One of Dinar Alert's brightest minds has this to say about this topic:
Tlar: Article: "Iraqi University maintains an extensive seminar delete zeros of the Iraqi currency" This article is interesting. Holding Economic Symposiums on the deletion of the zeros to educate the Association of money changers.
These Symposiums have now been going on for more than a month. If the plan is to start a free float at 1000 to 1 or at 1166, and then let the currency be market driven and grow from there...At the point that the currency becomes too expensive and burdensome, they will obviously have to introduce the lower denominations.
To train the Association of money changers on the deletion of the zeros seems strange to me, since with each incremental increase in the value of the dinar, everything will have to be adjusted to the prevailing exchange rate anyway at the time.
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Tlar: A free float is a stair step process. Nobody has to train you that the yaun just increased in value. You will see it in the next VCR you buy. So to train people on the final obvious conclusion seems silly to me.
My point is this, as the existing currency attains a value that makes it too high to use it in day to day transactions because of the continual growth of the exchange rate, it will become painfully obvious to everyone that lower denominations will have to be introduced to maintain an orderly market.
This event requires no special training. It is the natural result of the increasing value of the dinar.
Tlar: It is only if there is an expectation of a major shock to the system, going from where the currency value is, instantly to a much higher exchange that people would need to be educated on what to expect.
It is the shock of dropping the zeros and releasing the smalls all at once, that would require showing the money changers what the new system would be, that would require training and understanding. Nobody has to be trained on slow growth.
It is automatically learned as it is experienced. So my question is this, why are they holding these Symposiums at all? In a free float situation they seem totally out of place.
Tlar: One more thing. Dr. Bakri was hired by the CBI to train and educate the people of a coming event. If you read his statements he describes this event in detail.
It is an event he says is where a thousand dinars today will be a thousand dinars tomorrow. He gives examples so as to make it clear. Shabibi was concerned about the first few days following this event. He said anyone found taking advantage of the situation would be prosecuted. How do you take advantage of a free float?
There should be no confusion if the currency starts at 1166. It's just business as usual. One can only take advantage in a scenario where the currency value has drastically changed and the buyer has not aware of it yet.
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