From: "MPCgram" To: Subject: Military Numismatics Newsletter 1063 Date: Tuesday, December 02, 2003 9:56 PM =========================================== MPC GRAM =========================================== Covering the entire World of Military Numismatics Series 005 - Number 1063 Wednesday December 3, 2003 A Comparison of Post-WW I German Currency to Post-War (2003) Iraq By Max Spiegel World War One and the War in Iraq are two very different wars; however, one can find some unusual similarities and differences, both numismatically and economically. While the reasons for entering the war (for the U.S. at least) are arguably similar, an attack on civilians aboard the Lusitania and at the World Trade Center (and the Pentagon) the outcome of the wars is what is important for a comparison, not the war itself. While World War I took many years for a decisive victory, it took only a few months to wipe out the Iraqi army which was of much less quality than the German army was at the time. In fact, the German army may have been the most technologically advanced of its day. The wars were different, but the outcome was the same, a U.S. victory. (While some may argue that it is not so decisive in our current war, it was none-the-less a victory for the much more advanced U.S. led coalition). Also, both countries experienced a period of higher inflation and a devaluation and lack of confidence in their currency. When the U.S. (and its allies) took control of both Germany and Iraq there were some vast differences in the economic conditions of the two countries, however. Germany was still very advanced and had little unemployment. In contrast, Iraq had 60% unemployment and 70% inflation. After World War One, the largely bitter (from all of the men lost) allies imposed very strict sanctions on Germany with the Treaty of Versailles. Part of the Treaty made Germany accept the blame for the war. In addition, France demanded reparations for the damage caused to her infrastructure. One payment later, Germany literally went bankrupt. Inflation skyrocketed and eventually caused many new denominations of currency to be printed. In order to fully grasp the drastic increase in inflation, one could compare the price of a one pound loaf of bread in 1914 to the same bread in 1923. During 1914, that loaf of bread would cost 13 pfennig (there are 100 pfennig in a mark). The price increased to 3.5 marks by June of 1922. After that, the period labeled hyperinflation began. In 1923 a loaf of bread cost 700 marks (January), 1200 marks (May), 100,000 marks (July), two million marks (September), 670 million marks (October), three billion marks (November 1st) and finally 80 billion marks on November 15th. At this time, the German government did a complete overhaul of its currency, introducing the Retenmark on that same day. This new mark was worth one trillion of the old marks. The inflation in Germany would not stop however, until 1924, where the price of bread finally reached 35 pfennig or 350 billion old marks. While the inflation stabilized, the jobless rate began to increase to 10% (January 1932) which was approximately 6,000,000 people. This economic instability created many interesting issues, including iron and aluminum coins (different denominations of pfennig) and the famous one billion mark note printed on October 20, 1923. Even though this may be the most famous issue, the city of Freital printed a 100 billion mark note on November 3, 1923. By the end of 1923, the exchange rate between marks and dollars was $4.3 trillion marks to the dollar. The rest, as they say, is history. Currently in Iraq, the economic conditions are completely different from those of post-war Germany. Perhaps it is because the economy was in such a bad condition when we got there, or because it has not been given enough time, but the exchange rate between dinar and dollars is not nearly as bad as it was in Germany. While the inflation is bad, a whopping 70% at the current moment, the black-market rates remain about the same post-war and pre-war. The reasons for this can often be difficult to explain. I would like to thank an economist and friend, David Levine, for clearing it up for me. Since the Iraqi dinar is a developing currency, it is not trusted by most westerners. Therefore, it can often go many years before the exchange rate is adjusted; no one outside of Iraq wants it so it is really irrelevant. In addition, the Iraqi government was not even reporting inflation rates, it is all estimated. But still, what is so different between the dinar after a major war and the mark after a major war? One difference is that the mark was trusted so much before the war, in