Get a snack and a drink first...

Today has pushed the re-denomination issue over the edge. We need to have some dialogue here and get ourselves on the same page. I am open for intelligent people adding unique perspective, but I am not in the mood to have the lottery club or the "Apple Dumpling Gang" jump on my back. I think this is evident, needs to be addressed, and we need to adjust our mindset here. I will humbly retract any statement that is challenged with contradictory evidence. I also bow to the idea that people are "hoping" for the best, I understand that. If that is your perspective then I pray you end up right. It doesn't however make what I am about to write for you less true. So lets hit this with some points I am sure we all agree on...

First, Iraq has too much money printed. Use 30 Trillion Dinars, it is close (some say 25 or 27 Trillion) But here is the thing to understand, they don't have too many printed for today! They barely have enough to get by! (As a matter of fact their budget increased 25% this year and they are still some 90 billion USD short!) But in terms of economics 101, they have too many dinar printed to see values rise substantially when it is traded worldwide. Forex is not going to raise the value of the Dinar to even $1.00 USD when they have 30 trillion printed!

At the end of the war the Galactic Meanies FORCED them to accept a RIDICULOUSLY SMALL value for their currency. They were TOLD the number of dinars to print! Here is why: (1) You can't go buy MIG fighter jets... 100% of your currency will barely keep your country afloat, no way in the world you will be able to reform a military. (2) You will print enough to pay Kuwait. The IMF will loan you money (against the Petro Dollar first, then against the Dinar later) so you can participate in international activities at the government level. We will tell you which ones, when, and who attends, and what you will say. (3) The people of Iraq will not be able to become an efficient market for any goods or services, this keeps the money laundering to a minimum, and allows the U.S. and Coalition forces to monitor all money movement much easier.

Next, Iraq's 6 trillion notes (the number of actual individual notes printed, not their value) are in crappy condition. At the outset we KNEW that the bills would last about 2 years or so each. Many of the bills in circulation have been in circulation for over 8 years now! This situation alone would have caused me to invest in the dinar opportunity!

This causes Iraqi's to take several actions. They can use the old tattered bills, they can trade them in for USD at the money changers (for a fee), or they can take them to the bank and try to get new ones. Neither of these options works great. Trading the dinar for dollars creates a "hidden" inflation that is not accounted for in the governments figures. If everyone has to spend an extra 10% of their income on money changers, then the purchasing value of the dinar is deflated. They can't take the old into the banks for new. We are allowed to print new money whenever the wind blows. Iraq is NOT. When our notes get gross, the banks have them destroyed, and the Fed works with the UST and replaces the destroyed bill with a new one, no accounting needs to take place regarding inflation as the number of bills and their value has stayed the same.

You can't use an ATM machine and get a scalable quantity of notes, value of notes or most importantly enough notes to be able to do anything significant. Want to get $200 out here? Great, you get ten $20 bills. Want $200 WORTH of Dinar? You can't get it. There is no way to give you (9.8) 25K Dinar notes! Also, the 25,000 Dinar note is the most commonly printed. That is opposite of every other country where their largest denomination notes have the fewest printed. So what do they fill the ATM with? Probably the largest denomination the 25,000 note. Except as we will see, the goal is to get rid of them... putting them in the ATM's would make that job a quadrillion times harder.

Next, remember that the zeroes at the end make accounting a nightmare. Shabibi says they will see a lift in GDP just by getting rid of the horrible accounting processes required because everything has three extra zeroes to account for. The system was designed to not work! You have to understand that. It is not a conspiracy theory, we didn't want rogues and maniacs vying for power, printing "new" or "personal" currencies, or funding themselves with oil sales. It is like telling your daughter she can go to the mall and get anything she wants. She will be ecstatic! Until you drop a $20 bill in her hand and tell her to have fun. She can still get whatever she wants... she just has to only want things worth $20 or less! We couldn't take the chance that Iraq would be "wanting" some pricey military equipment, so we left her with $20 bucks.

The monetary program has had to deal with massive inflation (duh... they got 30 trillion dinar printed!), international pressure to build currency reserves, the challenges to the Petro Dollar from other oil producing nations, occupation, and now, the people regularly use a foreign currency as the standard currency. Each of these items has been addressed and to make it all work, they all must be fixed.

They have to get the system using a larger basis, and Shabibi has said several times, he wants it to be "SCALABLE" (that means it works to the decimal point using tenths and hundredths. This has nothing whatsoever to do with the value, it is an accounting requirement. It does make me think the Pound Sterling intel is doo-doo.

