I was a little reluctant about having a Friday evening call in the middle of May with the BBQ weather in full swing. So I went ahead with a single email blast to the network and I noticed inverters dialing in 45 minutes ahead of time. We packed out our line well before the 8pm start time so here is a very brief review of the call followed by the recording download link. You can also get it on itunes with the link graphic to the right on the this screen.
CBI Bids On Paper Shredders
Someone brought up the fact that the Central Bank of Iraq has been bidding on commercial paper shredders, this went right into a conversation about devaluation of the dinar and I had to display a little common sense on the issue. Every country that prints currency has a way of destroying old notes that are cut, washed in the laundry, falling apart, or use the older security features. Some countries burn notes, but shredding is a common method.
When the USA took the $10,000 bank note out of circulation in the 60’s, the $100 because the new biggest note. The old 10k notes were destroyed at the banks but if you still own a $10,000 US banknote it is still worth $10,000 at a bank. As for Iraq the largest bill now is the 25,000 dinar note. Iraq may get rid of this note and make the 5,000 dinar note the biggest for example. But your 25,000 dinar note will still be worth, 25,000 dinars.
Lop Myth
Very popular topic of conversation because the headlines make so much advertising revenue for online marketers in the dinar industry. As always, the lopping of zeros is a myth. It keeps coming up all the time since 2004 when I became a dinar dealer. One DrDinar VIP member made the very important distinction that when the dinar revaluation occurs there will be zeros ‘lopped’ removed from the right of the decimal point in the exchange rate. Many people still get confused on this, what I’d like to see is some marketers take the bull by the horn and speak the truth on this very issue. Zeros will not lop off the banknotes, but rather the decimal point on the exchange rate will move to the right causing the zeros to the right to go away. Example: 0.00006 becomes 0.006
Gulf Oil Spill Effects
There was mention of the oil spill and how that may effect supply and demand of oil. Iraq may possibly benefit with a higher demand due to the increased oil production restrictions from the spill in the spill area.
RV Talk
No RV has occurred yet. With 2010 here and all the massive progress made in Iraq over the last 6 years that I have tracked I’ve concluded that a dinar revaluation will in fact occur sometime in the future. There is no question anymore whether or not it will occur. The only people that talk trash about an RV not happening at all are people that are not aware of the key progress milestones over the years including the snuffing out of the Iraq civil war.
Here is your podcast on this article:
http://www.DrDinar.com/free-downloads/CBIbidsOnPaperShredders.DrDinar.5.14.10.mp3
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This article may be reproduced online and offline as long
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Written by Darren Chabluk for http://www.DrDinar.com
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Iraq has came along way from where they were. Of course the PM voting had some speed bumps but the fact the people voted shows they want change. I believe the Iraqi people are tired of fighting and much of the civil war issues Sadam created. Of course the neighbors of this country do not want Iraq to succeed so we as the US need to stay a bit longer in my opinion. Why go through all this trouble and fighting to leave them high and dry while they are trying to get stable. The currency has been stable for quite some time, inflation has been under control so I di not believe a lop is coming. I also think that many are riding on Iraq’s success (USA, China, Europe, ect.) and many of these heavy hitting countries are not going to sit back and let them crach from interior or exterior factors. Changing their currency will not happen, many countries who forgave tons of debt to Iraq would be outraged if they pulled out a new currency. To me it is inevitable they will RV, they just need to get their governement rolling and cool off the heat in the street. I watched a current documentary film on Iraq and the people need help; education, health, food, ect. The paper shredder issue, I think it is a good thing. This is method of destroying currency and this is clue to me that the large notes are going bye bye. Hopefully they re going bye bye because of a RV.
This is not merely hopeful, this man is speaking with common sense.
Hello Darren
In the topic regarding the Lopping Myth I am not sure what you meant when you wrote: One DrDinar VIP member made the very important distinction that when the dinar revaluation occurs there will be zeros ‘lopped’ removed from the right of the decimal point in the exchange rate as the decimal point moves to the left.
… Zeros will not lop off the banknotes, but rather the decimal point on the exchange rate will move to the left causing the zeros to the right to become insignificant.
MY RESPONSE: That last sentence does not make much sense. Currently THE EXCHANGE RATE IS: .ooo9 USD equals one Iraqi Dinar.
So according to that last sentence I made note of the decimal point on the EXCHANGE RATE will move to the left?
Could you clarify please.
PS I am a long term holder of the Dinar.
Could you clarify please.
Decimal point will move to the right, I stand corrected.
Hello Darren;
You mean the decimal point will move to the right on the EXCHANGE RATE while the 25K note remains the same WITH ALL OF IT’S ZERO’S INTACT?
Now that makes more sense if that is what your VIP member meant.
In other words if the current exchange rate is .0009 USD = 1 Dinar
AND the decimal moves two spaces to the right then we are talking about a .09 cent revaluation for each Dinar. Or if the decimal point moves three spaces to the right we are then talking about a 90 cent revaluation rate.
Correct?
Sorry if I am dumbing this discussion down. But it is IMPORTANT do so to prevent rumors especially when the topic of lopping zeros comes into play.
Correct, I just modified a portion of the article with an example and made it easier to understand.
So just so I can recap because I am learning and absorbing information everyday on this investment. It is obvious that neighbors of Iraq do not want them to succeed. Iraq owes Kuwait, they need Ch7 lifted but they are the road block in this. Truly if this was lifted then assets would be return then a RV would reduce this debt drastically. Now because Kuwait is a big oil heavy hitter are they doing what ever they can to keep this CH 7 over their head? Or are they truly salty about the invasion in the Sadam era? All these variables coming from left and right Iran, Saudi Arabia, CH 7, civil conflict, political disputes, and government seating. I pray that a positive domino effect is set in place to knock out one problem out at a time. I think once some of these bigger issues are resolved the rest will follow. My question, is Iraq benefiting from not RV ing? I know we all focus on the good of a RV but is there benefits to them we are not seeing? Are they milking sales from their dinar because I dont think I have ever seen on auctions that they were selling U.S. dollars. Any thoughts?
PurdueAlum, I will do my best to answer questions I have answers too when I have more time. If there is anything you want to ask for guaranteed quick answers please go to http://www.DrDinar.com/helpdesk
Accurate, I immediately customized a fraction of the article with a model and complete it easier to appreciate. .Iraqi dinar
First the first Gulf oil spill, now we see that the Mariner Energy rig has blown up in Louisiana. I sure hope that this doesn’t mean more environmental damage. On the other hand, this country needs this domestic energy. This such a complex problem to figure out. I’m not sure what the solution is.