fact being one of the world’s most important currencies. The dinar, on the other hand, had not been trusted for over half a century. Another reason is that the mark was fine for several years after the war until it eventually lost its value. The dinar has only been out of Saddam Hussein’s control for a few months. There are also no reparations imposed on Iraq, while the Germans suffered not only reparations (which bankrupted their country) but the loss of the Rhineland which was their most important industrial area. Germany’s losing the Rhineland is like Iraq losing its oil fields. Oil, one of the world’s biggest commodities, will probably prevent a downward spiral of the Iraqi dinar. As I am sure you all have seen, the Coalition Provisional Authority (CPA) introduced the Iraqi dinar in conjunction with the 250 banks in Iraq on October 15, 2003. The bills have been issued in denominations ranging from 50 to 25,000 dinar. Iraqis are able to exchange Saddam dinars in the rate of one to one and they can exchange the Swiss dinars (the currency in circulation prior to 1979) in the rate of one to 150 new dinars. The Saddam notes will no longer be legal tender after January 15, 2004. While there is no market rate yet for the new Iraqi dinar, the Saddam notes are still trading at roughly 2000 to the dollar. Since 1982, however, the official rate put in place by Hussein’s regime was .3109 dinar to the dollar. That rate obviously has not been used as the dinar rarely leaves the country, except for collectors of course. Even at the time it was set in 1982, it may have been a huge understatement of the value of the dinar. Since then the Iraqi dinar has slowly slipped, reaching a peak of 12 dinar to the dollar in December of 1991. Eventually, especially after sanctions were imposed; it slipped to 2000 to the dollar until the present war where it slipped to 4000 until jumping back to 2000 to the dollar. Will the new Iraqi dinar trade at the black-market rate or not? Taking a look back to find similar instances of replacing a national currency, one doesn’t have to look far. On January 1, 1999, the Euro was introduced on paper (it was essentially an electronic currency), and on January 1, 2002, it became the official national currency of twelve countries. When it was first launched as an electronic currency, there was a slight drop in its market valuation in a short period of time. Over time, however, it began to pick up, eventually becoming more valuable than the dollar due to a slowing US economy. It is very possible that the new Iraqi dinar could follow the same pattern, slowly losing value (the Euro lost around 30% against the dollar), until it eventually is legitimized and trusted. Should the new dinar prove to be a success and violence in the region lessens, the exchange rate could lower drastically, possibly to what it was during the first Gulf War, 12 to the dollar. With most of Iraq’s money going into reconstruction, however, it could take years before their government gets a budget surplus. Oil, will definitely be a major factor in determining the exchange rate; if the Iraqis can sell enough of it, they could become as big a player as Saudi Arabia (although they too have a fixed rate) or Russia in oil. It will be very interesting to see if the new Iraqi dinar will follow the pattern of the Euro or show us an entirely different example of exchange rates for newly introduced currencies. As many of you have read, there was an attack in Samarra on December 1, 2003 with the main target being the two convoys transporting the new Iraqi dinar. This attack was obviously a coordinated attack on not only the coalition but any remnants of a new Iraq. With the last day the Saddam dinar as legal set for January 15, 2004, there is less than one and a half months left for the currency conversion. Is this the beginning of attacks on the new dinar itself, the Iraqi Banking System, or just more attacks on coalition forces? We will soon see the perils of changing national currencies in the middle of a war. This may have a very dramatic effect on the valuation of the new dinar, that is if the attack(s) on the dinar itself continue. =========================================== Editorial/opinion =========================================== I just called David Seelye to give him some feedback, but he was not home so an editorial was born. David is the bourse chairman for Fest V and doing a great job. You should recall (or learn) that for the first time we are going to have a bourse on Friday before the Fest. Dealers who are not attending the Fest are invited to take tables and the general public is invited to attend. We will have an innovative