dg l vs r debate - iraqi dinar · dinar guru is a website devoted to unraveling the secrets behind...

Lop vs RV Debate Revealed www.DinarGuru.com special report

Blanche Bonet

2

www.DinarGuru.com ©Copyright 2012

The Great Lop vs. RV Debate Revealed

The Questions Every Dinar Investor Wants To Know But Is Afraid To Ask

By Blanche Bonet

© 2012 All Rights Reserved

3


Introduction This book is intended to be your reference guide to better understand the Iraqi Dinar. Read the entire report from cover to cover at least once. If you learn what I’m about to reveal to you, you will have a deeper understanding of your investment and have a much more satisfying and enjoyable experience. As a result, your friends, family and coworkers will look at you in a whole new light. You will have an advantage over other investors…you’ll have the knowledge to make decisions based on logic and ration rather than heated emotion. You will not feel like you are in the dark anymore. If you fail to learn the info contained in this report you are likely to fall victim of the emotional roller coaster ride many dinar speculators fall into. Your family and friends will continue to doubt your decision to invest in the dinar and you’re likely to make poor and foolish decisions in the future. As with all things…there’s a catch to choosing knowledge over ignorance… (This analogy comes from my son…bless his heart!)

4


You’ve seen or heard about the movie The Matrix, right? In the movie Laurence Fishburne’s character, Morpheus offers young Neo a tantalizing choice…a la Alice in Wonderland. He holds out his hand and presents two pills...one red and one blue. Morpheus explains the red pill leads to a whole new world of truth and the blue pill sends him back to the world as he knows it now. Either way, there is no turning back. I’m in essence offering you the same thing…a red pill or a blue pill. If you choose the blue pill, you can continue down the same path you are on with your investment. Things will eventually work out, right? They always do, don’t they? Besides you’re bright; you can figure things out on your own, can’t you? Taking the blue pill is closing this book unread. Or… You can choose the red pill. The red pill exposes you to a whole new world...a world that has been playing itself out around you since the beginning…a world you are not aware of, but not completely

5


unaware of it either. I must warn you, the red pill comes with a cost...it’s kind of like an investor rite-of-passage. Once you are exposed you can’t be unexposed. I guarantee some of the information you learn in these pages will make you uncomfortable. Some of it is not what you want to hear. Some of it conflicts with what you currently believe is real. But all of it is geared to help lead you to a healthier and happier relationship with this investment. So what’s it going to be... The blue pill and closing the book? Or… The red pill and turning the page? I wish you all the best…

Blanche Bonet www.DinarGuru.com

6


Copyright, Legal Notice and Disclaimer: Note To The Bad Guys: This publication is protected under the US Copyright Act of 1976 and all other applicable international, federal, state and local laws, and all rights are reserved, including resale rights: you are not allowed to give or sell this Guide to anyone else. Please note that much of this publication is based on personal experience and anecdotal evidence. Although the author and publisher have made every reasonable attempt to achieve complete accuracy of the content in this Guide, they assume no responsibility for errors or omissions. Also, you should use this information as you see fit, and at your own risk. Your particular situation may not be exactly suited to the examples illustrated here; in fact, it's likely that they won't be the same, and you should adjust your use of the information and recommendations accordingly. Any trademarks, service marks, product names or named features are assumed to be the property of their respective owners, and are used only for reference. There is no implied endorsement if we use one of these terms. Finally, use your head. Nothing in this Guide is intended to replace common sense, legal, medical or other professional advice, and is meant to inform and entertain the reader. Copyright © 2012 Blanche Bonet. All rights reserved worldwide.

7


About DinarGuru.com Dinar Guru is a website devoted to unraveling the secrets behind the highly speculative Iraqi Dinar investment. If you’re interested in learning more about this investment and want to make better informed decisions for you and your family and avoid making bad ones go to www.DinarGuru.com. If you want even more, get yourself signed up in the blue box at the top…You’ll get latest guru intel, rare videos, articles and more sent to you. You’ll also get access to the Dinar Guru archives, which lists guru updates and predictions dating back over a year and half (since February 2011) and special access to the Dinar Guru Members Only Blog. The Dinar Guru community has grown to over 31,000 of the most savvy and informed investors in the world. Over 45 nations and 250 cities from around the world are represented on the site at every given moment. If you’re serious about your money, future and this investment, Dinar Guru is the place to see multiple perspectives spelled out in easy to understand language. Dinar Guru is one of the best ways to get informed and get off the emotional rollercoaster ride of this crazy investment… www.DinarGuru.com

8


Welcome to the Lop vs. RV report. Blanche Bonet here from www.DinarGuru.com . If you’ve ever felt confused about your Iraqi Dinar investment or ever have an inkling of doubt whether the dinar would ever RV… Or if you’ve ever have thoughts like, “How is it possible to turn such a tiny investment into such a potentially HUGE windfall…” Or if the thought, “There is NO WAY Iraq can pay for and cover the costs of the RV,” echoes in the back of your mind… Or if you become disillusioned and frustrated from time to time with the whole dinar “investment” … You’re not alone…these thoughts and questions are VERY common. It’s EASY to fall into rollercoaster mode if you’re not prepared and informed on this investment. If you want a clearer understanding of what’s going on with your money…then you’re in the right spot. Lop vs. RV is probably one of the oldest and most hotly contested debates of the Iraqi Dinar Investment. Nothing strikes passion, anger and fear like the three letters L.O.P.

9


This report is going to give you BOTH sides of the debate so you can see for yourself what the fuss is all about. It contains the most up to date information we have available on the LOP subject. Before we dive in too deep, I’ve got to tell you I was very reluctant to put this report together. It almost NEVER happened. Here’s the story. I receive quite a few emails begging me, some threatening, NOT to release this report.

Some feel the LOP horse has been beaten to death… Others feel bringing up LOP is too painful a subject…kind of like the white elephant in the room no one wants to talk about. It’s easier for them to pretend everything is going to be alright no matter what.

I’m not one of those “stick my head in the sand and HOPE every thing’s going to be alright” type of gals. BUT I wasn’t crazy about the idea of releasing a LOP report. Reports like the one you’re reading now take a TON of work and time to put together and lord knows I’m short on time…especially with keeping you and the community up-to-date on the latest guru post on www.DinarGuru.com , Dinar Guru member special email follow-ups and the relentless behind the scenes research. As I write this, the Dinar Guru community is nearly 31,000 strong and growing…(BTW, If you’re not in that number, What are you waiting for? Get your butt over to www.dinarguru.com right now and get signed up in

10


the blue box at the top! J A lot to juggle for a non-techie lady like me. But the LOP debate raged on. I get legitimate questions from worried and many times confused Dinar Guru community members about the ambiguous term “drop the zeros”, “LOP” and the RV all the time. I do my best to answer from BOTH LOP and RV perspectives and this helped a lot of members. But, It hit me…I didn’t have the supporting tangible PROOF the members wanted to see... Doubt still remained. After a lot of hand wringing and STRONG encouragement from the community I decided to put the LOP vs. RV reports together for you. I even successfully wrestled support from my son! J My son and me have invested a lot of time and effort into this report so you’d have a clearer understanding of the two sides. We compiled the best of the guru and community views on the subject. Before we get into the meat of the debate…here’s what I’ve learned about the old world of this investment (the dark ages) and the new world. This is important for you to see…a bit of Dinar Guru wisdom if you will. J The old Myth about the Dinar was Iraq would NEVER reveal to the public what they were going to do with their currency. One day we would just wake up and there would be a change in rate. For about the first YEAR or so of my investment, early 2010 to about mid 2011 this Myth appeared to be true.

11


Iraq and the CBI hardly said a word about it…we all just waited for it to POP! We relied HEAVILY on Intel Gurus sources since there was very little reported in the Media and very few documents existed discussing the Iraqi Dinar. Around June 2011 EVERYTHING changed. CBI articles became more and more plentiful… Around June 20, 2011, Shabibi even went as far as to say the dinar would change in 10 days (I’m paraphrasing here BTW). This was in multiple news articles. Around this time there was a mysterious court battle between the CBI and Maliki’s GOI. We don’t know too much about it, but it appeared the CBI won. But the “change” Shabibi talked about didn’t occur. In December/January 2011 the CBI released their PLAN to “remove the zeros” from the Dinar. Then followed it up with a raise in the rate to 1166. The community was abuzz! Since then CBI and Dinar related articles are common…some days there are 2, 3 or even 4 articles related in some fashion to the project. So much for the CBI keeping it a TOTAL secret. Now we have something real to work with to complement the Intel! As with all things related to Iraq and a country that’s literally creating a democracy…the clearer things appear to become…the more details surface to muddle the picture.

12


The old saying, “the devil is in the details” is certainly true here. One of the biggest and most controversial details to surface is the term...”remove the zeros” and all its other forms…”delete the zeros”, “raise the zeros” etc. I think it’s safe to say this is the HEART of the LOP debate. If things weren’t complex enough…there’s a lost in translation component to everything. One of the most common mistakes made in this investment is to ASSUME to know the precise meaning behind their words…

Since the words are a translation between languages AND cultures. To take the translation of a SINGLE article at face value is a fool’s game. The terms “Soon”, “in the coming days”, “next year”, “next week” come to mind…none of these translated phrases mean what they

mean in the west. Or at least not precisely what they mean here. “Next week” for example means this week a lot of times. Some gurus say the second most common mistake is to give too much weight and credibility to sources other than the CBI and Shabibi… Other gurus take this a step further and say don’t listen to anything unless it is coming from Shabibi himself. Still other gurus say don’t listen to ANYTHING coming out of Iraq at all…They only listen to International organizations like the WTO, IMF, World Bank and sources inside the US government…but doing this does

13


not tell us much about the LOP vs. RV debate. The report you’re reading right now is NOT something to take lightly. We’re talking about YOUR investment here…your life. Yeah, Yeah, Yeah, we all know this investment is a “longest of long shots” kind of investment and it really could (and maybe even should be) considered more investment entertainment rather than the real thing…

…but with that said few things in life have this kind of life changing potential…this report has real VALUE. I want to thank Gurus Doc, Kaperoni, Breitling, Southwest Florida Guy, BGG and Enorrste and the Dinar Guru community members for contributing their insights to the debate.

