Response to a recent American Contractor post
On the 18th American Contractor issued a post in which he made some comments that many of our members might be concerned about. I am reproducing his post below and will append my comments below that.
American Contractor: CBI Plan to Re-denomination not Finalized 4/18/11
“There has been some great news articles recently published in Baghdad. For those of you that rely on translators, I have one bit of advice for you, don’t put too much faith into the Arabic to English translators. Many of them create numerous errors and often lead to misinformation. I’ve seen this happen way too many times over the course of several years and have noticed it even more recently. My inbox has been bombarded with emails from readers whom [sic] have asked me to clarify or confirm something that has been translated only to discover that the information was completely false. In fact, many of the mistranslations of certain words have lead [sic] people to believe that a possible RV is around the corner. It appears that many of the mistranslations are in regards to certain news articles that the Central Bank of Iraq is about to change the currency and than [sic] an RV will occur shortly after. In my last emailed newsletter I stated that the re-denomination (if it does in fact occur) is not the RV that everyone is expecting. I have several of my own personal Arabic translators whom I trust and welcome any of my readers to email with their questions in regards to translations.”
Following are Enorrste comments:
It is unfortunate for American Contractor that he issued this post one day before Mr. Shabibi spoke in Washington and Mr. Saleh gave an interview to Iraqi News in Baghdad. Had he known what they both would say he might not have made this post, or the one previous to it on the 13th.
American Contractor is trying to make a distinction between “redenomination” and “revaluation.” Unfortunately he did not define the difference between them, in his mind, but only said that they are not the same. I wish he had been more clear in the supposed difference between the two.
Another poster on DinarDaddy Tidbits did the same thing a few days ago as well.
The fact is that the “redenomination” and the “revaluation” are, if not identical, at least intimately connected. There is a possibility that the overall process of the “RV” may well involve a “redenomination” followed almost immediately by a “revaluation.” This possibility has been brought about because of the cash crisis that currently exists in Iraq. American Contractor, in his April 13 post he said the following:
“Just to clarify and make it clear, the Central Bank of Iraq is not shredding the Iraqi Dinar as some would like to suggest and imply. There is absolutely no truth to this rumor.”
However, in the very same post he also made this statement:
“In other news, a Central Bank of Iraq spokesperson, Mohammed Saleh stated in an article from the Alsumaria News that the project of removing the three zero’s is very close to being complete.”
I am baffled that American Contractor is apparently unaware that the “removing the three zero’s” is in fact that removal of the large denominated notes mentioned in the quote just above this one. This has been announced as a part of the 5 year plan and the process began in late 2009. As far back as February of 2010 Shabibi himself stated to the press that 70% of the large denominated notes had been withdrawn from circulation.
Now, whether they were “shredded” or not is really not relevant to the discussion, just as whether $1000 bills in America still exist is a moot point. In either case, they will never surface again. It is possible that the bills exist and may remain on the books. Current CBI records indicate that the money supply remains at over 25 trillion dinars, so this may be why he states so categorically that the large notes have not been shredded. On the other hand, it is equally possible that the money supply is now consisting of greater and greater amounts of electronic funds, removing the need for the CBI to store the large notes. To the extent that this is the case, I suspect that the large notes are indeed being destroyed.
Now to get back to the “redenomination” versus “revaluation” discussion, it is clear that neither Mr. Shabibi nor Mr. Saleh make such a distinction. When Mr. Shabibi was asked point blank when the revaluation of the currency in Iraq would take place he answered, after some discussion, that it would be “very soon.” If there was a difference between redenominating the currency and revaluing the currency we might suspect he would have elaborated upon that.
Similarly, on the same afternoon, Mr. Saleh, who is the assistant to Mr. Shabibi, told Iraqi News that, “It is now time to revaluate the Iraqi currency.” Once again, no discussion of redenomination prior to revaluation was offered.
I believe that it is clear, then, that from the point of view of those “in the know” there is no difference between “redenomination” and “revaluation” of the IQD. What is clear is that the term “redenomination” has been used by these gentlemen as well as the term “revaluation,” but that MOST RECENTLY the terminology has turned exclusively to “revaluation.”