admission fee of minus $5 for all collectors who attend the bourse. Yes, we are paying collectors to come. All of this is old news, but important for you to remember. Here is what I wanted to tell David. I was chatting with a dealer tonight about other things. He told me that he received the bourse application from David. He said that he has never bought or sold MPC, but the event sounded interesting. He plans on attending and is still thinking about taking a table! Even if you cannot come to the Fest, you should come to the bourse. I expect that there might be some other surprises too. =========================================== MAIL CALL =========================================== Howdy, O esteamed Fred-itor, Twas' musing 'bout the BNR special issue re: MPC... All I could come up with was: Much Paper Conviviality!! [How 'bout that! The spell-checker said I spelled that right!] Jay in Garrison, TX Dear Jay, Yes, it is so. We would like to see your bright and shinny face at the Fest one of these years! This might also start something. More Paper Collectors, My Paper Collection, More Pretty Currency [sic]. And there are some possible X and R rated versions possible too. Editor Dear Editor, Anybody got any rare replacements for sale. Like notes with around 10 or less populations. miker sacto Dear Editor, You asked me to keep you informed on how I am doing on my master MPC set. I have passed some milestones recently. I completed 481 1$ left on 12/2/2003 (70 pieces) and I completed 472 5 cent pack 12/2/2003 (84 pices). I fewer than 1100 notes to go and 14 more until I have 4000. Doug Dear Doug, Wow, only 1100 notes to go. Please do not miss any more appointments. I only have 90 pounds to go to get to my goal. Editor Thanks so much for listing my "want list" in the Gram. I sure look forward to hearing from fellow collectors in this pursuit. I only have one question, will my "ad" be included in the WANTED section of the Gram or have I not followed S.O.P. to have it listed that way? ( sorry, two questions ). Please include it in future issues, as I am not to sure of getting much response to one listing. I guess I should have mentioned this also, I have lots of "trading" material that should be of some interest to other collectors. Maybe I have some numbers for someone else's set. Thanks again, Jack Hunter =========================================== CALENDAR OF EVENTS =========================================== 2004 Jan 6 Advertising deadline for Bank Note Reporter MPC special issue. Contact roloffm@krause.com and for editorial kranzd@krause.com. Jan 8-10 FUN, Orlando, Florida. CPMX February 26-28, Lyn Knight auction. Consignment deadline January 10, 2004. March 5-7, MPCFest V, reservations now being accepted. Reservations entered in order received: Roger Urce#$$, John Cheney#$, David Seelye, Harold Kroll, Gail Baker#, Leo May$$$, Kevin Neidy, Cuneyd Tolek, Warner Talso$$, Cameron Bueschel, Wendell Wolka, John V. Craig#, John Cheney#, Steve Swoish, Joe Bissell#, Sparky Watson$, Nick Schrier, Loretta Freyser, Dick Freyser, Ron Waddell, Robert Drew, Ed Arrich#, Neil Shafer#$, Dan Freeland#, Bill McNease, Doug Bell, Bob Olson$$, Fred Schwan$. # new Fester, $ paid. $$ paid single (¢¢ unpaid single) occupancy. Running totals: total 28, new festers 9. Standard rate $148, single occupancy $198, payments may be made by mailing paper instruments of any kind to BNR Press (or MPCFest or even Fred Schwan) at 132 E. Second St., Port Clinton, OH 43452. Payments may also be sent via PayPal (fredschawan@yahoo.com). Once you have sent your payment, monitor the above list to ensure that it has been received and posted). Show n tell: Gail Baker (education@money.org) Travel coordination: Sparky Watson (mcwatson@yahoo.com) Auction items: Larry Smulczenski (skifla@prodigy.net) Exhibits: Joe Boling (joeboling@aol.com ): bourse David Seelye coinman@rochester.rr.com March 26-28. The Portland, Oregon, ANA is sponsored by the Willamette Coin Club with Larry Gaye as the show chairman. Howard Sarg Daniel will be manning a NI/NBS/IBNS club table at this show, and moderating meetings for NI and IBNS. As always, Gramsters are welcome at the NI and IBNS meetings and at the club table. Masstricht April 23-25, Valkenburg, The Netherlands, contact Jos Eijsermans, Box 3240, NL 5930 Tegelen Netherlands June 11-13 Memphis Paper Money Show, Memphis, TN. Nov 18-21 Pcda Convention, St. Louis, Mo. 2005 date tba, MPCFest VI, reservations now being accepted. Reservations entered in order received: John Cheney$, Danny Bingham$, Fred Schwan. # new Fester, $ paid. $$ paid single occupancy. Running totals: total 3, new festers 1. ======================================== 