(Note: This is an active discussion - more comments may be added later so check back periodically -- thank you - Recaps Team)
Three zeros to be cancelled from Iraqi currency, says MP 16 Apr 2013
Parliamentary Finance Commission MP stated that the Central Bank of Iraq will soon cancel the zeros from the Iraqi currency.
MP Abdul Hussein al-Yassiri revealed that it will happen by this as the Central Bank of Iraq is taking all necessary steps to convert this plan into reality. He adds that the commission is in favor of Central Bank of Iraq with this decision as this will bring significant changes in the Iraqi economy.
It is to be noted that earlier Central Bank reported that cancelling out zeros from Iraqi currency is under planning of the Bank. The prime difficulty will be - is withdrawing 30 trillion dinars from the Iraqi market at the present time which will be replaced by new currency.
Previously the decision of eliminating zeros from Iraqi currency was not ratified by ministry of finance as the budget was done with the present currency.
Updated 16 Apr 2013 | Soruce: Aswat Al Iraq | By S.Seal http://www.iraqdirectory.com
KAPERONI : Though I do not like this news source, they got it right..."withdrawing
Read More Link On Right
JOEG: Nice article. Nice words. Encouraging. But when? Could just be political lies and pandering to get people to vote for Maliki's goons---just speculation on my part cuz I don't know when the elections are---have they already occurred or is the Parliamentary election supposed to be soon---thought it was sometime in April?
Remember, "soon" means " in the coming days," and we all know what that means. I'm encouraged by the words, even if they are political lies right before the Parliamentary election. The words keep what little hopium I have still alive.
But, unless it happens "soon" right before the election so Maliki can benefit from it by getting his goons elected back to Parliament, then I think if it doesn't happen by the election, then it won't be until close to the next election. Just an opinion.
My fingers remain crossed as I press the ENTER key on another "equity reserve" order. Yeeeehaaaaw, accumulate, accumulate, accumulate!
HANDOVERFIST: Kape, They talk about withdrawing 30 trillion dinars and replacing it with new currency. You have said that many articles say that the 25,000 dinar notes we have will still be worth 25,000 dinars after the ones in Iraq are replaced.
Can you point me to some articles that say this? I don't think I've read that anywhere.....about our dinars keeping their value. Thank you so much
Uflawman: Joeg this has nothing to do with the elections. Your "opinion" sounds just like the gurus who were saying it would rv before the last US election so Pres. Obama can benefit. By the way, the provincial elections begin this weekend.
The police and military/security personnel had elections this past weekend. The 3 zeros project has nothing to do with the elections. Also, you need to understand how the prime minister is elected. If Mailiki's party does not come out of the provincial elections in the majority, M is done and the majority party will make the necessary changes.
I know you want to stay grounded, but no one here is calling a concrete date for the increase in the value of the dinar. So, just follow the information and accept that there is some positive movement. And as for a date, it will happen when it happens. Lol
MR. G: Is it possible that these are recycled articles that have been edited to reflect current thinking? I find it strange with the elections coming up such positive news takes place making Maliki look good. It's Iraq, anything is possible and expected.
HANDOVERFIST: Well, Kape, the articles you posted to get me started on understanding that although the Iraqi's will turn in their dinars for the lower denoms.......while our dinars keep their 25,000 value..........the articles you posted are from 2011. You said I should go to Kap and Friends and start reading.
This is what you said in July of 2012:
2. The dinar will not be on Forex or any other public exchange. It must free float for that to happen. And from my own chats, the CBI has stated they will control the pricing of the dinar. That is a managed float. That is a fact!
Therefore, Forex is out. And shoots holes in all the rumor gurus who constantly talk about Forex as well.
This is fact people. So the Forex crap you heard was just that, crap.
IMO, the dinar will not be seen on Forex for a long time. Several years at best. This is proven by the CBI's own statements (see chat - Where your dinar will go...) that they will price the dinar. Meaning it will be a managed float.
The rate will be controlled based on volumn, etc., by the CBI once it is internationally recognized. The benefits are two fold. 1. Stability 2. To perpetuate the value up to the desired goal. Higher than the “staging rate”.
I am now thoroughly confused. Shall I go by what you said in 2011 or 2012. I pray that Bob does not delete this post before I get an answer.
TLAR: Handover fist, this is a fluid investment. It has changed many times in the four years I've been in it. Shabibi wanted to RV the currency but made a fatal mistake. He thought he could convince the government that it was the right thing to do for Iraq.
His plan was based on the study done for the CBI in 2008. He had intended to drop 3 zeros from the nominal rate then hold it as a controled rate for a period of 1 to 2 years as recommended by the study. What he did not take into consideration was the secret agenda by Maliki. Shabibi hit a brick wall.
The government fought him tooth and nail stopping the RV from happening at every turn as Shabibi waited patiently for government approval. Shabibi went through 2 years of waiting, trying to convince Maliki to go along to no avail.