Regardless which side of the LOP vs. RV debate you’re on… a lively debate is healthy…it encourages everyone (me, the community and the gurus) to work just a little harder to get to the truth of the matter. A wise investor doesn’t choose a side out of emotion but rather on the best facts available. If an investor chooses to invest, she invests the amount that makes sense to her unique situation…if she deems the investment NOT worthy…she steps away. Simple. Dinar Guru members like you are some of the most savvy dinar investors in the world. You are part of a truly GLOBAL community of high achievers in life. At any given moment throughout the day, community members from over 200 cities and 45 countries are reading the site along with you!

14


Seriously…45 countries from around the world at any given time are on the site…Australia, Malaysia, England, United States, Iraq, Italy, Brazil, South Africa, China and the list goes on and on…. MILLIONS of visits to figure out this whole dinar puzzle! And this is no ordinary group of people. It’s the crème de la crème. Dinar Guru members are a wise and accomplished bunch. We have an average of 47 to 57 years of life experience. J Are among the highest income earners in the WORLD…quite a few of our members stretch well above $125,000/year. Although I personally have not come close to reaching these heights, I’ve been around long enough and been among the Dinar Guru community long enough to recognize you don’t reach these levels in life by chance. You reach them by making smart wise decisions over the course of a lifetime. I’m totally humbled and at awe to say…You’re truly among GIANTS here at Dinar Guru. You found the right spot. Whether you’re like me and have not reached your goals just yet or whether you’re hurting from the economic down turn doesn’t matter... What matters is you’re doing what’s best by being part of a community that’s successful…(success is HIGHLY contagious you know! J) So stick around! Successful people hang around other successful people. We’re here to learn and figure this thing out! What we ultimately want to know is whether the Dinar is going to pay off…and if so is it going to pay off BIG!?! If you’ve enjoyed this report up to this point…and see the value in being a

15


member of the community…I want you to consider making a donation to Dinar Guru for a job well done right now. Click the link below…super simple! Dinar Guru can’t exist without people like you…donations like yours help ensure you’ll get reports like this on in the future and helps keep Dinar Guru Running… You can even decide the amount! Thank you. https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=9BAX5PCYDH9NN The way I view this report is as a living document…as more is uncovered and the more we learn I’ll add those pieces as well to the next one. Knowledge is POWER…no one likes to feel powerless. This report will give you the knowledge you need. We each have financial goals…There’s nothing more destructive than a plan based on misunderstood information…you’re almost doomed to fail. This report will help prevent you from planning wrongly… You’re part of the Dinar Guru community. No one wants to be the one on the outside looking in…unsure of what’s really going on…always reacting emotionally and uninformed about reality. This report will get you in the know…a contributing member of the community. (It probably has already gone a long way in doing this for you already) I’ve literally witnessed thousands of dinar investors go through 3 stages of development with the dinar. Its like clock work…you can set your watch to it… Generally a dinar investor starts out very dependent on the person who introduced them to the dinar. Most of their information comes from them. Soon they move online and discover a guru. They quickly become dependent on that single guru or a small group of gurus for all their information and “beliefs” about the dinar.

16


This is the stage where people form a US vs THEM mentality. I’m sure you’ve seen this…you hear one group is smart and the other groups are dumb…THIS group knows everything and THAT group knows nothing…etc. etc. As you can see this stage is VERY limiting. After about 1 to 6 months the savvy investors grow out of this stage and seek out additional information from different sources. They become more independent in their thinking and researching. Most find their way to www.DinarGuru.com to see what a variety of gurus are saying from different perspectives. They begin to re-form their own opinions about what’s going on with the Iraqi Dinar. Some reach the 3rd and highest level. This is a rare group. Many Dinar Guru members reach this stage. This is where one seeks to see the whole dinar picture HOLISTICALLY. This is when you begin to realize EVERYTHING being reported has meaning on some level. You begin to ask WHY more often and you seek out the answers. You take pieces from all camps… You begin to weave the pieces together to see a more complete landscape... This is the main purpose of this report. To bring together opposing views on a very important topic so you can piece together the picture that fits best for you. Here are your next steps. Step 1: Keep an open mind. Try not to use this report as a way to dig your heels deeper into the beliefs you already have. Consider other perspectives.

17


Step 2: Read the Lop side of the story and the evidence they provide…you may have to do a little investigating of your own here. (that’s what investing is all about—you’re responsible for your future) Step 3: Read the RV side of the debate and the evidence they provide as proof…do your own investigating here too. After you do this you will have a whole new perspective on the LOP vs RV debate. If you’ve enjoyed this report up to this point…I want you to consider making a donation to Dinar Guru for a job well done. After it’s all been said and done, I’ve really enjoyed putting this report together for you…I might put this report up for sale one day but right now I gave it to you and the community. Support from fantastic members like you is what keeps the Dinar Guru site going strong. If you feel its brought value to you…and Dinar Guru brings value to you, please take a moment right now and go ahead and click the link below to make a donation. Its very easy and painless I promise! J Thank you very much. Click below to make a donation to DinarGuru.com for a JOB WELL DONE! https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=9BAX5PCYDH9NN To get things started…here is a letter from a Dinar Guru member. It represents the many emails I receive about the lop. You can probably relate… =================================== Good Morning Blanche, Have you finished the article that will explain how the 'LOP' will affect our investment. Everyone is saying this is great news and I don't see how this is good at all. I know what 'nominal' values are but if it is as simple as multiplying how many Dinar I have times

18


.xxx (old value) [EDIT: the actual rate is .00086] or times 1.00 (new value), this is easy. However, it can't be right. You can't tell the general public in Iraq, that what they have in their pocket is worth 1,000 time more. This would mean everyone in Iraq (including civilians) just became 'gerzillionaires' and there would be chaos in the streets. There has to be something missing from the formula. Waiting patiently for your response. -Lxxxxx ------------------ My Response (slightly altered from original to make clearer): Hi Lxxxxxxx ...your question is a great one...may I include it in the Report? No one knows for sure about how this is going to happen...but there are pieces and clues and conclusions about it. Obviously there are two sides to every coin and this is an ongoing debate. The latest info coming out of the CBI is that they will draw in the large notes off the streets of Iraq...slowly over a few month process...some think they are doing that now with dollars. So a 25,000 IQD note now gets an Iraqi $21.5 USD...when it is exchanged at the bank they (the CBI) just pulled the 25,000 note off the street and replaced it with $21.50 USD... So if they then raise the rate to $1 [EXAMPLE ONLY} then the Iraqi can exchange their $21.50 USD for 21.50 IQD... Outside of Iraq...we are doing the opposite exchange process...We are exchanging $21.50 USD (approximately) for 25000 IQD…ideally we then exchange IQD back to USD or any other currency when the rate changes. There is an inside Iraq...and an outside Iraq. The IQD currency we hold does not interfere with what's going on inside Iraq...There are gatekeepers preventing large amount of currency entering ANY country so the economy is not set off balance.

19


Of course the LOP thinkers think this is total non sense. They feel the currency will be altered and NOT the rate. They feel a 25,000 note will become a 25 note. Meaning your 25,000 individual dinars (represented on a single note of 25,000) is reduced to 25 individual dinars. The byproduct of reducing the amount of currency is an increase in the rate but the total value of your dinars will NOT increase in relation to USD or any other currency. Pre Lop 25,000 IQD = $21.50 USD Post Lop 25 IQD = $21.50 USD The report will be coming out shortly...so you'll have more insight there. talk soon Blanche ======================== Very simply that is what the two scenarios look like….LOP vs RV. I’m no guru so well leave the technical stuff up to them… The rest of this report gives you the reasons behind the two sides. It is YOUR job to do your own due diligence. But here’s the kicker…the dynamics keep changing in Iraq…it’s possible (and probably probable) new possibilities may open up as the economy in Iraq changes and grows or stagnates and drops. That is the risk of investing in currency from a country right after a series of major wars. Remember there are adult Iraqis in they’re 30’s who do not know a time of prosperity. A child born in 1980 lived through the Iraq Iran wars…War with the US in

20


the 90’s and again war with the US in the 2000’s …thirty years of pain, suffering and destruction. There is a lot of mistrust within the country and toward the US. Try to keep this in mind. Since this is not a report on the history of Iraq it is about the Lop vs RV debate let’s get started. Without further ado… We begin the debate from a Dinar Guru member…he is an interesting gentleman. He got into the Iraqi Dinar investment very excited but then became disenfranchised when he felt the LOP scenario was the more accurate scenario. This was correspondence through email…so it was casual (As are most of the posts in this report). Do not put too much weight on spelling and grammar here…This is not a grade school essay. The content is what’s important. Do your best to focus on this. Here is his proof the LOP theory is the correct theory…. Part I.

LOP Theory of the Iraqi Dinar LOP Theory #1: Dinar Guru Member Yes, the largest RV in history was done by China at just over 30%. Let me see if I can dig up the info again. You are correct, the CBI has stated repeatedly that they intend to bring the dinar 1:1. It's the way they intend to do it that's up for debate. They have just 2 options; Re denominate, or RV. Currently, Iraq has an M2 money supply of 70 trillion dinar (anyone can find that right from the CBI's website, and that's usually not disputed in the dinar community anyway. Well, unless you count the people who say the CBI is lying, but give me a break). If Iraq RV's their currency 1:1 then that means they will have 70 trillion

21


dollars worth of dinar overnight. That is more money than exists in the entire world. Not only has it never been done, it's economically impossible. Something holds value because of it's rarity. That's why the dinar is so cheap, there is so much of it. An RV of that magnitude may change the value of the dinar momentarily, but it would cause massive hyperinflation thus leaving Iraq in the same position it's in right now. And we haven't even discussed the worldwide implications yet. Same thing is happening in the U.S. The Fed prints more dollars, the purchasing power of the dollar decreases (becomes less valuable because of increase in supply), and prices of goods and services goes up. Perfect example: A coke 60 years ago cost a nickel, now it cost a dollar. Why? Because we have more dollars in existence now then we did 60 years ago. How much were you paying for groceries 10 years ago vs. today? So, in order for Iraq to RV their currency they need to drastically decrease the money supply. I'm sure you remember a few months ago Kaperoni posted the exact same thing and the dinar world went up in flames because everyone thought Kap had lost it. Well, he was exactly right. Also, according to the CBI, the money supply in Iraq continues to increase not decrease thus making a 1:1 RV impossible. Second option, Re-denominate. Now, regardless of what the expert gurus tell you, the deleting of the 3 zeros, the removing of the 3 zeros, or however else they want to say it, all refer to a re-denomination. A re-denomination is simply the process of changing the face value of banknotes or coins used in circulating currency. This has been done numerous times throughout history and is not at all uncommon. In a nutshell, the 25,000 dinar worth $22 and change, now becomes a 25 dinar note worth $22 and change. It's a value neutral event. Anyone holding dinars neither makes money nor loses money. Countries RD their currency to reduce the money supply and ease cash transactions (I'm sure you've seen the news articles posted by the gurus about easing the cash transactions). Most importantly, the dinar will now be on par with the dollar which is what Iraq wants. However, as investors we DO NOT want this to happen. In order for Iraq to RD their currency they will need to print a new currency which I'm sure you're aware of. That means we will have to exchange the dinar we hold now for the new dinar. Are we guaranteed that we will be