2004 scholarship fund Donations of cash and numismatic material will be gladly accepted. Generally the numismatic material is auctioned at MPCFest, but might be sold via ebay or other places. Your scholarship donations help the hobby by sending qualified individuals to the ANA summer seminar military money class. Except for unavoidable charges like ebay fees, 100% of your donation goes to scholarships. Al Glaser RA Medina Warner Talso David Seelye Russ Walsh Joe Boling Harold Kroll Pam West Ed Hoffman Ron Wadell Wes Hardy Dick Freyser Robert Drew Brett Irick Kevin Neidy Brian Giese John & Nancy Wilson John Cheney Neil Schafer Joel Shafer Arlen Sheldon 2003 Scholarship Donors Ed Hoffman - RA Medina - Dick Freyser -Larry Smulczenski - David Seelye - Howard Daniel - Steve Feller - Warner Talso - Pam West - Mr. 691 - Leo May - John & Nancy Wilson - Max Spiegel - Gail Baker - Chris Connell - Bill Haines - Joel Shafer - Mikhail (Misha) Istomin - Gary Hicks - Robert Drew - Tom Warburton - Larry Lee - Fred Schwan - Mark Watson - Harold Kroll - Ian Marshall - Marcus Turner - Neil Shafer - Keith & Sue Bauman Contact me at: "Marcus Turner" mail to: maturner@indy.rr.com Checks should be made out to the "Military Numismatists Scholarship." or Marcus Turner 8103 East US Highway 36 Suite 163 Avon, Indiana 46123 USA IMPORTANT SCHOLARSHIP INFORMATION Additional information can be found at the link below. We encourage everyone to print copies of this information and distribute it to those who might be interested. Further you are encouraged to e-mail the pdf document to anyone you see fit. Thank you http://www.papermoneyworld.net/news/Military Numismatists Scholarship Fund 2003.pdf Marcus Turner Scholarships from the ANA: See the following location for an application for financial aid to the summer seminar: http://www.money.org/sumsemfin.html =========================================== MPC ANA Museum Project =========================================== ANA collection of MPC: Thanks to donations from Douglas Bell, Dick Fryser, Ed Beaman, Bruce Peacock, David Seelye, Michael Cummings, Ray Czahor, David Pitchford and Mr 691the ANA MPC collection is current as follows: Series 100 - [50 sen], [1Y, 5Y, 10Y, 20Y all A underprint] Series 461 - 5, [10] cents, [$1] Series 471 - [5, 10, 25, 50 cents, $10] Series 472 - [5, 10 cents], [$1, $10] Series 481 - 5 cents, [10, 25 cents], 50 cents, $1, [$5] $10 Series 521 - 5, 10, 25, 50 cents, [$10] Series 541 - 5, 10, 25 cents Series 591 - [5, 10, 25, 50 cents, $1] Series 611 - [5, 10, 25 cents, $1] Series 641 - 5, 10, 25, 50 cents, $1, $5, $10 Series 651 - [$1] Series 661 - [10, 25, 50c], [$5], [$1, $5] $10 Series 681 - 5, 10, 25, 50 cents, $1, [$5], [$20] Series 691 - [$1, $5, $10, $20] Series 692 - 5, 10, 25, 50 cents, $1 Series 701 - [$1, $5, $10, $20] [50c etc.] = notes donated by Gramsters –Chris Connell =========================================== RESEARCH =========================================== New modification to the database you can now retrieve your password if you have forgotten at the main logon screen. Keep in mind syntax is important. The mpc database has changed its name it now going to be referred as, WW II P a p e r M o n e y D a t a B a s e This is just a hint of things to come If you are having trouble logging on please inform Doug Bell At doug@papermoneyworld.net Papermoneyworld maintains an innovative interactive data base of all military payment certificates. Everyone is invited to enter notes in their possession or that they have observed. Visit the site at: http://www.papermoneyworld.net/user/default.asp this project is financially supported by David Seelye http://www.thempcman.net/ , mailto: coinman@rochester.rr.com =========================================== Subscription information: =========================================== You can enter an email address to receive the gram by using the link below. Use this to change your address (add the new one), add a friend or enemy. http://www.papermoneyworld.net/WebMailList/Default.asp ========================================= HOT CONTACT LIST - DEALER & RESOURCE LIST Below is the BNR Press Hot Contact List. This list serves several functions. Obviously it is an outreach by the dealers listed for your business. Most of them buy and sell MPC. Others organize shows or publish periodicals, or furnish information dedicated to this field. They have supported the new Comprehensive Catalog of Military Payment Certificates with their advertising. They deserve your support and patronage! Name phone fax / cell email Allens (614) 882-3937 (614) 882-0662 info@allens.com American Coins & Collectibles (800) 865-3562 American