MAKECENTS : As I have said a couple of times I doubt there was any bank that would exchange Swiss dinars during the Saddam dinar era as it were. But, it continued to have value (and increasing value) in
DONTLOP: define a swiss dinar in 2003 .. only problem is we are not talking about currency were talking about demonetized swiss dinars .. .. demonetized . it was not legal tender ..
why would it be concidered legal tender during the exchange ..it would of had to of been re instated and had a new value attached to it .... then demonetized again after the exchange .. an over night rv. from zero value according to the cbi .. who did the exchange ..to a value over the value of the saddam notes that were backed by the cbi the entire 13 years while the swiss dinars were demonetized by the CBI
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MAKECENTS: As I have already said, it seems very likely that it was effectively a local only currency. In 2003 what other country is doing business with Iraq in any currency? On the streets in northern Iraq a Swiss dinar bought much more than a Saddam dinar (like 150 times as much).
dontlop, on 16 Mar 2013 - 01:01, said: why would it be concidered legal tender during the exchange
MAKECENTS: Because it was in use by millions of people in norther Iraq. If it was not in use, why was it even considered in the exchange for the Bremers?
DONTLOP: they were illegal .
MAKECENTS: Indeed so. There is a reason the northern Kurdish region is described as "semiautonomous".
DONTLOP: if someone uses illegal currency in the united states do ya think they should be honored by exchanging them for real currency
they were deemed demonetized for 13 years .. you do know what demonetized means .. no value .. illegal tender .. not legal tender
they had to monetize it again .. they had to remonetize it from a value of zero .. and by decree .. give it a new value .. revalue ..theres no other legal way to do it
MAKECENTS: If there had been no war they might well eventually have faded away. But once the economy was pretty much destroyed and a new banking system had to be started up, they honored the currencies that were in use, even if one of them was illegal under Saddam.
Darin, on 15 Mar 2013 - 23:36, said: I am sure once it became de-monetized, some individuals likely threw it away or assumed it was worthless.
That poor fellow either may have threw it away, gave it away, or simply lost it. With the mentality it had no value, the wealth of holding it was lost.
The problem here is simple: You couldn't take a Swiss dinar and go to a bank and get value from it. It was just paper money used in the Kurd region. If we packed all of ourselves into an area and created a town, we simply could do the same thing with IQD as a basis for trade. But in this instance, we couldn't go to our local bank and get USD for it.
Still, the banks didn't have a set value for it whatsoever than decided to bring its value back. That's pretty crazy and unique in my opinion.
DONTLOP REPLY TO DARIN: there was an exchange period .. i think it was a couple years . the banks and people would of just exchanged them.
then comes who ever that still had swiss dinars after demonetization if the swiss dinar . and kept them for what ever reason ... since there were hardly any left because those that were exchanged were most likely burned .... they claim they were rare . of course they were rare .. they were demonetized .. they had no printing plate to print more .. and they expect people to believe they still were using them in the north .. im impressed .. those swiss dinars must of been brand new to last 13 years ..they must of been al torn and worn after using them for 13 years ..geez some of them may of been 5 or 10 years old when they were demonetized . . they must of been made out of the best paper money could buy.
MAKECENTS: If they were not still in use by a significant number of people, why include them in the exchange?
DONTLOP: i know this is very important to you to get this squared away with me . but your not makingcents .. ,, its going to be very difficult for you to continue your crusade as a lopster if you cant convince people that the swiss dinar didnt revalue a gazillion percent in iraq in 2003 .. .. but im done with that . you need to read up on it. if your that interested .. even though theres very little .. they didnt cover their tracks very well .
your telling me it was done because they were outlaws ... and outlaws should be able to exchange their illligitimate currency just like any other legitimate currency .. laws do not apply to iraq monetary system accept the fact . the swiss dinar was remonetized and revalued a gazillion percent increase .,. an over night rv .. in iraq within the last 10 years .. and you wil sleep better
MAKECENTS: Answer my last question. If it was not in use, why include it in the exchange?
DONTLOP: the kurds were on our side and thats my whole point . why would they ..it wasnt legal .. unless they remonetized and revalued then demonetized again they would of had to remonetize the swiss dinar .. revalue the swiss dinar .. exchage the swiss dinar for new bremmers ,, then demonetize the swiss dinars afterwards .
now it makes ya wonder whot accounting records they used to determin its value at 150 to one .. so now you know ,, currency rates are set by decree .. thats it .
accounting ..lol .. that cracks me up .. thats just a tool the cabal uses to make sure no one is stealing their money .. accounting comes afterwards .. after they determin the valuiation
makecents, on 16 Mar 2013 - 01:56, said: Answer my last question. If it was not in use, why include it in the exchange?