22


able to do that? I don't know of one single bank that is trading dinar right now, and forgive me if I don't place unwavering trust in the dealers who smoked me on my original dinar purchase (for which I accept full blame). Many people think Iraq will simply close its borders not allowing any currency in while they do an in country exchange only. And why wouldn't they do that? They just made a ton of money by not paying all of us investors back. I wouldn't put it past them anyway. A side note: It's funny how years ago talking of an RD or deleting the zeros was taboo in the dinar world. It was looked at as being negative because everyone knew it was bad, and if it happened the investors would be left holding the bag. Now the gurus speak of it as if it's something that must happen. Weird huh? So how are we going to make money? First, Iraq does not need to RD, or remove the zeros, or delete the zeros, or however you want to say it. If they do then we need a guarantee that we will be able to exchange our dinars. I'm not holding my breath. Second, the dinar will have to gradually rise in value over the course of years. We're talking 10 to 20 years. If they do that then we stand to make a pretty decent ROI. Anyway, I could go on and on. All of this is based on a very simple understanding of economics and how currencies work. This is information that anyone can find with simple searches on the internet. You just have to be able to accept the reality of this investment and not some hyped up dream being pitched to you by an anonymous guru (who in some cases is a known liar). My idea is to educate. More than that, my idea is to tell the truth. You are probably right though. Although my statement is 100% accurate, people's emotions are involved, and people who are emotionally involved tend not to listen to logic or reason. However, I still don't think that should be a reason to not post my info. My statements can be backed up with facts, while not one guru on your site can say that. LOP Theory #2: Community Member Sam Here is another LOP Theory post. It was sent to me by a community member…I think the original comes from a gentleman named Sam….

23


Deleting the Zeros From time to time we read news articles coming out of Iraq mentioning their plans to "delete the zeros" from their currency. Sometimes it's stated as "remove the zeros", "lift the zeros", "drop the zeros", or "cut the zeros" but they all mean the same thing. They're talking about a redenomination similar to what has occurred with dozens of other countries over the past century whose currencies have depreciated in value after a period of hyperinflation. Here a few examples: 1. Nigeria - "removing zeros" "dropping two zeros"

http://www.cenbank.org/redenomination/newpolicy.asp 2. Turkey - "lop six zeros" "drops six zeros"

www.spokesman.com/stories/2004/dec/31/turkey-will-lop-six-zeros-from-its-currency-at/

3. Venezuela - "lopping off three zeros" http://en.mercopress.com/2008/01/02/venezuela-launches-new-currency-to-stem-inflation

4. Afghanistan - "drop some zeros" http://edition.cnn.com/2002/WORLD/asiapcf/central/10/06/afghan.currency/

5. Iran - "take three zeros" "slice three zeros" "remove three zeros" http://www.reuters.com/article/2011/04/02/businesspro-us-iran-currency-redenomiati-idUSTRE73112P20110402

6. Zimbabwe - "lop 10 zeros" "removing 10 zeros" http://mg.co.za/article/2008-07-30-zim-to-lop-10-zeros-off-currency

7. Romania - "slash four zeros" http://www.scoop.co.nz/stories/WL0506/S00311.htm

8. Russia - "lose three zeroes" http://articles.cnn.com/1997-08-04/world/9708_04_ruble.reform_1_ruble-president-boris-yeltsin-inflation?_s=PM:WORLD

All of these redenominations worked essentially the same way. The old currency was replaced by a new currency that was more valuable by multiples of ten, along with a proportionate reduction of the money supply which typically resulted in no net change. A transition period was announced and people were allowed to use the old currency or exchange it for the new before the old was "demonetized" or declared worthless. In the case of the Iraqi dinar, also a victim of depreciation resulting from a prolonged period of hyperinflation, armchair economists have

24


decided to educate the dinar community that "deleting three zeros" actually means pulling the larger notes with three zeros out of circulation in preparation for a substantial RV. This interpretation is completely baseless. It is unprecedented, it's not supported by the testimony of people in Iraq reporting the scarcity of larger notes in circulation, and it certainly isn't supported by the figures from the CBI which show a growing money supply rather than a shrinking supply as one would expect if this were the case. Recently Ali Agha of Dinar Trade (a man who claims that his family has been in the currency business for generations) has conducted interviews where he discussed the subject of "deleting the zeros". His interpretation is consistent with the articles I cited earlier. He says that it means a lop, although he's of the belief that there's not enough support in parliament to push the plan through, leaving wide open the possibility of the IQD growing in value over a period of time which would be the best scenario for investors. To reduce the money supply by removing larger notes from circulation in preparation for an RV with no corresponding rate adjustment would result in economic ruin as the people and businesses would be undercapitalized. This scarcity of money would likely result in deflation, which is considered worse than inflation because it causes people to stop spending money. This leads to a slowing economy and a downward economic spiral toward depression. Since we've seen no significant rate adjustments over the past couple of years, and since the GDP is still growing in Iraq, and since the CBI financial reports show a growing money supply I have to conclude that the "removing the larger notes" interpretation is shall we say ... caca del toro. One popular dinar pundit from Texas is fond of saying that removing the zeros means removing the larger notes because they've already removed 70% of the zeros and "you can't remove 70% of an exchange rate". This is no doubt based on yet another misreading of an article from 2010 stating that Iraq had reduced excess liquidity by 70%, an interpretation which has repeatedly been debunked both here and in several forums. All you need to do is look up the

25


definition of "excess liquidity" in a financial dictionary. "cash held by a bank above what is required by the regulatory authorities" - qfinance.com http://www.qfinance.com/dictionary/excess-liquidity As you can see nothing in this definition refers to the amount of cash in circulation. It's the excessive amount of cash held by a bank. The word "delete" means "to eliminate especially by blotting out, cutting out, or erasing". http://www.merriam-webster.com/dictionary/delete It doesn't mean "to remove by gathering or withdrawing from circulation". It's referring to the zeros in the exchange rate, not to the larger notes with three zeros. So if I wanted to I could make a similar declaration that "you can't delete paper money". Now consider this excerpt from Wikipedia's discussion of "redenomination" http://en.wikipedia.org/wiki/Redenomination. In times of inflation, the same number of monetary units have continually decreasing purchasing power. In other words, prices of products and services must be expressed in higher numbers. If these numbers become excessively large, they can impede daily transactions because of the risk and inconvenience of carrying stacks of bills, or the strain on systems, e.g. automatic teller machines (ATMs), or because human psychology does not handle large numbers well. The authorities may alleviate this problem by redenomination: a new unit replaces the old unit with a fixed number of old units being converted to 1 new unit. If inflation is the reason for redenomination, this ratio is much larger than 1, usually a positive integral power of 10 like 100, 1000 or 1 million, and the procedure can be referred to as "cutting zeroes". The definition of "deleting the zeros" is one of the main reasons I concluded that nobody will get rich off of the IQD. It was clear from my research that the term was being misrepresented by dinar gurus and that the CBI was talking about a textbook redenomination which would in all likelihood leave investors with a loss.

26


When Shabibi was in DC last year he was asked about revaluing the dinar and his response was essentially that it depends on inflation because that's how they've been keeping inflation under control. They've been periodically adjusting the exchange rate. Later in that same meeting he was asked about deleting three zeros from their currency. Here he made a clear distinction from a revaluation in that he said deleting the zeros was simply a way to facilitate payments and they had already decided to do this. You can hear his remarks in the video below. (At the beginning of the video he is responding to the question about whether or not they would revalue the dinar.) [video not included here-I could not find the link] Maybe Iraq won't delete the zeros. Maybe parliament will vote down the measure and force the CBI to adopt a policy of slow growth toward a penny as Ali has suggested. If so dinar investors could realize some significant profits even if they don't get rich from a 1000:1 RV. But whatever happens investors need to be clear on what "deleting the zeros" means. It means lop. LOP Theory #3: Guru Proteus This next post is from a Guru Proteus…. The intention of Iraqi currency is not for export purposes, it was designed for internal usage, and it is not an international instrument: like a promissory Notes, Bills of Exchange, or any other type of commercial document under the applicable commercial law. Unlike our USD's that say this note is legal tender for ALL DEBTS public and private, the Dinar does not say this on it!. This is what I said on the Conference Call. The CBI shall determine through REGULATION the denominations, weights, content, and Designs of the Currency we have heard this from the CBI, SHABIBI and SALEH, so why would I doubt what they say if they are following the CBI laws to the exactness of the law.

27


We have heard from the CBI, that they will adsorb the 150 million that it will cost for the printing of the new currency, again I must believe them as it is in the CBI LAW. The CBI will exchange notes upon request for EQUIVALENT AMOUNTS, not Identical denominations, but for EQUIVALENT VALUE, which is what we have heard from the CBI, SHABIBI, and SALEH,that we will not lose value in the exchange of our notes. Again the statement of the CBI reflect exactly what the CBI LAW states. The CBI has stated that they will exchange our notes for the NEW Notes (Monetary Change), they have stated the locations(at the banks, not vendors), and that the time frame would be beginning in 2013 for a period of a year or so (again from CBI's statements exactly like the CBI LAW is written), So, why would I believe anything other than what the law states in black and white? In new articles of recent origin, the CBI has released detail about the denominations, the designs, the values(a 25k note will be equivalent in value to a 25 dinar note, and so on through the removal of the ZEROS PROJECT) and the reasoning behind the new denominations that will be released in the beginning of next year. So, being in the OFFICIAL PUBLICATION that was released I must believe this. Also, they are so consistent with the CBI LAW that is in writing, this is not conjecture, not fable, it is very consistent with the published CBI LAW. In any situation that the courts of Iraq, the legislature if deemed INEQUITABLE, will select a method of conversion that is EQUITABLE. So, if in your interpretation of the CBI LAWS feel that our receiving 1000 times the value of the Iraqi Dinar that we invested in is correct, then I hope that you are correct, but if you feel that 1000 times profit on a simple note of currency of a little over stated, then I could feel that the expectations of us making 1000 times our investment is INEQUITABLE and the Iraqi Courts could easily select a more EQUITABLE method of exchange. SHABIBI has said over and over again, that the primary purpose of the Monetary change in not to add value to the dinar(that could be a side effect of the process, but the process was designed to make transactions in Iraq easier to complete, by making notes easier to calculate), and also for the purpose of maintaining the currency notes, as it costs Iraq 8% of their GDP to maintain their currency supply (where other countries only expend 4% of their GDP on preservation of the Monetary supply, so Iraq could instantly gain 4% GDP simply by a redenomination of the notes). ALSO, notes wear out, it requires counting machines, their are mistakes made by tellers, merchants, and it is very cumbersome to deal with the daily things that

28


citizens have to do, and it requires huge amounts of notes to perform the daily needs of the citizens and this is why the project of removing the ZEROS (000's) was designed. I firmly believe that when the economy grows the value of the Iraqi Currency will grow also but not from the exchange project. These are separate issues. I am as invested as everyone else. I have not sold out, I am here for the long-run, but I am not afraid to look at both sides of the situation and I surely am not afraid to consider what the VERBATIM FACTS of the CBI LAW States. =============================================== =============================================== PART II Obviously, most of the gurus support the RV Theory…so we have more comments on the RV Theory side of the debate. Don’t take quantity of posts to means more proof. I wanted to include as many perspectives as possible.

