The information is below is for private use only and should not be used in any commercial environments. Please take your vitamins and consult your doctor if any soreness, redness, or loss of appetite occurs...
See Part 2 here (assumes 70% of currency withdrawn).

I was doing some research with the amount of currency that is in circulation and how the RV would potentially affect that. Please remember that this is not a scientific study and that I have absolutely NO inside information. I based this solely on what I have found online and background knowledge of the subject in the few months I've paid attention to things. This is a lengthy mathematical argument. Please take a break and come back to it if you get confused. I tried to make it as simple as possible while still providing information I thought was relevant.

This is also not meant to prove or disprove anyone or any articles that have been discussing the Iraqi Dinar. This should not be taken as an endorsement or denial of information that you hear from any other sources. I am merely presenting a mathematic comparison of information for others to respond to or to provide plausible explanations for. I am invested in dinar so I have no ill-intent. In fact, I hope my gut feel is wrong and this explanation is completely unrelated to the reasons for a pleasing RV to happen.

My theory is basically that it would be highly improbable for the IQD to go straight from its current rate of $0.00085 (USD) to $3.50+ or even $1.00 +/- because of the value of the IQD currency that would be in circulation after the RV took place. Having said that, my non-intellectual side hopes that I'm completely wrong and this works out better than my expectations allow. I think it would be really useful to know how much Iraqi currency was in circulation while it was valued at $3.20 +/- around 1980 but I couldn't find that information online anywhere. It might help validate or invalidate the relevance of some of the numbers below...

  (#1)
Exchange Rate
(#2)
Currency In Circulation
(#1 x #2)
Currency Value
In Billions of USD
USA 1.00 829 Billion USD $829
Saudi Arabia 0.267 USD 1,176 Billion Riyals $314
Kuwait 3.58 USD 27 Billion Kuwaiti Dinar $97
Iraq 0.00085 USD 27,000 Billion Iraqi Dinar $23
Data Sources USA: www.ny.frb.org       Saudi Arabia: www.sama.gov.sa
Kuwait: www.cbk.gov.kw       Iraq: www.cbi.iq

I looked at 4 different countries in my sample. Someone with international currency experience or knowledge is welcome to explain the flaws in my logic. I just picked the USA, Iraq, and 2 other Middle Eastern countries as samples (Kuwait and Saudi Arabia). I looked at the amount of currency that was in circulation (expressed in USD) as compared to the approximate value of each currency (translated into USD).

The rates or exchange are the latest available but the numbers still work as long as they're within a margin of error of my values. In addition, some of the Currency in Circulation totals below may only include outstanding physical currency and some of it may include other deposits, etc in banks in addition to the physical currency. Even in cases where the values of currency is two times or half as much as I state below, the general premise of the argument still holds. So aside from gross negligence in the values and formulas used below, the concepts should be taken as is and not nit-picked over minor value changes. I also know the amount of USD in circulation has risen sharply in the last few years and that the data I'm using is from 2007. But I'll still use those numbers since that's what I could find right now.

I also realize that Iraq may be buying up their own Dinar at the moment. Even if they've managed to buy back 10, 20, or even 30 percent of their own Dinar, I believe the ratios below still speak for themselves.

Scenario 1

The RV happens and the value of the IQD goes from $0.00085 (USD) to $3.60 (USD). This is on the assumption that the IQD will be on par with or greater than the Kuwaiti Dinar.

 
Country
(#1)
Exchange Rate
(#2)
Currency In Circulation
(#1 x #2)
Curr Value in Billions of USD
Iraq 3.60 USD 27,000 Billion Iraqi Dinar $97,200

As you can see above, a straight jump from the current value to $3.60 results in Iraq having the equivalent of $97,200 Billion USD in circulation. Or to say it another way, Iraq would have $97.2 Trillion USD in circulation while the United States only has about $829 Billion USD in circulation. That means Iraq would have over 117 times the amount of currency in circulation than the United States does. I have no idea what the significance of that would be but it does not seem like a rational jump for Iraq to suddenly have that much more currency in circulation than the United States.

Scenario 2

The RV happens and the value of the IQD goes from $0.00085 (USD) to $1.00 (USD). This is on the assumption that the IQD will be on par with the USD.