Numismatic Ass'n (800) 367-9723 ana@money.org Guy Araby (562) 945-7891(310) 508-0018 guyaraby@earthlink.net Bob Baker(713) 864-3122 Ken Barr (408) 272-3247 ken@kenbarr.com Fred Bart (810) 979-3400 Dick Balbaton (508) 699-2266 (508) 643-1154 RBalbaton@aol.com Keith and Suzanne Bauman (248) 647 8938 tnaksbauman@earthlink.net Joe Bissell (602) 440-0442 (602) 494-9103 BNR Press (419) 732-6683 (419) 732-6683 fredschwan@yahoo.com Remy Bourne (800) 789-7070 (763) 789-4747 Ed Carne (614) 882-3937 (614) 882-0662 info@allens.com Champion Stamp (212) 489-8130 (212) 581-8130 Cookie Jar Collectibles (301) 604-9225 cjcpi@comcast.net Guido Crapanzano [39] 2-8056228 [39] 2-4459856 Currency Dealer Newsletter (310) 515-7369 David F. Cieniewicz (205) 852-7015 CGC (602) 493-4758 (602) 494-9103 sales@gradedcurrency.com Mike Cummings (863) 603-9899 (863) 603-9880 mpccoin@hotmail.com Cygnet Charters (419) 734-2422 Ray Czahor (301) 604-9225 cjcpi@comcast.net Denlys of Boston (617) 482-8477 denlys@aol.com Doric Coins & Currency (508) 699-2266 (508) 643-1154 FUN (407) 321-8747 Great Lakes Bank Note Company (419) 732-6683 IBNS joeboling@aol.com Essie Kashani (909) 627-3996 (909) 627-2776 kashani10@aol.com Lowel Horwdel (765) 583-2748 (765) 583-4584 horwdel@inshightbb.com Lyn Knight (800) 243-5211 Krause Publications (715) 445-2214 bnr@krause.com Harold Kroll(251) 649-5134 HARBONS@aol.com Leo May (305) 720-0659 LeoMayEnt@aol.com Ian Marshall (416) 445-0286 (416) 445-0286 iam@total.net Memphis Coin Club (901) 757-2515 MPCGram (419) 732-6683 MPCGram@yahoo.com Pomexport Ltd. 1-201-641-6641 / Fax: 1-201-641-1700 E-Mail: Info@pomexport.com // website: http://www.Pomexport.com Bob Reed(504) 361-5684 bobreed@rrcoins.net Fred Schwan (419) 732-6683 (419) 732-6683 FredSchwan@yahoo.com David Seelye (585) 594-1987 (585) 594-2311 coinman@rochester.rr.com Richie Self (318) 868-9077 R. M. Smythe (800) 622-1880 (212) 908-4047 www.smytheonline.com Mel Steinberg & Son (415) 897-1654 (voice and fax) melsteinberg@mindspring.com Military Trader (800) 334-7165 Scott Winslow Associates (603)472-7040 (603) 472-8773 scott@scottwinslow.com George Warner(307) 672-3700 Pam West [44] 0208 641 3224[44] 0208 641 3224 pamwestbritnotes@compuserve.com ======================================= POST / BASE EXCHANGE(PX/BX/NEX) Dump your dupes! Your classified advertisement for items for sale, purchase or trade will be run here for free. Send your ads to the gram. This service is for everyone, most humble dealer or most advanced collector. The point is to make the gram more interesting. In all cases confirm your order via email first. FOR SALE Dear Editor, "Democratic Republic of Vietnam Coins And Currency" by Howard Daniel III, signed by the author. Volume II Part 3. First Edition, September 1995. Hardbound, 322 pages, 8 1/2 by 11. New Condition and out of print--only one copy available. This is definitely the bible on coins, currency, bonds, coupons, POW issues of Vietnam and is rarely offered. I will send it POSTPAID in the US to the first order received for $50. Ray Czahor, Cookie Jar Collectibles, Box 597, Columbia, MD 21045, cjcpi@comcast.net Thanks, RAY WANTED SECTION: Collectors may submit lists of items wanted for their collections for listing here. Dealers and collectors who have these items, are then encouraged to list them for sale in the above section as a reply. Wanted listings will run for a period of 1 month. WANTED 01; =========================================== MPC Gram Staff: Publisher, editor: Fred Schwan - MPCGram@yahoo.com Subscription Manager:Doug Bell- doug@papermoneyworld.net Tuesday Columnist : JoeBoling- JoeBoling@aol.com Friday Columnist: Warner Talso: wtalso@aol.com Fest Auctioneer: Larry "Ski"Smulczenski - skifla@prodigy.net Critic:Harold Kroll - HARBONS@aol.com Scholarship Coordinator: Marcus Turner- maturner@indy.rr.com Webmaster & Technical Advisors:Doug Bell "Wiz" - doug@papermoneyworld.net Russ Walsh - russ.walsh@gte.net Fact Checker: Warner Talso -Calendar Coordinator: John & Nancy Wilson -The Boss: Judy Schwan ===== MPC Gram is published by BNR Press and papermoneyworld.com as a free service to the community of military money collectors. Your suggestions, criticisms, complaints, editorial contributions, letters, and even praise are very welcome. The entire contents including linked illustrations are copyright protected by the publishers. In the case of contributors, the copyright is protected on behalf of the creators. Please send all correspondence regarding the gram to MPCgram@yahoo.com. Thank you very much for your participation. __________________________________ Do you Yahoo!? Free Pop-Up Blocker - Get it now http://companion.yahoo.com/