Support for the RV Theory RV Theory #1: Guru Doc responds Money supply needs to be reduced to support a significant RV. We will not argue the absolute value of the current money supply since it does not matter. Lets just say it is 10s of trillions and has to be reduced to support a RV. Without a reduction even a RV of $1 is economic suicide. The value of the dinar would be greater than all the currencies currently in the world. This is also why when anyone who proposes ridiculous rates like $3+ obviously have no clue of basic economic principles.

29


A simple re domination (LOP) to reduce money supply it is an economically neutral event. For example lets assume a coke currently costs 1000 dinar. After the LOP (three zeros) 1000 dinar will now be worth 1 dinar. However, the same is true for the coke. It would now cost 1 dinar. Also everything else would be adjusted by 1000x like salaries and bank accounts. The problem with this is does absolutely nothing to improve the buying power of the Iraq citizens. Yes this strategy has been used by other countries to combat inflation but it by itself will not improve their standard of living. The other problem with a pure and only LOP is Shabibi has stated on numerous occasions that the goal of currency reform is to increase the value of the dinar thus improving the standard of living for all Iraqis. It is also in direct contradiction with the SIGR which clearly stated the value would be raised to slightly less than $1 and the old notes would coexist with the new currency for up to 2 years. The real question then is what is going on with the "deleting the zeros" and new currency. The better question is how does all this fit into the bigger picture of reducing the money supply and increase purchasing power for the citizens. The answer may be simpler than we think. How does any government tighten money supply? One way is to simply withdraw currency from circulation. Consider the daily auctions where the CBI is buying up to 200 billion dinar daily with USD. All the CBI has to do is to retire the 3 zero bills they take in. Doing this the CBI can reduce money supply without an official LOP. We know right now there is very little dinar being used inside Iraq. Report after report talk about the USD as the currency of choice. Assuming the CBI is pursuing this strategy the money supply can be reduced from 10s of trillions to 10s of billions reasonably quietly. Several ask what about the many trillions of dinar that people outside of Iraq hold. First, our opinion is this number is incorrect. Reality is most likely there are less than 750,000 people holding less than 750,000 dinar on average each. This equates to around 560 billion dinar. We also contend very little of this dinar will make its way the the CBI for redemption. Most of this will remain with the CB in the country where it was exchanged by the private holder. We contend this is also true with the dinar held by other governments around the world. Our opinion is the very large holders like the USA and possibly China have already made deals with Iraq to trade a portion of their holdings for real commodities like oil. We also maintain part of these holdings will go into the foreign

30


currency reserves of these other countries. When we understand this we see how insignificant we are as individual dinar holders. It is also why it is such a joke to assume any internet blog site can influence the timing of the RV. We report, you decide Doc ============================= RV Theory #2: Guru Enorrste responds Please post the article written by the "lopster" below as well as my following comments. I suggest you also copy this to the person who runs www.DinarGuru.com so that they can become educated as well. The article below is based entirely on a false premise. Once it is shown that the premise is false then the remainder of the content of the article fails as well. The premise of the article is that the money supply, M2, which is now said to be 70 trillion dinars, will remain at that same level. I will not dispute the M2 number but will state clearly that the CBI is on record that the currency now in circulation (i.e., physical currency) is about 30 trillion dinars. This is a direct statement from the CBI. They have made this statement to indicate that it is way too high. Furthermore, in the same articles that have this statement there is another statement which is that the goal is to REDUCE the money supply in Iraq to about 25 billion dinars. It blows my mind that the writer of this article fails to take into account the very statements of the CBI that deal with this specific issue. Furthermore, the CBI is on record on this matter and has been since 2007! When I wrote my book I included an article from 2007 in which Al Zubaidi, the head of the Ministry of Finance at that time, had recommended to Shabibi, head of the CBI, that the money supply be reduced from the then 25 trillion dinars to about 25 billion dinars "as it was before the Saddam Hussein regime." In that same article he recommended that the dinar RETURN to the value of $3.33 per dinar that it held prior to the Saddam Hussein regime. Again, as noted in my book, Shabibi accepted that recommendation and a 5 year plan was created to implement it. Because of the election the timing has been delayed somewhat, but the

31


plan is still being implemented. More recent articles explain clearly that the goal is now to bring the dinar initially to "about $1", after which it will rise gradually to the level of equilibrium, which will be over $3.00. Furthermore, the process will include REDUCING the current money supply to 25 billion dinars to affect this change. This is in CBI articles, not "guru-speak." All of this can be found on www.DinarAlerts.webs.com. The question then becomes as follows: how will they reduce the money supply? The answer is the "remove the three zeros" project! During the last year the large denominated notes have been gradually withdrawn from the market and are being stored at the CBI for eventual destruction. The reason for the "dollarization" that is evident in the country is because there are fewer and fewer dinars available to the general public. Even banks can no longer obtain new larger denominated notes in Iraq (there is an article stating this point, incidentally). At the time of the $1 RV most of the large notes will have been pulled in. Shabibi is on record that as of last year already over 50% of them were removed, and at the beginning of this year it was over 75% removed. The CBI has stated that now "all preparations" for the implementation of the issuance of the small denoms is now complete. They are ready to raise the value of the IQD to about $1. At the time that they do this they will issue the EXISTING small denominated IQD that was printed in 2003 and has been held in vaults since that time at the CBI. AT THE SAME TIME they will begin destroying the large denominated notes. Between the RV date and the end of this year most of the remaining large notes will be deposited in banks, since they will be worth $5,000 to $25,000 each (!) and they will also be sent to the CBI to be destroyed. In January 2013 the NEW CURRENCY will be issued with 3 languages. The EXISTING CURRENCY (now almost all small notes entirely) and the NEW CURRENCY will COEXIST until the middle of 2014, after which all of the EXISTING CURRENCY will be withdrawn as it wears out, leaving only the NEW CURRENCY in Iraq. The plan is to print only 25 Billion NEW dinars! The PROCESS of "removing the three zeros" will reduce the money supply to 25 billion dinars. This is NOT guru magic. It is a clear statement of the intent of the CBI. Now, with $63 billion in reserves currently, and with a projected money

32


supply post RV of 25 billion dinars at about $1 each, then the total money supply will equal about $25 billion. This means that Iraq will have almost 250% coverage of their money! This will make the dinar the strongest currency in the world, by far. Finally, it must be asked what will happen to the 5 to 7 trillion dinars that are outside of Iraq. The CBI has clearly stated that this money will become a "world reserve currency" for "a long time", quoting Saleh himself (all of these articles are on the web site and have been discussed thoroughly by Kap, Russell, and myself on numerous conference calls). Therefore, they will NOT be included in the "effective" money supply in Iraq, any more than the Dollar is counted as it sits in reserves all around the world. The writer of the article I am discussing is obviously well intentioned, but also ill informed. Had he done his due diligence and read all of the abundantly available information directly from the CBI he would have been educated on the "remove the three zeros" project enough to know that it is NOT A LOP and that it is clearly an RV at "about $1" just as the CBI has been saying for over a year now. The EXISTING CURRENCY will remain legal tender, per the CBI, throughout this process. This means that we will be able to cash in at the $1 rate at least through the middle of 2014. Again, this is directly from the CBI. While I appreciate that the "lopster" writer wants to educate, I believe that it is incumbent for him to educate himself before he tries to educate others. By spreading the drivel that he has, he not only shows himself to be ignorant of the facts but also does no service whatsoever to those who read his drivel. This comment is not a "put down" on the writer personally. It is only a total TRASHING of the content of his writing. I do not attack persons; I attack fallacious content. Ignorance is not a pejorative term: it simply means that he is not well informed. Enorrste ======================= RV Theory #3: Guru BGG: A LOP is typically used in currency scenarios where a country has an economy that is on the significant “downswing” – particularly in very high inflationary instances – when the currency is so worthless it makes sense

33


to “take zeros off” to help instill some confidence in the money again – which all it is anyway. A big con game. However, this is not the case with Iraq. It is currently operating (and I use that word loosely) under a UN imposed, artificially low, pre-programmed rate – as of now. This number is mainly enforced so they can’t become a threat to the rest of the world for a while. It appears – rightly so, with the way Maliki is acting at the helm. When Iraq prints articles about “raising the zero’s” it is a poor translation to imply they mean to take actual zero’s off the “nominal value” – they mean to remove the big bills from the market…much like we did with the 10,000 dollar notes here in the US. The current value of the currency in no way is a reflection of the true value of the Iraqi economy or wealth. RV Theory #4: Guru Enorrste The following comments are being made by me to clear up the obvious confusion that has arisen and will arise over the article entitles “Conscious / deletion of zeros from the currency…Decision is preceded by the fear of citizens and economist warned / achievement.” This article was originally posted on our forum on April 13 but was overlooked by all since there were no highlights in the article. It came from the Investigative Journalism section of an Arabic online newspaper by the name of Al-Iraq News. The article consists of analysis made by the unnamed reporter dealing with three interviews he held. The interviewees were Hashimi Afaihan, the Chairman of the Chamber of Commerce (presumably in Baghdad), Dr, Jawad Al-Bakri, professor at the College of Economics and Business University of Babylon, and Dr. Abdul Hussein Al-Anbuge, Prime Minister for Economic Affairs in the Iraqi government. In addition, at the end of the article, there is a reference to a statement made by Mohammed Saleh, deputy of the Central Bank of Iraq. It is important that understand the backgrounds of these players in order to gain knowledge of the meaning and motivation behind their comments. With this knowledge we will be able to place their comments in the proper perspective. This will allow us to separate the “wheat from the chaff.”