With all of these very evident problems, you have to assume they have been working on a solution. They have, and they have not been shy about telling us about it. They are going to reduce the number of Dinars. Holding massive amounts in reserve is a good start, but the worldwide market will not fall for it... nothing stops those dinar from being released or used to purchase assets or be used in their budget to cover shortfalls. Either case means the dinar value would deflate (which ironically causes inflation). IN the end, they HAVE to reduce the actual number and value of dinars overall. THIS STEP WILL RESULT IN A RE-DENOMINATION. They have only mentioned it regularly for the last 7 years! Why are we all acting surprised?

They have to replace the old, tattered, stapled, and taped together dinar that are in circulation right now. This is a big deal. Something has to happen quickly allowing them to print NEW dinar to replace the worn out ones if they are not planning on re-denominating or revaluing. Shabibi has ALREADY STATED PUBLICLY that he is PURPOSEFULLY taking the larger notes out of circulation! This is one reason why. The reason listed in the previous paragraph is another. Add these two requirements together and you would 100% EXPECT them to re-denominate. YOU WOULD DO THE SAME THING! It is a smart, easy, and very simple way to overcome many of the obstacles we have listed. (And by the way, they wouldn't have already printed new notes with a smaller face values if they were not planning on re-denominating!)

If one more person says they are going to invest in 50 Dinar notes so they can make money in a re-denomination I am going to sprain a brain muscle. IT IS ABSOLUTELY INSANE TO BELIEVE THAT ONE DAY LATER THE 50 DINAR NOTE WILL BE WORTH DOUBLE THE VALUE OF THE 25,000 DINAR NOTE. Please people, that is nuts. Stop going there. It would screw up the system so badly that there would be a massive civil war. Everyone that saved and held their money and turned it into 25,000 Dinar notes so they could do business more efficiently is NOT going to be financially devastated because they didn't use 50 dinar notes! The 50 dinar note will become something else after the re-denomination and it will be 1/500 the value of whatever they name the 25,000 note. (At a 1:1 Re-denomination, the 50 Dinar will be worth USD $0.05! Just thought you might want to know that.)

Their STATED and EVIDENT goals are to fix accounting, to adjust the number of bills available, and to replace the old bills. We know it, we know it, we know it... they have even printed new bills and coins!!!! Iraq is re-denominating the dinar.

Their SECONDARY goal is to determine a new WORLD WIDE VALUE for this new bill! Will their new 50 dinar note buy a motorcycle tire, or will it buy a motorcycle. Will the NEW, "TRADED WORLD WIDE" dinar be based on an artificial peg? Will it be compared to other major currencies and traded for goods and services? Will it be electronic only? What would you do?

You would do exactly what the World Bank and the IMF suggested that they do... establish a basket of goods (agricultural trade, oil, natural gas, gold, etc) and tie this basket to a wide range of foreign currencies. Create a base value that represents your GDP and your expected GDP fairly, and start doing business with the world. That means REVALUE! You see the two requirements are NOT exclusive of one another! We are going to see both. Here is how it will happen.

Iraq is going to set a figure that they can maintain and afford. This base figure allows them several months to make deals with foreign nations at a SET, KNOWN, valuation. It is the BASIS POINT. Iraq will be bound to honor those contracts for goods and services set at this basis point and the initial rate will be set high enough so they can get the infrastructure, oil development, security, and investment interest they need. TO DO ANYTHING OTHER THAN THAT WOULD BE INTERNATIONAL SUICIDE. Does that mean $10.49? NO. Get your big brain pants on and think through it. Does it mean $0.10? NO. That would result in a non-scalable currency that the market will appreciate instantly. If they set it too low, the market makes the money on the trade, too high and they end up overpaying internationally. It does mean that when they say they want to be the strongest in the ME... it should give us a pretty solid clue. But remember, this figure is determined months in advance and is used in INTERNATIONAL negotiations and debt transfer. It is not shared with the owner of Exxon or Jimmy Buffet, or Warren Buffet for that matter. This initial basis point will be used to guarantee that their next two or three years GDP and expenses and revenues can be BUDGETED more accurately!

You have to understand what happens next to wrap your mind around the entire process. When Iraq sets a basis point (By the way, I believe they already have done this step!), it is meant (hoped) to be lower than the actual value. This guarantees Iraq a revenue source that is accurate and conservative. It gives them extra money right away, and trust me, they are already bickering about what to do with it. Why? BECAUSE THEY KNOW THE EXTRA MONEY IS COMING!!!!!!! THEY SET A BASIS POINT LOWER THAN THE FAIR MARKET VALUE OF THE DINAR!!!!. Do you get it? When parliament said they agreed to give 25% of the earnings above the budget estimates to the people of Iraq, they already knew that for two, and probably three years out, this figure would be significant!

