Replies to post #13092 on Iraqi Dinar Discussion Board (IQD)

[heavystereogem]

Yup, I always thought that slow grow was the only possible way to come out ahead in this investment. An economy takes a while to turn around. You can't just change the value of money overnight and expect things to be better. That's why I never believed a RV or LOP would happen.

[Aerospace]

Had… is the operative word there. You are correct that all countries that lop “had” high inflation. But most of those countries got their inflation in check prior to lopping. Iraq’s exchange rate went from 3 dollars per dinar to 2000 dinars per dollar. That is massive inflation, it occurred from the mid eighties through the early 2000s, they now have it in check.

This link explains lops perfectly.

http://convention2.allacademic.com/getfile.php?file=apsa05_proceeding/2005-09-05/40104/apsa05_proceeding_40104.pdf
As a result, redenominations often occur after economic crises, as governments attempt to convince citizens and markets that hyperinflation is a thing of the past. In some cases, the timing is correct, in that redenomination caps off high levels of inflation.

Some governments are content for citizens to spend two thousand lira or manta for a cup of coffee, even if this leads citizens to question the legitimacy of the local currency. In other cases, governments do choose to redenominate, but only after a sustained period during which inflation has been reigned in; the time between hyperinflation and redenomination, then, may stretch to over a decade.