34


Hashemi Afaihan is an ardent enemy of the Central Bank of Iraq. He and Mohammed Saleh have had occasion to battle in the press recently. Here is a quote from an article in which Saleh was defending the role of the Central Bank of Iraq regarding the fall in the value of the dinar against the dollar recently: “The head of the Chamber of Commerce of Babylon Engineer Sadiq Hashem Afaihan Mamouri lack of sufficient experience with economic advisers in The Iraqi government has led to instability in the monetary policy in Iraq. He explained in a statement (citizen): If left the country under a policy of political consensus, all the facilities of the State is going to lag and inertia to Atianha with people incompetent and do not have sufficient experience which qualifies them in the administration, and that the Iraqi state After changing the system were not based on economic efficiencies of large and efficient management of the economic file the correct form of Iraq and began to be subject to Mhassat abhorrent that the pain is not brought to the Iraqis and their suffering increase Bartqa people to positions they are not worthy of their management under the principle of the wrong person ..The Iraqi economists have no role in solving the economic problems did not give them none of this role as well as economic advisers in the Iraqi government do not have experience in the management of the Iraqi economy, despite the passage of more than eight years on the Iraqi experience of modern, but the politicians did not benefit from their experiences and has continued to insist on the principle of consensus is fruitful in the wheel of economic development.” (http://iraqidinarchat.net/?p=2199) It is clear from this direct quote from Hashimi Afaihan that he believes himself to be superior to everyone else in the Iraqi government when it comes to economics. In short, he is “full of himself.” Therefore, anything that he writes on the issue of removing the three zeros must be taken with a grain of salt, since he clearly believes that he knows it all and that everyone else, including the Central Bank of Iraq, is incompetent. Dr. Al-Bakri, on the other hand, has given seminars on behalf of the Central Bank of Iraq around the country. Kaperoni posted an article in which Dr. Bakri stated that if you paid 1000 dinars for a pack of cigarettes before the revaluation and removal of the three zero notes, then that same 1000 dinars would buy you 1000 packs of cigarettes after the revaluation and removal of the three zeros. More importantly, it is Dr. Bakri who uses the “pros and cons” argument when discussing the revaluation of the dinar. In the article I am discussing

35


now he makes the point that the removal of the three zeros will stop the dollarization of the economy of Iraq. We have discussed on several calls that this will only work if the dinar becomes worth at least a dollar. While it is possible that a LOP would make the dinar worth a dollar, the same Dr. Bakri is on record with another “pro” argument that the revaluation will involve a substantial INCREASE in the value of the dinar. Also, his cigarette analogy specifically states that the same 1000 dinar note would buy 1000 packs of cigarettes after the RV. If there were a LOP, the 1000 dinar note would equal 1 dinar only, and would therefore only buy 1 pack of cigarettes. Therefore we have Dr. Bakri implicitly stating in this article that this is NOT a LOP. I suspect that he was not present when Hashemi Afaihan had his interview with the author of the article and therefore had no idea that Afaihan would be making such a stupid mistake. Had he known about what was going to be put in the article ahead of his own comments, he would have corrected Afaihan. The next person quoted is Abdul Hussein Al-Anbuge. In January of this year he came out against the Central Bank’s proposal to move forward with the “remove the three zeros project” and said the following: “Criticized the Adviser to the Prime Minister for Economic Affairs Abdul Hussein Al-Anbuge, Saturday, the Iraqi Central Bank's policy to lift the Iraqi dinar against the U.S. dollar, while noting that the bank had not coordinated with the economic system in addressing the situation, saying that such policy violates the productive base in Iraq. Said Abdul Hussein Al-Anbuge in an interview for "Alsumaria News", "the central bank to raise the Iraqi dinar against the U.S. dollar at the present time is true that the rise is real," noting that "the image of the Iraqi economy is reflected in the exchange rate of the dinar." He Anbuge "Raising the price of the Iraqi dinar in this way now will contribute to enhancing the phenomenon of economic rent because it will make imports cheaper and thus lead to a deepening of this phenomenon," adding that "this phenomenon will feel the citizen that he should remain imports which are not the productive base in the Iraqi economy which seeks to get to the economic development in all other sectors." (http://www.burathanews.com/news_article_147376.html) Dr. Al-Anbuge has been negative on the CBI proposal for quite some time. He is a member of the Council of Ministers under Maliki and was largely responsible for Resolution 107 that was passed in April in which the Council of Ministers passed a resolution that would “indefinitely” delay the

36


“remove the three zeros project.” As we all know, this fell on deaf ears in both the CBI and in Parliament. The Council was forced to admit that it had overstepped its authority and then “begged” the Parliament to delay the project, just as they did with the tariff law, which Parliament refused to delay. More importantly, however, is the fact that in the January 28 statement made by Al-Anbuge above it is clear that he understands that the revaluation will indeed lead to a “raising the price of the dinar,” as quoted above. In addition he calls the change in value “real” because it would “make imports cheaper.” Only a revaluation will have this affect. A LOP will not do that. Therefore, we are left with a Chairman of the Chamber of Commerce who is a bloviator and who is clearly an egomaniac who is ill-informed, a Professor of Economics who has staunchly defended the revaluation and laid it out clearly that it is NOT a LOP, and a disgruntled Minister of Economics from within the Maliki government who knows the truth but is still trying to delay it! This in itself would be enough to squelch the “apparent” import of this article. However, there is one more tidbit that needs to be addressed, and that is the statement made by Saleh in this article. Here is the quote referring to him: "That the draft lifting the three zeroes from the currency made by the government five years ago to the bank Central, and has undergone during this period to an extensive study over the need to raise zeros to strengthen the value of the currency of Iraq." ( http://dinaralert.webs.com/apps/forums/topics/show/7786283-conscious-deletion-of-zeros-from-the-currency-decision-is-preceded-by-the-fear-of-citizens-and-economists-warned-achievement-) There are two important parts to Saleh’s statement. The first I will quote shortly. The second is his clear statement that removing the zeros will “strengthen the value of the currency of Iraq.” Of course the “lopster” will say that the LOP will raise the value of the dinar, since the dinar will rise to about $1 with the LOP. However, that would not “strengthen the value” of the dinar, would it? It would be “revenue neutral.” So how else can we understand this statement from Saleh? Fortunately the article tells us the answer, and this is the second point to note in his statement. It refers to a draft that was written 5 years ago made by agreement between the government (Ministry of Finance) and the Central Bank. Fortunately, I have retained the actual statement that came from that

37


agreement when it was announced in the press. Here is the quote from June 30, 2006, now almost 6 years ago: “A statement by B.J. AL Zubaidi, the Minister of Finance, in which he said that he had suggested to the Chairman of the Central Bank, Dr. Sinan AL Shibibi, that three zeros be taken from the Iraqi Dinar in order to raise its value so that one Dinar be equal to a Dollar. He explained that the financial authorities were set on holding a meeting next month to discuss the matter. The meeting is to be attended by experts and specialists from the Ministry of Finance, the Iraqi Central Bank and the Commercial Bank.” (http://edinarfinancial.net/news/?nn=320). Here is another, dated February 6, 2010 and quoted in Radio Free Iraq, in which Saleh confirms that the plan is in place: “Saleh said by the end of 2010 the new banknotes will be fully introduced while the old banknotes will be gradually removed from circulation. He did not specify when the new notes would be issued. ”Both will be legal tender in Iraq until the old notes are completely withdrawn. ”Iraqi officials have had a long-running plan to redenominate the Iraqi dinar. In 2006, the Finance Ministry recommended to the Central Bank that it carry out such a plan.” Obviously due to the election and other problems with the formation of the GOI, this plan has been delayed beyond 2010. But the point is that the plan exists and includes a “raise” in the “value” of the dinar. And finally here is one more quote from June of 2006: “The Ministry of Finance together with the Central Bank are studying a proposal to raise the value of the Iraqi dinar in order to return it to previous levels where one Iraqi dinar was valued at 3.33 US dollars.” Further elaboration on the plan that was being worked on was also given in the same article: “A statement by B.J. AL Zubaidi, the Minister of Finance, in which he said that he had suggested to the Chairman of the Central Bank, Dr. Sinan Al Shabibi, that three zeros be taken from the Iraqi Dinar in order to raise its value so that one Dinar be equal to a Dollar.” (http://www.iraqdirectory.com/DisplayNews.aspx?id=1593)

38


All three of these articles refer to the draft that was written in early 2007, five years ago. However the last article is the most important, because it clearly states that the plan is to RAISE THE VALUE OF THE DINAR back to the “previous level” of $3.33 per dinar, with an interim level of $1. This is entirely consistent with the multitude of recent articles we have seen coming from the CBI recently that indicate that the value will initially be “about $1” and then “gradually” rise from there. Now, it is impossible to talk about a “raise” in the “value” of the dinar and talk about a LOP in the same sentence. A LOP is revenue neutral, whereas a revaluation involves a “raise” in the “value” of the currency. Therefore, the article that Kaperoni posted does NOT accurately portray the plans of the Central Bank of Iraq. Instead, it consists of the rant of an uninformed egomaniac included in an otherwise innocuous article in which ALL of the other participants know that the “value” of the dinar will “raise” with the removal of the three zeros project. Enorrste Kaperoni Here is a quote from the CBI at a symposium... "the point of view the central bank is that the deletion of zeros does not affect the value of the Iraqi currency" That clearly means no LOP direct from the CBI. Enorrste Kaperoni is correct here. The removal of the large notes (remove the three zeros) does NOT affect the value of the currency. The RV (revaluation) which makes the small denoms have value ("about $1" per CBI statements) DOES INDEED raise the value of the currency. However, after the RV, those who have some of the large notes will benefit, because THOSE NOTES will also RAISE THEIR VALUE, only at the NEW value of $1 per dinar. The confusion for those who view this event as a LOP is that they have consistently misunderstood the meaning of "remove the three zeros". They think that the zeros are just LOPPED off, when in fact the CBI is quite clear that the "three zeros notes" will remain legal tender at least until mid 2014, AND that they will retain their value as legal tender,