This next point is absolutely critical and I never see it mentioned. THE MARKET WILL CORRECT THE BASIS POINT ESTABLISHED WITHIN 15 SECONDS OF BEING INTRODUCED! When FOREX learns the new "Basis Point" a million algorithms all over the world will begin shooting out ESTIMATED FUTURE VALUES based upon the oil mostly. The value of the dinar is going to climb, and climb, and climb, and keep on climbing until... WHAMMO... the traders charts and fancy programs tell them, "this is the top end"! From that point on, the value will fluctuate every single second, day and night, based upon the basket they have created and the trillion other reasons why currency values rise or fall.

IRAQ IS NOT BOUND TO repay or prove or maintain THESE FIGURES AT ALL! ONLY THE BUYER (At the new rate) pays the cost over basis! Iraq's dinar can be valued at $700 each and they would never have to generate a single penny extra in oil sales or GDP or pull one single farthing out of their butt to pay anyone. YOU HAVE TO UNDERSTAND THE IMPORTANCE OF THAT FACT! They KNOW that the value is going to rise in the world market. They are holding tons in reserve for just that time. They KNOW that the they can set "guaranteed" rates for international trade that are lower than the expected FOREX prices they will see within moments of revaluing. The countries in financial trouble right now are perfectly happy getting a guaranteed figure in long term contracts. I believe this process has been the hold up. The info had to be shared, but they couldn't afford to let China, Isreal, the U.S., U.A.E., and Canada get their hands on every dinar at auction either. This was most likely accomplished at the meeting held in Jackson Hole. Sales to countries may have stopped at that point and from then on you either negotiated at the basis point rate or got left behind. In all likelihood the institutional holder (Whales) "GO" point was the U.S. forces leaving. The large companies came rushing in at that point and started making deals based upon the nation to nation "basis point" figures. Exxon skipped Iraq entirely and went straight to the Kurds! How? They new the deal, figured a profit point and said it was worth it to act now!

So, the big question is this: When will Iraq choose to revalue their currency and set the basis point. Will they do it before they re-denominate or will they do it after they re-denominate?

Unfortunately it is a trick question. As I have stated, I believe they have already done it. They have established a basis point value for the dinar AND they have outlined a re-denomination process publicly as well. Everyone that needed to know, knows the basis figure and were given a general time line. But I would bet my last Sponge Bob and Patrick boxers that the timeline was NOT September 2012! I think this was supposed to happen quite a bit earlier, and you will be surprised when I tell you who I believe is holding it up! Everyone is getting antsy!

I have some questions regarding the global meltdown and Iraq's involvement. I personally believe that they are going to play a huge role. Nevertheless, to do that is going to require that they revalue BEFORE they officially re-denominate. That is great for us, but it is expensive for Iraq. It is my opinion that much of the waiting game has not been outsiders like China or the U.S.A. I believe that Iraq is negotiating concessions for making the RV prior to the re-denomination. They have a lot to lose by doing it that way, but the world has a lot to gain. Someone, somewhere, is making promises and so far, Shabibi is not satisfied. That is total conjecture, but it answers the question that I often ask myself... "Who is benefiting by making this drag out?" It isn't parliament so I can't understand why they would go one more minute without wanting to become instant billionaires. Shabibi is making the world put up or shut up, and I am sure he is driving everyone crazy. But then again, he is holding all the cards!

Here is what we hope for: Best for us is that they revalue quickly (pre re-denomination) to get the most bang for their trillion bucks. They can re-value at a lower rate if they do it with 30 trillion bills. In this scenario expect them to tell the people that their dinar is going to be ten time more valuable on ____X____ (fill in a date). If this happens it will happen with scripts and electronic banking and the state issued master cards. They will not re-denominate for about 6 months if they RV on their current assets. But at that point I don't care!

The next possibility is that they re-denominate, AND use the USD as PAR for a while, then release the USD from the basket and let the market adjust the value from that point. This is what I expect to see happening, and the reason is simple, they can introduce new denominations slowly while they use the USD. It is scalable and easily transfers electronically etc. That means they take your 25,000 dinar note (worth approx $21.36 USD) and hand you 25 NEW Dinars (worth $25.00). This is technically a revaluation too, but I agree that there is no way they are going to let the market get the extra $2 or $3 dollars per dinar, and not themselves. If they use this option expect the "real" revaluation within 6 months.

The last option is that they set an RV amount and re-denominate to that figure. I don't see that happening because it leaves the rate open for too long, forcing the market to not be able to react until the old bills are traded in. They won't wait, they will slam the value hard because the market will see that there are still too many bills available. In this case they would say, come in and get your new Dinar... 25,000 old gets 75 new. This accounts for the RV and Re-denomination is one fell swoop which is good, but during the 6 months or so when they are having you trade in the old for new, all the contracts and international business would have to be at that rate. It won't happen. Forex traders will realize that there are still old AND now new dinar out there... essentially making the money supply issue much worse... not better... and the rates will tumble. Iraq will lose several dollars value per dinar in the drop, and will stuck with high guarantee rates.

