraq will lop the the zero's which means the actual value of a 25,000 dinar note will now be 25 dinars and the exchange rate will be 1.4 dinars to 1 USD because the face value of the dinar note has been reduced 1000 times (1400 to 1 divided by 1000 = 1.4 to 1).

This means that the exchange of the current 25,000 dinar note (new actual value 25 dinars) to USD will be 35 USD and not 35,000 USD as people are speculating.

Can anybody verify that this is correct or come up with a plausable scenario to show that the exchange will in fact be 35,000 USD.

bjft,

It hasn't been proven one way or another as of yet but how the dinar will be handled.

Your explanation above is one chain of thought from recent published articles.

Another chain of thought is that rather than lopping 3 zeros from the dinar and then revaluing to equate or peg it to the dollar what will happen is that there will be an immediate revalue without the need to lop - obviously this latter scenario would increase the wealth of anyone holding dinar, including the Iraqis themselves.

In your instance of lopping your arithmeic is actually a touch skewed - in your example the lopped 25 dinar would actually be worth $17.85 (1.4 dinar to 1 dollar equals $17.85) - but that is semantics.

The proponents of zero lopping are actually mostly of the belief that they will do the first part you mention (i.e. lop 3 zeros to make a 25,000 dinar note worth 25 dinars) but rather than then take that and re-equate it they suggest that the dinar will, at that point, peg to the dollar 1:1 - so 25 dinar=$25 (which gives a profit to speculators of roughly 20%).

However, those who believe in a straight revaluation believe that Iraq needs to revitalise its economy and in order to do so the currency needs to be stronger - the easiest short-medium term way of doing this is to revalue it and it has been suggested that the oil reserves in the country DO provide sufficient backing to sustain this revaluation.

There is also an investment law which has recently been passed and without a revaluation Iraq's countries could be bought up for very little $ (although my understanding of this element is that if they open Iraq to investment AFTER any reval OR lop then this is prevented - i.e. I dont think that this validates either scenario more than the other).

Also though there are many other explanations (eg, the iraqi people need to see democracy working, they need to see the market economy working, the country being re-built, re-established, inward investment etc etc) and without a revaluation it will be difficult to see these things happen.

This is most definitely a speculative currency trade but given that Iraq is going through turbulent times, war, insurgents, terrorists, bombings etc etc just how speculative is it ?

For me I always consider these things with a risk vs reward approach. In this particular trade for me I think the risk is relatively small (US$900 gets you 1 mill dinar) - the risk is you lose your money - but the potential rewards are HUGE - you could see a revalue (as happened in Kuwait) of, for example, 1:1 and your $900 investment has turned to $1 million.

A risk worth taking in my opinion !

Originally Posted by clueless

one more addition to my ignore list.

That is one's own choice but, in my opinion, a bit extreme.

When you were a newbie in this venture clueless did you not ask questions or did you just jump in with both feet ?