DARIN: Only logical sense is that "if the Kurds" were using it and not favoring the use of the Saddam dinar, than it would make LOGICAL sense to give them a favorable exchange to the new currency to once again demonetize the old Swiss Dinar and get the Kurds on board with using the new IQD that does not represent the Saddam regime.
DARIN: If they were to deny the Swiss any exchange to the new IQD, than the Kurds would be left unhappy. So, it is likely that the Swiss was included to get Kurds on the same level as the rest of Iraq and to become more of one versus pushing them out. Remember, they were no longer printing Swiss (as far as I know) so they were likely not as popular or common so to do so, wouldn't have been that big of a deal.
DARIN: Also, the duration of time to exchange the currencies was very limited. I think it was only a 2 week allowance with the borders being closed. If the people didn't act, they lost out. Here is a thought
MAKECENTS: This announcement from the CPA (from the Internet wayback machine) says it was from Oct 15 2003 to Jan 15 2004, so 3 months. LINK
DARIN: A lot of the hard cash money supply was reduced in 2003 when the new IQD was released.
MAKECENTS: How so?
Why continue to print like a drunker sailor drinks when you can simply add value to the existing money supply versus going on printing sprees.
Makecents: Right, seems like it was maybe in the 5-10T range? But a continuously changing exchange rate is just a pain for everyone, especially if you are importing everything.
DARIN: Their reserves were "low" but their money supply was also low.. They can R/D, and the bank would just do the same thing again.. Continue printing because they can...
MAKECENTS: As the economy grows, I would expect M2 and reservers to increase whether they RD or not, to keep the value of M2 at about the same percentage of GDP. If it goes too low the economy doesn't have the flow to work.
DONTLOP: sadam robbed them blind in the north and in the south .. the only people saddam took care of was the sunnis
MAKECENTS: But the DID accept them in the exchange for the bremers. So despite it being illegal the Kurds appear to have used them anyway for the previous 13 years.
DONTLOP: yep they revalued by decree with in a split second agreement them for zero value to 150 new dinars for one 1990 swiss dinar with no monetary value
MAKECENTS: If they had no value, why did anyone have them? They had to be in use, i.e. to have a value in the economy even if Saddam's CBI did not honor them. That value was apparently about 150 times greater than the Saddam dinars based on what each could purchase in the local markets, according to the wiki. So it was not arbitrary, they officially gave them the value that reflected their actual use.
Its sort of like in the late 90s when Saddam said the exchange rate was 1 dinar for $2 or $3 USD, but in fact it was 2000 or so dinars per $1 USD. What matters is what is really going on in the economy.
DONTLOP: oh apparently .. so thats an accounting tecnique .. you ask alot of questions .. why dont you go get the answers on the web .. ?
ya know all you got to do is show me the m2 money supply of demetized swiss dinars to back up your claims .. go get the info on the m2 money supply of swiss dinars and show me their books and how many reserves they had to back it up ..
oh thats right they didnt have to do any book keeping .. because they werent pegged .. so what your philosphy is ......if iraq just quits pegging their currency to everything they just set the rate of the dinars to what ever they want ,,
they can even demonetize the dinar completly and spend all their reserves and if anyone asks .. how they get that value for the dinar ,, they should just say .. well apparently .. they do have that value // lol /
you lopsters crack me up .. geez ... im gonna have to use this thread for referance to your wisdom in the future .. im definatly going to tag it .. thanks for the ammunition ..
MAKECENTS: Show me the books in 2003 for Saddam's dinars. Pretty much what we know is that they exchanged Saddam dinars at 1 to 1 and the Swiss at 1 to 150 based on the relative purchasing power of each. I would not be at all surprised if the CPA didn't know how many of either currency was in circulation, especially since the Saddam dinars were so easy to counterfeit.
No. You can NEVER just set the value to anything. If you peg you have to back it, that is the definition of a peg. If you float then you are at the mercy of the market that sets the rate for you based on actual transactions.
DONTLOP: so you think the swiss dinar was floated ..lol .. it wasnt even a fraction of a monetary unit .. .. you crack me up .. you been drinkin tonight .. who measured that float ...
ya the kurds had their own market .. and it floated by itself in the hands of a few who didnt exchange them in when they were demonetized..
you gonna hold on to your dinars till they are completely demonetized ?
you should hold your dinars all the way thru the exchange period .. and when they are demonetized ,, you should just let them float
DARIN REPLY TO MAKECENTS: The money supply reduction would have been reduced from the many dinars that were not likely exchanged.
Well, if it was 3 months, I believe the borders were closed for that duration.
