In the latest version of “why are you still here?” we see more arguments about what the actual “value” of a currency is.
Newshound Guru P….. What is the deletion of zeros of currency? An action aimed at increasing the nominal value of money. Nominal value, NOT the exchange rate. Re-denomination, that’s what this is. Ok, so let’s look at this statement, in economics (which I taught actually) nominal value of something is its CURRENT PRICE. The real value of something, is its relative price over time. This isn’t re-denomination, it’s finding the real value of something. Wikipedia is killing so many opinions. We’re still listening to people who don’t understand the words they write.
So let’s look at the math again. Currently the value is .00076 to 1, the problem we keep getting into is the this is DOLLAR value. It’s .00076 to the dollar. If they drop the zeros from the value and move the decimal point by that move, it becomes .76 to 1. That didn’t change the currency it changed the VALUE of the exchange to the DOLLAR. So let’s look at that in real terms, let’s say you have a million dinar. So that’s .00076 x 1million which would give us $760 US Dollars, which is where we are now. But if you drop the zeros from the VALUE, that would give you .76 x 1 million and would equal $760,000 US Dollars. Too many people spend time comparing apples to oranges. The VALUE inside Iraq is based on the prices INSIDE Iraq, the advantage we get is the opportunity to take the value of the currency and use it outside the country. Look at the numbers, something that used to cost 2000 dinar (let’s take eggs) in country, or $1.52 USD, but wait, since we dropped three zeros isn’t it just 2 dinar now? Remember, it’s VALUE not the currency (sound familiar). If we translate that to new pricing, that’s 1.16 dinar now because it’s .76 to the USD VALUE.
Of course we’re all speculating how this will shake out, y’all can argue over who was right after I’m at the bank LOL.
BWM