DINAR IRAQ AND DONG VIETNAM UPDATE 12/7/20

IN A HYPERINFLATED ECONOMY THE m2 HAS EXPANDED. THE ONLY WAY TO GET REID OF TEH SURPLUS OF PHYSICAL UNITES OF CURRENCY IS TO REDUCE THE FACE VALUE OF THE CURRENCY, IE DROPPING THE ZEROS OR TO REDENOMINATED WITH A NEW CURRENCY AND A LOWER EXCHAGNE RATE. IE 1,000 OLD INARS FOR A NEW DINAR. HELP ME UNDERSTAND IS THIS IS CORRECT?

First of all I want to tell you that the person who asked this question has not at all been following the process to delete the zeros.

Secondly, the process to delete the zero includes measures to be undertaken to bring in nearly 2/3 of the circulated dinar out of circulation. This is an integral part of the project. Since 2012 this has been accomplished for the most part by the CBI. Remember when you decrease money supply you cause deflation, when you increase the supply of money you cause inflation.

So we see now one tool the CBI has used to control inflation all these years and control it slowly, as they needed to withdraw the currency slowly. When inflation crept back in they simply withdrew more money. Now with NOT having to recirculate billions in payroll cash each month again and again, they finally can control this 2/3 and keep them reasonably out of circulation.

Yes, using the ATMS will drive up more money back into circulation, but these will be the lower category notes and it will take many more of these notes to make the 1/3 remaining amount of the money supply that will remain.

So they can afford to put back more notes (not total value amount) into circulation post-RV. Now when the rates goes up post-RV and finally settles down to the nominal rate, again they can put yet more of the notes into circulation and regulate them slowly as not to cause inflation. But his is slow and takes time.