So if 30 trillion were in Saddam dinars, I doubt all 30 trillion were exchanged.
Therefor, a likely good chance a huge amount was reduced in supply of what existed before and what existed afterwards.
So, a market value can exceed an official rate, why not set the official rate to represent the market value?
If everyone started exchanging IQD for $3 per dinar even though the CBI allows it to be 1164, wouldn't the value from CBI go up if the market supported it?
MAKECENTSREPLY TO DARIN: I don't know about the borders, but why would a large amount of dinars not have been exchanged?
I don't kNOW what the earliest year the CBI offers docs for on the money supply. If M2 is 75T now and have been increasing on average by 5% a year for 10 years that would imply a start of about 45T. That sounds high to me so maybe the yearly increase has been bigger, but I don't know.
I wouldn't say the market value can exceed the official rate, as if that were true the market would have a sort of short circuit where you could make money exchanging between the banks and the street. So they can't be too far off from each other in either direction. In the case of the Swiss dinar from 1990-2003, it wasn't recognized at all by the CBI (and thus likely any bank) so it was just a local currency in the north.
dontlop, on 16 Mar 2013 - 03:51, said: so you think the swiss dinar was floated
MAKECENTS: In a sense that is correct, but only as a local currency. Its value in the economy of the north was likely set by the market.
dontlop, on 16 Mar 2013 - 03:51, said: ya the kurds had their own market .. and it floated by itself in the hands of a few who didnt exchange them in when they were dem
MAKAECENTS: Yes, that is correct (a local market, not an international one), though a few million who didn't exchange.
DARIN TO MAKECENTS: Borders were closed often during that time due to a high volume of violence.
There were articles I recall reading about how foreign businessmen lost money as they held the old currency for conducting business.
I don't recall the M2 starting out at 45T, I know it was much smaller. If the market value can't exceed the official rate, than explain how a value is held for a demonetized currency with no official rate.
MAKECENTS TO DARIN: I would not think a lot of Saddam dinars would have been out of the country then, but could be. I agree. The wayback machine shows CBI.iq starting in 2009 or so, and M2 YoY growth is shown at 33% or 40% (growth rates starting from 0 can be huge for a few years).
If the rates at the bank and on the street (or any two exchangers) are very far apart, then you can end up owning all of Iraq by exchanging a dollar at the bank for 1164 dinars, then exchanging those on the street for many dollars (at the higher rate), take those dollars to the bank, and repeat.
If the bank rate is higher, you just do it in the reverse direction. But if the bank no longer recognizes a currency (e.g. the Swiss dinars) that does not mean you can say 'here is nothing, please give me all your Swiss dinars". i.e. it isn't a 0 rate of exchange, its no exchange so the method doesn't work in that extreme case.
DONTLOP: i gues the iraqis can just use anything for currency .. corn .. stones . .. it doesnt have to be legal tender or have any accountability .. and they can just exchange it in for real currency ,,
sometimes ya just have to read the process of demonitization. and what it means when old currencys are no longer legal tender... they are no more legal tender than old toilet paper is as good as new toilet paper
can you imagine if in the united states some people just started using something that isnt legal tender as legal tender .. then let its own little market determin its value and decree its value as valid with no records .. and then going and exchanging it in for real legal tender ..lol .ya thats gonna fly .
A Community Currency is often used as synonym for complementary currency, local currency, regional currency, alternative currency, auxiliary currencies, and private currencies. The debate is not easy to solve, since the words have different meanings to different people. All are currencies that have different designs and serve different purposes than conventional money. They depart from the notion that money is essentially a human invention and instrument to influence the relations between citizens and organizations. A solid theoretical framework legitimizes this idea and in the past hundred years a lot of experimentation and experience was picked up with realizing social goals by the implementation of community currencies.
even though theres such terminology for such things such as local currency
i dont think that any group of people can just start a local currency without govt approval and expect to exchange that local currency for legal tender
we do know there was an exchange period for the swiss dinar and it was demonetized by the iraq govt , in the early nineties .
Definition of 'Demonetization'
Demonetization is the act of stripping a currency unit of its status as legal tender. Demonetization is necessary whenever there is a change of nationalicon1.png currency. The old unit of currency must be retired and replaced with a new currency unit.xicon_inv.png.pagespeed.ic.wFvokAlXxE.pn
Investopedia explains 'Demonetization'
A recent example of demonetization occurred when the nations of the European Monetary Union adopted the euro. In order to switch to the euro, authorities first fixed exchange rates for the varied national currencies into euros. When the euro was introduced, the old national currencies were demonetized. However, the old currencies remained convertible into euros for a while so that a smooth transition through demonetization would be assured. LINK
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