If Iraqis could all get rich off this project to delete the zeros, they would simply never conduct the project to delete the zeros. But these notes stuffed under the mattresses really don’t matter much anyhow. The CBI has talked about these notes stuffed under the mattresses many times and they have a pretty good estimate as to how much. So, these stashes of notes in Iraq don’t matter since IN IRAQ…these stashes of notes will be worth exactly the same today post- project to delete the zeros as yesterday pre-project to delete the zeros. They are only going to delete the zeros in Iraq.
The next stage to the process…is to move to reinstate and put the dinar on a FLOAT…They plan to halt all currency auctions for a specified period during this transition time. They might never start the auctions up again. To do this they plan to get it off the “de facto” peg to the USD and put it on a peg to a basket of 5 currencies. So, tell me how can the rate stay at .00085 when they do this? It is not possible. The reality is there will NEVER be a revaluation only a reinstatement and moving to the FLOAT and off the “de-facto” peg will bring a new rate. …The dinar is going to get REINSTATED. It is through the FLOAT that the rate will rise. It will only rise when traders get in and buy it up on the international trading platforms.
But did I say the rate will start at .00085? NO…the CBI is NOT going to just take the .00085 rate and use it and float it…the rate will be determined by the basket of currencies. We just don’t know that new rate yet…We do see, however, rates at the banks of pending reinstatement of the dinar at a rate of around $3.60 – $4.25 and up. So, this is probably going to be around the initial rate after the new peg to the basket. From there, the free market will drive it up or down accordingly. But in the long run it will probably stabilize around $3.60ish which is close to the Kuwaiti dinar.