39


just as Saleh said in the statement I quoted at the beginning of this thread. However, in addition it is also clear that the CBI will RAISE THE VALUE to about $1 rather than LOP to $1. This is the reason why we will benefit from the RV. There will be a revaluation AND THEN a redenomination as the new currency replaces the existing dinars, including the small denominated notes. This is also why the statement by Saleh that the dinar would become a world reserve currency "for a long time" has meaning. If there were a LOP, this statement would be meaningless. On the other hand, if there were a true revaluation to $1 then the countries around the world that have dinars (large denominated notes) would indeed benefit by placing them as reserve currency in their Federal Reserve deposits. Furthermore, in order to reduce the money supply from 30 trillion dinars to 30 billion dinars the large denominated notes must eventually disappear (in the sense that they won't be counted in the money supply of Iraq, just as the dollars in reserves outside of the US are not counted in our money supply). However, just as a $500 bill and $1000 bill are still legal tender in the US, the large denominated notes from Iraq will remain legal tender "for a long time". If Iraq were doing a LOP, then they would be forced to call in the large denominated notes from around the world, and destroy them. But instead they have stated just the OPPOSITE! They have NO PROBLEM with other countries holding large denominated notes in their reserves. They actually are counting on it! If a 25,000 dinar note is held in reserves in a foreign country, it MUST have value commensurate with the $1 rate of the dinars in Iraq after the RV. Otherwise that note would lead to worldwide confusion. The CBI is not in the "confusion" business. Enorrste ================================= RV Theory #5 Guru Kaperoni

40


…I spent years researching this investment and have written several chats over the years with 'factual proof' of a RV. You’re more than welcome to use that information to prove the point. Below are just a few of them in the last month lol. There are literally over 100 in the Kap section in the DinarAlert forums. Here is the one key fact that continues to re-occur throughout all these articles that LOPers won't accept...You will find it stated in almost all the articles in one form or another...The old dinar (3 zero dinar) does not change.... "Iraqi Central Bank provided in 2010 that it plans to change the denomination of the dinar, to enable the most basic money transactions. They planned to drop the three zeros of the nominal value, but to maintain the real value of the dinar unchanged."

"the point of view the central bank is that the deletion of zeros does not affect the value of the Iraqi currency"

"assured that this project does not affect the wealth of the people, nor their currencies"

"We must emphasize the extremely important issue is that if you remove three zeroes from the currency should not affect the actual value thereof to be trading in the old currency and gradually withdrawn"

“If three zeros were lifted from the IQD, this means the IQD becomes stronger 1000 times in terms of value.”

“For example, a pack of cigarettes that was selling for 1000 dinar would be only 1 dinar. If it was a conversion like that, if the three zeros were lifted from the previous currency, this means the old 1000 dinars will buy 1000 packs of cigarettes instead of 1.”

That means unequivocally that the old (3 zero notes) dinar's value will not change..meaning a 25,000 dinar note remains 25,000 dinar, 10,000 dinar will remain 10,000 dinar, etc. Therefore, this is a Revaluation when the rate changes if anyone is holding these older 3 zero notes. http://dinaralert.webs.com/apps/forums/topics/show/7560639-kaperoni-chat-on-dr-bakri-paper-4-7-2012-dinaralert-chat-room

41


http://dinaralert.webs.com/apps/forums/topics/show/7326862-project-to-delete-the-zeros-of-the-iraqi-currency-5-12-2011

http://dinaralert.webs.com/apps/forums/topics/show/6612064-assistant-professor-dr-fadel-punitive-a-special-article-economic-forum-uae-

http://dinaralert.webs.com/apps/forums/topics/show/7709236-kaperoni-looks-at-3-articles-collection-of-dinar-revalue-confirmation-5-20-2012

http://dinaralert.webs.com/apps/forums/topics/show/7670443-kaperoni-the-consent-chat-dinaralert- chat-room-5-9-2012-5pm-cst

http://dinaralert.webs.com/apps/forums/topics/show/7653774-kaperoni-chat-from-another-site-explaining-what-the-transition-in-dinar-and-the-value-5-4-2012

http://dinaralert.webs.com/apps/forums/topics/show/7620084-kap-looks-at-article-nwayaalpennek-central-raised-the-value-of-all-iraqi-dinars-to-equal-one-dollar-4-24-2012

http://dinaralert.webs.com/apps/forums/topics/show/7646831-kaperoni-looks-at-older-article-2010-the-concept-and-the-plan-for-the-rv-in-an-article-titled-may-grow-strong-financial-support-raise-the-value-of-iraqi-dinar-5-2-2012-

Kap RV Theory #6: Guru Enorrste explains further… You may recall that Abdul Hussein Anbuge was one of those interviewed in the now infamous LOP article that we took apart a few days ago.This article falls in line with that article but is now limited to the one person only. He offers 10 reasons why, in his opinion, the "remove the three zeros" project should be indefinitely tabled. Unfortunately none of his reasons deals accurately with the situation. His first "reason" is a simple matter of opinion: aren't there enough other things to worry about in Iraq that changing the currency? Of course since he doesn't understand the process, even though it has been adequately explained by the CBI, he goes on to provide other "reasons" why this is such a bad idea, all of which are based on a false premise. The simple fact is that the plan has been in place for over 5 years, and is a major element in the overall recovery plan for Iraq. So the answer to this question is an unqualified YES! This is important and does need to be addressed now, in spite of the fact that there are other issues in Iraq that also need to be addressed. His second reason is also based on a false premise. By failing to understand that the project involves an RV instead of a LOP, he doesn't

42


understand that the RV will CURE the inflationary pressures rather than exacerbate them. He also doesn't believe that the project will "contribute to the value of the dinar." Unfortunately, this statement runs directly in the face of the CBI's statements to the contrary. The CBI has stated clearly that the project will definitely contribute to the value of the dinar. Therefore, we see that Mr. Anbuge is just uninformed. His third "reason" has been mentioned by others: the cost of the new currency is too high and the money could be better used elsewhere. The CBI has stated that the cost of printing a new currency is about $150 million, or less than the amount of dollars sold at auction on a SINGLE DAY by the CBI. In other words, the cost is not high at all. Furthermore, the new currency will eliminate counterfeiting and fraud, both of which have a signicant ONGOING cost at the present time in Iraq. Therefore, the overall affect of printing the new currency may well lead to a SAVINGS rather than an expenditure! The fourth reason is almost laughable, namely that the Iraqi people will suffer psychologically when 3 zeros are LOPPED off their currency (as he sees it now). Once again he fails to see that the project involves and RV and not a LOP. Therefore, he doesn't understand that the people will benefit greatly from the RV. In short, there will be NO psychological impact on the people except a POSITIVE one as their wealth increases. The fifth reason has also been expressed before, namely that the project will lead to corruption and money laundering. I find this one to be the most humorous, because there is absolutely no evidence whatsoever that this would occur. It is an argument made out of thin air and has no evidence to support it. In fact we read yesterday that 35 banks have now entered fully into the electronic banking that the CBI and IMF have been working on for some time now. The issuance of a new currency will in fact REMOVE any opportunity for money laundering or corruption, rather than create it. The sixth reason is one that might have merit, were it not for the fact that the CBI has been managing this through seminars and symposiums to clarify the "process" so that the complexity of the project is minimized. Admittedly switching from one currency to another is complex, and even more so when performing an RV at the same time, but it is not as

43


if this has never been done before! The CBI has numerous other country examples to look to for guidance during this process. So why should it be any more difficult in Iraq than it was in other countries? After all, they survived the process, right? In short, this is a spurious argument that has fear as its basis, rather than logic. The seventh reason is once again based on a false premise (the LOP theory). He claims that people will "clam up" and stop spending due to "confusion". However, just the opposite will occur when the project involves and RV instead of a LOP. With more wealth spending will INCREASE, as will CONFIDENCE. There will be no confusion and certainly won't be any slowdown in the economy. Reason number 8 is really weak. He claims that there will be no real difference in "accounting". For instance, he says, if something cost 12550 dinars before the project it would cost 12.550 dinars after the project (or in other words, the same amount of "numbers" but just a movement of the decimal point). My response to this argument is simple: SO WHAT? This is no reason not to go ahead with the project, and carries no weight at all when there are many other POSITIVE reasons for the project to proceed, as stated numerous times by economists, Saleh, and others. Reason number 9 is about the same as number 8. It again assumes a LOP. However, when it is understood that an RV is in the mix, then the reason fails. A man who made 1 million dinars monthly prior to the RV would have a salary of 1000 dinars after the RV. In other words, his salary "value" would not change. The 1000 dinars would be "worth" what the million dinars had been worth prior to the RV. The "number of banknotes" will not change (he is correct on this point) but the MONEY SUPPLY will drop from 30 trillion dinars to 30 billion dinars after the three zero notes are removed. Therefore, his point is pointless, because he is counting bank notes instead of MONEY SUPPLY. Who cares how many bank notes there are? What matters is that the MONEY SUPPLY drops, which it will, causing the dinar to become one of the most powerful currencies on the planet.

44


The final tenth reason is spurious as well. He claims that there will be problems with the money supply because "good money forces out bad/old money". This is called Cretiam's Law, and the CBI is COUNTING ON THIS as a part of the removal of the large notes process! Rather than creating a problem it is actually solving one. The large notes (old/bad money) will disappear quickly after the new small denom notes are introduced in 2013. In addition the old/bad small notes will also disappear quickly. This is in complete agreement with the plan of the CBI. Therefore, reason 10 has no bearing in terms of being a negative. Well, there you have it. Once again the "bad guys" are shown to have false premises, faulty understanding of the process, and possibly motivations that have nothing to do with the goals of the CBI (improving the overall economy of Iraq and its position in the world economy). It makes you ask this question: Exactly what is the motivation for these naysayers? RV Theory #7: Guru Breitling Video/Audio

Click the link below to “watch” the video…really its more of an audio…(copy and paste link into your browser if it does not click!)

45


http://youtu.be/2uYgVaHxYAI =====================================================

RV Theory #8: Guru Kaperoni..

Guru Kap looks at CBI currency article 6/19/2012

The following article came out today decribing the images on the new dinar...

Very interesting news today...This article and my comments below...This is a sign of a RV!

Iraq: ziggurat and the bridge of the most prominent imams signs adopted by the central bank to issue the new currency

Tuesday, June 19, 2012 13:33

Hafqna - Baghdad / The Central Bank of Iraq's adoption of certain monuments and pictures to be developed on the currency's new after deletion of zeros.