Maliki has his own interests and IMHO they do not coincide with the best interests of Iraq. Finally last year Shabibi made the decision to do this whether the government wanted it or agreed to it.
Maliki and his goons immediately turned the heat up making many unfounded accusations all at once. Because of government threats Shabibi then decided to just float the currency because he felt he had to do something to get this going. He was in a box.
Iraq needs a currency and he as governor of the CBI was responsible for getting a currency. He had determined that the government, Maliki would never go along but something had to be done. Before he could do that Maliki, through phoney charges, had arrest warrants issued while Shabibi was out of the country..
Shabibi would not come back to Iraq which created a vacancy at the CBI, so Maliki appointed Turki to replace him. That brings us to today. Is the new defiant CBI going to float the currency or go back to the original plan based on the study from 2008?
So when Kap says it will be a free float he is saying that they have not put the original plan back in force. Arguments can be made to support both views. Handoverfist, I would not want to debate Kap on this. It is a judgment call made on the facts at the time. The facts have changed.
PALLADIUM: I don't post much anymore, though I do read the articles still. Trying to keep myself in reality. Joeg I feel your frustration and all I can say is just read the articles and walk away. It is becoming very clear as the years drag on (8 for me now) that any significant change is years into the future.
An article today indicates that Iraq will probably borrow up to an additional $5 billion from the World Bank to help with rebuilding their economy and infrustructure. That alone should tell us this is going to drag out more years; not to mention that the Parliamentary Finance Committee is indicating that the budget was written with the current rate with no thought to value change.
I won't even discuss that the Kurds are still not actively participating in Bagdad, and the government is still in disarray. The revaluation of a currency(s) was never meant to reset the global economy as the gurus stated; i.e. look to the nation of Cyprus with all of the scalping of account balances to find out how the world's economy will be reset for a period of time.
Joeg, hang on to the dinar, as they will be worth something in the future.
This is a good article though, as it confirms that the plan is to make the change and movement of the value at some point in the future. I do believe it is recycled news, but at least we know the deletion project is still top of mind in Iraq.
Handoverfist, Kap gives his opinion; and I truly enjoy listening/reading his thoughts/opinion. Kap has kept me grounded over the years. Kap has and continues to encourage everyone to do their own research from the vast articles that are provided here to read.
Also, circumstances, policies, and situations change constantly. Kap has given his opinion (it's just an opinion) over the years based on the facts that were available and provided in news articles at the time.
I encourage you to go by what you think based on your own research based on valid news articles elsewhere and articles that are shared here, thanks to Bob, Kap, etc. Just try to stay grounded though, because it can be oh, so confusing at times.
HandOverFist: Thank you Tlar and Palladium. I really appreciate your responses. Now that I understand better I'm wondering if I can have one more question answered.
Articles have come out saying they want to make 30 trillion dinar into 30 billion dinar (redenomination) and issue the new currency. They say it will take 2 years to change the currency completely.
Are we feeling that since our 25,000 dinar notes will be good for 2 years, that during that time the dinar will appreciate and that is how we will make money on this investment?............and therefore, the redenomination in Iraq will not affect our dinar notes? Is this correct? I have never seen it explained this way, but if this is the way it is, then I get it (at last).
Palladium: Handoverfist, please go to the Kap and friends and Iraq Dinar forum section. Start looking through and reading the articles. It will take a some time probably. Sorry, there are no quick answers to a lot of things in dinar land.
I do not believe in the redenomination theory; as it is based on mistranslated articles and lack of understanding on how Iraq's currency got to where it is at currently.
There have been to many articles referencing all of the complaints about the lack of large notes in circulation and available for everyday trading for goods/services; which would indicate the CBI has already removed the larger notes from circulation.
Finally, you would need to understand how central banks account for currency in circulation. There are M numbers. The CBI stopped reporting the M0 number in either 2005 or 2006; and that would be the true exact amount of paper currency in actual circulation.
That 30 trillion number is the M1 number and has other factors added into it, including bank account balances thrown in with it (I believe that is correct), and it's not an accurate number.
My opinion is there will be a small opening staging rate and the dinar will be placed on a free float to be driven up according by demand based on market forces. I'm not sure what will happen after that, and I probably won't stay around to find out after it reaches .30 to .40 cents in value.
It will probably not be at a 1 to 1 with the dollar quickly, and God forbid if war breaks out in the region. No I don't believe it will change to $3.50 over night (though I do daydream)
HandOverFist: Thanks Palladium. So you're thinking, like Ali has always said, it will RV around 10 cents (staging rate) and then free float from there. I've had that thought too. I kinda feel like that's what's gonna happen.......much as I'm not crazy about that idea. :(
I, also, don't believe it will change to $3.50 over night. Why should they give us $3.50 when they don't have to? People will be cashing out all along the way until it reaches $3.50.
Punisher: At .10 that would make Iraq look weak coming out of the gate. I see nothing less that .90 out of the gate.