Now don't get frustrated, the next part is what we are counting on. Once the money has been distributed (weeks, not months), Iraq is going to make an announcement that they are setting the value of the NEW dinar to $___X_____ (you fill in the blank). This will match the basis point figure exactly. I believe it is going to be in the $3.14 range. Then within a mere blink of an eye, FOREX will adjust the value, and all future transactions regarding the electronic buying or selling of the dinar will be at the FOREX rates. These transactions do not cost Iraq a penny.

I believe this rate will skyrocket quickly and will start to level out when each of the member countries sells their dinar at the already agreed upon rate to shore up their individual economies. When the rate starts to falter, Iraq will need to show the world that they have increased technology, investors, GDP and security... or the rate will not increase. Even large oil contracts will only cause a short term bump in value... as oil is already counted as sold the moment it hits the pipelines!

Iraq has essentially just increased their budget about 25% AND increased the estimated value for oil by about 25% too. EVEN with the increased estimate for avg barrel prices, they are about 90 billion (USD) short. For oil sales to increase, oil production needs to increase and for that to happen takes time AND infrastructure. Even if their goal was increase oil sales in 10 years, if they didn't fix roads and refineries and water treatment facilities and airports and plumbing... the oil production would be hindered. If they don't meet the budget (sales decrease or prices decrease or both) what will they do? That dilemma is the second reason I invested in dinar! It can not go unanswered. They have to increase dinar value to obtain infrastructure required to generate budget revenue! It is a a loop!

I have stated several things that I believe are absolutes for this country. I am only using time here in the esoteric sense to convey which things happen first in relation to other events. I have no idea of the time frame, and honestly the time frame was not one of my concerns regarding the investment. As a matter of fact, I would't be on any website anywhere looking for someone to call the RV. I don't believe what anyone says, it will be worldwide news in a matter of seconds. Finally, I am estimating a rate that meets a very subjective risk vs. reward algorithm that I ran on this over a year ago. I could be off by a huge margin either direction. The only reason I even shared the figure is so you will understand that I am a positive investor and hopefully it will limit the responses calling me names for believing in a re-denomination. Would I suggest that people invest in the dinar? Yes. Would I give them a time frame? No. I have already posted that I believe your investment mentality should be the same as if you were buying collectible currencies. Do I think we are close? I do. I think that the amount of energy being thrown at this from all sides has reached a boiling point. Investors are getting to the edge, countries are starting to make plan "B" arrangements, and tiny little events in Iraq are almost always responded to with something regarding the financial plan to drop the zeroes. It is such a high energy force right now that if it does not happen soon, there will be repercussions world-wide, and that may even include getting forces back on the ground there. I hope it is soon. I hope the crazy high numbers magically happen somehow, and I hope the trade in process is the simplest thing ever... But I am planning on the events to unfold as I have listed them. Which still makes my decision to invest in the dinar one of the most profitable things I have ever done!

Be Blessed!

Space Cowboy

I just can't read all that, I'm sorry I need a short version or I won't read it, I sorry that is just who I am!!!!!!!!

this is a monolog, not a dialog. He clearly doesn't want any other opinion but his own.

I have come to the conclusion that I have ADD and Missy has CADD (Canine Attention Deficit Disorder) There is no way I could finish it. Cliffy notes please!!

I have listened to every opinion for nearly two years. Less than some, more than others. I am a highly educated person and even if I wasn't, I can read and understand that this community is divided. Today, for the ten millionth time I have seen someone post a fearful remark because they do not understand that the revaluation is necessary and that no matter what happens to change the re-denomination, investors can still be excited. My sole purpose was to introduce a bridge between these camps.

Secondly, since it is written, I would have to say you are correct, it is a monologue. However to use that technicality to assume the second half of your statement is true is unfair to me and illogical. I have in fact ASKED for responses, I have agreed to adjust my hypothesis to account for contrary evidence, and I have agreed that there is a group of people that do not want to care about it, they are more comfortable leaving it in God's hands. I even took the time to make sure that I did not, and would not, do anything to challenge their faith.

Finally, it is a forum for expression. I am confused that you would expect me to do anything other than express my opinions. That being said, I certainly understand that you have the very same opportunity and I respect that. I said I hoped the personal attacks would be less... live and learn I guess.

Fang, I am sorry. I have come to appreciate your comments and feedback. I did take a long time putting it together and I feel like I invested some of my time back into the community... which gives me great pleasure. I have been very blessed by you all and I enjoy and appreciate the opportunity to perhaps add something.

Spacecowboy- Words of wisdom, you speak- We need more people like you,refined ,I think- Terbo:D