The Book of the Central Bank is entitled to the Directorate General for the issuance and cabinets posted on some sites Allaketronah, "which included currency notes a number of monuments and pictures the most important, put a picture of a bridge imams The magnitude of the significance of high value. "He said: This is dedicated to the highest class of the new currency a category (200) dinars, hundred dinars, and on the back of this paper has developed a school of the Baghdad. and placed on the face of the category (100) dinars, hundred dinars, Photo for the Azwaip in Baghdad, one of the areas ancient, which was set up by the suspension bridge and appears in the image building of the Iraqi Central Bank, in addition to the building of the University of Baghdad, is the oldest scientific institution in Iraq, while placed on the back of the paper image (ziggurat), one of the features of construction of Iraq at the dawn of history . and placed on the face of the paper of class (50) JD (fifty dinars) image of the King Codaa one of the most kings of the dynasty of Lagash II (King XII), a God of growth and fertility, while the back of the paper have included a picture of Fort Ukhaydir a Fort archaeological dates back to the era of the Abbasid It is unique defensive forts in a deserted area, such as those constructed in

46


which this fort is located to the south-west of the city of Karbala.

The central bank said: that in the face of the banknote (25) dinars (twenty five dinars) was developed, the image of King Hammurabi receiving the law. Either the back of the paper have included a picture of a peasant from Iraqi Kurdistan contribute with men in the preparation of the field of agriculture.

He continued: put on the face of the banknote (10) JD (ten dinars), the Arab-Muslim image of the dinar, either the back of the paper has developed a picture of the lighthouse Hadba in Mosul, one of the landmark development of excellence in our beloved Iraq .. Either category (5) JD (five dinars) was placed on the face of her paper image of a waterfall entirely on Beck in Kurdistan, a reference to the state's interest in water and its sources in addition to the interest in tourism and the environment either the back of the paper has developed a picture of a palm Iraq, a sign of a property for each land of the vast from southern Iraq to the north.

The central bank said in his book: in line with the best applications and international experiences, he decided to stop the basic parameters of the currency notes of the categories (25000,10000,5000) JD Almtdolh now as it is in the new series (25,10,5) dinars so that the audience is also imprinted with a thousand in his memory.

The bank was put on the aspects of coins map of Iraq and highlights where the Tigris and the Euphrates, and the center of the map a circular area to install the coin mineral, while the other side of the coins have included, first class (2) BD, the image of (the Monastery of Saint Matthew), a historic site and my soul is located in the north of Iraq, Iraqis and taken from different sects and religions shrine to seek blessings and tourism. Included in category (1) BD image and reality are inspired from the displacement of Kurds Faili designed and prepared the Ministry of Culture.

Has been developed on the category (500) fils image to fill a modern on the River Euphrates, and was intended to highlight the importance of water and means of storage and organization in Iraq, and on the category (250) fils putting pictures to fill Kut on the Tigris River, for the same purpose, and put on a category (100 fils), a picture of a lion Babylon, symbol of the power and vigor of the nation of Iraq. and put on a class (50) fils a picture of the palm, the symbol of Mesopotamia. and class (25) fils a picture of the Ishtar Gate in memory of great Iraqis.

47


The end

Hafqna

http://www.shafaqna.com/arabic/component/k2/item/11722-%D8%A7%D9%84%D8%B9%D8%B1%D8%A7%D9%82--%D8%A7%D9%84%D8%B2%D9%82%D9%88%D8%B1%D8%A9-%D9%88%D8%AC%D8%B3%D8%B1-%D8%A7%D9%84%D8%A7%D8%A6%D9%85%D8%A9-%D9%85%D9%86-%D8%A7%D8%A8%D8%B1%D8%B2-%D8%A7%D9%84%D8%AF%D9%84%D8%A7%D9%84%D8%A7%D8%AA-%D8%A7%D9%84%D8%AA%D9%8A-%D8%A7%D8%B9%D8%AA%D9%85%D8%AF%D9%87%D8%A7-%D8%A7%D9%84%D8%A8%D9%86%D9%83-%D8%A7%D9%84%D9%85%D8%B1%D9%83%D8%B2%D9%8A-%D9%81%D9%8A-%D8%A7%D8%B5%D8%AF%D8%A7%D8%B1-%D8%A7%D9%84%D8%B9%D9%85%D9%84%D8%A9-%D8%A7%D9%84%D8%AC%D8%AF%D9%8A%D8%AF%D8%A9.html

Look at this quote...

"The central bank said in his book: in line with the best applications and international experiences, he decided to stop the basic parameters of the currency notes of the categories (25000,10000,5000) JD Almtdolh now as it is in the new series (25,10,5) dinars so that the audience is also imprinted with a thousand in his memory."

Reading this, it appears they are leaving the 1,000 in circulation or not creating a replacement. In either case, "so that the audience is also imprinted with a thousand in his memory."

My view is that this is a clear sign of a Revaluation. There is no need to leave a 1,000 dinar in circulation or create significance in one's mind or history if it's value is equivalent to 1 dinar. Just like in the USA, 1,000 dollar bills are still around if you can find them.

Kap

Almost daily the same questions arise, the same insecurities or the same fears. There is absolute proof in these forums that a revaluation of the dinar is coming.

I want to make you aware of a post/chat I did some months ago pertaining to a "paper" that Dr. Bakri wrote in Iraq. This "paper" is the most conclusive evidence we have. He "matter of factly" states without question what the "present authorities have decided to change the Iraqi currency to a new currency" over the other choice which is a LOP. So there is no guessing, no wondering, no confusion, no misdirection. It is unequivicable!

As i said before, all the facts are in our forums.... You see Dr. Bakri discussed this issue extensively in June of 2011...Here is a real good quote that takes the "guesswork" out of the plan. “The history of modern economics tells us that many nations in the world

48


such as the countries involved in WW1 and WW2 or most recently the collapse of the Eastern Bloc countries, have taken one of these two measures, either by changing the whole national currency or eliminating zeros from the currencies so that it can go back to its previous stable condition.” Now here he is saying...clearly there are two choices... 1. changing the whole currency or 2. eliminating zeros from the currency (LOP) Now here is where it gets good..Dr. Bakri answers the question for us. So we don't have to speculate or guess or wonder which it is... “In the Iraqi experience after the fall of the dictatorial regime, the present authorities have decided to change the Iraqi currency to a new currency.” Do you see how "matter of fact" he is? As if he has been specifically told or has assurance of the plan. This is absolutely the most direct and powerful statement we have heard. This is not an opinion, but a factual statement…"the present authorities have decided to change the Iraqi currency to a new currency” Now this also tells us that they are NOT deleting the zeros off the notes. And it tells us that “collecting the notes” is what is happening to reduce the money supply. It also tells us that we have been accurate all along on the research we have done on this investment. Here is the telling part -- we did not know this information until just a few days ago. Which then ends up being a “validation” of the research. Then he said this... “This does not affect the value of the dinar so far but it opens the dinar to the free currency market such as against the dollar, etc.” Now this quote is simply amazing. It is telling us that the value of the old dinar (3 zero notes) is not effected. Clearly, this is what we want. Some may want to interpret this saying “yes the value does not change and the exchange rate also stays the same,” ie

49


(LOP) Well this next quote…puts an end to that theory as well...more proof yet to come… “If three zeros were lifted from the IQD, this means the IQD becomes stronger 1000 times in terms of value.” This in itself is all we need to be assured of our investment. But the good Dr. gives us the dagger in the LOPster heart with this gem of an example… “For example, a pack of cigarettes that was selling for 1000 dinar would be only 1 dinar. If it was a conversion like that, if the three zeros were lifted from the previous currency, this means the old 1000 dinars will buy 1000 packs of cigarettes instead of 1.” The report can be found here... http://www.uobabylon.edu.iq/uobcoleges/fileshare/articles/%D8%B1%D9%81%D8%B9%20%D8%A7%D9%84%D8%A7%D8%B5%D9%81%D8%A7%D8%B1.pdf

English version... http://translate.google.com/translate?hl=en&sl=ar&u=http://repository.uobabylon.edu.iq/papers/publication.aspx%3Fpubid%3D1122&ei=pWyHT6f2NpCjiQeHutWdBA&sa=X&oi=translate&ct=result&resnum=7&ved=0CFwQ7gEwBg&prev=/search%3Fq%3D%25D8%25A3%25D8%25B5%25D9%2581%25D8%25A7%25D8%25B1%2B%25D8%25A7%25D9%2584%25D8%25AF%25D9%258A%25D9%2586%25D8%25A7%25D8%25B1%2B%25D8%25B1%25D9%2581%25D8%25B9%2B2012%26hl%3Den%26rls%3Dcom.microsoft:en-us:IE-Address%26rlz%3D1I7RNSN_en%26prmd%3Dimvns

My Arabic translator version here (same as electronic translation) http://dinaralert.webs.com/apps/forums/topics/show/7557133-kaperoni-enorrste-translate-economist-s-proposal-to-raise-zeros-from-the-dinar-

My chat on this subject here..

http://dinaralert.webs.com/apps/forums/topics/show/7560639-kaperoni-chat-on-dr-bakri-paper-4-7-2012-dinaralert-chat-room

RV Theory #9: Guru SWFloridaGuy SWFloridaGuy] Redenomination Vs. Revaluation. I take the latest article from the Finance Committee as a great sign. They are saying the new currency "will increase by three zeros, indicating that they had an extensive study concluded that the lifting of the zeroes will strengthen the value of the Iraqi currency." Some people speculate the plan may be a redenomination, followed by an RV, where we would make a profit of around 3x what we paid.