 
Country
(#1)
Exchange Rate
(#2)
Currency In Circulation
(#1 x #2)
Curr Value in Billions of USD
Iraq 1.00 USD 27,000 Billion Iraqi Dinar $27,000

As in Scenario 1, a straight jump from the current value to $1.00 results in Iraq having a circulation that grossly surpasses the USD. It would result in the equivalent of $27,000 Billion USD or $27 Trillion USD in circulation. This again is compared to the $829 Billion USD in circulation for the United States. That means Iraq would still have have over 30 times the amount of currency in circulation than the United States does. Again, I have no idea what the significance of that would be but it also does not seem like a rational jump.

Scenario 3

The RV happens and the value of the IQD goes from $0.00085 (USD) to $0.10 (USD). This is on based on no real reason except that it's a smaller possible value that has been floated online.

 
Country
(#1)
Exchange Rate
(#2)
Currency In Circulation
(#1 x #2)
Curr Value in Billions of USD
Iraq 0.10 USD 27,000 Billion Iraqi Dinar $2,700

As in Scenarios 1 & 2, a straight jump from the current value to $0.10 still results in Iraq having a circulation that surpasses the USD. It would result in the equivalent of $2,700 Billion USD or $2.7 Trillion USD in circulation. This again is compared to the $829 Billion USD in circulation for the United States. I see it highly unlikely that Iraq would have more currency in circulation than the United States but again that is my opinion and not based on any facts that I'm aware of.

Scenario 4

The zeroes are removed from the Iraq currency (Lopping) and no RV happens. In this case, I'm assuming that the value of Dinar in your hand as compared to USD does not change but you would exchange them for a smaller denomination that had the same exchange value. I'm also not going to cover the fact that the exchange might have to take place in Iraq instead of outside the country, etc. Those are other discussion points that are outside the scope of this discussion and I don't claim to have any facts to confirm or deny that scenario.

To explain the "Lop" as I understand it, I'll describe what would happen to 250,000 Iraqi Dinar in a Lop. I will not include currency exchange fees or anything else in this scenario. Just a straight Lop with no additional interference.

 
Country
(#1)
Exchange Rate
(#2)
Currency In Circulation
(#1 x #2)
Curr Value in Billions of USD
Iraq (Pre Lop) 0.00085 USD 27,000 Billion Iraqi Dinar $23
Iraq (Post Lop) 0.85 USD 27 Billion Iraqi Dinar $23

Notice how the amount of currency in circulation changed AND the Exchange Rate changed, but the resulting currency value in USD did not change. This is more of an accounting / convenience issue for the Iraqi people but does not really affect the value of any IQD you own.

Scenario 5

The zeroes are removed from the Iraq currency (Lopping) and THEN an RV happens. In this case, everything from Scenario 4 happens in addition to an RV. I assume that the value goes from the Post-Lop value to $3.60 (USD). This is on the assumption that the IQD will be on par with or greater than the Kuwaiti Dinar.

 
Country
(#1)
Exchange Rate
(#2)
Currency In Circulation
(#1 x #2)
Curr Value in Billions of USD
Iraq 3.60 USD 27 Billion Iraqi Dinar $97

Notice how the "Currency in Circulation" is 27 Billion in this example as opposed to 27,000 Billion Iraqi Dinar in most of the examples above. This is as a result of the Lop that occurs BEFORE the RV. This results in Iraq having the equivalent of $97 Billion USD in circulation. That is about 1/10 of the circulation of the USD economy and more on par with other countries in the Middle East. They'd still have a lower total circulation than Saudi Arabia with a similar population but Saudi Arabia also has the 2nd largest oil reserves as opposed to the 3rd largest with Iraq.

Conclusion

I am simply pointing out scenarios as I see them with the data available. I'm sure there are all sorts of deals and meanings going on behind the scenes that I will never know or understand. I am also not trying to imply that the amount of currency in circulation does or does not have a particular global significance. I'm simply saying that in Scenarios 1, 2, and 3 above that the amount of currency in circulation seems way out of proportion with the rest of the world and Iraq's potential place in the world. I just don't believe it makes rational sense. Scenario 4 above seems like a step towards 5 and is one that has been discussed frequently. Scenario 5 seems like the most plausible to me since it fits with a lot of the chatter and the numbers that are being touted as possible end valuations.

Having said all of that, I would like to say that I'm not making any predictions of what is or is not happening with regard to the IQD. I'm simply making some numeric comparisons based on data that is publicly available. Please do your own research and "trust but verify" their information when possible.

Personal Observations

Find people that are trustworthy and do not appear to have an alternative motive to giving you advice. Sources that charge you for information, try to sell you products, or get you to sign up for additional services may be perfectly legit, but you need to ask yourself what is their motivation for providing the information. Not everyone is out to deceive you but there are plenty that will try...