Steve
On the 18th American Contractor issued a post in which he made some comments that many of our members might be concerned about. I am reproducing his post below and will append my comments below that.
American Contractor: CBI Plan to Re-denomination not Finalized 4/18/11
“There has been some great news articles recently published in Baghdad. For those of you that rely on translators, I have one bit of advice for you, don’t put too much faith into the Arabic to English translators. Many of them create numerous errors and often lead to misinformation. I’ve seen this happen way too many times over the course of several years and have noticed it even more recently. My inbox has been bombarded with emails from readers whom [sic] have asked me to clarify or confirm something that has been translated only to discover that the information was completely false. In fact, many of the mistranslations of certain words have lead [sic] people to believe that a possible RV is around the corner. It appears that many of the mistranslations are in regards to certain news articles that the Central Bank of Iraq is about to change the currency and than [sic] an RV will occur shortly after. In my last emailed newsletter I stated that the re-denomination (if it does in fact occur) is not the RV that everyone is expecting. I have several of my own personal Arabic translators whom I trust and welcome any of my readers to email with their questions in regards to translations.”
Following are Enorrste comments:
It is unfortunate for American Contractor that he issued this post one day before Mr. Shabibi spoke in Washington and Mr. Saleh gave an interview to Iraqi News in Baghdad. Had he known what they both would say he might not have made this post, or the one previous to it on the 13th.
American Contractor is trying to make a distinction between “redenomination” and “revaluation.” Unfortunately he did not define the difference between them, in his mind, but only said that they are not the same. I wish he had been more clear in the supposed difference between the two.
Another poster on DinarDaddy Tidbits did the same thing a few days ago as well.
The fact is that the “redenomination” and the “revaluation” are, if not identical, at least intimately connected. There is a possibility that the overall process of the “RV” may well involve a “redenomination” followed almost immediately by a “revaluation.” This possibility has been brought about because of the cash crisis that currently exists in Iraq. American Contractor, in his April 13 post he said the following:
“Just to clarify and make it clear, the Central Bank of Iraq is not shredding the Iraqi Dinar as some would like to suggest and imply. There is absolutely no truth to this rumor.”
However, in the very same post he also made this statement:
“In other news, a Central Bank of Iraq spokesperson, Mohammed Saleh stated in an article from the Alsumaria News that the project of removing the three zero’s is very close to being complete.”
I am baffled that American Contractor is apparently unaware that the “removing the three zero’s” is in fact that removal of the large denominated notes mentioned in the quote just above this one. This has been announced as a part of the 5 year plan and the process began in late 2009. As far back as February of 2010 Shabibi himself stated to the press that 70% of the large denominated notes had been withdrawn from circulation.
Now, whether they were “shredded” or not is really not relevant to the discussion, just as whether $1000 bills in America still exist is a moot point. In either case, they will never surface again. It is possible that the bills exist and may remain on the books. Current CBI records indicate that the money supply remains at over 25 trillion dinars, so this may be why he states so categorically that the large notes have not been shredded. On the other hand, it is equally possible that the money supply is now consisting of greater and greater amounts of electronic funds, removing the need for the CBI to store the large notes. To the extent that this is the case, I suspect that the large notes are indeed being destroyed.
Now to get back to the “redenomination” versus “revaluation” discussion, it is clear that neither Mr. Shabibi nor Mr. Saleh make such a distinction. When Mr. Shabibi was asked point blank when the revaluation of the currency in Iraq would take place he answered, after some discussion, that it would be “very soon.” If there was a difference between redenominating the currency and revaluing the currency we might suspect he would have elaborated upon that.
Similarly, on the same afternoon, Mr. Saleh, who is the assistant to Mr. Shabibi, told Iraqi News that, “It is now time to revaluate the Iraqi currency.” Once again, no discussion of redenomination prior to revaluation was offered.
I believe that it is clear, then, that from the point of view of those “in the know” there is no difference between “redenomination” and “revaluation” of the IQD. What is clear is that the term “redenomination” has been used by these gentlemen as well as the term “revaluation,” but that MOST RECENTLY the terminology has turned exclusively to “revaluation.”
Steve
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