50


I disagree with this. Our money will be worth face value for a year. The "000" notes will be legal tender but they will not be equivalent to those notes without the "000s," which is why there has to be an effort to remove them from circulation in country, prior to raising the value. The large notes will retain their value and there will be 2 choices, trade in for lower denoms we can hold indefinitely or exchange for another currency, in our case USD. [SWFloridaGuy] The dinar is not considered a promisary note, we will be able to exchange them outside of Iraq and the CBI must be honor them at face value. Article 32 Paragraph also states that the CBI must honor them in accordance with the law. "Article 32 Issuance of currency. 1. The CBI shall have the exclusive right to issue banknotes and coins for circulation in Iraq. Banknotes issued under this Article shall be a first charge on the assets of the CBI. The CBI shall make appropriate arrangements for the issue of its banknotes and coins as required for circulation in Iraq. Banknotes and coins issued by the CBI and intended for circulation are not promissory notes , bills of exchange ,or any other type of commercial document under the applicable commercial law, and the CBI is obliged to honor them only as provided for in this law." We've seen articles that point to a redenomination and that is exactly what we should expect to see. [SWFloridaGuy] Shabibi himself said in DC, when it comes to the possibility of a revaluation of the IQD, it depends upon inflation, stability and is something they must hide from the public, for obvious reasons. More than just hide from us though, with the attention this has received it's imperative to the process to actively suppress anything that supports a revaluation and their goal is (and should be) to throw us off the scent. They do need to educate the public of the upcoming changes though and the only way I can see doing this is by saying they will introduce a new currency with the zeros removed and reference countries in the past who have gone through a RD. [SWFloridaGuy] It would be implausibly foolish to reference Kuwait and tip their hand to the world. Shabibi is by no means a foolish man. Iraq does not have hyperinflation and they are one of the wealthiest countries in the world. This plan has been in the works for quite some time and no one wins unless they revalue. It's my opinion that we're going to see the zeros removed and the

51


exchange rate raise somewhere on par with the USD, like the SIGR report suggested. Over time this may raise to become the strongest currency in the middle east (which includes more factors than just the highest exchange rate) but initially 1:1 is a huge jump and if it revalues the way we want it to, presents many challenges in and of itself. These are just my opinions, which seem to be evolving over the years and I absolutely could be wrong. I don't pretend to have this figured out and am not an expert by any means. I enjoy hearing both sides of the redenomination vs. revaluation debate and can appreciate aspects of both arguments. [SWFloridaGuy] I'm just hoping for the best like everyone else.

RV Theory #10: Guru SWFloridaGury

There was an excellent article released. "The Iraqi Parliament and the Finance Committee supports the Central Bank of Iraq (CBI)’s efforts to revalue of the Iraqi Dinar through the removal of three zeros from the currency. The removal of three zeros is expected to raise the value of the Dinar as well as facilitate dealing with the currency and the payroll system in the country."

Here's my interpretation of that article and the result of my research up to this point:

No country has ever accomplished what Iraq is about to. They have reached this stage with a lot of help and I propose this is by design and all part of the ingenious reconstruction plan for Iraq. Economic policy is influenced by international capital markets and also by foreign central banks. This revaluation is how the government of Iraq will reassert monetary sovereignty, dedollarize and give the citizens confidence in the national currency.

Many overlook the psychological aspect and simply focus on the economic implications. Establishing their credibility is also a major factor, not only with their own citizens but also with international capital markets. Iraq must

52


revalue their currency if they ever hope to be respected as a borrower and a location for private investment in the eyes of global capital markets.

This is NOT going to be a case of redenomination. The Iraqi dinar is not being recalibrated due to years of struggling with hyperinflation. They are one of the wealthiest countries in the world and soon their currency will reflect that. These foreign central banks that have invested so heavily into the reconstruction of Iraq will prosper and Iraq's debts will be paid.

FACT: Democratic governments only redenominate in response to hyperinflation.

FACT: Authoritarian governments only redenominate in the presence of civil conflict. Neither of these conditions describe Iraq.

I believe once the zeros are removed from the IQD the large notes will retain their value. I also believe a rate somewhere on par with the USD is realistic. Anywhere close to equal the USD would make it a historic revaluation. In my opinion this has all been part of a very well-orchestrated plan and the end result will be a very favorable outcome for all parties involved.

We will see the removal of the zeros and a simultaneous revaluation of the currency. Locally the currency may be exchanged at branches of the Rafidain and Rasheed banks. The Iraqis will have a time limit to deposit all their dinars to facilitate the change into the lower denoms. Iraq is positioning themselves to become economic leaders both regionally and globally and no longer will they be isolated from the international community. Iraq got to where they are today with a lot of help.

They received this help, not because they are a charity case, but rather because (like we do) others see Iraq's potential. Therefore in order to profit themselves, they have been willing to offer assistance in the reconstruction, rebuilding the infrastructure and revitalizing the banking sector, thus helping the CBI institute the framework for a functioning monetary policy that achieves stability.

Simply put, a revaluation is an upward change in the currency's value and that is what is on the horizon for the Iraqi Dinar!

RV vs LOP Further reading…

53


Finally, Here is a view from a community member icfaith …I’m not sure if this person is the author or the poster. He/she does not include many supporting details but gives a little insight you may want to research further.

Sent to me from community member…. To educate those who feel the Iraq Dinar will LOP No-LOP 101 class I have been here for years and seen those that feel Iraq Dinar will RV, then there are those that feel Iraq will LOP. My role here today is to explain to those either new to Dinar or the oldies that have somehow got it in their heads that Iraq will LOP. In order to explain this properly and fairly, we need to understand what a LOP actually is and the reasons necessary for a LOP to happen. Here is a great article LINK http://www.iraqdirectory.com/DisplayNews.aspx?id=1677 that explains an actual LOP by Russia and Afghanistan. Both Russia and Afghanistan are countries who have zero lopped their currency. Lets look at their situations in relation to the Iraqi Dinar and the speculation and rumors about Iraq doing a zero lop on their currency: Afghanistan had 4 types of currency in circulation as a result of a civil war. It was unknown how much of each was in circulation. For the people and the government, this was a very difficult situation. As a result, the currency kept losing it's value. They needed something both credible and efficient to use as currency. You did not want people carrying around bags of money since everything is cash based. Their zero lop happened at the same time as they printed new currency to replace the confusing mix they had before. This ensured everyone had the same currency, there was a known amount in circulation, and people could buy and sell things with few notes. CBI has expressed in articles that there will be up to 10 years before they felt they will have retrieved all of the 3 zero notes. Even if you held the 3 zero notes for 25 years, you will still be able to redeem them at whatever

54


the current rate would be. The new lower denom notes are not replacing the 3 zero notes, instead they are being added to the 3 zero notes and in time the 3 zero notes will be phased out. It has little in common to the Iraqi Dinar and the speculation about the zero lop. Iraq has already printed and established a single national currency, with secure features and knows exactly how much is in circulation. The Dinar denominations are already designed to carry high or low values without carrying around sacks of money. It makes no sense for them to change the face of the currency, when they are talking about increasing the value to fit their economic goals. Russia performed zero lopping to their currency in 1998. They did this in response to hyperinflation and to restore confidence in their currencies structure and value. Iraq has roughly only 20% inflation. Russia also had denominations that went too high - they had denominations of 5k, 10k, 50k, 100k, and 500k - which were replaced with denominations of 5, 10, 50, 100 , and 500. In comparison, Iraq's highest denomination is the 25k and has denominations all the way down to 25 Dinar. If Iraq did zero lopping off the structure of the bills, they would overlap denominations that already exist. This does not make sense or fit the stated goals with the Iraqi Dinar. It seems that a zero lop, or zero lopping would not occur with the denominations of the Dinar, but by increasing it's value with a revalue that would benefit their economy and their poor in a positive way. So a country LOP's its currency due to extreme inflation (which presently Iraq is at around 8.7%) or due to having an unestablished currency (which Iraq has an established currency). Iraq CBI has told the world in articles that the new currency and the old currency will co-exist. Best way to explain this is to think Iraq is not replacing the old currency with new currency. They are adding the lower denom notes to the current currency and over time will be removing the 3 zero notes as they raise the value of the Iraqi Dinar. United states did the same thing and this is being modeled in the same way. United states used to have a $10,000, $5,000 and $1,000 bills. We created lower denom currency and slowly phased out the 3 zero notes.

So there you have it….the LOP vs. RV debate.

55


Both sides present very compelling arguments. Now it’s up to you to decide what’s best for you and your family.

Remember, wisdom is the ability to act in the face of seemingly conflicting and contradictory information. Sometimes it’s not easy.

Balance is the key.

This report is going to have HUGE implications on the community…the Lop vs. RV debate is going to heat up once again.

New questions are going to be raised.

One question that has been raised for me is…(this is for the RV Theorists…)

How does introducing lower denomination reduce the money supply?

This is how it is explained currently…A 25,000 dinar note is made up of 25,000 individual dinars. Once the lower denominations are out…an Iraqi will go to the bank and exchange the 25,000 note for 25,000 single dinar notes or 5,000 5 Dinar notes or 250 100 Dinar notes…the money supply has not gotten lower.

Right?

My own answer to the question would be…IF Iraq was going to have both large and small notes hold their zeros then the large notes would HAVE to be pulled in BEFORE the lowers were introduced (at least in country). Otherwise the money supply does not get reduced.

After all, it does not matter whether an Iraqi has a 25K note or 25,000 singles makes not difference the money supply is still 25,000.

Another alternative would be to SLOWLY raise the rate and pull the larger notes in as the rate increases…kind of like taking the slack out of a fishing line.

Another way would be to DOLLARIZE the country before a major increase in rate…the CBI could sell USD to Iraqi’s for their 25,000 notes. This way all of them could be pulled off the street. Then make a rate change and introduce the new lower denominations. The Iraqi’s would then exchange their USD for the new lower denominations.

56


I’m no guru so I don’t know the answer to this BIG question but I’m very curious to know the answer.

I’ve always wondered how introducing more currency ( ie lower denoms ) makes the money supply go down.

So if there’s support out there in the community, I’ll put together another RV vs. LOP report with all the guru and community member answers to the debate I’m sure will follow this one.

If you’ve enjoyed this report I want you to consider making a donation to Dinar Guru for a job well done. After all’s been said and done, I’ve really enjoyed putting this report together for you… If you feel its brought value to you…and Dinar Guru brings value to you, please take a moment right now and go ahead and click the link below to make a donation. Its very easy and painless I promise! J Thank you very much. Click below to make a donation (Think of it as a TIP) to DinarGuru.com for a job well done!...This is a 57 pg. report after all! You can even decide the amount! J https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=9BAX5PCYDH9NN Thank you so much for reading and donating… Talk soon

Blanche Bonet PS Like always you can get the latest Guru updates on the Dinar Guru site www.DinarGuru.com And access to the only Guru update archive in the world dating back nearly a year and a half…(early 2010)

57


Also, if you are not a Dinar Guru member, what are you waiting for? Get yourself signed up. And join a community of over 30,978 savvy dinar investors. www.DinarGuru.com If you have not read the Dinar Guru Exposed post…this is a great time to read it…it uncovers some of the biggest Myths of the dinar. You can read it here… www.dinarguru.com/dinar-‐guru-‐exposed.html

dg l vs r debate - iraqi dinar · dinar guru is a website devoted to unraveling the secrets behind...

Documents